internal_revenue_service number release date index numbers ------------------------------------------ ---------------------------------------------- -------------------------------------- ---------------------------------- 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 b03 plr-131840-15 date date x a b ---------------------------------------- ---------------------- --------------------------- -------------------- state ----------------- date --------------------- date ----------------- year n ------- ---- dear ----- -------- this letter responds to a letter received by our office on date and subsequent correspondence submitted on behalf of x by its authorized representatives requesting a ruling that x be granted an extension of time under sec_301_9100-3 of the procedure and administration regulations to make an election under sec_754 of the internal_revenue_code code for year plr-131840-15 facts x is a limited_liability partnership organized under the laws of state on date on date a a member of x died x intended to make an election under sec_754 for year the year in which a died after a’s death a’s n interest in x was transferred to b x relied on its advisor to file an election under sec_754 however the advisor failed to make an election under sec_754 for year law sec_754 provides that a partnership may elect to adjust the basis of partnership property when there is a distribution_of_property or transfer of a partnership_interest an election under sec_754 applies with respect to all distributions of property by the partnership and to all transfers of property in the partnership during the taxable_year to which the election was filed and all subsequent taxable years sec_1_754-1 of the income_tax regulations provides that an election under sec_754 to adjust the basis of partnership property under sec_734 and sec_743 with respect to a distribution_of_property to a partner or a transfer of an interest in a partnership shall be made in a written_statement filed with the partnership return for the taxable_year during which the distribution or transfer occurs for the election to be valid the return must be filed not later than the time prescribed by sec_1 e including extensions thereof for filing the return for that taxable_year sec_301_9100-1 provides that the commissioner may grant a reasonable extension of time to make a regulatory 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 subtitles e g h and i sec_301_9100-1 provides that a regulatory election includes an election whose due_date is prescribed by a regulation published in the federal_register 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_9100-2 provides the rules governing automatic extensions of time for making certain elections sec_301_9100-3 provides extensions of time for making regulatory elections that do not meet the requirements of sec_301_9100-2 requests for relief subject_to sec_301_9100-3 will be granted when the taxpayer provides the evidence including affidavits described in sec_301_9100-3 to establish to plr-131840-15 the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and the grant of relief will not prejudice the interests of the government conclusion based on the facts submitted and representations made we conclude that the requirements of sec_301_9100-1 and sec_301_9100-3 have been satisfied accordingly x is granted an extension of time of days from the date of this letter to make an election under sec_754 effective for its year taxable_year the election should be made in a written_statement filed with the appropriate service_center for association with x’s year tax_return a copy of this letter should be attached to the statement filed except as specifically set forth above we express or imply no opinion concerning the federal tax consequences of the facts described above under any other provision of the 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 pursuant to a power_of_attorney on file with this office we are sending a copy of this letter to your authorized representatives the ruling contained in this letter is 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 ruling_request it is subject_to verification on examination sincerely associate chief_counsel passthroughs and special industries by ____________________________ james a quinn senior counsel branch office of the associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes cc


t c memo united_states tax_court ronald a and kellie j weigelt petitioners v commissioner of internal revenue respondent docket no filed date ronald a and kellie j weigelt pro_se julie l payne for respondent memorandum opinion dawson judge this case was assigned to special_trial_judge carleton d powell pursuant to sec_7443a and rule sec_180 sec_181 and sec_183 the court agrees with and adopts the opinion of the special_trial_judge which is set forth below opinion of the special_trial_judge powell special_trial_judge by notice_of_deficiency dated date respondent determined a deficiency in petitioners' federal_income_tax for the taxable_year in the amount of dollar_figure at the time the petition was filed petitioners resided in federal way washington the issues are whether petitioners are entitled to a deduction for contributions made to individual_retirement_accounts ira's and whether petitioners are entitled to an overpayment of income taxes paid on separation benefits received from the u s army army petitioners timely filed a petition with this court disputing the disallowance of the ira deduction and claiming an overpayment in the amount of dollar_figure the alleged overpayment results from the inclusion of dollar_figure in income that petitioners contend is exempt from taxation under sec_104 the facts concerning the dollar_figure have their genesis in the disintegration of the soviet union and the winding down of unless otherwise indicated section references are to the internal_revenue_code in effect for the year in issue and all rule references are to the tax_court rules_of_practice and procedure the cold war in ronald a weigelt petitioner joined the army and after completing officer's candidate school was commissioned an officer in the u s army reserves petitioner had planned to make the army a career in the army began a reduction in force because of the changes in the international situation on date petitioner was honorably discharged from the army and received a special separation benefit ssb payment in the amount of dollar_figure prior to his discharge petitioner applied to the department of veterans affairs dva for a disability pension on date the dva notified petitioner by letter that he was entitled to monthly disability compensation benefits commencing date date and date in the respective amounts of dollar_figure dollar_figure and dollar_figure the letter however also informed him that you have received a special separation benefit ssb payment of dollar_figure from the army we must withhold benefit payments until we recover that full amount we will then automatically begin monthly payments on their joint federal_income_tax return petitioners reported the dollar_figure ssb payment petitioners also claimed a dollar_figure deduction for two dollar_figure ira contributions upon examination respondent determined that petitioners had unreported income from wages and interest in the respective amounts of dollar_figure and dollar_figure and that the deduction claimed for the ira contributions was not allowable while the return was being examined petitioners filed an amended return omitting the ssb payment from income the amended_return was treated as a claim_for_refund and was denied by respondent petitioners do not dispute the adjustments to the wage and interest_income they do however contest the disallowance of the ira contributions deduction and contend that the ssb payment is nontaxable and accordingly they are entitled to an overpayment the parties agree that if the ssb payment is nontaxable petitioners' adjusted_gross_income is dollar_figure the issues raised both depend on the taxability of the ssb payment with regard to the ira issue under sec_219 an individual is allowed a deduction for qualified retirement contributions sec_219 however limits the deduction where an individual or the individual's spouse is an active_participant for any part of the taxable_year of certain pension plans an active_participant includes a participant in a plan established for its employees by the united_states sec_219 petitioner was an active_participant during in the case of married individuals filing a joint_return the deduction when one individual is an active_participant is reduced using a ratio determined by dividing the amount of the taxpayers' adjusted_gross_income in excess of dollar_figure by dollar_figure adjusted_gross_income as reported dollar_figure plus adjustments to income dollar_figure plus disallowed ira contributions deduction dollar_figure minus the ssb payment dollar_figure sec_219 and this results in the total disallowance of the ira deduction for filers of joint returns where the total adjusted_gross_income exceeds dollar_figure felber v commissioner tcmemo_1992_418 affd without published opinion 998_f2d_1018 8th cir if the dollar_figure ssb payment is includable in petitioners' gross_income no deduction would be allowed for the ira contributions accordingly we now turn to that issue the ssb payment was made under u s c sec c and d under these provisions a reserve officer who has completed more than years of active_service and is involuntarily discharged is entitled to a lump-sum separation payment equal to the product of the total years of active_service times the monthly basic_pay at the time of the discharge multiplied by sec_61 provides that gross_income means all income from whatever source derived unless congress specifically exempts certain income from inclusion the broad language of sec_61 requires its inclusion 348_us_426 the broad reach of sec_61 therefore would include the ssb payment in gross_income to be sure congress may exempt types of income from taxation however exemption from taxation must be clearly made out and not rest on doubt or ambiguity 161_us_134 on rehearing 163_us_416 an exemption cannot rest upon mere implications 311_us_60 see also 485_us_351 sec_104 excludes from income amounts received as a pension for personal injuries or sickness resulting from active_service in the armed_forces the parties agree that with respect to the disability compensation received from the dva those payments would be exempt under sec_104 the ssb payment however was not made for personal_injury_or_sickness the payment was made under u s c sec c because of petitioner's separation from active_service prior to normal retirement and was based in part on his years of active_service there are two distinct potential sources for the payment--the ssb payment and the dva disability compensation u s c sec h provides however that a member of the armed_forces who has received separation pay under this section based on service in the armed_forces shall not be deprived by reason of his receipt of such separation pay of any disability compensation to which he is entitled under the laws administered by the department of veterans affairs but there shall be deducted from that disability compensation an amount equal to the total amount of separation pay received u s c sec h petitioner does not dispute that normally the ssb payment would be includable in gross_income see 49_tc_599 47_tc_274 on the other hand petitioner argues that since he in effect is required to repay that amount from the nontaxable dva disability compensation the ssb payment should also be treated as nontaxable this same issue was before the court in 76_tc_687 berger involved u s c sec publaw_89_718 sec 80_stat_1115 repealed by publaw_96_513 94_stat_2870 that section provided that a member of the reserves who was involuntarily released from active_duty was entitled to readjustment pay based on his years_of_service if however the member was entitled under repealed u s c sec b to disability compensation from the dva then known as the veteran's administration an amount equal to percent of the readjustment payment is deducted from the disability compensation in berger as here the taxpayer argued that the readjustment pay he received should be reclassified as disability compensation excludable from income under sec_104 berger v commissioner supra pincite in rejecting that argument the court noted that the legislative_history reveals the congressional awareness of the plight of servicemen who have been involuntarily released from active_duty and who are immediately entitled to both a lump-sum readjustment payment and disability compensation congress provided that these veterans would receive readjustment pay and that upon subsequent confirmation of entitlement to disability compensation the readjustment pay in essence would be repaid to the government by a deduction from the disability compensation congress could have enacted a law which would have allowed the immediate exclusion of readjustment payments from taxation however congress did not choose to have the lump-sum readjustment payments treated in this manner congress deliberately determined that a veteran covered by u s c sec b would be permitted to receive veterans' administration disability compensation upon restoring to the government that 75-percent portion of the readjustment payment id pincite the repealed section of title would appear to be the lineal ancestor of u s c sec while u s c sec h mandates a 100-percent recovery_of the ssb payment before petitioner would receive the dva disability compensation in substance the two provisions are the same congress could have provided that the ssb payment received under u s c sec c was nontaxable to the extent it was subject_to recoupment under u s c sec h we have searched the statutory language and the legislative_history of u s c sec and find no indication that congress intended that an ssb payment would be tax exempt under these circumstances see h rept in sum congress did not provide for such an exemption and we cannot infer one see 904_fsupp_1312 m d ala contrary to petitioners' argument 540_f2d_1196 4th cir is inapposite that case concerned the tax treatment of retirement pay and the retroactive granting of increased disability compensation because the dollar_figure ssb payment was properly included in petitioners' income petitioners' adjusted_gross_income exceeds dollar_figure accordingly the dollar_figure deduction for the ira contributions is not allowable under sec_219 to reflect the foregoing decision will be entered for respondent


- - taxpayer internal_revenue_service number release date index number -------------------------- -------------------------- ------------------------------------------ ---------------------------------- ---------------------------------- department of the treasury washington dc person to contact ----------------------- id no --------------- telephone number --------------------- refer reply to cc intl - plr-104709-03 date april legend --------------------------------------------------------------------------------------- ----------------------- ---------------------------------------------------------- ------------------------------------------------------------- ---------------------------------------------------------------- -------------------------- -------------------------- ------------------------------------------------------------ entity a entity b date cpa firm individual a tax professionals dear ------------------ this replies to a letter dated date in which taxpayer requests an extension of time under sec_301_9100-3 to file the following the election and agreement described in sec_1_1503-2 with respect to the dual consolidated losses_incurred by entity a in the tax_year ended on date a separate election and agreement described in sec_1_1503-2 with respect to the dual consolidated losses_incurred by entity a and entity b in the tax_year ended on date and the annual certification described in sec_1_1503-2 for the tax_year ended on date with respect to the dual consolidated losses_incurred by entity a in the tax_year ended on date the information submitted for consideration is substantially as set forth below in re plr-104709-03 the ruling contained in this letter is predicated upon 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 a ruling verification of the factual information representations and other data may be required as a part of the audit process cpa firm has provided tax service to taxpayer in excess of eight years which include the tax years at issue in this ruling letter individual a is an officer of taxpayer the affidavit of individual a states that taxpayer reasonably relied on cpa firm to make the necessary elections that would allow taxpayer to use the dual consolidated losses_incurred by entity a and entity b tax professionals hold positions with cpa firm tax professionals were in various degrees responsible for preparing reviewing and signing the tax returns of taxpayer for the tax years ended on date sec_1 and the affidavits of tax professionals state that they were unaware of the requirement to file the election agreements and the annual certification described in sec_1_1503-2 the facts state that taxpayer is requesting relief after it discovered the missed filings and before their discovery by the irs sec_301 -1 b provides that an election includes an application_for relief in respect of tax and defines a regulatory election as an election whose due_date is prescribed by a regulation a revenue_ruling revenue_procedure notice or announcement sec_301_9100-1 provides that the commissioner has discretion to grant a taxpayer a reasonable extension of time under the rules set forth in sec_301_9100-3 to make a regulatory election under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301_9100-3 provides that requests for relief subject_to this section will be granted when the taxpayer provides the evidence including affidavits described in sec_301_9100-3 to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and the grant of relief will not prejudice the interests of the government in re plr-104709-03 in the present situation the filings described in sec_1_1503-2 are regulatory elections as defined in sec_301_9100-1 therefore the commissioner has discretionary authority under sec_301_9100-1 to grant taxpayer an extension of time provided that taxpayer satisfies the rules set forth in sec_301_9100-3 based on the facts and information submitted we conclude that taxpayer satisfies sec_301_9100-3 accordingly taxpayer is granted an extension of time of days from the date of this ruling letter to file the following the election and agreement described in sec_1_1503-2 with respect to the dual consolidated losses_incurred by entity a in the tax_year end on date a separate election and agreement described in sec_1_1503-2 with respect to the dual consolidated losses_incurred by entity a and entity b in the tax_year ended on date and the annual certification described in sec_1_1503-2 for the tax_year ended on date with respect to the dual consolidated losses_incurred by entity a in the tax_year ended on date the granting of an extension of time is not a determination that taxpayer is otherwise eligible to file the election agreements and the annual certification sec_301_9100-1 a copy of this ruling letter should be associated with the election agreements and the annual certification this ruling is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent no ruling has been requested and none is expressed as to the application of any other section of the code or regulations to the facts presented pursuant to a power_of_attorney on file in this office a copy of this ruling letter is being furnished to taxpayer sincerely associate chief_counsel international by allen goldstein reviewer enclosure copy for purposes


t c memo united_states tax_court charles d williams petitioner v commissioner of internal revenue respondent docket no 25567-16l filed date charles d williams pro_se marty j dama for respondent memorandum findings_of_fact and opinion pugh judge this case was commenced in response to a notice_of_determination concerning collection action s under sec_6320 and or notice_of_determination sustaining respondent’s notice_of_intent_to_levy to collect petitioner’s unpaid federal_income_tax liabilities for and subject years findings_of_fact the stipulated facts are incorporated in our findings by this reference petitioner resided in texas at the time he filed his petition from the 1970s to the time of trial petitioner has lived at the same street address in euless texas euless residence he failed to file a federal_income_tax return for any of the subject years respondent therefore prepared substitutes for returns under sec_6020 on date respondent sent by certified mail two copies of the notice_of_deficiency for the subject years to petitioner--one copy to his euless residence and one copy to a post office box in dallas texas dallas p o box the notice_of_deficiency was signed by janet a miller territory manager technical services gsa the administrative record includes a substitute u s postal service usps form_3877 certified mailing list for the mailing to the euless residence attached to the form_3877 is usps tracking information showing that the usps form_3849 certified mail return receipt which informs the recipient of certified mail was delivered to the eule sec_1 unless otherwise indicated all section references are to the internal_revenue_code_of_1986 as amended and in effect at all relevant times rule references are to the tax_court rules_of_practice and procedure residence on date it also shows that the item of certified mail the notice_of_deficiency was returned to respondent unclaimed the record also includes a copy of the envelope addressed to the euless residence stamped by the usps to show that the item was unclaimed and the envelope addressed to the dallas p o box showing that the usps was unable to forward the item on date respondent sent to petitioner at p o box in bedford texas bedford p o box a notice_of_federal_tax_lien and your right to a hearing lien notice on date petitioner submitted form request for a collection_due_process or equivalent_hearing that was blank but for his signature and date on date respondent sent petitioner at his bedford p o box a final notice_of_intent_to_levy and notice of your right to a hearing with respect to his unpaid tax_liabilities for the subject years levy notice on date petitioner submitted form attaching both the lien notice and the levy notice this form likewise was blank but for petitioner’s signature and the date the record does not indicate how respondent became aware of petitioner’s new address as noted below petitioner argues that he mailed a notice of address change to respondent and we may presume on the basis of respondent’s use of the bedford p o box that respondent ultimately became aware of petitioner’s new address however we also note petitioner in his correspondence with the settlement officer often used a different p o box on date petitioner resubmitted form checking as the basis only the proposed levy or actual levy box this time completed with a cover letter explaining that when he had printed out the prior form the information that he had typed in did not print out in an attachment he asked that his prior hearing request be merged into this one he disputed the alleged taxes and penalties associated with these taxes and requested a face-to-face hearing that he would record he asked for verification that the irs had followed and performed the procedures required_by_law finally he asked for collection alternatives if he was determined to owe the tax he did not provide a telephone number on date settlement officer west so west sent petitioner a letter scheduling a telephonic conference for date and requesting that he submit financial information and past-due tax returns for through past- due returns the letter advised petitioner that respondent had issued him a notice_of_deficiency for the subject years but stated that he would be allowed to challenge the underlying liabilities determined in that notice and invited him to file returns for the subject years the letter also explained that so west could consider collection alternatives only if petitioner submitted the information so west had requested filed returns for the subject years and filed all past-due returns required to be filed petitioner did not call at the scheduled time for the telephonic conference on date rather in a series of exchanges petitioner ignored so west’s requests for information reiterated his position that he had never received the notice_of_deficiency asked for proof of his liabilities asked for a copy of the law requiring full compliance to be entitled to a face-to-face hearing and requested a face-to-face hearing so west explained that petitioner did not qualify for a face- to-face hearing because he was not in compliance with his tax_return filing obligations and had not provided requested financial information and so west repeated the requests for the financial information and past-due returns in his final letter dated date petitioner disputed that the notice_of_deficiency had been properly addressed and mailed to him at his bedford p o box claiming that he had submitted a change_of address to his bedford p o box he attached to his letter a copy of a handwritten letter dated date addressed to internal_revenue_service constitution ave nw washington dc that reported his bedford p o box respondent’s case activity report reflects that so west determined that petitioner has never filed a tax_return she also determined that petitioner’s bedford p o box was not considered his address at the time the two copies of the notice_of_deficiency were mailed to him so west rejected petitioner’s proof of change_of address because it was only a copy of a letter without proof that he ever mailed it at trial petitioner testified only that he changed his address in the past two to three years he claimed that he did not receive mail at the euless residence because of concerns about theft from the mailbox at the street but did not state that no mail was delivered to that address or that he refused to check that mailbox for mail delivered to it on date respondent issued to petitioner a notice_of_determination upholding respondent’s proposed levy to collect his income_tax liabilities for the subject years on that same date respondent issued letter decision letter on equivalent_hearing upholding the lien notice which respondent now asks us to treat as a notice_of_determination on the basis of our review of petitioner’s forms we agree that petitioner should be entitled to challenge the lien notice and that the letter should be treated as a notice_of_determination i procedural background opinion before trial respondent filed a motion for summary_judgment that the notices of determination should be sustained to which petitioner responded and respondent replied in accordance with our orders petitioner filed a further reply we then set respondent’s motion for hearing at the calendar call for this case at the hearing petitioner moved orally to submit the case under rule counsel for respondent objected that there were material facts which the parties could not agree to stipulate on that basis we denied petitioner’s oral motion to submit under rule and we denied respondent’s motion for summary_judgment we also denied petitioner’s cross-motion for summary_judgment to the extent his response was so styled the parties stipulated the administrative record and petitioner argues that we must decide this case solely on what is in the administrative record he also stated at trial that his arguments are in the administrative record and in his summary_judgment briefs we therefore refer to those briefs in summarizing the positions of the parties specifically petitioner claims that he did not receive the notice_of_deficiency for the subject years and that so west failed to confirm that the notice_of_deficiency was signed by an official with the proper delegated authority ii scope and standard of review where the validity of the underlying tax_liability is in issue the court reviews the commissioner’s determination de novo 114_tc_176 when as here the irs prepares a substitute for return pursuant to sec_6020 the taxpayer may raise his liability in an administrative hearing if he did not receive a notice_of_deficiency or otherwise have a prior opportunity to contest the liability see sec_6320 sec_6330 see also 114_tc_604 but this court considers a taxpayer’s challenge to his underlying liability in a collection action case only if he properly raised that challenge at his administrative hearing 129_tc_107 see sec_301 f q a-f3 f q a-f3 proced admin regs an issue is not properly raised at the administrative hearing if the taxpayer fails to request consideration of that issue by the settlement officer or if he requests consideration but fails to present any evidence after being given a reasonable opportunity to do so giamelli v commissioner t c pincite see mcrae v commissioner tcmemo_2015_132 at holding that the taxpayer failed explicitly to contest his underlying liability during the administrative hearing and failed to provide any evidence concerning his liability see also zook v commissioner tcmemo_2013_128 at holding that the taxpayer failed to raise her underlying liabilities properly when she failed to provide any documentation of the underlying liabilities and asserted frivolous arguments the settlement officer must verify that the requirements of any applicable law or administrative procedure have been met consider issues properly raised by the taxpayer and consider whether the proposed collection action balances the need for the efficient collection_of_taxes with the taxpayer’s legitimate concern that any collection action be no more intrusive than necessary sec_6320 and c b c where the validity of the underlying tax_liability is not properly at issue the court will review the settlement officer’s administrative determination on the issues above for abuse_of_discretion sego v commissioner t c pincite iii last_known_address as part of the settlement officer’s determination she must verify that a valid notice_of_deficiency was issued to the taxpayer at the taxpayer’s last_known_address sec_6330 134_tc_1 131_tc_197 petitioner’s first argument is that the notice_of_deficiency is invalid because it was not sent to his last_known_address as required by sec_6212 if a notice_of_deficiency is mailed to the taxpayer at the taxpayer’s last_known_address actual receipt of the notice is immaterial the notice is valid see eg 724_f2d_808 9th cir it is the taxpayer’s responsibility to provide the irs clear and concise notification of any change in address see sec_301_6212-2 b proced admin regs defining the taxpayer’s last_known_address as the address on the taxpayer’s most recently filed and properly processed return unless the irs has been given clear and concise notification of a different address see also 907_f2d_517 5th cir rev’g 92_tc_949 763_f2d_89 2d cir the taxpayer may submit a change_of address by indicating a new address on his next return by filing a written or electronic notice of change_of address with the irs or by providing an updated address to the usps for inclusion in its national change_of address ncoa database sec_301_6212-2 and b proced admin regs a taxpayer’s written notification regarding change_of address will be considered properly processed days after the date of receipt by one of the following the irs submission processing campus serving the taxpayer’s old address the customer service division in the local area office or the irs employee who contacted the taxpayer regarding the filing of a return or an adjustment in the taxpayer’s account revproc_2010_16 sec_5 2010_19_irb_664 we also have held that the irs was justified in believing that a notice_of_deficiency was mailed to the correct address and that the taxpayer simply failed to claim it when it was returned to the irs marked unclaimed and there was no evidence in the record that the irs was aware either before or immediately after the mailing of a notice_of_deficiency that the address of record was not correct see thomas v commissioner tcmemo_1998_438 aff’d without published opinion 194_f3d_1305 4th cir conversely the irs was found to have failed to exercise reasonable diligence by sending a notice_of_deficiency to an address from which prior correspondence had been returned as undeliverable see 625_f3d_254 5th cir the only evidence petitioner offered that he had given clear and concise notification of any address other than that used by respondent was the copy of the handwritten letter dated date but that handwritten letter was dated less than days before the mailing of the notice_of_deficiency and was not addressed to any of the addresses identified by the irs in revproc_2010_16 supra petitioner provided no evidence that he had mailed this letter to the irs or when he had done so and he did not provide any other evidence to confirm that he had changed his address at around this time or updated the ncoa database at trial petitioner could not recall when he had changed his p o box and so west determined that petitioner had not filed any federal_income_tax returns so respondent would not have learned of his new address that way we may infer that petitioner did provide notice of the bedford p o box before the lien notice was issued because respondent used that address on the lien notice but on the record before us we cannot conclude that petitioner provided notice of that new address in the time prescribed for respondent to use that new address on the notice_of_deficiency petitioner did not rebut the evidence in the administrative record that the usps form_3811 notifying him that certified mail namely the notice_of_deficiency was delivered to his euless address and the utf unable to forward marking on the envelope in which the notice_of_deficiency was mailed to petitioner’s dallas p o box suggests that petitioner did not file a forwarding address for that p o box considering when petitioner claims to have changed his address see domestic mail manual dmm sec_507 the usps usually forwards mail for months the record shows that the notice_of_deficiency mailed to petitioner at his euless residence was returned to the irs as unclaimed rather than undelivered as evidenced by the usps stamp on the envelop and the usps tracking information therefore we hold that respondent was justified in believing the notice_of_deficiency was sent to the correct last_known_address and that so west was reasonable in rejecting petitioner’s alleged address change snodgrass v commissioner tcmemo_2016_235 see arroyo v commissioner tcmemo_2013_112 iv delegation petitioner also argues that so west failed to v erify that the nods were created signed by the secretary of treasury or a duly authorized delegate of the secretary of treasury as required by definition in sec_7701 sec_7701 and sec_6212 we disagree for purposes of sec_6320 and sec_6330 either the secretary or_his_delegate eg the commissioner may issue a final notice_of_intent_to_levy or a notice_of_federal_tax_lien sec_7701 a i a see also sec_301_6320-1 sec_301_6330-1 proced admin regs we have held consistently that a notice_of_deficiency signed by a technical services territory manager pursuant to delegation_order set forth in internal_revenue_manual pt date is valid and have rejected challenges like petitioner’s as frivolous see eg batsch v commissioner tcmemo_2016_140 at aff’d 695_fedappx_166 8th cir muncy v commissioner tcmemo_2017_83 at and we have found specifically that janet a miller technical services gulf states area had proper authority see eg roye v commissioner tcmemo_2012_246 at n consequently after considering petitioner’s claim of error and reviewing the record before us we hold that so west properly verified pursuant to section c that the requirements of any applicable law or administrative procedure have been met v right to challenge underlying liabilities if we assume that petitioner never received the notice_of_deficiency for the subject years as he claims he would be entitled to challenge his underlying liabilities the administrative record shows that so west did give him that opportunity asking him to submit tax returns for the subject years petitioner did not do so petitioner’s failure to present evidence as to his correct liabilities or to provide requested financial information amount to a failure properly to raise the issue of his underlying liabilities at the administrative hearing see mcrae v commissioner tcmemo_2015_132 sec_301_6320-1 q a-f3 f q a-f3 proced admin regs because petitioner failed to raise his underlying liabilities properly in his administrative hearing with so west he is not entitled to do so now because his underlying liabilities are not properly before us we review so west’s determination for abuse_of_discretion only see goza v commissioner t c pincite caudle v commissioner tcmemo_2014_196 aff’d 603_fedappx_220 4th cir sec_301_6320-1 q a-f3 f q a-f3 proced admin regs vi compliance with tax_return filing obligations at the administrative hearing a taxpayer is expected to provide relevant information requested by the settlement officer for her consideration of the facts and issues involved in the hearing sec_301_6330-1 proced admin regs petitioner refused to participate in the scheduled telephonic hearing and failed to submit the financial information and past-due returns requested by so west petitioner was not in compliance with his federal_income_tax return filing obligations nor did he present any collection alternatives a settlement officer does not abuse her discretion when she declines to consider a collection alternative under these circumstances see huntress v commissioner tcmemo_2009_161 holding no abuse_of_discretion when the settlement officer rejects collection alternatives where the taxpayer offered none failed to provide financial information and was not current with filing and payment obligations lance v commissioner tcmemo_2009_129 holding no abuse_of_discretion when the taxpayer fails to provide financial information sec_301_6330-1 q a-d8 proced admin regs for the same reason we conclude that so west did not abuse her discretion by denying petitioner’s requests for a face-to-face hearing and to audiorecord the hearing 127_tc_219 see eg zastrow v commissioner tcmemo_2010_215 moline v commissioner tcmemo_2009_110 aff’d 363_fedappx_675 10th cir once a taxpayer has been given a reasonable opportunity for a hearing but has failed to avail himself of it the commissioner may make a determination based on the administrative file as was done here see oropeza v commissioner tcmemo_2008_94 upholding a determination based on the case file where the taxpayer refused to participate in an administrative hearing either in person or by telephone aff’d 402_fedappx_221 9th cir sec_301_6330-1 q a- d7 and q a-d8 f q a-f4 proced admin regs our review of the record reveals no abuse_of_discretion vii sec_6673 penalty finally we warned petitioner at trial that sec_6673 authorizes the court to impose a penalty of up to dollar_figure for frivolous and groundless arguments or whenever it appears to the court that proceedings before us have been instituted or maintained by the taxpayer primarily for delay sec_6673 notwithstanding the fact that petitioner did not to make any statements at trial after our warning that appears to us to be the case here because this is petitioner’s first case before the court we will not impose a penalty but he may expect a penalty in a future case if he persists in maintaining the same frivolous and meritless positions or uses the court primarily for delay despite our warning conclusion after review of the entire administrative record the court concludes that so west satisfied the verification requirements of sec_6330 and did not abuse her discretion in sustaining the notice_of_intent_to_levy and the notice_of_federal_tax_lien any contentions we have not addressed are irrelevant moot or meritless to reflect the foregoing an appropriate order and decision will be entered for respondent


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-121324-12 date date legend x --------------------------------------------------- ------------------------------------ state state ------------- ----------------- dear -------------- this letter responds to a letter from x’s authorized representatives dated date submitted on behalf of x requesting a ruling concerning the qualifying_income exception to the publicly_traded_partnership rules of sec_7704 of the internal_revenue_code facts according to the information submitted and representations made x is a limited_partnership organized under the laws of state x intends to consummate an initial_public_offering ipo after consummation of the ipo x expects to be a publicly_traded_partnership within the meaning of sec_7704 x is an independent wholesale_distributor of refined petroleum products and natural_gas x makes bulk sales of refined petroleum products and natural_gas to its customers which include dealers distributors ---------------------------------------------------------------------- ------------------------------------- and ------------ businesses x purchases refined products including gasoline diesel_fuel and residual fuel oils from refineries trading organizations and various producers conducts operations at its plr-121324-12 terminals and makes sales of refined products to its customers approximately two- thirds of x’s refined products sales are to dealers distributors and other purchasers for -------- nearly one-third of x’s refined product sales are bulk sales to ------------------------ --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- ------------- the refined products subject_to this ruling_request are --------------------------------------------- --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------- x purchases natural_gas from producers and trading companies and generally resells it --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- -------------------------------------- law and analysis sec_7704 provides that except as provided in sec_7704 a publicly_traded_partnership shall be treated as a corporation sec_7704 provides that for the purposes of sec_7704 the term publicly_traded_partnership means any partnership if interests in the partnership are traded on an established_securities_market or interests in the partnership are readily_tradable on a secondary market or substantial equivalent thereof plr-121324-12 sec_7704 provides that sec_7701 shall not apply to any publicly_traded_partnership for any taxable_year if such partnership met the gross_income requirements of sec_7704 for such taxable_year and each preceding_taxable_year beginning after date during which the partnership or any predecessor was in existence sec_7704 explains that a partnership meets the gross_income requirements of sec_7704 for any taxable_year if percent or more of the gross_income of such partnership for such taxable_year is qualifying_income sec_7704 provides that the term qualifying_income means income or gains derived from the exploration development mining or production processing refining transportation including pipelines transporting gas oil or products thereof or the marketing of any mineral_or_natural_resource including fertilizer geothermal_energy or timber based solely on the facts submitted and representations made we conclude that income derived by x from the marketing of ----------------------------------------------------------- ------------------------------------------------------------------ constitutes qualifying_income within the meaning of sec_7704 except as expressly provided herein we express or imply no opinion concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter in particular no opinion is expressed as to whether x meets the percent gross_income requirement of sec_7704 in any taxable_year the ruling is directed only to the taxpayer who requested 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 x’s authorized representative sincerely david r haglund david r haglund chief branch office of the associate chief_counsel passthroughs special industries enclosures copy of this letter copy of this letter for sec_6110 purposes cc


department of the treasury internal_revenue_service office of the chief_counsel washington d c date number release date uil the honorable david loebsack u s house of representative sec_1221 longworth house office building washington d c dear mr loebsack cc ita b4 conex-120139-10 am responding to your letter dated date submitted on behalf of your constituent residents homebuyer tax_credit for the home she purchased on date asked if her daughter is eligible for the long-time as you requested responded directly to response lam enclosing a copy of my hope this information is helpful if you need further assistance please call me or at sincerely michael j montemurro chief branch office of associate chief_counsel income_tax accounting enclosure department of the treasury internal_revenue_service washington d c office_of_chief_counsel date cc ita b4 conex-120139-10 uil dear am responding to your e-mail to representative loebsack who asked me to respond directly to you your daughter has owned a home for over years you asked if she qualifies for the long-time residents homebuyer credit for a home that she purchased on date taxpayers who are long-time residents of the same principal_residence may qualify for an income_tax_credit for the purchase of a different principal_residence equal to percent of its purchase_price up to a maximum credit of dollar_figure sec_36 of the internal_revenue_code this credit applies only if the taxpayer purchases the residence on or after date sec_11 of the worker homeownership and business assistance act of because your daughter purchased her home before the date effective date she may not take this credit the law does not grant the irs authority to make an exception to this effective date have enclosed pages of publication your federal_income_tax which provides a more detailed explanation of the first-time_homebuyer credit hope this information is helpful if you have any questions please contact ' at sincerely enclosure michael j montemurro branch chief office of associate chief_counsel income_tax and accounting


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 b1 plr-114211-07 date date ---------- legend x -------------------------------------------------- date dear ----------------- ------------------- this responds to a letter dated date submitted on behalf of x requesting relief under ' b of the internal_revenue_code facts x was incorporated on date the shareholders of x desired that x elect s_corporation treatment effective on date but the election to be treated as an s_corporation was not timely filed accordingly x requests a ruling that it will be treated as an s_corporation effective date law and analysis sec_1362 provides that a small_business_corporation may elect to be an s_corporation sec_1362 provides the rule on when an s election will be effective sec_1362 provides in relevant part that if an s election is made within the first two and one-half months of a corporation's taxable_year then the corporation will be treated as an s_corporation for the year in which the election is made under ' b however if an s election is made after the first two and one-half months of plr-114211-07 a corporation's taxable_year then that corporation will not be treated as an s_corporation until the taxable_year after the year in which the s election is filed sec_1362 provides that if no ' a election is made for any taxable_year and the secretary determines that there was reasonable_cause for the failure to timely make such election then the secretary may treat such an election as timely made for such taxable_year and ' b shall not apply x did not timely file an election to be treated as an s_corporation under ' a x has however established reasonable_cause for not making a timely s election and is entitled to relief under ' b conclusion based solely on the facts submitted and the representations made and provided that x otherwise qualifies as an s_corporation we conclude that x will be treated as an s_corporation effective date within days from the date of this letter x should submit a properly completed form_2553 effective date with a copy of this letter attached to the relevant service_center except as specifically set forth above no opinion is expressed or implied as to the federal_income_tax consequences of the transaction described above under any other provision of the code specifically no opinion is expressed concerning whether x is in fact an s_corporation for federal tax purposes the code provides that it may not be used or cited as precedent this ruling is directed only to the taxpayer s requesting it sec_6110 of plr-114211-07 in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to the taxpayers’ authorized representative sincerely dianna k miosi chief branch office of the associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes


t c summary opinion united_states tax_court bobby s and sara e roberts petitioners v commissioner of internal revenue respondent docket nos 5214-09s 3421-10s filed date jason j alley for petitioners emile l hebert iii for respondent armen special_trial_judge these consolidated cases were heard pursuant to the provisions of sec_7463 of the internal_revenue_code in effect at the time that the petition was filed pursuant to sec_7463 the decision to be entered is not unless otherwise indicated all subsequent section references are to the internal_revenue_code in effect for the years in issue and all rule references are to the tax_court rules_of_practice and procedure reviewable by any other court and this opinion shall not be treated as precedent for any other case respondent sent notices of deficiency to petitioners determining deficiencies additions to tax and accuracy-related_penalties with respect to petitioners’ individual federal income taxes for the and taxable years as follows additions to tax penalty secs year deficiency a a a dollar_figure dollar_figure dollar_figure dollar_figure dollar_figure dollar_figure big_number big_number -0- -0- -0- -0- the sole issue for decision is whether petitioners are entitled to deduct transportation_expenses under sec_162 incurred and paid_by bobby s roberts for travel between his home_office in roanoke alabama and his testing facility in metairie louisiana the resolution of this issue turns on whether bobby s roberts’ tax_home was in roanoke alabama or in metairie louisiana two notices of deficiency were sent to petitioners the first notice which was dated date related to tax years and the second notice which was dated date related to tax_year petitioners timely filed petitions with this court in both instances and the two cases were subsequently consolidated for trial briefing and opinion all other issues presented by the notices of deficiency have been conceded or otherwise resolved by the parties respondent concedes that sara e roberts’ tax_home was in roanoke alabama during the tax years in issue background some of the facts have been stipulated and they are so found we incorporate by reference the parties’ stipulation of facts as supplemented and accompanying exhibits petitioners resided in the state of alabama when the petitions were filed all references to petitioner in the singular are to petitioner bobby s roberts after returning home from the vietnam war petitioner attended auburn university auburn in alabama where he completed undergraduate and graduate studies in the department of rehabilitation and special education upon petitioner’s graduation with a major in vocational evaluation auburn hired him as a faculty_member to coordinate the undergraduate rehabilitation program between and petitioner lived in alabama and worked as a faculty_member for auburn in petitioner was recruited by louisiana state university lsu to develop and teach courses at its health sciences center in new orleans petitioner accepted the job moved to the new orleans area and worked at lsu from to in petitioner resigned from his position at lsu and worked as a consultant with various hospitals in the new orleans area until finally in late he and his family returned to alabama where they settled into a home in roanoke that petitioner had purchased several years earlier at all relevant times thereafter petitioners resided in roanoke alabama roanoke from late to petitioner again worked for auburn but during this time as an adjunct faculty_member he was also employed as a vocational expert with the social_security administration where he provided expert testimony at administrative hearings that were conducted in both alabama and georgia in petitioner was recruited by work recovery inc work recovery to help develop rehabilitation facilities throughout its southeast rehabilitation region southeast region which consisted of kentucky tennessee north carolina south carolina georgia florida alabama and mississippi petitioner worked from his home in roanoke which was centrally located within the southeast region although recruited by work recovery to develop the southeast region at one point during his employment petitioner assisted in the development of a rehabilitation facility in metairie louisiana located in the company’s southwest rehabilitation region petitioner however never operated or worked out of the facility in metairie once the metairie facility was completed petitioner returned to his work developing and researching work recovery inc was previously named valpar corp facilities in the southeast region one such facility that petitioner worked on was piedmont hospital in atlanta georgia in work recovery filed for bankruptcy and petitioner finding himself unemployed started a sole_proprietorship involved in vocational rehabilitation and evaluation services because of his proximity to auburn and his contacts there petitioner planned to continue working from his home_office offering vocational rehabilitation services in the same southeast region originally targeted by work recovery consequently petitioner began working again with piedmont hospital in atlanta georgia and also with the director of the state rehabilitation facility in alabama shortly after the creation of his sole_proprietorship petitioner began receiving referrals from the louisiana area requesting his services some of these referrals requested that petitioner provide testing services in addition to other evaluation services petitioner informed these referral sources that he did not have a testing facility or provide testing services as part of his business after receiving additional requests however petitioner began to look into providing testing as an additional service and ultimately decided to obtain a facility for this purpose in date petitioner signed a lease for a building in metairie louisiana that became a testing facility for his business at all times relevant thereafter petitioner had a facility for testing in metairie during and petitioner worked from a space in his residence that he converted to a modest home_office he provided rehabilitation cost analyses loss of earnings analyses and expert opinion assessments entirely from his home_office no testing was required to provide these services and all work including the composition of a final expert report was performed from petitioner’s home_office in roanoke during the tax years in issue petitioner primarily traveled to metairie if a case required testing or if a deposition or court appearance was scheduled when staying overnight in metairie petitioner minimized his expenses cooking food in a small microwave oven and sleeping on a sofa bed in the waiting room at his testing facility consequently petitioner only deducted his transportation_expenses petitioner typically arrived in metairie on a monday afternoon and returned to roanoke either on a wednesday or a thursday morning if he had no work to complete in metairie petitioner sometimes returned to roanoke on a tuesday while in roanoke petitioner worked saturdays and sunday afternoons after teaching sunday school and engaging in other personal activities if a case required testing petitioner would travel to his testing facility in metairie to perform the test the testing process only took hours per client on average in contrast the evaluation and reporting process in these cases performed entirely from petitioner’s home_office took an average of to hours per client petitioner also traveled to louisiana to give testimony in court or at a deposition when he was scheduled to give testimony however petitioner would often arrive in louisiana only to discover that the case was settled or the deposition was canceled many times when this occurred petitioner would return to roanoke early and work from his home_office in petitioner made round-trip flights and a single one-way flight between birmingham alabama and new orleans louisiana in petitioner made round-trip flights between alabama and louisiana after hurricane katrina devastated new orleans in date southwest airlines canceled direct flights between birmingham and new orleans and petitioner’s testing facility sustained heavy damage thus petitioner began using his vehicle to travel to metairie hauling equipment that he needed to make repairs consequently in petitioner made round trips with his vehicle driving from his home_office in roanoke to metairie unfortunately because of the extent of the damage sustained petitioner was forced to eventually abandon his old testing facility and lease a new facility in from date to date no testing was performed and petitioner conducted all of his work from his home_office traveling to metairie primarily to repair or otherwise relocate his testing facility consequently in petitioner made round trips in his vehicle from his home_office to metairie and only conducted three tests that year discussion6 generally expenditures_for transportation between a taxpayer’s home and place of business are considered personal expenses and are not deductible see sec_262 413_us_838 sec_1_162-2 sec_1 b income_tax regs transportation_expenses however may be deducted under sec_162 if they are ordinary and necessary incurred while away from home and incurred in pursuit of a trade_or_business 326_us_465 the reference to home in sec_162 means the taxpayer’s tax_home 74_tc_578 foote v commissioner our decision is made without regard to the burden_of_proof the vocational tax_home concept was first construed by this court in 5_bta_1181 and has been steadfastly upheld by this court see eg 86_tc_589 85_tc_798 67_tc_1 49_tc_557 t c 49_tc_557 this court has held as a general_rule that the location of a taxpayer’s principal_place_of_business is his tax_home not the location of the taxpayer’s personal_residence mitchell v commissioner supra pincite kroll v commissioner supra pincite- when a home_office however qualifies as the taxpayer’s principal_place_of_business under sec_280a then the taxpayer’s personal_residence is considered his tax_home and expenses paid_or_incurred traveling between that residence and another workplace may be deductible see 113_tc_106 76_tc_839 73_tc_766 therefore we must decide whether petitioner’s home_office in roanoke was his principal_place_of_business under sec_280a even though petitioner did not claim a home_office deduction on his tax returns for the tax years in issue when a taxpayer conducts business from both a home_office and another workplace and a determination must be made as to which qualifies as the taxpayer’s principal_place_of_business two objective factors are given primary consideration the petitioner makes no claims for home_office_deductions in these cases relative importance of the business functions or activities conducted at each place and the amount of time expended at each place 506_us_168 strohmaier v commissioner supra pincite after careful consideration of the record we find that petitioner’s home_office was his principal_place_of_business during the years in issue and therefore roanoke was his tax_home consequently we hold that petitioners are entitled to deduct the ordinary and necessary transportation_expenses paid_or_incurred for travel away from roanoke in pursuit of petitioner’s business petitioner testified at trial that he converted a portion of his residence to a home_office that he used on a regular basis to conduct analysis draft reports and perform other functions for his business we credit petitioner’s testimony at trial and find that he used his modest home_office exclusively and on a regular basis for his business during the tax years in issue see sec_280a moreover there is ample evidence in the record to support the conclusion that petitioner’s home_office in roanoke was his principal_place_of_business during the tax years in issue see sec_280a first petitioner performed the most important functions of his business from his home_office in roanoke he provided rehabilitation cost analyses loss of earnings analyses and expert opinion assessments entirely from his home_office no testing was required to provide these services even when a case required petitioner to travel to metairie to conduct a test the testing process itself was a relatively small component of the overall service provided the testing data was collected as one step in the process that petitioner used to conduct his analysis formulate his opinion and draft his expert reports the service provided by petitioner is not the collection of raw data through testing it is his complex analysis of that data the formulation of an expert opinion and the presentation of that opinion in the form of a clear and concise written report consequently we find that the most important functions performed by petitioner even in cases that involved testing were analysis of data collected formulation of expert opinions and composition of expert reports these functions were entirely performed from petitioner’s home_office we note that petitioner would also travel to louisiana for the purpose of giving testimony either in court or at a deposition giving testimony however is ancillary to what we find to be the most important services provided by petitioner therefore given petitioner’s credible testimony at trial we find that the relative importance of the business functions petitioner conducted from his home_office in roanoke substantially outweigh the activities petitioner performed in louisiana second not only did petitioner perform the most important functions of his business from his home_office in roanoke he spent most of his time working there as well petitioner typically arrived in louisiana on a monday afternoon and returned to roanoke either on a wednesday or a thursday morning if petitioner had no work to complete in louisiana he sometimes returned to roanoke on a tuesday while in roanoke petitioner worked on saturdays and even sundays after teaching sunday school and engaging in other personal activities if a case required testing in metairie the testing process only took hours per client on average in contrast the evaluation and reporting process in these cases performed entirely in roanoke took an average of to hours per client consequently even when petitioner had a case that required testing he spent twice as much time on average analyzing data and drafting his reports in roanoke than he did testing a client in metairie the record does not provide as clear a measure regarding how much time petitioner spent giving testimony in louisiana at a court appearance or a deposition when he traveled to louisiana for the purpose of giving testimony however petitioner would often arrive only to discover that the case was settled or the deposition was canceled in any event petitioner’s ancillary and irregular appearances in court or at a deposition in louisiana even when coupled with the testing process and other minor activities he may have performed there do not outweigh the time he spent performing business functions at his home_office therefore although he traveled to louisiana frequently we find that petitioner spent more time performing analysis and drafting reports from his home_office in roanoke than he spent performing business activities in louisiana finally we disagree with respondent’s contention that petitioner maintained his home_office in roanoke for personal reasons specifically because petitioner’s wife and children resided there instead the record suggests that petitioner maintained his home_office in roanoke because of the exigencies of his business not personal reasons when work recovery shut down and he started his own business petitioner continued the southeast region business model petitioner began working again with piedmont hospital in atlanta georgia and also working with the director of the state rehabilitation facility in alabama although he would travel to louisiana for cases that required testing and to provide testimony his home_office in roanoke remained centrally located within the southeast region therefore we find that petitioner maintained his home_office in roanoke not for personal reasons but because of his business model in conclusion petitioner’s principal_place_of_business and therefore his tax_home was in roanoke alabama during the tax years in issue consequently petitioner was away from home within the meaning of sec_162 when he incurred transportation_expenses for traveling between his home_office and louisiana in pursuit of his business accordingly petitioner is entitled to deductions for transportation_expenses incurred for traveling between his home_office and louisiana in pursuit of his business during the tax years in issue conclusion we have considered all of the other arguments made by respondent and to the extent that we have not specifically addressed them we conclude that they are without merit to reflect the foregoing decisions will be entered under rule


internal_revenue_service department of the treasury number release date index number washington dc person to contact telephone number refer reply to cc intl br1-plr-108939-00 date date ty a country b year year year year date c this is in response to a letter dated date requesting a ruling under sec_877 of the internal_revenue_code_of_1986 code that a’s surrender of her u s alien registration card green card did not have for one of its principal purposes the avoidance of u s taxes under subtitle a or subtitle b of the code additional information was received in a letter dated date the information submitted for consideration is substantially as set forth below the ruling contained in this letter is based upon information and representations submitted by the taxpayer and accompanied by penalty of perjury statements 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 a was born in country b in year a is now a citizen and resident of country b where she is subject_to country b tax on her worldwide income a began residing in the united_states in a year and obtained her green card in year a returned to country b in year and surrendered her green card expatriated on date c on the date of a’s expatriation her net_worth exceeded the amount set forth in sec_877 plr-108939-00 sec_877 generally provides that a citizen who loses u s citizenship or a u s long-term_resident who ceases to be taxed as a lawful permanent resident individuals who expatriate within the 10-year period immediately preceding the close of the taxable_year will be subject_to the special rules of sec_877 for such taxable_year unless such loss did not have for one of its principal purposes the avoidance of u s taxes sec_2107 and sec_2501 provide special estate and gift_tax regimes respectively for individuals who expatriate with a principal purpose to avoid u s taxes a former u s citizen or former u s long-term_resident will be treated as having expatriated with a principal purpose to avoid u s taxes for purposes of sec_877 sec_2107 and sec_2501 if the individual’s average income_tax_liability or the individual’s net_worth on the date of expatriation exceed certain thresholds see sec_877 sec_2107 and sec_2501 a former u s citizen whose net_worth or average tax_liability exceeds these thresholds however will not be presumed to have a principal purpose of tax_avoidance if that former citizen is described within certain statutory categories and submits a request for a ruling within one year of the date of loss of u s citizenship for the secretary’s determination as to whether such loss had for one of its principal purposes the avoidance of u s taxes see sec_877 sec_2107 and sec_2501 under notice_98_34 1998_27_irb_30 modifying notice_97_19 1997_1_cb_394 a former long-term_resident whose net_worth or average tax_liability exceeds the applicable thresholds will not be presumed to have a principal purpose of tax_avoidance if that former resident is described within certain categories and submits a complete and good_faith request for a ruling as to whether such loss had for one of its principal purposes the avoidance of u s taxes notice_98_34 requires that certain information be submitted with a request for a ruling that an individual's expatriation did not have for one of its principal purposes the avoidance of u s taxes a is eligible to request a ruling pursuant to notice_98_34 because she is a resident of country b and her worldwide income is subject_to country b tax the country in which she was born a submitted all of the information required to be submitted by notice_97_19 as modified by notice_98_34 including additional information requested by the service after review of the submission accordingly based solely on the facts submitted and the representations made we conclude that a has made a complete and good_faith submission in accordance with sec_877 and notice_98_34 therefore a will not be presumed under sec_877 to have as one of her principal purposes for expatriating the plr-108939-00 avoidance of u s taxes we further conclude that a will not be treated under sec_877 as having as one of her principal purposes for expatriating the avoidance of u s taxes because the information submitted clearly establishes the lack of a principal purpose to avoid taxes under subtitle a or b 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 in addition no opinion is expressed as to a’s u s tax_liability for the taxable years prior to or after her expatriation under sections of the code other than sec_877 sec_2107 and sec_2501 a copy of this letter must be attached to a’s u s income_tax return for the year in which a obtained the ruling whether or not a is otherwise required to file a return 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 senior technical reviewer sincerely yours w edward williams cc intl br1 cc


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 b02 plr-135533-06 date january legend - a ------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------ ----------------------- ----------------------- ------------------------------------------------------------------------------------------------------ ----------------------- ------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------ -------------- trust state state dear ------------ this letter responds to your letter dated date and subsequent correspondence submitted on behalf of trust requesting rulings under sec_671 and sec_2501 of the internal_revenue_code the information submitted states that a a resident of state proposes to execute trust which will be governed by the laws of state and will have a state corporate trustee b is a sibling of a and c is a child of a b c plr-135533-06 article second a of trust provides that during a’s lifetime the trustee may distribute all or any part of the net_income and principal to such one or more of a b and a’s descendents whenever born and in such shares or proportions as the distribution committee shall determine or may reimburse or provide advances to any person with whom any beneficiary resides for any expenses including without limitation housing housekeeping child care educational and health-related expenses_incurred in connection with caring for such beneficiary provided however that such distributions shall be made only at such time or times as the distribution committee shall by unanimous agreement direct the trustee or either member of the distribution committee acting alone shall so direct the trustee upon obtaining a’s prior written consent to each distribution article second b of trust provides that the trustee shall make no distribution other than as directed by the distribution committee in accordance with the provisions of article second a article second d of trust provides that the trustee shall add all undistributed_net_income to principal at least annually article second e of trust provides that upon the death of a the principal and all income of trust shall be distributed to such one or more persons and in such estates interests and proportions other than a a’s creditors a’s estate or to pay any obligations owed to a’s creditors or the creditors of a’s estate as a directs by a provision of a’s last will and testament duly admitted to probate or by a provision of a revocable inter_vivos_trust which shall by its terms become irrevocable upon a’s death and the assets of which will be includable in a’s gross_estate for federal estate_tax purposes and expressly referring to the power_of_appointment granted to a by article second e it is further provided that a may at any time by a written acknowledged instrument delivered to the trustee release such power_of_appointment with respect to any or all of the property subject_to such power or may further limit the persons or entities in whose favor or the extent to which this power may be exercised any property that a does not effectively appoint through the exercise of the power_of_appointment granted by article second e will be divided into separate and equal shares for a’s then living descendants per stirpes each share so set apart for a child of a shall be administered in accordance with the provisions of article third and each share so set apart for a grandchild of a shall be administered in accordance with the provisions of article fourth article third of trust provides that any property set apart for a child of a will be held in further trust for the child’s life the trustee may distribute all or any part of the net_income and principal to a’s child at any time at the child’s death the property will be distributed to his or her children and will be held in further trust accordance with the plr-135533-06 provisions of article fourth article fourth of trust provides that any property set apart for a descendant other than a child of a will be held in further trust for the descendant’s life the trustee may distribute all or any part of the net_income and principal to a’s descendant at any time at the descendant’s death the property will be distributed to his or her children and will be held in further trust until the maximum period permitted by law at which time it will be distributed outright and free of trust to the then income_beneficiary of the trust article fifth provides that if at a’s death or the termination of any trust created after a’s death none of a’s descendants are then living the trust property shall be divided into two equal shares one share shall be further divided into equal subparts for each then living descendants of b per stirpes and one share shall be further divided into equal subparts for each then living descendant of a’s sister per stirpes each subpart will be held in further trust for a’s niece or nephew for who such subpart was so set apart upon the death of a’s said niece or nephew the trust property will be distributed to the descendants of a’s niece or nephew article ninth a of trust provides that the distribution committee shall initially consist of a’s brother b and child c article ninth b of trust provides that at all times during a’s lifetime the distribution committee will be composed of two beneficiaries of the trust other than a or any spouse of a in the event that b or c are unable to act a’s son will be the first beneficiary to fill the vacant position on the distribution committee thereafter the then eldest beneficiary of the trust shall fill any vacant position on the distribution committee if at any time there are less than two adult beneficiaries the parent or guardian of the next eldest beneficiary shall fill any vacant position on the distribution committee if all of a’s descendants predecease a the distribution committee powers will vest in the trustee you have requested the following rulings so long as the distribution committee is serving no portion of the items of income deductions and credits against tax of trust shall be included in computing the taxable_income deductions and credits of a or any other person under sec_671 the contribution of property to trust by a will not be a completed_gift subject_to federal gift_tax any distribution_of_property from trust to a by the distribution committee will not be a completed_gift subject_to federal gift_tax plr-135533-06 ruling sec_671 provides that where it is specified in subpart e of part i of subchapter_j that the grantor or another person shall be treated as the owner of any portion of a_trust there shall then be included in computing the taxable_income and credits of the grantor or the other person those items of income deductions and credits against tax of the trust which are attributable to that portion of the trust to the extent that such items would be taken into account under chapter in computing taxable_income or credits against the tax of an individual sec_672 provides for purposes of subpart e the term adverse_party means any person having a substantial_beneficial_interest in the trust which would be adversely affected by the exercise or nonexercise of the power which he possesses respecting the trust sec_673 through specify the circumstances under which the grantor is treated as the owner of a portion of a_trust sec_673 provides that the grantor shall be treated as the owner of any portion of a_trust in which the grantor has a reversionary_interest in either the corpus or the income therefrom if as of the inception of that portion of the trust the value of such interest exceed sec_5 percent of the value of such portion sec_674 provides in general that the grantor shall be treated as the owner of any portion of a_trust in respect of which the beneficial_enjoyment of the corpus or the income therefrom is subject_to a power of disposition exercisable by the grantor or a nonadverse_party or both without the approval or consent of any adverse_party sec_674 provides that sec_674 shall not apply to a power exercisable only by will other than a power in the grantor to appoint by will the income of the trust where the income is accumulated for such disposition by the grantor or may be so accumulated in the discretion of the grantor or a nonadverse_party or both without the approval or consent of any adverse_party under sec_675 and applicable regulations the grantor is treated as the owner of any portion of a_trust if under the terms of the trust agreement or circumstances attendant on its operation administrative control is exercisable primarily for the benefit of the grantor rather than the beneficiary of the trust sec_676 provides that the grantor shall be treated as the owner of any portion of a_trust whether or not he is treated as such owner under any other provision of part i subchapter_j chapter where at any time the power to revest in the grantor title to such portion is exercisable by the grantor or a nonadverse_party or both plr-135533-06 sec_677 provides in general that the grantor shall be treated as the owner of any portion of a_trust whether or not he is treated as such owner under sec_674 whose income without the approval or consent of any adverse_party is or in the discretion of the grantor or a nonadverse_party or both may be distributed to the grantor or the grantor's spouse held or accumulated for future distribution to the grantor or the grantor's spouse or applied to the payment of premiums on policies of insurance on the life of the grantor or the grantor's spouse sec_678 provides a general_rule that a person other than a grantor shall be treated as the owner of any portion of a_trust with respect to which such person has a power exercisable solely by himself to vest the corpus or the income therefrom in himself based solely on the facts and representations submitted we conclude an examination of trust reveals none of the circumstances that would cause a or any other person to be treated as the owner of any portion of trust under sec_673 sec_674 sec_676 sec_677 or sec_678 we further conclude that an examination of trust reveals none of the circumstances that would cause administrative controls to be considered exercisable primarily for the benefit of a or any other person under sec_675 thus the circumstances attendant on the operation of trust will determine whether a or any other person will be treated as the owner of any portion of trust under sec_675 this is a question of fact the determination of which must be deferred until the federal_income_tax returns of the parties involved have been examined by the office with responsibility for such examination ruling sec_2 and sec_2501 provides for the imposition of a gift_tax on the transfer of property by gift sec_2511 provides that the gift_tax applies to a transfer by way of gift whether the transfer is in trust or otherwise whether the gift is direct or indirect and whether the property is real or personal tangible or intangible sec_25_2511-2 of the gift_tax regulations provides that a gift is complete as to any property with respect to which the donor has so parted with dominion and control as to leave the donor with no power to change the disposition of the property whether for the donor's own benefit or for the benefit of another but if upon a transfer of property whether in trust or otherwise the donor reserves any power over its disposition the gift may be wholly incomplete or may be partially complete and partially incomplete depending upon all the facts in the particular case accordingly in every case of a transfer of property subject_to a reserved power the terms of the power must be examined and its scope determined plr-135533-06 sec_25_2511-2 provides an example where the donor transfers property in trust to pay the income to the donor or accumulate it in the discretion of the trustee and the donor retains a testamentary power to appoint the remainder among the donor's descendants the regulation concludes that no portion of the transfer is a completed_gift however if the donor had not retained a testamentary_power_of_appointment but had instead provided that the remainder should go to x or his heirs the entire transfer would be a completed_gift sec_25_2511-2 provides that a gift is incomplete in every instance in which a donor reserves the power to revest the beneficial title in himself or herself a gift is also incomplete if and to the extent that a reserved power gives the donor the power to name new beneficiaries or to change the interests of the beneficiaries as between themselves unless the power is a fiduciary power limited by a fixed_or_ascertainable_standard under sec_25_2511-2 a donor is considered as possessing a power if it is exercisable by the donor in conjunction with any person not having a substantial adverse_interest in the disposition of the transferred property sec_25_2511-2 provides that the relinquishment or termination of a power to change the beneficiaries of transferred property occurring otherwise than by death of the donor is regarded as the event which completes the gift and causes the gift_tax to apply see also 308_us_39 sec_2514 provides that in the case of a power_of_appointment created after date the exercise or release of a general_power_of_appointment shall be deemed a transfer of property by the individual possessing such power sec_2514 provides that the term general_power_of_appointment means a power exercisable in favor of the individual possessing the power the individual's estate the individual's creditors or the creditors of the individual's estate sec_25_2514-1 provides that a power_of_appointment is not a general power if by its terms it is exercisable only in favor of one or more designated persons or classes other than the possessor or his creditors or the possessor's estate or the creditors of the estate sec_2514 provides that in the case of a power_of_appointment created after date that is exercisable by the possessor only in conjunction with another person if the power is not exercisable by the possessor except in conjunction with a person having a substantial interest in the property subject_to the power which is adverse to the exercise of the power in favor of the possessor then the power is not a general_power_of_appointment for purposes of sec_2514 a person who after the death of the possessor may be possessed of a power_of_appointment with respect to the property subject_to the possessor's power which he may exercise in his own favor shall be deemed as having an interest in the property and such interest shall be plr-135533-06 deemed adverse to such exercise of the possessor's power sec_25_2514-3 provides in part that a co-holder of a power_of_appointment has no adverse_interest merely because of his joint possession of the power nor merely because he is a permissible appointee under a power however a co-holder of a power is considered as having an adverse_interest where he may possess the power after the possessor's death and may exercise it at that time in favor of himself his estate his creditors or the creditors of his estate thus for example if x y and z held a power jointly to appoint among a group of persons which includes themselves and if on the death of x the power will pass to y and z jointly then y and z are considered to have interests adverse to the exercise of the power in favor of x similarly if on y's death the power will pass to z z is considered to have an interest adverse to the exercise of the power in favor of y sec_25_2514-1 provides that the term power_of_appointment does not include the powers reserved by a donor to himself or herself however no provision of sec_2514 or the applicable regulations is to be construed as limiting the application of any other code section or provision of the regulations in this case a retains a limited testamentary power to appoint the trust corpus and accumulated income to any persons other than a a’s creditors a’s estate or the creditors of a’s estate in view of this retained power a's transfer of property to trust will not be a completed_gift subject_to federal gift_tax see sec_25_2511-2 however a will be treated as making a taxable gift at such time as trust corpus or income is distributed to a beneficiary other than a or if during a 's lifetime a releases the testamentary power to appoint the trust property see sec_25_2511-2 in addition b and c as members of the distribution committee have the power to distribute trust income and corpus to themselves however b's power can only be exercised with the consent of a or c and c's power can only be exercised with the consent of a or b further on the death of either b or c the deceased's power will devolve to the survivor and a’s son jointly therefore b and c will not have a general_power_of_appointment by reason of the joint distribution power see sec_25_2514-3 accordingly during the period the distribution committee consists of b and c neither b nor c will be treated as making a taxable gift if trust corpus or income is distributed to a under the terms of trust except as specifically set forth above no opinion is expressed concerning the federal tax consequences of the facts described above under any other provision of the 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 plr-135533-06 in accordance with the power_of_attorney on file with this office copies of this letter are being sent to the taxpayer’s authorized representatives sincerely bradford r poston senior counsel branch office of the associate chief_counsel passthroughs special industries