WASHINGTON - In a move that could quash one of the most controversial products in retail banking, the Internal Revenue Service proposed on Thursday to strip the Retirement CD of its tax-deferred status.

The product - a hybrid of a conventional CD and an annuity - has been touted as ideal for retirement planning and has been blessed by banking regulators. But the insurance industry has protested vigorously, calling the product a clear invasion of its turf.

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