IRC 101(j) governs the income-tax treatment of employer-owned life insurance (EOLI). Death benefits on policies issued after August 17, 2006 are excludable only if the employer satisfied notice and consent requirements before issue and the insured met eligibility criteria (employee at time of issue or within specified categories). Annual Form 8925 reporting is required. Failure to comply can make otherwise tax-free proceeds taxable.

Employers adopt notice and consent procedures and file Form 8925 annually. Advisors audit legacy policies for coverage eligibility and documentation to protect tax-free treatment.