NEW YORK ( TheStreet) -- AIG ( AIG) and MetLife ( MET) lawyers have been told by the Internal Revenue Service that it ruled in their favor on a tax question, clearing the way for a $15 billion sale of AIG's second-biggest foreign life-insurance unit, American Life Insurance, a report says.

With the tax matter resolved, MetLife could finalize terms for acquiring the AIG unit, also known as Alico, the Wall Street Journal reports..

AIG and MetLife's boards are prepared to meet and finalize the deal this weekend, a person familiar with the matter said, the newspaper reports. It could be announced as early as Sunday night.

The tax issue, the Journal says, concerns whether Alico would have to withhold U.S. taxes on income it distributes to foreign holders of its annuities and life-insurance products. Alico, which is domiciled in Delaware, gets more than 80% of its revenue overseas. It has been operating under the assumption that it won't have to withhold such taxes.

AIG and Alico asked the IRS several weeks ago for a "private letter ruling" that would confirm their interpretation of the tax issue. The IRS is now expected to give them that, the Journal reports.

MetLife will pay $7 billion cash and $8 billion in a mix of common and preferred stock to purchase Alico, people familiar with the matter said.

The proceeds from the same will go toward repaying the Federal Reserve Bank of New York, which owns preferred shares in Alico.

The U.S. Treasury, which owns a large stake in AIG and which also oversees the IRS, wasn't involved in the talks, the Journal reports.

-- Written by Joseph Woelfel in New York.

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