Fla.: Citizens Property Insurance Corp. Receives Millions from IRS

March 21, 2007

Florida’s Citizens Property Insurance Corp. received more than $168 million from the Internal Revenue Service as part of an agreement declaring Citizens’ predecessor a tax-exempt entity, a company official said this week.

“We received this money from the IRS to settle a court battle that began when the Florida Windstorm Underwriting Association, a predecessor of Citizens, sued the Internal Revenue Service for a refund of previously paid federal income taxes,” said Perry Cone, general counsel.

The money was received by Citizens on March 19.

The total IRS payment was $168,303,580.87, including interest, said Fred Harris, an attorney with the Greenberg Traurig law firm, which represented Citizens and the FWUA.

Harris said the IRS alleged the FWUA “was not a tax-exempt entity and was subject to federal income tax obligations.”

Also assisting in the litigation was the CPA and consulting firm of Berkowitz Dick Pollack & Brant of Miami.

Citizens was created by the Legislature in 2002 as a tax-exempt, public, not-for-profit corporation, and its tax status has never been an issue, Cone said. The refund money will be used to pay future claims and expenses, he said.

Source: Citizens Property Insurance Corp.

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