Today, the Tax Court issued its decision in R.V.I. Guaranty Co. v. Commissioner.  RVI sold “residual value insurance” to leasing companies, manufacturers, and financial institutions that leased assets to third parties or provided financing for such leases.  RVI insured against the risk that the actual value of the asset upon termination of the lease would be significantly lower than the expected value.  The IRS argued that the insurance policies did not constitute insurance for federal income tax purposes because the lessors were purchasing protection against an investment risk, not an insurance risk.  After analyzing whether the transactions involved risk-shifting and risk-distribution and constituted insurance “in its commonly accepted sense,” as well as whether the risk transferred was an “insurance risk,” the Tax Court determined that the policies constituted insurance for federal income tax purposes and that RVI qualified as an insurance company.