department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division release number rele elease date date contact person identification_number date date uil code contact number employer_identification_number form required to be filed tax years dear this is our final_determination that you do not qualify for exemption from federal_income_tax as an organization described in internal_revenue_code sec_501 recently we sent you a letter in response to your application that proposed an adverse determination the letter explained the facts law and rationale and gave you days to file a protest since we did not receive a protest within the requisite days the proposed adverse determination is now final you must file federal_income_tax returns on the form and for the years listed above within days of this letter unless you request an extension of time to file we will make this letter and our proposed adverse determination_letter available for public inspection under code sec_6110 after deleting certain identifying information please read the enclosed notice notice of intention to disclose and review the two attached letters that show our proposed deletions if you disagree with our proposed deletions you should follow the instructions in notice if you agree with our deletions you do not need to take any further action if you have any questions about this letter please contact the person whose name and telephone number are shown in the heading of this letter federal_income_tax status and responsibilities please contact irs customer service at if you have any questions about your letter cg catalog number or the irs customer service number for businesses the irs customer service number for people with hearing impairments is sincerely rob choi director exempt_organizations rulings agreements enclosure notice redacted proposed adverse determination_letter redacted final adverse determination_letter letter cg catalog number department of the treasury internal_revenue_service washington d c contact person identification_number contact number fax number employer_identification_number uil index dollar_figure tax_exempt_and_government_entities_division date nov egend i association state date investment firm u i o l m i o j u n o dear we have considered your application_for recognition of exemption from federal_income_tax under internal_revenue_code sec_501 based on the information provided we have concluded that you do not qualify for exemption under code sec_501 the basis for our conclusion is set forth below issues does the applicant which will be referred to as a qualify for exemption under sec_501 of the code facts you a are a b nonprofit corporation formed on c your articles of incorporation provide that you were formed to be a mutual benefit organization your bylaws state the following article states that a is a not-for profit mutual benefit corporation based on the c rules and operating_under_the_lodge_system a’s key philosophy is based on the premise that it is the inalienable right of every person to be able to provide for their personal retirement the purpose of a is to provide a means by which a person can build a retirement income through membership in a page article ii states that an associate membership may be acquired by filing the appropriate documents and adopting a method of establishing a retirement level through cash purchase or by the payment of monthly dues associate membership can be purchased and given as gifts from birth through retirement age an associate's membership has no par_value until the associate’s retirement age is realized an associate’s membership is transferable as a gift until retirement payments begin an associate’s membership cannot be rescinded or be traded or sold article ii states that retirement status will mature upon reaching the age of sixty-five the associate will receive a monthly payment based on the degree of paid up membership payments will be on a schedule based on a percent per year payments to be continued until death retirement benefits received by an associate member will be subject_to all the laws of the land article v states upon joining a each person must adopt a plan to achieve the goal of being a full member this plan can be incremental or in a lump sum a member can at any time begin a plan to achieve full membership a’s fees shall be handled by an investment firm in such a manner that no two consecutive years shall dip below ten percent return on investment charitable_contributions received beyond the cost of operation will be divided into a number of associate memberships and will be given away each year to newborn children in a drawing article viii states the board shall select an agent from a reputable firm to manage an account for all dues dues shall be applied to the record of the associate at the time of payment and a record of degree of completeness shall be delivered to the associate article ix states that retired persons who are not members but wish to assist in the promotion of a may apply for an honorary membership and represent and promote a in enlisting persons to join and prepare for their retirement article x states that a recommends that each associate twenty-one years of age and older give a dollar gift a month to a either monthly or yearly this will keep the associate's records current and apply towards the cost of a those funds greater then needed will be placed with other gifts or grants under article article states a will strive to secure charitable_contributions to enable underprivileged to participate in membership you stated in your application that it is the wish of a that by gaining exemption under c you can solicit funding from foundations businesses and individuals to use as donations to gift the underprivileged membership in your letter of date you state that a is a fraternal_organization that will maintain a record of its associate members a will solicit the aid of d to form managed trust fund that will use the collective membership funds to seek to increase the maximum retums on the trust to a level where associate members will receive an annuity upon reaching the age of retirement or commensurate age where the annuity will be set page most business will be conducted over the intemet board meetings will be live as well as canned for later review only moneys from yearly dues will be handled by the office all other funds will be deposited directly into the trust donations will be accumulated in the trust and associate membership awarded to newbor at a level of one thousand per newbom dollar_figure to be increased by the board with the duration of time in a lottery fashion to randomize distribution you provide that associate members will receive through their membership managed financial_assets just like public employees enjoy now and the ability to increase their membership points which no retirement package offers with the exception of 401k the membership points remain at zero value until retirement which removes the temptation of loading the individual plan with debt and removes them from bankruptcy it will not be restricted to the amount an individual ear s like social_security so that low wage earners can through frugality provide a sustainable retirement the trust management cost will be born by the trust giving each associate equal treatment the size of the trust will afford associates opportunities not afforded to small account holders you state that the operations will be carried out in our current business and as we will enlist the help of the membership and current retirees the organizations goal is to restrict the cost of operations to zero by the use of computers and our integrity by using all offline management letter if a would provide payments for life sickness or accident insurance you were asked in a you stated in your response that you will not be handling any insurance when your membership reaches a significant point you will seek out service providers that will offer a group rate to associate member both working and retired law sec_501 of the internal_revenue_code provides for the exemption from federal_income_tax of fraternal beneficiary societies orders or associations a operating_under_the_lodge_system or for the exclusive benefit of the members of a fraternity itself operating_under_the_lodge_system and providing for the payment of life sick accident or other_benefits to the members of such society order or association or their dependents b sec_1_501_c_8_-1 of the income_tax regulations states that a fraternal beneficiary society is exempt from tax only if operated under the lodge_system or for the exclusive benefit of the members so operating operating_under_the_lodge_system means carrying on its activities under a form of organization that comprises local branches chartered by a parent organization in order to be exempt it is also and largely self-governing called lodges chapters or the like necessary that the society have an established system for the payment to its members or their dependents of life sick accident or other_benefits page revrul_63_190 1963_2_cb_212 describes an organization whose purposes as stated in its constitution are to spread friendship and fraternity in the club to aid the membership in the event of illness personal injury or accident to pay benefits to sick members in the event of death to pay a death_benefit to whomever the member shall have designated and to develop patriotism among the membership the ruling held a nonprofit organization not operated under the lodge_system which maintains a social_club for members and also provides sick and death_benefits for members and their beneficiaries does not qualify for exemption from federal_income_tax either as a social_club under sec_501 a civic league under sec_501 or fraternal beneficiary society under sec_501 revrul_55_495 1955_2_cb_259 held in part an association which provides for the payment of life sick accident or other_benefits to members or their dependents but does not operate under the lodge_system or for the exclusive benefit of the members of an organization so operating is not entitled to exemption from federal_income_tax as an organization described in sec_501 of the internal_revenue_code of revrul_73_165 1973_1_cb_224 held in part a fraternal beneficiary society that operates under the lodge_system and provides for member benefit payments may qualify for exemption regardless of whether the fraternal or the insurance features predominate as long as both features are present revrul_84_48 1984_1_cb_133 holds sec_501 of the code provides for the exemption from federal_income_tax of fraternal beneficiary societies orders or associations that operate under the lodge_system or for the exclusive benefit of the members of a fraternity itself operating_under_the_lodge_system and that provide for the payment of life sick accident or other_benefits to the members of such societies or their dependents the term other_benefits as used in sec_501 of the code is limited by the type of benefit specified in that section it is applicable only to those benefits which are of a like_kind and nature to those enumerated historically sick benefits have been understood to include benefits designed to compensate for loss of income during a period of illness and accident benefits have been understood to for a benefit encompass benefits payable due to a loss of eaming power resulting from an injury to be of a like_kind and nature to sick or accident benefits and therefore to be included within the term other_benefits under sec_501 c of the code the benefit must be similar in nature to protection designed to compensate for expenses resulting from bodily injury or loss of eaming power national union v marlow f indicates what constitutes a fraternal beneficiary society the case held in part a fraternal-beneficial society would be one whose members have adopted the same or a very similar calling avocation or profession or who are working in union to accomplish some worthy object and who for that reason have banded themselves together as an association or society to aid and assist one another and to promote the common cause the term fraternal can properly be applied to such an association for the reason that the pursuit of a common object calling or profession usually has a tendency to create a brotherly feeling among those who are thus engaged many of these associations make a practice of assisting their sick and disabled members and of extending substantial aid page to the families of deceased members their work is at the same time of a beneficial and fraternal character because they aim to improve the condition of a class of persons who are engaged in a common pursuit and to unite them by a stronger bond of sympathy and interest philadelphia reading relief association v commissioner 4_bta_713 pincite provides that the organization was denied exemption because it lacked the necessary fraternalistic element the court noted the association's membership consisted of individuals whose vocations were as numerous and diverse as the classifications of jobs of a railroad company membership was open to all employees of the company the only motive for the association's existence was a mercenary one to provide insurance benefits and the organization had neither lodges rituals ceremonials nor regalia commonly associated with fraternal associations application of law in order to qualify for exemption under sec_501 of the intemal revenue code an organization must have a fraternal purpose must operate under the lodge_system and must provide for the payment of life sick accident or other_benefits to its members operating_under_the_lodge_system requires at a minimum two active entities a parent and a subordinate activities must be carried_out_under a form of organization that comprises local branches called lodges chapters and the like the local branches must be chartered by the parent organization and largely self-governed see sec_1 c -10f the income_tax regulations you are similar to the two organizations described in revrul_63_190 and revrul_55_495 that were denied exemption under sec_501 of the code because like these organizations you have not demonstrated that you operate under the lodge_system you have not proven that your activities are carried on under a form of organization that comprises local branches that are chartered by a parent organization and that are largely self-governing furthermore you have not proven that you carry on fraternal activities that are required under sec_501 of the code even though your members may enjoy a common tie or goal you have not shown evidence that rituals ceremonials and regalia commonly associated with fraternal associations are present therefore you are similar to the organizations described in revrul_73_165 and philadelphia reading relief association v commissioner supra in national union v marlow supra the court provides an explanation of a fraternal beneficiary society - you do not meet the court's definition you have not demonstrated that as a fraternal- beneficial society your members have adopted the same or very similar calling avocation or profession or who are working in union to accomplish some worthy object and who for that reason have banded themselves together as an association or society to aid and assist one another and to promote the common cause you bring individuals together for the purpose of providing a means for those individuals to invest their money in order to provide for a retirement annuity this is not an acceptable purpose under sec_501 of the code an additional requirement of sec_501 of the code is that an organization provide for the payment of life sick accident or other_benefits to members of such society order or association or their dependents you have not demonstrated that you will provide for the page payment of life sick accident or other_benefits to your members or their dependents when asked whether you provide for the payment of life sick or accident insurance you responded that you will not be handling any insurance when your membership reaches a significant point you will seek out service providers that will offer a group rate to associate members both working and retired following the rationale of revrul_84_48 other_benefits have been understood to include benefits designed to compensate for loss of income during a period of illness and accident benefits have been understood to encompass benefits payable due to a loss of earning power resulting from an injury therefore providing a means for individuals to collectively invest their personal funds for the sole purpose of generating future retirement income does not fall within the definition of other_benefits retirement income is not income for the purpose of compensating for expenses resulting from bodily injury or loss of earning power furthermore loss of earning power for the purpose of code sec_501 does not encompass retirement because retirement is an intentional act of loss of eaming power as-opposed-to an unintentional act of earning power as a result of injury or other circumstances beyond an individual's control applicant's position your letter outlines the position of the organization with regard to its qualification for tax exemption under sec_501 of the code you state that you are forming a fraternal beneficiary society under the lodge_system for the exclusive benefit of the members you also state that you cannot start to run without first crawling and that every organization begins with is the first lodge or grand lodge you stated that your the first lodge and then adds chapters a understanding is that the government wishes that all activities carried out in the grand lodge and it’s chapters to occur under the bylaws of the grand lodge and it sec_501 this is to restrict the use granted by the government from being abused by allowing activities other than those spelled out in the bylaws by this requirement the government is stating that if we grant this to you along with it comes responsibilities that you will be held accountable for as a grand lodge for the actions and conduct of the chapters as well as the lodge services response to applicant's position we hold that you do not meet the requirements for tax exemption under sec_501 of the code as a fraternal beneficiary society operating_under_the_lodge_system that provides life sick accident or other_benefits to members you do not have a fraternal purpose do not operate under the lodge_system and you do not provide life sick accident or other_benefits to members conclusion based on the facts presented above we hoid that a does not meet the requirements for tax exemption under sec_501 of the code page you do not have a fraternal purpose do not operate under the lodge_system and do not provide for the payment of life sick accident or other_benefits to its members you have the right to file a protest if you believe this determination is incorrect to protest you must submit a statement of your views and fully explain your reasoning you must submit the statement signed by one of your officers within days from the date of this letter we will consider your statement and decide if that information affects our determination if your statement does not provide a basis to reconsider our determination we will forward your case to our appeals_office you can find more information about the role of the appeals_office in publication exempt_organization appeal procedures for unagreed issues in order to have your case forwarded to our appeais office you must provide the following information which is outlined on page of publication under the heading regional_office appeal the organization's name address and employer_identification_number a statement that the organization wants to appeal the determination the date and symbols on the determination_letter a statement of facts supporting the organization's position in any contested factual issue a statement outlining the law or other authority the organization is relying on and a statement as to whether a hearing is desired the statement of facts item must be declared true under penalties of perjury this may be done by adding to the appeal the following signed declaration under penalties of perjury declare that have examined the statement of facts presented in this appeal and in any accompanying schedules and statements and to the best of my knowledge and belief they are true correct and complete your appeal will be considered incomplete without this statement an attorney certified_public_accountant or an individual enrolled to practice before the intemal revenue service may represent you during the appeal process to be represented during the appeal process you must file a proper power_of_attorney form_2848 power of attomey and for more information about declaration of representative if you have not already done so representation see publication practice_before_the_irs and power_of_attorney all forms and publications mentioned in this letter can be found at www irs gov forms and publications if if you do not intend to protest this determination you do not need to take any further action we do not hear from you within days we will issue a final adverse determination_letter to you that letter will provide information about filing tax retums and other matters page please send your protest statement form_2848 and any supporting documents to the applicable address mail to deliver to internal_revenue_service eo determinations quality assurance intemal revenue service eo determinations quality assurance if you may also fax your statement using the fax number shown in the heading of this letter you fax your statement please call the person identified in the heading of this letter to confirm that he or she received your fax if you have any questions please contact the person whose name and telephone number are shown in the heading of this letter sincerely robert choi director exempt_organizations rulings agreements


number release date id office uilc cca_2013031410480103 -------------- from -------------------- sent thursday date am to -------------------- cc subject re last_known_address question ------------ - assuming that the address that the service sent the original notice to was that taxpayer’s last_known_address then a copy should be remailed with the original mailing date to the taxpayer at the requested address see eg irm processing incoming correspondence discussing procedures for remailing undeliverable notices of deficiency let me know if you have any other questions


internal_revenue_service department of the treasury index no washington dc person to contact identifying number telephone number refer reply to cc dom it a 09-plr-121800-98 date mar j999 x y z dear this is in reference to a request filed on behalf of x the taxpayer for permission to change to the current_expense method of deducting the research_and_experimental_expenditures relating to z pursuant to the provisions of sec_174 of the internal_revenue_code for the taxable_year beginning date year_of_change it is represented that the taxpayer has been deferring research_and_experimental_expenditures which are being amortized over a period of months the change in accounting_method will apply only to research_and_experimental_expenditures paid_or_incurred by the taxpayer on or after the first day of the year_of_change in accordance with sec_1_174-4 of the income_tax regulations as of the first day of the year_of_change the total amount of unamortized research_and_experimental_expenditures was y this amount shall continue to be amortized over the remaining months in the amortization period permission is hereby granted the taxpayer pursuant to the facts presented to change to the current_expense method for deducting research_and_experimental_expenditures paid_or_incurred on or after the first day of the year_of_change to the extent that such expenditures qualify under the provisions of sec_1_174-2 beginning with the year_of_change provided the taxpayer keeps its books_and_records for the year_of_change and for subsequent taxable years provided they are not closed for that year on the date it receives this letter on the method_of_accounting granted in this letter 2g - -2- this condition is considered satisfied if the taxpayer reconciles the results obtained under the method used in keeping its books_and_records and the method used for federal_income_tax purposes and maintains sufficient records to support such reconciliation that the taxpayer uses the method granted in this letter for the year_of_change and for all later tax years unless the taxpayer secures permission to change to another recognized method that the taxpayer deducts the unamortized balance of research_and_experimental_expenditures treated as deferred expenses prior to the first day of the year_of_change in accordance with its present method of amortizing such expenditures and that the taxpayer attaches a copy of this letter to its tax_return for the year_of_change as evidence of its authority for making the change in connection with the permission granted herein it should be understood that the responsibility for making determinations as to whether the expenditures paid_or_incurred by the taxpayer in connection with the taxpayer's trade_or_business are research_and_experimental_expenditures within the meaning of sec_174 is a matter to be considered by the district_director upon examination of the taxpayer's returns this 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 sincerely yours assistant chief_counsel income_tax accounting by j charles strickland chief branch ld ytallird


t c summary opinion united_states tax_court sharon k bell petitioner v commissioner of internal revenue respondent docket no 1420-10s filed date sharon k bell pro_se john w strate and timothy froehle specially recognized for respondent armen special_trial_judge this case was heard pursuant to the provisions of sec_7463 pursuant to sec_7463 the decision to be entered is not reviewable by any other court unless otherwise indicated all section references are to the internal_revenue_code in effect when the petition was filed and all rule references are to the tax_court rules_of_practice and procedure and this opinion shall not be treated as precedent for any other case this matter is before the court on respondent’s motion to dismiss for lack of jurisdiction filed date respondent moves to dismiss this case on the ground that the petition was not filed within the time prescribed by sec_6213 or sec_7502 for reasons discussed hereinafter we shall grant respondent’s motion background at the time that the petition was filed petitioner resided in the state of oregon on date respondent sent petitioner a notice_of_deficiency the notice_of_deficiency which was sent to petitioner by certified mail addressed to her at her last_known_address determined deficiencies in income taxes for and of dollar_figure and dollar_figure respectively and accuracy-related_penalties under sec_6662 for those years of dollar_figure and dollar_figure respectively petitioner received a copy of the notice_of_deficiency on date the record does not disclose whether petitioner received the original notice_of_deficiency or if not what may have happened to it the record does disclose that on date petitioner requested a copy of the notice_of_deficiency and that on date a copy was faxed to her by respondent’s taxpayer_advocate_service the first page of the notice_of_deficiency included the following statement if you want to contest this determination in court before making any payment you have days from the date of this letter to file a petition with the united_states tax_court for a redetermination of the deficiency also included on the first page of the notice_of_deficiency was the following statement last day to file a petition with the united_states tax_court jan on tuesday date petitioner filed a petition seeking a redetermination of the deficiencies and penalties determined by respondent in the date notice_of_deficiency the petition which is dated arrived at the court by regular mail in an envelope bearing no postmark date affixed to the envelope was a stamp printed by petitioner on her personal computer using software furnished by in addition in fulfilling petitioner’s request for a copy of the notice_of_deficiency respondent’s taxpayer_advocate_service advised petitioner as follows in accordance with your request on nov a copy of the notice_of_deficiency mailed to you by certified mail on oct is enclosed you are advised that there is no provision in the law for the suspension of the 90-day period provided for in the notice for petitioning the united_states tax_court the notice enclosed indicated the 90-day period will expire on jan stamps com this stamp reflects the stamps com logo dollar_figure of us postage first-class and a 5-digit number that corresponds to petitioner’s zip code the stamp also includes two strings of alphanumeric characters whose meaning is not disclosed in the record as previously mentioned the stamp bears no postmark and was not postmarked or canceled by the u s postal service nor does a postal service postmark appear anywhere on the envelope itself as indicated respondent filed a motion to dismiss for lack of jurisdiction on date petitioner filed a notice of objection on date respondent followed with a response on date thereafter a hearing on respondent’s motion was held in fresno california on date with both parties appearing and presenting argument in support of their respective positions according to its web site stamps com is a revolutionary software-based service that allows you to calculate and print official usps postage right from your pc http stamps com petitioner mailed her notice of objection again using a stamp printed with her personal computer and stamps com software significantly this stamp bears a stamps com postmark date of mar the hearing was held in fresno california consistent with petitioner’s request for place of trial upon inquiry by the court at calendar call petitioner stated that she requested fresno which is miles from her home in oregon rather than portland which i sec_50 miles from her home because of parking issues in portland discussion general principles this court’s jurisdiction to redetermine a deficiency in income_tax depends on the issuance of a valid notice_of_deficiency and a timely-filed petition rule a c 93_tc_22 90_tc_142 sec_6212 expressly authorizes the commissioner after determining a deficiency to send a notice_of_deficiency to the taxpayer by certified or registered mail it is sufficient for jurisdictional purposes if the commissioner mails the notice_of_deficiency to the taxpayer at the taxpayer’s last_known_address sec_6212 81_tc_42 the taxpayer in turn ha sec_90 days or days if the notice is addressed to a person outside the united_states to file a petition with this court for a redetermination of the contested deficiency sec_6213 by virtue of sec_7502 a petition that is timely mailed is deemed to be timely filed although timely mailing is generally determined by the postmark date see sec_7502 sec_301 c proced admin regs extrinsic evidence is admissible if a postmark date is either illegible or missing see 68_tc_354 65_tc_548 it is clear in the present case that respondent mailed the notice_of_deficiency to petitioner on date see 89_tc_321 n holding that postal service form_3877 represents direct evidence of the date of mailing of the notice_of_deficiency see also 119_tc_183 overruling various challenges by a taxpayer to the introduction into evidence by the commissioner of postal service form the 90th day after the date of mailing was tuesday date however the petition was not received and filed by the court until tuesday date thus the petition was not timely filed and respondent’s motion must be granted unless the petition is deemed to have been timely filed by virtue of having been timely mailed as previously mentioned the envelope in which the petition was mailed to the court did not bear any postmark and both parties have proceeded on the basis that extrinsic evidence regarding the date of mailing is therefore admissible under the circumstances of this case we are content to follow the parties’ approach although we do not purport to establish a general_rule applicable in all cases involving mailpieces bearing stamps com postage petitioner’s position petitioner’s position is succinctly set forth in her notice of objection my original petition was filled out by me on date it was mailed date at the hearing petitioner was less certain that she mailed the petition on december but she was emphatic that she did so shortly after christmas petitioner offered only her testimony to support her position respondent’s position respondent relies on michael j fanning a united_states postal service executive whose duties include management of the mail irradiation program for u s government mail in zip codes including that of the tax_court in washington d c according to mr fanning first-class mail that is mailed from an origin point in salem oregon to a destination point in washington d c has a three-day service standard meaning that a mailpiece should be delivered on the third calendar day after it is deposited with the postal service however mail that is addressed to the tax_court in washington d c is subjected to an irradiation process instituted following the anthrax attacks in date that serves to add additional calendar days to the service standard petitioner also did not explain why she dated the petition if it was filled out on christmas analysis because petitioner is the party invoking the court’s jurisdiction she bears the burden of proving that the petition was timely filed see maddox v commissioner tcmemo_2009_ petitioner relies exclusively on her testimony however testimony that is not supported by documentary_evidence or otherwise need not be accepted as gospel see 87_tc_74 here we decline to accept petitioner’s unsupported testimony at face value based on the totality of the record which includes inter alia the following petitioner’s failure to offer any record of the use of her stamps com account in this regard according to its web site stamps com automatically keeps a detailed record of the postage you print this makes it easy for you to review your postage spending or to print a report for your files of course the date that postage is printed is not necessarily the date of mailing this obvious truth was recognized by petitioner at trial well i can print it but i can’t always get to a post office to get it mailed on that date but the date that postage is printed would at least constitute some evidence of the date of mailing the fact that the stamp affixed to the envelope containing the petition bore no postmark whereas the stamp affixed to the envelope containing the notice of objection did bear a stamps com postmark this distinction suggests that postmarking may be at the sender’s option giving credence to the stamps com postmark on the envelope containing petitioner’s notice of objection the elapsed time between the mailing of that document on date and its receipt by the court on date is within the service standard of the postal service as described by mr fanning this provides a concrete example supporting his statement regarding the 6-day service standard applicable to the instant case conclusion because petitioner has failed to prove the date on which her petition was mailed and further because her petition was not delivered or deemed delivered to the court within days of the date of mailing of the notice_of_deficiency we hold that we lack jurisdiction under sec_6213 and sec_7502 accordingly we are obliged to grant respondent’s motion to dismiss despite our we should not be understood to imply that a stamps com postmark is entitled to the same dignity as a postmark made by the united_states postal service petitioner could have avoided this outcome by going to a u s post office and sending her petition by registered or certified mail as to registered mail the date of registration is treated as the postmark date as to certified mail the sender can obtain a postmarked receipt that is evidence of timely continued holding we observe that petitioner will still be able to have her day in court by paying the determined amounts filing a claim_for_refund and then if the claim is denied or not acted on for months bringing a suit_for_refund in the appropriate federal court see 55_tc_138 n to give effect to the foregoing an order granting respondent’s motion and dismissing this case for lack of jurisdiction will be entered continued mailing and hence timely filing see sec_7502 sec_301_7502-1 proced admin regs


internal_revenue_service department of the treasury number release date index no washington dc person to contact telephone number refer reply to date plr-123840-00 cc intl b1 date a date b date c country d year e dear this is in response to a letter dated b by a’s authorized representative requesting a ruling under sec_877 of the internal_revenue_code_of_1986 code that a’s loss of long-term_resident status did not have for one of its principal purposes the avoidance of u s taxes under subtitle a or subtitle b of the code 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 the information submitted for consideration is substantially as set forth below a a long-term_resident of the united_states within the meaning of sec_877 relinquished her u s lawful permanent resident status expatriated on date c by returning her green card to the u s embassy in country d a has been a citizen of country d during her entire life by reason of her birth in country d a and a’s parents were born in country d a became a permanent resident_of_the_united_states and obtained her green card in year e on the date of a’s expatriation her net_worth exceeded the threshold required under sec_877 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 taxed under sec_877 and 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 plr-123840-00 avoid u s taxes page a former citizen or former 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 under notice_98_34 1998_2_cb_29 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 a is eligible to request a ruling pursuant to notice_98_34 because on the date of expatriation a was a resident and fully liable to income_tax in country d the country where a was born 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 submitted all the information required by notice_98_34 including any additional information requested by the service after review of the submission based solely on the information 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 avoidance of u s taxes however because the information submitted does not clearly establish the existence or lack of a principal purpose to avoid taxes under subtitle a or b of the code no opinion is expressed as to whether a’s expatriation had for one of its principal purposes the avoidance of such taxes while this ruling rebuts the presumption of tax_avoidance under sec_877 it is not conclusive as to whether a subsequently may be found to have a principal purpose of tax_avoidance under sec_877 sec_2107 and sec_2501 based on all the facts and circumstances see sec_877 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 taxable periods prior to his loss of permanent residence status or for taxable periods after her loss of permanent residence status 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 plr-123840-00 page which a obtained the ruling 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 a’s representative sincerely yours ____________________ w edward williams senior technical reviewer branch office of the associate chief_counsel international cc


department of the treasury internal_revenue_service washington d c date cc ebeo br wta-n-122493-98 number release date uilc dollar_figure internal_revenue_service national_office field_service_advice memorandum for from chief branch employee_benefits and exempt_organizations cc ebeo subject welding and oilfield workers this field_service_advice responds to your request of date field_service_advice is not binding on examination or appeals and is not a final case determination this document is not to be cited as precedent issue whether amounts paid to employees as rig rentals are wages for federal employment_tax purposes conclusion whether rig rentals are wages depends upon whether the rentals are paid pursuant to an accountable_plan if so paid the payments are not wages for employment_tax purposes thus the issue that must be resolved based upon the facts and circumstances of each case is whether the rig rentals are paid pursuant to an accountable_plan facts on date your office submitted a request for technical_advice with respect to rig rental payments under separate cover we advised that we were unable to process the request for technical_advice because the requirements of revproc_1998_1 i r b were not met in particular the facts wta-n-122493-98 provided were not case specific accordingly we closed the request for technical_advice and opened a field_service_advice discussions with the revenue_agent who prepared the request confirmed that examination is seeking general advice on handling similar cases involving rig rentals thus we provide the following advice we understand that there are many similar cases and we recognize that examination would like the same conclusion to apply to all cases however as explained herein determining whether the rig rentals are paid pursuant to an accountable_plan requires performing a factual analysis of the specific facts of each case generally an employer engaged in the business of specialized industrial construction will hire employee rig welders welders are highly skilled and when hired to perform welding services that is the only function they perform at the job site they provide all of their own equipment which generally includes a truck welder welding tanks and related items on a non-union job welders are required to provide all their own welding supplies on a union job supplies are generally provided by the employer typically employers compensate the welders by paying them an hourly wage of about dollar_figure per hour which is treated as wages subject_to employment_taxes the employer will also pay the welder an additional_amount per hour such as dollar_figure to rent the employee’s welding equipment this payment is commonly referred to as a rig rental the welder is paid at the end of each week when he turns in his rig ticket which reports the hours worked each day but does not indicate the expenses the welder incurred associated with his equipment thus the amount of rig rental is based solely on hours worked and has no apparent relationship to expenses_incurred the employer issues the employee two checks one for wages and one for rig rentals the amount treated as wages will be reported to the employee on form_w-2 and the rig rental if reported will be reported on form_1099 law analysis sec_62 as stated the issue is whether the rig rentals are wages for employment_tax purposes the three federal employment_taxes are the federal_insurance_contributions_act fica_taxes federal_unemployment_tax_act futa_tax and income_tax_withholding in general wages are defined for fica futa and income_tax_withholding purposes as all remuneration for employment unless otherwise excluded sec_3121 sec_3306 and sec_3401 there is no statutory exception from wages for amounts paid_by employers to employees for employee business_expenses however sec_1_62-2 provides that amounts an employer wta-n-122493-98 pays to an employee for employee business_expenses under an accountable_plan are excluded from the employee’s gross_income are not required to be reported on the employee’s form_w-2 and are exempt from the withholding and payment of employment_taxes sec_31_3121_a_-3 sec_31_3306_b_-2 and sec_31_3401_a_-4 of the employment_tax regulations and sec_1_6041-3 of the income_tax regulations whether amounts are paid under an accountable_plan is governed by sec_62 which includes the provisions on employee reimbursement or other expense allowance arrangements sec_62 generally defines adjusted_gross_income as gross_income minus certain above-the-line deductions sec_62 allows an employee an above-the-line deduction for expenses paid_by the employee in connection with his or her performance of services as an employee under a reimbursement or other expense allowance arrangement with the employer sec_62 provides that an arrangement will not be treated as a reimbursement or other expense allowance arrangement for purposes of sec_62 if the arrangement does not require the employee to substantiate the expenses covered by the arrangement to the person providing the reimbursement or gives the employee with the right to retain any amount in excess of the substantiated expenses covered under the arrangement under sec_1_62-2 a reimbursement or other expense allowance arrangement satisfies the requirements of sec_62 if it meets the three requirements of business connection substantiation and returning amounts in excess of expenses set forth in paragraphs d e and f respectively of sec_1_62-2 the three requirements if an arrangement meets the three requirements all amounts paid under the arrangement are treated as paid under an accountable_plan sec_1 c i the regulations further provide that if an arrangement does not satisfy one or more of the three requirements all amounts paid under the arrangement are paid under a nonaccountable_plan amounts paid under a nonaccountable_plan are included in the employee's gross_income for the taxable_year must be reported to the employee on form_w-2 and are subject_to_withholding and payment of employment_taxes sec_1_62-2 sec_31_3121_a_-3 sec_31 b - b and a -4 b sec_62 of the code was enacted by the family support act of publaw_100_485 through enactment of sec_67 of the code by sec_132 of the tax_reform_act_of_1986 act publaw_99_514 c b vol the congress sharpened the distinction between the tax treatment of unreimbursed and reimbursed employee business_expenses among other changes unreimbursed employee business_expenses plus other miscellaneous_itemized_deductions generally were made wta-n-122493-98 an arrangement meets the business connection requirement of sec_1_62-2 if it provides advances allowances including per_diem allowances allowances for meals and incidental expense and mileage allowances or reimbursements for business_expenses that are allowable as deductions by part vi sec_161 through sec_196 subchapter_b chapter of the code and that are paid_or_incurred by the employee in_connection_with_the_performance_of_services as an employee sec_1_62-2 provides that the business connection requirement will not be satisfied if the payor arranges to pay an amount to an employee regardless of whether the employee incurs or is reasonably expected to incur business_expenses described in paragraphs d or d sec_1_62-2 of the regulations provides that the substantiation requirement is met if the arrangement requires each business_expense to be substantiated to the payor the employer its agent or a third party within a reasonable period of time as for the third requirement that amounts in excess of expenses must be returned to the payor the general_rule of sec_1_62-2 provides that this requirement is met if the arrangement requires the employee to return to the payor within a reasonable period of time any amount_paid under the arrangement in excess of the expenses substantiated sec_1_62-2 provides that if a payor's reimbursement or other expense allowance arrangement evidences a pattern of abuse of the rules of sec_62 and the regulation sections all payments made under the arrangement will be treated as made under a nonaccountable_plan revrul_68_624 employers typically rely on revrul_68_624 1968_2_cb_424 as authority for designating a portion of an employee’s compensation as a rental payment and excluding that amount from wages the question raised in revrul_68_624 is what percentage of the total amount_paid by a corporation for_the_use_of a truck and the services of a driver is allocable as wages of the driver for fica purposes the facts specify that the corporation hires a truck and driver to haul stone from its subject_to a two-percent floor at the same time the congress decided to retain the above-the-line deduction treatment for reimbursements received by an employee pursuant to a reimbursement arrangement this rationale for allowing an above-the- line deduction to offset true reimbursement amounts does not apply in the case of nonaccountable plans under nonaccountable plans the amount received by the employee from the employer is not determined by the actual amount of expenses_incurred by the employee during the year wta-n-122493-98 quarry to its river loading dock at a fixed amount per load and allocates one-third of the amount_paid the employee as wages and two-thirds as payment for_the_use_of the truck the ruling holds that an allocation of the amount_paid to an individual when the payment is for both personal services and the use of equipment must be governed by the facts in each case if the contract of employment does not specify a reasonable division of the total amount_paid between wages and equipment a proper allocation may be arrived at by reference to the prevailing wage scale in a particular locality for similar services in operating the same class of equipment or the fair rental value of similar equipment although revrul_68_624 has not been obsoleted we believe it should not be relied upon to exclude rental payments for equipment from wages the analysis in rev_rul is incomplete under current law because it does not consider whether the rental payments are paid under an accountable_plan under current law the rental payments can be excluded from wages only if they are paid under an accountable_plan an employment contract that merely allocates compensation between wages and rentals will not satisfy the requirements of sec_62 to exclude employee reimbursements or other expense allowance payments from wages an employer must establish an accountable_plan case law research has not revealed any private letter rulings or technical_advice memoranda concerning whether rig rentals are wages for employment_tax purposes in addition to our knowledge no case has considered this specific issue however two recent cases trans-box systems v united_states no c-97- the u s dist lexis n d cal date and welch v commissioner t c memo are helpful in analyzing the rig rental issue trans-box a courier service paid its courier drivers who used their own cars to make deliveries dollar_figure per hour trans-box treated of the dollar_figure as wages subject_to employment_taxes and treated the remaining as either lease payments or vehicle expense payments the government assessed employment_taxes on the entire dollar_figure in opposing the government’s motion for summary_judgment trans-box’s primary position was that the automobile lease payments or vehicle expenses were paid under an accountable_plan and were exempt from employment_taxes trans-box asserted that it had substantially complied with the 2in baker v barnard construction co inc wl d n m rig welders prevailed on a summary_judgment motion that they were employees for purposes of the fair labor standards act although this decision is not relevant for tax purposes it is interesting that the facts specify that the litigating rig welders filed as independent contractors for tax purposes wta-n-122493-98 accountable_plan requirements in sec_62 citing 81_tc_709 trans-box raised two alternative arguments first it argued the drivers were independent contractors rather than employees for purposes of the automobile lease payments and thus not subject_to sec_62 second trans-box argued that it was entitled to relief under sec_530 of the revenue act of the government argued that trans-box had treated the drivers as employees for all purposes and the arrangement trans-box established was not an accountable_plan because the drivers were not required to substantiate their expenses or return any amounts received that exceeded their expenses the court concluded that trans-box failed to create a triable issue of fact regarding whether the drivers were at least for some purposes independent contractors the court noted that the facts in the record point to the conclusion that trans-box had treated the owner-operators as employees for all purposes it had paid the drivers hourly wages reported those on form_w-2 and not filed any forms for the automobile payments the court pointed out that trans-box's primary argument was that the drivers were employees for all purposes and that it substantially complied with the requirements of sec_62 while acknowledging that trans-box was free to argue alternative or conflicting legal arguments the court stated serious questions about the veracity of its allegations are raised because trans-box’s alternative argument relies upon conflicting versions of the material facts at issue trans-box systems v united_states u s dist lexis thus the court granted the government's motion for summary_judgment on the plaintiff's claims and summary_judgment on the government's counterclaim for recovery_of unpaid employment_taxes the court did not address the sec_530 argument although this decision rests on trans-box’s failure to create a triable issue of fact on worker classification it is significant because the court refused to apply a substantial compliance rule to sec_62 or to allow trans-box to argue different versions of the facts in welch v commissioner t c memo the tax_court held that mr welch’s equipment_leasing activities in were not passive activities mr welch a carpenter was hired by movie production companies as a construction 3although not asserted by the government trans-box also did not satisfy the business connection requirement sec_1_62-2 provides that the business connection is not satisfied if a payor arranges to pay an amount to an employee regardless of whether the employee incurs or is reasonably expected to incur business_expenses wta-n-122493-98 coordinator mr welch and the production company would enter into a deal memorandum setting forth the terms of his employment including the rate that he would be paid and the rate at which he rented his equipment to the company typically an inventory of his tools and equipment would be attached to the deal memo the production company would report mr welch’s wages on a form_w-2 and the tool rentals on a form_1099 as construction coordinator he constructed movie sets hired employees arranged for the purchase of materials and furnished all the required tools he was required to purchase maintain transport and repair the tools as needed the facts also specify that in mr welch rented tools to a third party for dollar_figure for a project for which he was not the construction coordinator the court analyzed whether mr welch’s rental_activity was a rental_activity for purposes of sec_469 and concluded it was not because he provided equipment to production companies for an average period of days or less and he performed significant_personal_services in connection with making the property available for use by customers the court noted that he acquired maintained transported and repaired the tools and equipment the court concluded that mr welch provided extraordinary_personal_services and the rental of the tools and equipment by the production companies was incidental to receipt of mr welch’s services as a construction coordinator the court further held that mr welch materially participated in his business as a construction coordinator and therefore was not subject_to the loss limitations imposed by sec_469 although the tax_court was not required to decide whether the rental arrangement was an accountable_plan within the meaning of sec_62 or whether mr welch was an employee or independent_contractor the facts illustrate an arrangement for the rental of equipment that was an arms length transaction memorialized in a writing perhaps the most significant fact is that mr welch actually rented his tools to a third party that did not also employ him as the construction coordinator thus at least in that instance his rental_activity was separate from the services he performed as an employee case development hazards and other considerations it is our view that the best approach to address the rig rental issue wta-n-122493-98 wta-n-122493-98 if you have further questions please call me at wta-n-122493-98 jerry e holmes


commissioner department of the treasury i n t e r n a l r e v e n u e s e r v i c e washington d c date number info release date conex-103480-07 uil the honorable chuck hagel united_states senate washington d c dear senator hagel thank you for your recent letter concerning the irs and department of treasury’s proposed revenue_ruling that addresses the self-employment_tax treatment of payments under the conservation reserve program crp we appreciate your comments we are aware of the decision of the u s tax_court regarding this issue as well as the holding of the u s court_of_appeals that overruled that decision it was the lack of clarity in this area that prompted the irs and department of treasury to seek public input on guidance to address this issue the proposed revenue_ruling that resulted from this project reflects what the irs and the department of treasury believe is the proper interpretation based on existing statutory and case law we believe that barring specific statutory language exempting crp payments from self-employment_income these payments are subject_to self-employment_tax as income derived from a trade_or_business as you know we have requested comments regarding the proposed revenue_ruling and will take all comments received including yours into account as part of the process finalizing the ruling if you would like to discuss this further please contact me or your staff may contact ------------- --------- -------------- assistant chief_counsel exempt_organizations employment_tax government entities at ----- ------------- sincerely mark w everson commissioner department of the treasury i n t e r n a l r e v e n u e s e r v i c e washington d c date conex-103480-07 uil the honorable pat roberts united_states senate washington d c dear senator roberts thank you for your recent letter concerning the irs and department of treasury’s proposed revenue_ruling that addresses the self-employment_tax treatment of payments under the conservation reserve program crp we appreciate your comments we are aware of the decision of the u s tax_court regarding this issue as well as the holding of the u s court_of_appeals that overruled that decision it was the lack of clarity in this area that prompted the irs and department of treasury to seek public input on guidance to address this issue the proposed revenue_ruling that resulted from this project reflects what the irs and the department of treasury believe is the proper interpretation based on existing statutory and case law we believe that barring specific statutory language exempting crp payments from self-employment_income these payments are subject_to self-employment_tax as income derived from a trade_or_business as you know we have requested comments regarding the proposed revenue_ruling and will take all comments received including yours into account as part of the process finalizing the ruling if you would like to discuss this further please contact me or your staff may contact ------------- --------- -------------- assistant chief_counsel exempt_organizations employment_tax government entities at ----- ------------- sincerely mark w everson commissioner department of the treasury i n t e r n a l r e v e n u e s e r v i c e washington d c date conex-103480-07 uil the honorable byron dorgan united_states senate washington d c dear senator dorgan thank you for your recent letter concerning the irs and department of treasury’s proposed revenue_ruling that addresses the self-employment_tax treatment of payments under the conservation reserve program crp we appreciate your comments we are aware of the decision of the u s tax_court regarding this issue as well as the holding of the u s court_of_appeals that overruled that decision it was the lack of clarity in this area that prompted the irs and department of treasury to seek public input on guidance to address this issue the proposed revenue_ruling that resulted from this project reflects what the irs and the department of treasury believe is the proper interpretation based on existing statutory and case law we believe that barring specific statutory language exempting crp payments from self-employment_income these payments are subject_to self-employment_tax as income derived from a trade_or_business as you know we have requested comments regarding the proposed revenue_ruling and will take all comments received including yours into account as part of the process finalizing the ruling if you would like to discuss this further please contact me or your staff may contact ------------- --------- -------------- assistant chief_counsel exempt_organizations employment_tax government entities at ----- ------------- sincerely mark w everson commissioner department of the treasury i n t e r n a l r e v e n u e s e r v i c e washington d c date conex-103480-07 uil the honorable max baucus united_states senate washington d c dear senator baucus thank you for your recent letter concerning the irs and department of treasury’s proposed revenue_ruling that addresses the self-employment_tax treatment of payments under the conservation reserve program crp we appreciate your comments we are aware of the decision of the u s tax_court regarding this issue as well as the holding of the u s court_of_appeals that overruled that decision it was the lack of clarity in this area that prompted the irs and department of treasury to seek public input on guidance to address this issue the proposed revenue_ruling that resulted from this project reflects what the irs and the department of treasury believe is the proper interpretation based on existing statutory and case law we believe that barring specific statutory language exempting crp payments from self-employment_income these payments are subject_to self-employment_tax as income derived from a trade_or_business as you know we have requested comments regarding the proposed revenue_ruling and will take all comments received including yours into account as part of the process finalizing the ruling if you would like to discuss this further please contact me or your staff may contact ------------- --------- -------------- assistant chief_counsel exempt_organizations employment_tax government entities at ----- ------------- sincerely mark w everson commissioner department of the treasury i n t e r n a l r e v e n u e s e r v i c e washington d c date conex-103480-07 uil the honorable kent conrad united_states senate washington d c dear senator conrad thank you for your recent letter concerning the irs and department of treasury’s proposed revenue_ruling that addresses the self-employment_tax treatment of payments under the conservation reserve program crp we appreciate your comments we are aware of the decision of the u s tax_court regarding this issue as well as the holding of the u s court_of_appeals that overruled that decision it was the lack of clarity in this area that prompted the irs and department of treasury to seek public input on guidance to address this issue the proposed revenue_ruling that resulted from this project reflects wha t the irs and the department of treasury believe is the proper interpretation based on existing statutory and case law we believe that barring specific statutory language exempting crp payments from self-employment_income these payments are subject_to self-employment_tax as income derived from a trade_or_business as you know we have requested comments regarding the proposed revenue_ruling and will take all comments received including yours into account as part of the process finalizing the ruling if you would like to discuss this further please contact me or your staff may contact ------------- --------- -------------- assistant chief_counsel exempt_organizations employment_tax government entities at ----- ------------- sincerely mark w everson commissioner department of the treasury i n t e r n a l r e v e n u e s e r v i c e washington d c date conex-103480-07 uil the honorable richard durbin united_states senate washington d c dear senator durbin thank you for your recent letter concerning the irs and department of treasury’s proposed revenue_ruling that addresses the self-employment_tax treatment of payments under the conservation reserve program crp we appreciate your comments we are aware of the decision of the u s tax_court regarding this issue as well as the holding of the u s court_of_appeals that overruled that decision it was the lack of clarity in this area that prompted the irs and department of treasury to seek public input on guidance to address this issue the proposed revenue_ruling that resulted from this project reflects what the irs and the department of treasury believe is the proper interpretation based on existing statutory and case law we believe that barring specific statutory language exempting crp payments from self-employment_income these payments are subject_to self-employment_tax as income derived from a trade_or_business as you know we have requested comments regarding the proposed revenue_ruling and will take all comments received including yours into account as part of the process finalizing the ruling if you would like to discuss this further please contact me or your staff may contact ------------- --------- -------------- assistant chief_counsel exempt_organizations employment_tax government entities at ----- ------------- sincerely mark w everson commissioner department of the treasury i n t e r n a l r e v e n u e s e r v i c e washington d c date conex-103480-07 uil the honorable sam brownback united_states senate washington d c dear senator brownback thank you for your recent letter concerning the irs and department of treasury’s proposed revenue_ruling that addresses the self-employment_tax treatment of payments under the conservation reserve program crp we appreciate your comments we are aware of the decision of the u s tax_court regarding this issue as well as the holding of the u s court_of_appeals that overruled that decision it was the lack of clarity in this area that prompted the irs and department of treasury to seek public input on guidance to address this issue the proposed revenue_ruling that resulted from this project reflects what the irs and the department of treasury believe is the proper interpretation based on existing statutory and case law we believe that barring specific statutory language exempting crp payments from self-employment_income these payments are subject_to self-employment_tax as income derived from a trade_or_business as you know we have requested comments regarding the proposed revenue_ruling and will take all comments received including yours into account as part of the process finalizing the ruling if you would like to discuss this further please contact me or your staff may contact ------------- --------- -------------- assistant chief_counsel exempt_organizations employment_tax government entities at ----- ------------- sincerely mark w everson c ommissioner department of the treasury i nt e r n a l r e v e n u e s e r v i c e washington d c date conex-103480-07 uil the honorable larry craig united_states senate washington d c dear senator craig thank you for your recent letter concerning the irs and department of treasury’s proposed revenue_ruling that addresses the self-employment_tax treatment of payments under the conservation reserve program crp we appreciate your comments we are aware of the decision of the u s tax_court regarding this issue as well as the holding of the u s court_of_appeals that overruled that decision it was the lack of clarity in this area that prompted the irs and department of treasury to seek public input on guidance to address this issue the proposed revenue_ruling that resulted from this project reflects what the irs and the department of treasury believe is the proper interpretation based on existing statutory and case law we believe that barring specific statutory language exempting crp payments from self-employment_income these payments are subject_to self-employment_tax as income derived from a trade_or_business as you know we have requested comments regarding the proposed revenue_ruling and will take all comments received including yours into account as part of the process finalizing the ruling if you would like to discuss this further please contact me or your staff may contact ------------- --------- -------------- assistant chief_counsel exempt_organizations employment_tax government entities at ----- ------------- sincerely mark w everson commissioner department of the treasury i n t e r n a l r e v e n u e s e r v i c e washington d c date conex-103480-07 uil the honorable christopher bond united_states senate washington d c dear senator bond thank you for your recent letter concerning the irs and department of treasury’s proposed revenue_ruling that addresses the self-employment_tax treatment of payments under the conservation reserve program crp we appreciate your comments we are aware of the decision of the u s tax_court regarding this issue as well as the holding of the u s court_of_appeals that overruled that decision it was the lack of clarity in this area that prompted the irs and department of treasury to seek public input on guidance to address this issue the proposed revenue_ruling that resulted from this project reflects what the irs and the department of treasury believe is the proper interpretation based on existing statutory and case law we believe that barring specific statutory language exempting crp payments from self-employment_income these payments are subject_to self-employment_tax as income derived from a trade_or_business as you know we have requested comments regarding the proposed revenue_ruling and will take all comments received including yours into account as part of the process finalizing the ruling if you would like to discuss this further please contact me or your staff may contact ------------- --------- -------------- assistant chief_counsel exempt_organizations employment_tax government entities at ----- ------------- sincerely mark w everson commissioner department of the treasury i n t e r n a l r e v e n u e s e r v i c e washington d c date conex-103480-07 uil the honorable tom harkin united_states senate washington d c dear senator harkin thank you for your recent letter concerning the irs and department of treasury’s proposed revenue_ruling that addresses the self-employment_tax treatment of payments under the conservation reserve program crp we appreciate your comments we are aware of the decision of the u s tax_court regarding this issue as well as the holding of the u s court_of_appeals that overruled that decision it was the lack of clarity in this area that prompted the irs and department of treasury to seek public input on guidance to address this issue the proposed revenue_ruling that resulted from this project reflects what the irs and the department of treasury believe is the proper interpretation based on existing statutory and case law we believe that barring specific statutory language exempting crp payments from self-employment_income these payments are subject_to self-employment ta x as income derived from a trade_or_business as you know we have requested comments regarding the proposed revenue_ruling and will take all comments received including yours into account as part of the process finalizing the ruling if you would like to discuss this further please contact me or your staff may contact ------------- --------- -------------- assistant chief_counsel exempt_organizations employment_tax government entities at ----- ------------- sincerely mark w everson commissioner department of the treasury i n t e r n a l r e v e n u e s e r v i c e washington d c date conex-103480-07 uil the honorable mary landrieu united_states senate washington d c dear senator landrieu thank you for your recent letter concerning the irs and department of treasury’s proposed revenue_ruling that addresses the self-employment_tax treatment of payments under the conservation reserve program crp we appreciate your comments we are aware of the decision of the u s tax_court regarding this issue as well as the holding of the u s court_of_appeals that overruled that decision it was the lack of clarity in this area that prompted the irs and department of treasury to seek public input on guidance to address this issue the proposed revenue_ruling that resulted from this project reflects what the irs and the department of treasury believe is the proper interpretation based on existing statutory and case law we believe that barring specific statutory language exempting crp payments from self-employment_income these payments are subject_to self-employment_tax as income derived from a trade_or_business as you know we have requested comments regarding the proposed revenue_ruling and will take all comments received including yours into account as part of the process finalizing the ruling if you would like to discuss this further please contact me or your staff may contact ------------- --------- -------------- assistant chief_counsel exempt_organizations employment_tax government entities at ----- ------------- sincerely mark w everson commissioner department of the treasury i n t e r n a l r e v e n u e s e r v i c e washington d c date conex-103480-07 uil the honorable ken salazar united_states senate washington d c dear senator salazar thank you for your recent letter concerning the irs and department of treasury’s proposed revenue_ruling that addresses the self-employment_tax treatment of payments under the conservation reserve program crp we appreciate your comments we are aware of the decision of the u s tax_court regarding this issue as well as the holding of the u s court_of_appeals that overruled that decision it was the lack of clarity in this area that prompted the irs and department of treasury to seek public input on guidance to address this issue the proposed revenue_ruling that resulted from this project reflects what the irs and the department of treasury believe is the proper interpretation based on existing statutory and case law we believe that barring specific statutory language exempting crp payments from self-employment_income these payments are subject_to self-employment_tax as income derived from a trade_or_business as you know we have requested comments regarding the proposed revenue_ruling and will take all comments received including yours into account as part of the process finalizing the ruling if you would like to discuss this further please contact me or your staff may contact ------------- --------- -------------- assistant chief_counsel exempt_organizations employment_tax government entities at ----- ------------- sincerely mark w everson commissioner department of the treasury i n t e r n a l r e v e n u e s e r v i c e washington d c date conex-103480-07 uil the honorable patty murray united_states senate washington d c dear senator murray thank you for your recent letter concerning the irs and department of treasury’s proposed revenue_ruling that addresses the self-employment_tax treatment of payments under the conservation reserve program crp we appreciate your comments we are aware of the decision of the u s tax_court regarding this issue as well as the holding of the u s court_of_appeals that overruled that decision it was the lack of clarity in this area that prompted the irs and department of treasury to seek public input on guidance to address this issue the proposed revenue_ruling that resulted from this project reflects what the irs and the department of treasury believe is the proper interpretation based on existing statutory and case law we believe that barring specific statutory language exempting crp payments from self-employment_income these payments are subject_to self-employment_tax as income derived from a trade_or_business as you know we have requested comments regarding the proposed revenue_ruling and will take all comments received including yours into account as part of the process finalizing the ruling if you would like to discuss this further please contact me or your staff may contact ------------- --------- -------------- assistant chief_counsel exempt_organizations employment_tax government entities at ----- ------------- sincerely mark w everson commissioner department of the treasury i n t e r n a l r e v e n u e s e r v i c e washington d c date conex-103480-07 uil the honorable benjamin nelson united_states senate washington d c dear senator nelson thank you for your recent letter concerning the irs and department of treasury’s proposed revenue_ruling that addresses the self-employment_tax treatment of payments under the conservation reserve program crp we appreciate your comments we are aware of the decision of the u s tax_court regarding this issue as well as the holding of the u s court_of_appeals that overruled that decision it was the lack of clarity in this area that prompted the irs and department of treasury to seek public input on guidance to address this issue the proposed revenue_ruling that resulted from this project reflects what the irs and the department of treasury believe is the proper interpretation based on existing statutory and case law we believe that barring specific statutory language exempting crp payments from self-employment_income these payments are subject_to self-employment_tax as income derived from a trade_or_business as you know we have requested comments regarding the proposed revenue_ruling and will take all comments received including yours into account as part of the process finalizing the ruling if you would like to discuss this further please contact me or your staff may contact ------------- --------- -------------- assistant chief_counsel exempt_organizations employment_tax government entities at ----- ------------- sincerely mark w everson commissioner department of the treasury i n t e r n a l r e v e n u e s e r v i c e washington d c date conex-103480-07 uil the honorable amy klobuchar united_states senate washington d c dear senator klobuchar thank you for your recent letter concerning the irs and department of treasury’s proposed revenue_ruling that addresses the self-employment_tax treatment of payments under the conservation reserve program crp we appreciate your comments we are aware of the decision of the u s tax_court regarding this issue as well as the holding of the u s court_of_appeals that overruled that decision it was the lack of clarity in this area that prompted the irs and department of treasury to seek public input on guidance to address this issue the proposed revenue_ruling that resulted from this project reflects what the irs and the department of treasury believe is the proper interpretation based on existing statutory and case law we believe that barring specific statutory language exempting crp payments from self-employment_income these payments are subject_to self-employment_tax as income derived from a trade_or_business as you know we have requested comments regarding the proposed revenue_ruling and will take all comments received including yours into account as part of the process finalizing the ruling if you would like to discuss this further please contact me or your staff may contact ------------- --------- -------------- assistant chief_counsel exempt_organizations employment_tax government entities at ----- ------------- sincerely mark w everson commissioner department of the treasury i n t e r n a l r e v e n u e s e r v i c e washington d c date conex-103480-07 uil the honorable wayne allard united_states senate washington d c dear senator allard thank you for your recent letter concerning the irs and department of treasury’s proposed revenue_ruling that addresses the self-employment_tax treatment of payments under the conservation reserve program crp we appreciate your comments we are aware of the decision of the u s tax_court regarding this issue as well as the holding of the u s court_of_appeals that overruled that decision it was the lack of clarity in this area that prompted the irs and department of treasury to seek public input on guidance to address this issue the proposed revenue_ruling that resulted from this project reflects what the irs and the department of treasury believe is the proper interpretation based on existing statutory and case law we believe that barring specific statutory language exempting crp payments from self-employment_income these payments are subject_to self-employment_tax as income derived from a trade_or_business as you know we have requested comments regarding the proposed revenue_ruling and will take all comments received including yours into account as part of the process finalizing the ruling if you would like to discuss this further please contact me or your staff may contact ------------- --------- -------------- assistant chief_counsel exempt_organizations employment_tax government entities at ----- ------------- sincerely mark w everson commissioner department of the treasury i n t e r n a l r e v e n u e s e r v i c e washington d c date conex-103480-07 uil the honorable norm coleman united_states senate washington d c dear senator coleman thank you for your recent letter concerning the irs and department of treasury’s proposed revenue_ruling that addresses the self-employment_tax treatment of payments under the conservation reserve program crp we appreciate your comments we are aware of the decision of the u s tax_court regarding this issue as well as the holding of the u s court_of_appeals that overruled that decision it was the lack of clarity in this area that prompted the irs and department of treasury to seek public input on guidance to address this issue the proposed revenue_ruling that resulted from this project reflects what the irs and the department of treasury believe is the proper interpretation based on existing statutory and case law we believe that barring specific statutory language exempting crp payments from self-employment_income these payments are subject_to self-employment_tax as income derived from a trade_or_business as you know we have requested comments regarding the proposed revenue_ruling and will take all comments received including yours into account as part of the process finalizing the ruling if you would like to discuss this further please contact me or your staff may contact ------------- --------- -------------- assistant chief_counsel exempt_organizations employment_tax government entities at ----- ------------- sincerely mark w everson commissioner department of the treasury i n t e r n a l r e v e n u e s e r v i c e washington d c date conex-103480-07 uil the honorable john thune united_states senate washington d c dear senator thune thank you for your recent letter concerning the irs and department of treasury’s proposed revenue_ruling that addresses the self-employment_tax treatment of payments under the conservation reserve program crp we appreciate your comments we are aware of the decision of the u s tax_court regarding this issue as well as the holding of the u s court_of_appeals that overruled that decision it was the lack of clarity in this area that prompted the irs and department of treasury to seek public input on guidance to address this issue the proposed revenue_ruling that resulted from this project reflects what the irs and the department of treasury believe is the proper interpretation based on existing statutory and case law we believe that barring specific statutory language exempting crp payments from self-employment_income these payments are subject_to self-employment_tax as income derived from a trade_or_business as you know we have requested comments regarding the proposed revenue_ruling and will take all comments received including yours into account as part of the process finalizing the ruling if you would like to discuss this further please contact me or your staff may contact ------------- --------- -------------- assistant chief_counsel exempt_organizations employment_tax government entities at ----- ------------- sincerely mark w everson commissioner department of the treasury i n t e r n a l r e v e n u e s e r v i c e washington d c date conex-103480-07 uil the honorable carl levin united_states senate washington d c dear senator levin thank you for your recent letter concerning the irs and department of treasury’s proposed revenue_ruling that addresses the self-employment_tax treatment of payments under the conservation reserve program crp we appreciate your comments we are aware of the decision of the u s tax_court regarding this issue as well as the holding of the u s court_of_appeals that overruled that decision it was the lack of clarity in this area that prompted the irs and department of treasury to seek public input on guidance to address this issue the proposed revenue_ruling that resulted from this project reflects what the irs and the department of treasury believe is the proper interpretation based on existing statutory and case law we believe that barring specific statutory language exempting crp payments from self-employment_income these payments are subject_to self-employment_tax as income derived from a trade_or_business as you know we have requested comments regarding the proposed revenue_ruling and will take all comments received including yours into account as part of the process finalizing the ruling if you would like to discuss this further please contact me or your staff may contact ------------- --------- -------------- assistant chief_counsel exempt_organizations employment_tax government entities at ----- ------------- sincerely mark w everson


significant index no department of the treasury internal_revenue_service washington d c tax exempt and government entities sep _ set ep ra az re request for_the_use_of plan-specific substitute mortality tables for taxpayer plan plan ein ein - - dear plan no plan no this letter is to inform you that your request to use substitute mortality tables for making computations under sec_430 of the internal_revenue_code the code for plan and plan has been granted with respect to the populations specified in this letter effective for a period of plan years beginning with the plan_year commencing january code and sec_303 of the employee_retirement_income_security_act_of_1974 your request has been granted in accordance with sec_430 of the specifically this approval applies to the following population e plan sec_1 and combined - male and female annuitants including disabled participants based on the information provided by the taxpayer the following population does not have credible mortality experience and therefore the standard mortality tables will be used for calculations under sec_430 of the code e plan sec_1 and combined - male and female nonannuitants in granting this approval we have only considered whether the substitute mortality rates were developed correctly in accordance with sec_1_430_h_3_-2 of the treasury regulations regulations and revrul_2017_55 accordingly we are not expressing any opinion as to the accuracy or acceptability of any calculations or other material submitted with your request permission is hereby granted to use the substitute mortality rates shown in the tables below for the plan sec_1 and approved for use beginning with the plan_year commencing january substitute mortality tables base_year male annuitants female annuitants b a o m a o o w e e w k a n w a m h h_r o o s d n n h w d a a n n n n n a o y o n n y n n o y h n a n o w d w w a h w w b h h n w a a o a o a r w w w male female annuitants annuitants age at male female annuitants annuitants age the above rates were developed based on an experience study period from january the rates were calculated through december with a base_year of by adjusting the applicable standard mortality tables in sec_1_430_h_3_-1 of the regulations indicated in the table below using the mortality ratio and credibility weighting factor determined by aggregating male and female experience as shown in the table below population plan sec_1 and male annuitants plan sec_1 and female female annuitant mortality_table annuitants standard base mortality_table mate annuitant mortality_table mortality ratio credibility factor the internal_revenue_service has reviewed the substitute mortality rates and supporting information and has determined that based on the information submitted the rates were correctly developed in accordance with sec_1_430_h_3_-2 of the regulations and revrul_2017_55 the above rates must be applied on a generational basis as provided in sec_1_430_h_3_-2 of the regulations your attention is called to sec_430 of the code and sec_1 h - d of the regulations which describe the circumstances in which the use of the substitute mortality_table will terminate before the end of the 10-year period described above in general the substitute mortality tables can no longer be used as of the earliest of for a plan using a substitute mortality_table for only one gender the first plan_year for which there is full or partial credible mortality information with respect to the other gender that had lacked credible mortality information unless an approved substitute mortality_table is used for that gender the first plan_year in which the plan fails to satisfy the requirements of paragraph h -2 c of the regulations regarding the requirement that other plans and populations in the controlled_group must also use substitute mortality tables unless it can be demonstrated that they do not have credible mortality information taking into account the transition_period for newly affiliated companies in sec_1_430_h_3_-2 of the regulations the second plan_year following the plan_year for which there is a significant change in individuals covered by the plan as described in section h -2 c iii of the regulations the plan_year following the plan_year in which a substitute mortality_table used for a plan population is no longer accurately predictive of future mortality of that population as determined by the commissioner or as certified by the plan’s actuary to the satisfaction of the commissioner or the date specified in guidance published in the internal_revenue_bulletin pursuant to a replacement of mortality tables specified under sec_430 of the code and h -1 of the regulations other than annual updates to the static mortality tables issued pursuant to h - a of the regulations or changes to the mortality improvement rates pursuant to sec_1_430_h_3_-1 of the regulations this ruling is directed only to the taxpayer that requested it sec_6110 of the code provides that it may not be used or cited by others as precedent when filing form_5500 for the plan years for which the substitute mortality tables are used please note the information that is required to be attached to schedule sb actuarial information in accordance with the instructions to that form we have sent a copy of this letter to your authorized representative pursuant to a power_of_attorney on file in this office and to the manager ep classification in columbus ohio and to the manager ep compliance unit in chicago illinois if you have any questions regarding this matter please contact id at ' sincerely david m ziegler manager employee_plans actuarial group cc