internal_revenue_service number release date index number --------------------------------------------- --------------------------------- ------------------------------- --------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact --------------- id no ----------------- telephone number --------------------- refer reply to cc corp b03 plr-128296-11 date date legend parent ----------------------------------------------------------- ---------------------------------- 20xx 20yy ------- ------- company official --------------------------------------------------------------------- --------------------------------------------------- tax professional -------------------------- -------------------------------------------------------------- date z ---------------------------- -- dear ------------- this letter responds to your letter dated date submitted on behalf of parent requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations to file an election in particular parent is requesting an extension of time for the consolidated_group of which parent is the common parent to elect an extended carryback period the election for a consolidated_net_operating_loss cnol the material information submitted for consideration is summarized below plr-128296-11 parent is the common parent of an affiliated_group_of_corporations that joined in filing a consolidated_return for u s federal_income_tax purposes the parent group parent group files its returns on a calendar_year basis parent timely filed a consolidated federal_income_tax return for parent group’s 20yy taxable_year on date parent group incurred a cnol in the 20yy taxable_year the 20yy cnol parent seeks to carry back the 20yy cnol z years to its 20xx taxable_year under sec_172 parent was required to file the election in order to carry back the 20yy cnol beyond the normal 2-year period and to obtain the benefit of sec_56 the election was due on date but for various reasons a valid election was not filed after the due_date for the election it was discovered that the election had not been filed parent subsequently submitted this private_letter_ruling request under sec_301_9100-3 for an extension of time to file the election the period of limitations on assessment under sec_6501 has not expired for the parent group’s consolidated_income_tax_return for the taxable_year in which the 20yy cnol was incurred or any subsequent taxable_year parent has represented that it does not seek to alter a return position for which an accuracy-related_penalty has been or could be imposed under sec_6662 sec_172 of the internal_revenue_code generally permits a taxpayer to carry back a net_operating_loss to each of the taxable years preceding the taxable_year of the nol sec_172 permits a taxpayer to elect to carry back an applicable net_operating_loss to each of the or taxable years preceding the taxable_year of the applicable nol in lieu of the 2-year period provided by sec_172 sec_172 provides that the term applicable net_operating_loss the applicable nol means the taxpayer’s net_operating_loss for a taxable_year ending after date and beginning before date sec_172 provides that the election under sec_172 shall be made by the due_date including extension of time for filing the return for the taxpayer’s last taxable_year beginning in the election is irrevocable and in general may be made only with respect to one taxable_year sec_1502 provides that the secretary shall prescribe such regulations as he may deem necessary in order that the tax_liability of any affiliated_group_of_corporations making a consolidated_return and of each corporation in the group both during and after the period of affiliation may be returned determined computed assessed collected and adjusted in such manner as clearly to reflect the income_tax_liability and the various factors necessary for the determination of such liability and in order to prevent avoidance of such tax_liability in carrying out the preceding sentence the secretary may prescribe rules that are different from the provisions of chapter that would apply if such corporations filed separate returns plr-128296-11 sec_1_1502-21 provides that losses taken into account in determining a cnol may be carried to other taxable years whether consolidated or separate only under paragraph b of sec_1_1502-21 sec_1_1502-21 provides that net_operating_loss_carryovers_and_carrybacks to a taxable_year are determined under the principles of sec_172 and sec_1_1502-21 sec_1_1502-21t provides that a consolidated_group can elect an extended carryback period pursuant to sec_172 with regard to a cnol arising in a taxable_year ending after date and beginning before date revproc_2009_52 2009_49_irb_744 provides when and how a taxpayer may make an election under sec_172 sec_4 of revproc_2009_52 provides that the common parent of a consolidated_group makes the election for the group sec_4 and of revproc_2009_52 permit the election to be made for consolidated taxpayers by attaching a statement to the original or amended consolidated_return for the taxable_year of the applicable cnol by attaching a statement to the taxpayer’s amended consolidated_return applying the applicable cnol to the carryback_year or by attaching a statement to a claim for a tentative_carryback_adjustment on form_1139 sec_4 b and b of revproc_2009_52 require the election regardless of the manner in which made to be filed no later than the due_date including extensions for filing the return for the taxpayer’s last taxable_year beginning in under sec_301_9100-1 the commissioner has discretion to grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make a regulatory election sec_301_9100-1 requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 the election by a consolidated_group to extend the carryback period for a cnol under sec_172 is a regulatory election therefore the commissioner has discretionary authority under sec_301_9100-3 to grant an extension of time for parent to file the election provided parent establishes to the satisfaction of the commissioner that it acted reasonably and in good_faith the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and granting relief will not prejudice the interests of the government plr-128296-11 information affidavits and representations submitted by parent company official and tax professional explain the circumstances that resulted in the failure to timely file a valid election the information establishes that parent reasonably relied on a qualified_tax professional who failed to make or advise parent to make the election see sec_301_9100-3 based on the facts and information submitted including the affidavits submitted and the representations made we conclude that parent has shown it acted reasonably and in good_faith the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and granting relief will not prejudice the interests of the government accordingly provided the parent group qualifies substantively to file the election we grant an extension of time under sec_301_9100-3 until sixty days from the date on this letter for parent to file the election parent may file the election under sec_172 to carry back its 20yy cnol to its 20xx taxable_year on form 1120x amended u s_corporation income_tax return for either the 20xx or 20yy taxable_year according to the procedures set forth in revproc_2009_52 a copy of this letter must be attached to the form 1120x if parent files form 1120x electronically parent may satisfy the requirement of attaching a copy of this letter by attaching a statement to the parent group’s amended_return that provides the date and control number plr-128296-11 of this letter_ruling the above extension of time is conditioned on the parent group’s tax_liability if any not being lower in the aggregate for all years to which the election applies than it would have been if the election had been timely made taking into account the time_value_of_money we express no opinion as to the parent group’s tax_liability for the years involved a determination thereof will be made by the director’s office upon audit of the income_tax returns involved except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any item discussed or referenced in this letter in particular we express no opinion with respect to whether parent group qualifies substantively to make the election in addition we express no opinion as to the tax effects or consequences of filing the election late under the provision of any other section of the code or regulations or as to the tax treatment of any conditions existing at the time of or resulting from filing the election late that are not specifically set forth in this letter for purposes of granting relief under sec_301_9100-3 we relied on certain statements and representations made under penalty of perjury by parent company official and tax professional the director however should verify all essential facts in addition notwithstanding that an extension is granted under sec_301_9100-3 to file the election any penalties and interest that would otherwise be applicable continue to apply plr-128296-11 this letter_ruling is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent pursuant to the power_of_attorney on file in this office a copy of this letter is being sent to your authorized representative sincerely _ken cohen__________________ ken cohen senior technician reviewer branch office of associate chief_counsel corporate cc


internal_revenue_service number release date index number ---------------------- ------------------------------ --------------------------------------- --------------------------------------- in re -------------------------------- - department of the treasury washington dc person to contact ------------------ id no ------------- telephone number --------------------- refer reply to cc corp - plr-158167-03 date date ---------------- ---------------- --------------------------------- --------------------------------- ------------------------------------------- legend parent ------------------------------------------------------------------------------------ ----------------------------------------------------------- subsidiaries ----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- state x tax_year date --------------------------------------------- ------------------------------ --------------------------- ---------------- ---------------- ------------- --------------------- ----------------------- ------------------------ --------------------------- this letter responds to a letter submitted on behalf of parent dated october plr-158167-03 date date company officials ----------------------------- ------------------------------------------------------------------ ------------------------------------------------------------------- -------------------------------------------------------- -------------------------------------------------------------------- tax professional ------------------------------------------------------------------------------ dear ---------------- requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations to file an election the extension is requested in order to allow parent and subsidiaries to elect to file a consolidated federal_income_tax return the election with parent as the common parent under sec_1_1502-75 of the income_tax regulations for tax_year additional information was submitted in a letter dated date the information submitted is summarized below subsequently elected classification as an association_taxable_as_a_corporation for federal tax purposes parent acquired subsidiaries an affiliated_group_of_corporations filing consolidated_returns on date the election was due on date but for various reasons a valid election was not filed subsequently this request was submitted under sec_301_9100-3 for an extension of time to file the election the period of limitations on assessment under sec_6501 has not expired for parent’s or subsidiaries’ taxable years in which the election should have been filed or any taxable years that would have been affected by the election had it been timely filed corporations shall have the privilege of making a consolidated_return with respect to the income_tax imposed by chapter for the taxable_year in lieu of separate returns the parent a state x limited_liability_company was formed on date and sec_1501 of the code provides in part that an affiliated_group of plr-158167-03 making of a consolidated_return is subject_to the condition that all corporations which at any time during the taxable_year have been members of the affiliated_group consent to the consolidated_return_regulations prescribed under sec_1502 prior to the day prescribed by law for the filing of such return the making of a consolidated_return is considered such consent exercise its privilege of filing a consolidated_return such return must be filed no later than the last day prescribed by law including extensions of time for the filing of the common parent’s return sec_1_1502-75 of the regulations provides in part that if a group wishes to under sec_301_9100-1 the commissioner has discretion to grant a reasonable sec_301_9100-1 through provide the standards the the time for electing to file a consolidated_return is fixed by the regulations ie extension of time to make a regulatory or statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except subtitles e g h and i commissioner will use to determine whether to grant an extension of time to make a regulatory election sec_301_9100-1 sec_301_9100-2 provides automatic extensions of time for making certain elections requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 sec_1_1502-75 therefore the commissioner has discretionary authority under sec_301_9100-3 to grant an extension of time for parent and subsidiaries to make the election provided parent and subsidiaries show they acted reasonably and in good_faith the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and granting relief will not prejudice the interests of the government officials and tax professional explain the circumstances that resulted in the failure to timely make the election the information establishes that the request for relief was filed before the failure to make the election was discovered by the internal_revenue_service and that the interests of the government will not be prejudiced if relief is granted see ' b i made we conclude that parent and subsidiaries have shown they acted reasonably and in good_faith the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and granting relief will not prejudice the interests of the government accordingly an based on the facts and information submitted including the representations information affidavits and representations submitted by parent company except as expressly provided herein no opinion is expressed or implied in addition we express no opinion as to the tax consequences of filing the plr-158167-03 extension of time is granted under sec_301_9100-3 until days from the date on this letter for parent and subsidiaries to make the election for tax_year the above extension of time is conditioned on parent’s and subsidiaries’ tax_liability if any not being lower in the aggregate for all years to which the election applies than it would have been if the election had been timely made taking into account the time_value_of_money no opinion is expressed as to the taxpayers’ tax_liability for the years involved a determination thereof will be made by the applicable director’s office upon audit of the federal_income_tax returns involved further no opinion is expressed as to the federal_income_tax effect if any if it is determined that the taxpayers’ tax_liability is lower sec_301_9100-3 concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter including whether parent and subsidiaries qualify substantively to file a consolidated_return election late under the provisions of any other section of the code and regulations or as to the tax treatment of any conditions existing at the time of or resulting from filing the election late that are not specifically set forth in the above ruling for purposes of granting relief under sec_301_9100-3 we relied on certain statements and representations made under penalties of perjury however the director should verify all essential facts in addition notwithstanding that an extension is granted under sec_301_9100-3 to file the election penalties and interest that would otherwise be applicable if any continue to apply the code provides that it may not be used or cited as precedent relevant this ruling is directed only to the taxpayers requesting it sec_6110 of a copy of this letter must be attached to any income_tax return to which it is plr-158167-03 letter are being sent to parent and a second authorized representative in accordance with the power_of_attorney on file with this office copies of this sincerely ken cohen ken cohen senior technician reviewer branch office of associate chief_counsel corporate


internal_revenue_service number release date index number -------------------------------- ----------------------------------------------- -------------------------------------- --------------------------- -------------------------------------- --------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact ----------- id no ------------- telephone number -------------------- refer reply to cc psi b01 plr-152083-05 date date --------------------- -------------------------- -------------------------------- legend legend x -------------------------------------------------- country d dear -------------- correspondence written on behalf of x requesting an extension of time under ' and ' of the procedure and administration regulations to elect to be treated as a partnership for federal tax purposes this letter responds to the letter dated date and related facts the information submitted states that x was incorporated under the laws of country on d x intended to file a form_8832 entity classification election to be treated as a partnership for federal tax purposes effective d however the election was not timely filed law and analysis sec_301_7701-3 provides that a business_entity that is not classified as a corporation under ' b or an eligible_entity can elect its classification for federal tax purposes elections are necessary only when an plr-152083-05 eligible_entity does not want to be classified under the default classification or when an eligible_entity chooses to change its classification sec_301_7701-3 provides that except for certain existing entities described in sec_301_7701-3 unless a foreign eligible_entity elects otherwise the entity is a a partnership if it has two or more members and at least one member does not have limited_liability b an association if all members have limited_liability or c disregarded as an entity separate from its owner if it has a single member that does not have limited_liability sec_301_7701-3 provides that an eligible_entity may elect to be classified other than as provided under ' b by filing form_8832 with the appropriate service_center under ' c iii this election will be effective on the date specified by the entity on form_8832 or on the date filed if no such date is specified the date specified on form_8832 cannot be more than days prior to the date on which the election is filed under sec_301_9100-1 the commissioner may grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the code except e g h and i sec_301_9100-1 defines the term regulatory election as including an election whose deadline is prescribed by a regulation published in the federal_register commissioner will use to determine whether to grant an extension of time to make an election sec_301_9100-2 provides automatic extensions of time for making certain elections sec_301_9100-3 provides extensions of time for making elections that do not meet the requirements of sec_301_9100-2 requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-1 through provide the standards the conclusion based solely on the facts submitted and representations made we conclude that x has satisfied the requirements of and and therefore it is granted an extension of time of sixty days from the date of this letter to file a form_8832 to elect to be treated as a partnership for federal tax purposes effective d a copy of this letter should be attached to the election a copy is enclosed for that purpose plr-152083-05 except as specifically set forth above we express no opinion concerning the federal tax consequences of the facts described above under any other provision of the internal_revenue_code this ruling is directed only to the taxpayer requesting it sec_6110 of the code provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being mailed to your authorized representative sincerely heather c maloy associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for ' purposes cc


internal_revenue_service number release date index number ---------------------------- -------------------------------------- -------------------------- ---------------------------------- ----------------------------- in re -------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact --------------------- id no -------------- telephone number -------------------- refer reply to cc corp b06 plr-107287-07 date date --------------------------- --------------------------------------------- parent ------------------------------------------------------------------------- ----------------------------------------------------------- distributing ---------------------------------------------------------------- ----------------------------------------------------------- controlled -------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------- ----------------------------------------------------------- --------------------------- target holdco ---------------------------------------------------------------- ----------------------------------------------------------- sub ---------------------------- -------------------------------------------- --------------------------------------------------------------------------------- --------------------------------------- ------------------------------------ sub ----------------------------------------------- --------------------------------------------------------------------------------- ------------------------------------------------------------------------------- ----------------------- -------------------------------------------------------------------------------- plr-107287-07 busine sec_1 -------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------ --------------------------------------------------------- busine sec_2 ----------------------------------------------------------------------------------------------------------- state a state b date date date a certain payments -------------------------------------------------------------------------------- -------------------------- ------------------------ ----------------------- ---------------------- ------------------ ------------- -------------------------------------------------------------------------------------- --------------------------------------------------------------------------------- --------------------------------------------------------------------------------- --------------------------------------------------------------------------------- ----------- dear ------------ this letter responds to your representative’s letter dated date requesting rulings on certain federal_income_tax consequences of completed and proposed transactions additional information was submitted in letters dated march april may may and date the material information submitted for consideration is summarized below the rulings contained in this letter are based on facts and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party this office has not verified any of the material submitted in support of the request for rulings verification of the information representations and other data may be required as part of the audit process in particular this office has not reviewed any information pertaining to and has made no determination regarding whether the distribution described below i satisfied the business_purpose requirement of sec_1_355-2 of the income_tax regulations ii was used principally as a device for the distribution of earnings_and_profits of distributing or controlled or both plr-107287-07 see sec_355 of the internal_revenue_code and sec_1_355-2 and iii an acquisition or acquisitions were part of a plan or series of related transactions pursuant to which one or more persons acquired directly or indirectly stock representing a 50-percent_or_greater_interest in distributing or controlled see sec_355 and sec_1_355-7 parent a publicly traded corporation incorporated in state a is the common parent of an affiliated_group_of_corporations which file a consolidated federal_income_tax return including distributing and sub sub holds all of the outstanding interests in sub an entity disregarded as separate from its owner for u s federal tax purposes under sec_301_7701-3 of the procedure and administrative regulations prior to date target holdco was the common parent of an affiliated_group_of_corporations including distributing which filed a consolidated federal_income_tax return immediately prior to date distributing had only a single class of common_stock outstanding distributing common_stock distributing was engaged in the active_conduct of busine sec_1 and busine sec_2 we have received financial information which indicated that busine sec_1 and busine sec_2 each had gross_receipts and operating_expenses representing the active_conduct_of_a_trade_or_business for each of the five years prior to the distribution for what has been represented as valid business purposes the following transactions have been partially consummated and proposed i ii on date in a merger represented by the taxpayer as constituting a reorganization under sec_368 target holdco merged with and into parent with parent being the surviving corporation pursuant to this merger the target holdco shareholders received parent stock and cash in exchange for their target holdco stock and parent became the owner of a greater than percent of distributing common_stock on date distributing formed controlled a state b limited_liability_company and elected under sec_301_7701-3 to have controlled treated as a corporation for u s federal tax purposes taxpayer has represented that this election was effective as of the effective time of the formation of controlled iii on date distributing contributed the busine sec_1 assets to controlled and controlled assumed all of the liabilities associated with such assets the contribution on date controlled had only a single class of common_stock outstanding controlled common_stock and distributing directly owned all of the controlled common_stock plr-107287-07 iv on date distributing distributed all of the controlled common_stock to parent in exchange for distributing common_stock of equal value the distribution v on date controlled merged with and into sub with sub being the surviving corporation taxpayer has represented that this merger constituted a reorganization under sec_368 vi on date sub contributed the busine sec_1 assets to sub and sub assumed all of the liabilities associated with such assets vii sub will liquidate into parent by an election of sub under sec_301 c to be disregarded as an entity separate from its owner for u s federal tax purposes steps i through vi were completed by date after step vi distributing was engaged in busine sec_2 and sub as successor to controlled was engaged in busine sec_1 the following representations have been made with respect to the contribution and distribution a the fair_market_value of the controlled common_stock received by parent approximately equaled the fair_market_value of the distributing common_stock surrendered by parent in the exchange b c d e no part of the consideration distributed by distributing in the distribution was received by parent as a creditor employee or in any capacity other than that of a shareholder of distributing the five years of financial information submitted on behalf of busine sec_1 and busine sec_2 is representative of the operations of busine sec_1 and busine sec_2 at the time of the distribution and with regard to such businesses there were no substantial operational changes between the date of the last financial statements submitted and the date of the distribution following the distribution distributing and sub as controlled’s successor have each continued the active_conduct of its business independently and with its separate employees the distribution was carried out for the following corporate business purposes i to resolve managerial financial and other problems resulting from operating busine sec_1 and busine sec_2 within the same entity and ii plr-107287-07 to improve the overall competitive position of busine sec_1 by moving it out from the regulated busine sec_2 umbrella the distribution was motivated in whole or substantial part by one or more of these corporate business purposes the distribution was not used principally as a device for the distribution of the earnings_and_profits of distributing or controlled or both the total adjusted_basis and fair_market_value of the assets transferred to controlled by distributing in connection with the contribution equaled or exceeded the sum of the liabilities assumed as determined under sec_357 by controlled in the contribution the liabilities assumed as determined under sec_357 by controlled in the contribution were incurred in the ordinary course of business and were associated with the assets being transferred distributing neither accumulated its receivables nor made extraordinary payment of its payables in anticipation of the distribution no intercorporate debt existed between distributing and controlled or sub as controlled’s successor at the time of or subsequent to the distribution immediately before the distribution items of income gain loss deduction and credit if any were taken into account as required by the applicable intercompany_transaction regulations see sec_1_1502-13 and sec_1 as in effect before the publication of t d 1995_2_cb_147 and as in effect at the time of the distribution sec_1_1502-13 as published by t d further at the time of the distribution distributing did not have an excess_loss_account in the controlled common_stock except for certain payments payments made in connection with all continuing transactions if any between distributing and controlled or sub as controlled’s successor have been for fair_market_value based on terms and conditions arrived at by the parties bargaining at arm's length no two parties to the distribution were either at the time of the distribution or at any other time before it or after it investment companies as defined in sec_368 and iv for purposes of sec_355 immediately after the distribution no person determined after applying sec_355 held stock possessing 50-percent or more of the total combined voting power of all classes of distributing f g h i j k l m plr-107287-07 common_stock entitled to vote or 50-percent or more of the total value of shares of all classes of distributing common_stock that was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the distribution for purposes of sec_355 immediately after the distribution no person determined after applying sec_355 held stock possessing 50-percent or more of the total combined voting power of all classes of controlled common_stock entitled to vote or 50-percent or more of the total value of shares of all classes of controlled common_stock that was either i acquired by purchase as defined in sec_355 and during the five- year period determined after applying sec_355 ending on the date of the distribution or ii attributable to distributions on distributing common_stock that was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the distribution the distribution was not part of a plan or series of related transactions within the meaning of sec_1_355-7 pursuant to which one or more persons acquired directly or indirectly stock representing a 50-percent_or_greater_interest within the meaning of sec_355 in distributing or controlled including any predecessor or successor of any such corporation since date for all purposes parent has consistently treated the distribution as having qualified under sec_355 and sec_368 including for purposes of determining its basis in the stock of i distributing ii controlled and iii sub the successor to controlled parent has continuously owned i first directly and currently through an entity disregarded as separate from its owner for u s federal tax purposes a of distributing as it did immediately after the distribution and has not engaged in any distributions or dispositions of distributing stock since the distribution ii all of the shares of controlled from the time immediately after the distribution through the time controlled merged with and into sub in step v above and iii all of the shares of sub outstanding immediately after step v above distributing and sub have been members of the parent consolidated_group for all times since the distribution n o p q r based solely on the information submitted and the representations made we rule as follows on the contribution and distribution plr-107287-07 the contribution followed by the distribution was a reorganization under sec_368 distributing and controlled were each a_party_to_a_reorganization within the meaning of sec_368 distributing recognized no gain_or_loss on the contribution sec_361 and sec_357 controlled recognized no gain_or_loss on the contribution sec_1032 controlled’s basis in each asset received in the contribution equaled the basis of that asset in the hands of distributing immediately prior to the transfer of such asset to controlled sec_362 controlled’s holding_period for each asset received in the contribution included the period during which such asset was held by distributing sec_1223 distributing recognized no gain_or_loss on the distribution sec_361 and sec_355 parent recognized no gain_or_loss and was not otherwise required to include any amount in income on the distribution sec_355 the aggregate basis of the distributing common_stock and controlled common_stock held by parent immediately after the distribution equaled the aggregate basis of the distributing common_stock held by parent immediately before the distribution allocated in the manner described in sec_1_358-2 sec_358 b and c the holding_period of the controlled common_stock received by parent in the distribution included the holding_period of the distributing common_stock on which the distribution was made provided that the distributing common_stock was held as a capital_asset on the date of the distribution sec_1223 earnings_and_profits were allocated if any between distributing and controlled in accordance with sec_312 and sec_1_312-10 and sec_1 f step v and step vi above will not adversely affect rulings issued regarding the contribution and distribution rulings through no opinion is expressed about the tax treatment of the contribution and distribution under other provisions of the code or regulations or the tax treatment of any plr-107287-07 conditions existing at the time of or effects resulting from the contribution and distribution that are not specifically covered by the above rulings in particular no opinion is expressed regarding i whether the distribution satisfied the business_purpose requirement of sec_1_355-2 of the income_tax regulations ii whether the distribution was used principally as a device for the distribution of the earnings_and_profits of distributing or controlled or both see sec_355 and sec_1_355-2 iii whether the distribution and an acquisition or acquisitions were part of a plan or series of related transactions pursuant to which one or more persons acquired directly or indirectly stock representing a 50-percent_or_greater_interest in distributing or controlled under sec_355 iv whether step i and step v each qualified as a reorganization under sec_368 and v the federal_income_tax consequences of certain payments made for other than fair_market_value this ruling letter is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file in this office a copy of this letter is being sent to your authorized representatives a copy of this letter must be attached to any income_tax return to which it is relevant alternatively taxpayers filing their returns electronically may satisfy this requirement by attaching a statement to their return that provides the date and control number of this letter_ruling sincerely _____________________________________ mark j weiss assistant to the chief branch office of associate chief_counsel corporate cc


t c memo united_states tax_court gregory alan lindstrom petitioner v commissioner of internal revenue respondent docket no filed date gregory alan lindstrom pro_se molly h donohue for respondent memorandum opinion gale judge this matter is before the court on respondent's motion to dismiss for lack of jurisdiction respondent's motion contends that the court lacks jurisdiction because the petition was not timely filed petitioner argues that the notice_of_deficiency was invalid because it was not mailed to his last_known_address that respondent's failure to use the last_known_address is not cured by petitioner's actual receipt because petitioner had insufficient time after receipt to file a petition and in the alternative that the petition was timely the court conducted a hearing at which the parties proffered evidence in support of their respective positions background at the time the petition was filed petitioner gregory alan lindstrom resided in massachusetts in date petitioner moved from state route new lebanon new york new lebanon address to ensign street dalton massachusetts dalton address petitioner filed a change_of address form with the u s postal service usps indicating his move to the dalton address on date petitioner subsequently moved from the dalton address to 2nd street pittsfield massachusetts pittsfield address prior to his receipt of the notice_of_deficiency and again notified the usps of his change_of address respondent mailed a notice_of_deficiency with respect to petitioner' sec_2002 taxable_year to the new lebanon address respondent's receipt for certified mail1 records that the notice_of_deficiency was deposited with the usps on date which is also the date on the face of the notice no postmark appears on the envelope in which the notice_of_deficiency wa sec_1 usps form_3877 firm mailing book for accountable mail sent on date the usps affixed a label bearing that day's date and the pittsfield address to the envelope containing the notice and forwarded the notice to the pittsfield address petitioner admits that he received the notice_of_deficiency on date days before the statutory deadline for filing a petition in this court with respect to the notice_of_deficiency date2 petitioner prepared and signed a petition using this court's one-page petition form t c form paragraph of the form petition which permits the taxpayer to set forth the relief requested and the reasons why you are entitled to such relief had an entry of six sentences the petition was undated petitioner used a private delivery service fedex to deliver his petition to the court the fedex envelope which contained the petition bears an electronically generated label with a ship date denoted as date and the notation standard overnight the petition was received and filed by the court on date the 90th day after the date mailing of the notice_of_deficiency was date which was a sunday the notice_of_deficiency also stated that the last day on which to file a petition with this court was date discussion in a deficiency case our jurisdiction depends upon the commissioner's issuing a valid notice_of_deficiency to the taxpayer and the taxpayer's timely filing a petition in this court 81_tc_42 bjelk v commissioner tcmemo_1998_169 generally a petition is timely if it is filed within days following the date that the notice_of_deficiency was mailed sec_6213 when a petition is not filed within the applicable_period with respect to a valid notice_of_deficiency the case must be dismissed for lack of jurisdiction masino v commissioner tcmemo_1998_118 citing 749_f2d_691 11th cir petitioner argues that the 90-day period provided by sec_6213 began date when the usps forwarded the notice_of_deficiency to its final destination we disagree sec_6213 plainly provides that except where a notice_of_deficiency is addressed to a person outside the united_states a tax_court petition may be filed within days of the date that the notice is mailed in the absence of a postmark on the envelope itself the date stamped on the commissioner's certified mail receipt is the next best evidence of the date of mailing unless otherwise indicated all section references are to the internal_revenue_code_of_1986 as in effect for the year in issue and commencement of the 90-day period 61_tc_97 modified 63_tc_534 here the envelope contains no postmark and the date on the certified mail receipt is date we accordingly conclude that the notice was mailed on date for the purpose of applying sec_6213 the 90th day following the date of mailing was sunday date sec_6213 provides that a sunday is not counted as the last day of the period consequently the last day for filing a timely petition in this case was monday date the date deadline was also stated on the face of the notice_of_deficiency pursuant to section a of the internal_revenue_service restructuring and reform act of publaw_105_206 112_stat_767 the petition in this case was received by the court on date however a petition that is delivered to the court after the expiration of the period provided by sec_6213 shall be deemed timely if it bears a timely usps postmark sec_7502 sec_7502 provides that the petition may similarly be deemed timely when the taxpayer uses a designated_delivery_service rather than the usps the commissioner has designated the private delivery service used by petitioner fedex standard overnight as such a service for the purpose of sec_7502 notice_2004_83 2004_2_cb_1030 in these circumstances the date on an electronically generated fedex label created and applied by a fedex employee is conclusive proof of the date of mailing equivalent to a usps postmark austin v commissioner tcmemo_2007_11 notice_97_ 1997_1_cb_413 we are persuaded that the electronically generated label on the fedex envelope containing the petition was created and applied by a fedex employee the ship date of date that appears on the label is therefore treated as the date of mailing for purposes of sec_7502 consequently the petition is not deemed timely under that section we next consider whether the notice_of_deficiency was valid when the secretary determines that there is a deficiency he is authorized to send notice of such deficiency to the taxpayer by certified mail or registered mail sec_6212 such notice_of_deficiency shall be sufficient if mailed to the taxpayer's last_known_address as specified in sec_6212 sec_6212 does not create a mandatory address to which a notice_of_deficiency must be mailed rather it is a safe_harbor available to the commissioner which renders a notice_of_deficiency valid irrespective of actual receipt 888_f2d_916 1st cir affg tcmemo_1984_503 81_tc_65 sec_6212 does not invalidate other methods of communication that result in actual notice to the taxpayer mulvania v commissioner supra consequently petitioner's contention that the notice_of_deficiency was invalid because it was not sent to his last_known_address is without merit in petitioner's circumstances we need not and do not decide whether the notice_of_deficiency was mailed to petitioner at his last_known_address see mulvania v commissioner supra pincite masino v commissioner supra it is settled law that the validity of a notice_of_deficiency will be sustained when mailing results in actual notice to the taxpayer without prejudicial delay mileti v commissioner tcmemo_1990_383 see eg 94_tc_316 mulvania v commissioner supra pincite frieling v commissioner supra pincite petitioner argues that receipt of the notice_of_deficiency days prior to the deadline for filing the petition constituted prejudicial delay such that the notice_of_deficiency should be adjudged invalid we do not agree whether a taxpayer has been prejudiced by a delayed notice_of_deficiency is a question of fact 73_tc_690 petitioner contends that days was insufficient time for him to prepare and file the petition because he had to locate and contact his former spouse who possessed the necessary records the petition as filed however consists of a single-page standardized tax_court form the lengthiest portion of the form petition on which petitioner set forth the relief requested and his reasons therefor consists of six sentences therein petitioner disputes the notice of deficiency's determination that he failed to file a return for as well as the notice's treatment of two real_estate transactions considering the record as a whole we are not persuaded that petitioner was prejudiced by the 16-day delay in receiving the notice_of_deficiency given the relative simplicity of the petition he filed petitioner had ample time to prepare and file it when he received the notice_of_deficiency consequently petitioner's receipt of the notice_of_deficiency days after it was mailed did not constitute prejudicial delay we hold that the notice_of_deficiency herein is valid accordingly respondent's motion to dismiss for lack of jurisdiction will be granted and this case will be dismissed for the petition asserts that on date a married_filing_jointly taxpayer return was filed sic we assume that petitioner meant to aver that he timely filed the return on date respondent asserts in his response to petitioner's objection to the motion to dismiss that on date after issuance of the notice_of_deficiency for the tax_year at issue in this case respondent's service_center in andover received from petitioner and his spouse a form_1040 for the tax_year ending date petitioner thereafter apparently abandoned his claim of having filed timely he has subsequently failed to address respondent's allegation that a form_1040 for was not received until date lack of jurisdiction on the grounds that the petition was untimely to reflect the foregoing an order of dismissal for lack of jurisdiction will be entered


internal_revenue_service number release date index number -------------------------- ---------------------------- ------------------------------------ department of the treasury washington dc third party communication none date of communication not applicable_person to contact ------------------------ id no ------------- telephone number --------------------- refer reply to cc psi b09 plr-133108-06 date date --------------------------- -------------------------------- ------- ------------------------- ------------------------- -------------------------- -------------------------------- ---------------------------- ------- -------------------- --------------------------------------------- ----------------------------------------- --------------------------------------- ------------------------ legend trustee trust year settlor son son daughter wife year trust company corporation bank bank bank dear ------------------ this responds to a letter dated date submitted on your behalf in which rulings are requested on the estate gift and generation-skipping_transfer_tax consequences of the proposed modification to trust and the anticipated exercise of a limited testamentary_power_of_appointment provided under trust facts the facts and representations submitted are summarized as follows in year settlor established trust an irrevocable_trust for the benefit of his wife and descendants son son and daughter are the children of settlor and wife settlor and wife are plr-133108-06 currently deceased and son son and daughter are over the age of trust was created before date according to the provisions of paragraphs b c and d of article of trust upon the death of wife in year the trust corpus was divided into three shares one for each child of settlor and wife according to paragraph d of article the trustee of trust may distribute to each child from his or her respective separate share so much of the net_income as the trustee deems wise and prudent in the trustee’s absolute discretion for each child over the age of the trustee may distribute from his or her respective share so much of the principal and accumulated income of trust as such child shall from time to time request in writing paragraph d of article further provides that upon the death of a child of settlor and wife the trustee shall distribute the entire remaining principal and accumulated income of the child’s separate share of trust to or for the benefit of such of the descendants of the child as such child shall direct in his or her will son son and daughter anticipate exercising their respective limited testamentary power to appoint the principal and income of their respective trust as provided in trust the rules governing the appointment of successor trustees are provided in article of trust paragraph b provides that if after the death of settlor any trustee shall for any reason fail or cease to act as trustee the power to appoint a successor trustee may be exercised by the following persons in the following order by a majority of trustees of trust company if trust company shall cease to exist and no business_enterprise shall acquire the property comprising the trust estate of trust company by the board_of directors of corporation the board or any successor organization which shall acquire substantially_all of the assets and business of corporation and in the event of the nonexistence of all of the foregoing by a majority in interest in the income beneficiaries who shall be under no disability trust company has ceased to exist and the board currently has the power to appoint successor trustees in a meeting of the board after the death of wife the board resolved to appoint successor trustees of the trusts established under trust as follows if the current trustee or any successor trustee appointed hereunder ceases to act as trustee of any trust the board appoints as trustee of such trust such qualified bank or trust company as the beneficiary of such trust may appoint by signed written instrument delivered to the board no later than thirty days after such cessation to act if such beneficiary does not make an appointment the board appoints as trustee of such trust the first of the following that is then in existence is then a qualified bank or trust company and is then willing to act as trustee of such trust a bank b bank and c bank plr-133108-06 the board’s resolution defines qualified bank or trust company as a bank or trust company that is qualified to accept trusts that is not related or subordinate to any beneficiary of a_trust within the meaning of sec_672 of the code that has engaged in the trust business for at least ten years immediately prior to its appointment as trustee by the board and that has assets under management of at least one billion dollars the board further resolved that a bank or trust company ceases to act as trustee of a_trust upon the first to occur of its resignation its removal as trustee by thirty days written notice signed by the beneficiary of the trust and delivered to it and to the board and its cessation to exist or to be qualified to accept trusts the board’s resolution is only effective upon the receipt of a favorable ruling issued by the service confirming that the implementation of the resolution will not cause any trust to be subject_to the generation-skipping_transfer gst tax and will not cause any trust to be taxed in the estate of the beneficiary of that trust you request the following rulings a beneficiary’s power to appoint and remove a qualified bank or trust company as successor trustee of his or her respective trust will not be considered the creation of a general_power_of_appointment under sec_2041 or sec_2514 and the exercise of this power will not cause the assets of a beneficiary’s trust to be includible in his or her estate nor will the exercise of the power be considered a transfer for federal gift_tax purposes the exercise of a beneficiary’s testamentary special_power_of_appointment will not be considered an exercise of the beneficiary’s lifetime general_power_of_appointment the implementation and operation of the board’s resolution will not cause trust or the beneficiaries’ trusts created thereunder to lose their exempt status under b a of the tax_reform_act_of_1986 and sec_26_2601-1 of the generation-skipping_transfer_tax regulations and will not subject distributions from any of the trusts to the gst tax law and analysis ruling sec_1 and sec_2041 of the internal_revenue_code of provides that the value of the gross_estate shall include the value of all property with respect to which a general_power_of_appointment created on or before date is exercised by the decedent by will or by certain lifetime disposition the failure to exercise such a power or the complete release of such a power shall not be deemed an exercise thereof a general_power_of_appointment is defined by sec_2041 as a power exercisable in favor of the decedent his estate his creditors or the creditors of his estate plr-133108-06 sec_20_2041-1 of the estate_tax regulations provides in part that a donee may have a power_of_appointment if he has the power to remove or discharge a trustee and appoint himself for example if under the terms of the instrument the trustee or his successor has the power to appoint the principal of the trust for the benefit of individuals including himself and the decedent has the unrestricted power to remove or discharge the trustee at any time and appoint any other person including himself the decedent is considered as having a power_of_appointment however the mere power of management investment custody of assets or the power to allocate receipts and disbursements as between income and principal exercisable in a fiduciary capacity whereby the holder has no power to enlarge or shift any of the beneficial interests therein except as an incidental consequence of the discharge of the fiduciary duties is not a power_of_appointment sec_20_2041-1 provides that a decedent may have two powers under the same instrument one of which is a general_power_of_appointment and the other of which is not for example a beneficiary may have a power to withdraw trust corpus during his life and a testamentary power to appoint the corpus among his descendants the testamentary power is not a general_power_of_appointment sec_20_2041-2 provides that if a general_power_of_appointment created on or before date is exercised only as to a portion of the property subject_to the power sec_2041 is applicable only to the value of that portion sec_2514 provides that an exercise of a general_power_of_appointment created on or before date shall be deemed a transfer of property by the individual possessing such power but the failure to exercise such a power or the complete release of such a power shall not be deemed an exercise thereof sec_2514 provides that a general_power_of_appointment is a power that is exercisable in favor of the individual possessing the power the possessor his estate his creditors or the creditors of his estate sec_25_2514-1 of the gift_tax regulations provides in part that a donee may have a power_of_appointment if he has the power to remove or discharge a trustee and appoint himself for example if under the terms of the instrument the trustee or his successor has the power to appoint the principal of the trust for the benefit of individuals including himself and a another person has the unrestricted power to remove or discharge the trustee at any time and appoint any other person including himself a is considered as having a power_of_appointment however the mere power of management investment custody of assets or the power to allocate receipts and disbursements as between income and principal exercisable in a fiduciary capacity whereby the holder has no power to enlarge or shift any of the beneficial interests plr-133108-06 therein except as an incidental consequence of the discharge of the fiduciary duties is not a power_of_appointment sec_25_2514-1 provides that a beneficiary may have two powers under the same instrument one of which is a general_power_of_appointment and the other of which is not for example a beneficiary may have a general power to withdraw a limited portion of trust corpus during his life and a further power exercisable during his lifetime to appoint the corpus among his children the latter power is not a general_power_of_appointment sec_25_2514-2 provides that if a general_power_of_appointment created on or before date is exercised only as to a portion of the property subject_to the power the exercise is considered to be a transfer only as to the value of that portion revrul_95_58 1995_2_cb_191 holds that a decedent grantor's reservation of an unqualified power to remove a trustee and to appoint an individual or corporate successor trustee that is not related or subordinate to the decedent within the meaning of sec_672 is not considered a reservation of the trustee's discretionary powers of distribution over the property transferred by the decedent grantor to the trust accordingly the trust corpus is not included in the decedent's gross_estate under sec_2036 or sec_2038 the ruling notes that the eighth circuit in 973_f2d_1409 8th cir concluded that the decedent had not retained dominion and control_over assets transferred to a_trust by reason of his power to remove and replace the trustee with a party that was not related or subordinate to the decedent accordingly the court held that under sec_25 c the decedent made a completed_gift when he created the trust and transferred assets to it sec_672 defines the term related_or_subordinate_party to mean any nonadverse_party who is the grantor’s spouse if living with the grantor or any one of the following the grantor’s father mother issue brother or sister an employee of the grantor a corporation or any employee of a corporation in which the stock holdings of the grantor and the trust are significant from the viewpoint of voting control a subordinate employee of a corporation in which the grantor is an executive in regard to the first ruling requested upon the resignation of the current trustee a bank or trust company that is appointed as successor trustee will have the sole discretionary authority to make distributions of income from each trust after the resignation of the current trustee son son and daughter will have an unqualified power to remove a trustee and to appoint a successor trustee the board’s resolution however restricts any appointment of a successor trustee to a qualified bank or trust company which is defined therein as a bank or trust company that is qualified to accept trusts that is not related or subordinate to any beneficiary of a_trust within the meaning of sec_672 of the code that has engaged in the trust business for at least ten years immediately prior to its appointment as trustee by the board and that has assets under management of at plr-133108-06 least one billion dollars the removal and appointment powers given to son son and daughter are not the equivalent of the power referred to in the examples in sec_20_2041-1 and sec_25_2514-1 where an individual may remove a trustee and appoint himself instead the proposed power given to son son and daughter is the equivalent of the power referenced in revrul_95_58 where a replacement trustee may not be a_related_or_subordinate_party within the meaning of sec_672 accordingly based on the facts submitted and the representations made we conclude that the board’s resolution will not cause son son or daughter to have a general_power_of_appointment under sec_2041 or sec_2514 thus the exercise of this power will not cause the assets of a beneficiary’s trust to be includible in his or her estate nor will the exercise of the power be considered a transfer for federal gift_tax purposes in regard to the second ruling requested we note that son son and daughter anticipate exercising their respective limited testamentary powers of appointment to appoint property of his or her respective trust to his or her descendants son son and daughter also have an inter_vivos general power to appoint as much principal and accumulated income from his or her respective trust as he or she requests in writing to the trustee as provided in sec_20_2041-1 and sec_25_2514-1 the same trust instrument as in this case may give a beneficiary two separate powers one of which is a general_power_of_appointment and one of which is not the exercise of a limited testamentary_power_of_appointment is not considered as an exercise of a lifetime general_power_of_appointment even though both powers are over the same trust assets if son son or daughter exercise only his or her respective limited testamentary_power_of_appointment and not his or her general_power_of_appointment the assets from each trust will not be included in his or her gross_estate under sec_2041 if son son or daughter exercises his or her lifetime general_power_of_appointment the exercise will be considered to be a transfer under sec_2514 to the extent of the value of property with respect to which the general_power_of_appointment is exercised ruling sec_2601 of the internal_revenue_code imposes a tax on every generation-skipping_transfer gst which is defined under sec_2611 as a taxable_distribution a taxable_termination or a direct_skip under of the tax_reform_act_of_1986 the act gst tax is generally applicable to generation-skipping transfers made after date however under b a of the act and sec_26 b i of the generation-skipping_transfer_tax regulations the tax does not apply to a transfer under a_trust that was irrevocable on date except to the extent the transfer is made out of corpus added to the trust by an actual or constructive_addition after date plr-133108-06 sec_26_2601-1 provides rules for determining when a modification judicial construction settlement agreement or trustee action with respect to a_trust that is exempt from the gst tax under sec_26_2601-1 will not cause the trust to lose its exempt status these rules are applicable only for purposes of determining whether an exempt trust retains exempt status for gst tax purposes the rules do not apply in determining for example whether the transaction results in a gift subject_to gift_tax or may cause the trust to be included in the gross_estate of a beneficiary or may result in the realization of capital_gain for purposes of sec_1001 sec_26_2601-1 provides that a modification of the governing instrument by judicial reformation or nonjudicial reformation that is valid under applicable state law will not cause an exempt trust to be subject_to the gst tax if the modification does not shift a beneficial_interest in the trust to any beneficiary who occupies a lower generation as defined in sec_2651 than the person or persons who held the beneficial_interest prior to the modification and the modification does not extend the time for vesting of any beneficial_interest in the trust beyond the period provided for in the original trust a modification of an exempt trust will result in a shift in a beneficial_interest to a lower generation beneficiary if the modification can result in either an increase in the amount of a gst or the creation of a new gst sec_26_2601-1 example provides as follows in grantor executed an irrevocable_trust for the benefit of grantor’s issue naming a bank and five other individuals as trustees in the appropriate local court approves a modification of the trust that decreases the number of trustees which results in lower administrative costs the modification pertains to the administration of the trust and does not shift a beneficial_interest in the trust to any beneficiary who occupies a lower generation as defined in sec_2651 than the person or persons who held the beneficial_interest prior to the modification in addition the modification does not extend the time for vesting of any beneficial_interest in the trust beyond the period provided for in the original trust therefore the trust will not be subject_to the provisions of chapter in the present case trust was irrevocable on date it is represented that no additions actual or constructive have been made to trust after that date the change in the process for appointing and removing successor trustees as set forth in the board’s resolution is similar to the change described in sec_26_2601-1 example the board’s resolution will not result in a shift of any beneficial_interest to any beneficiary who occupies a generation lower than the persons holding the beneficial interests in the trusts prior to the board’s resolution and the board’s resolution will not extend the time for vesting of any beneficial_interest in trust beyond the period provided for in trust accordingly based on the facts submitted and the representations made we conclude that the implementation and operation of the board’s resolution will not cause trust to plr-133108-06 lose its status under of the tax_reform_act_of_1986 as a_trust exempt from the application of the gst tax under chapter of the code except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter this ruling is directed only to the taxpayer requesting it sec_6110 of the code provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative the rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination sincerely melissa c liquerman branch chief branch passthroughs special industries cc ---------------------- -----------------