department of the treasury internal_revenue_service washington d c --- - ------------- contact person telephone number identification_number number release date date uil employer_identification_number legend p j b s a m dear ------------------ p and j request rulings under sec_507 sec_4940 sec_4941 sec_4942 sec_4944 and sec_4945 of the internal_revenue_code concerning p’s transfer under sec_507 of one-half of its assets to j statement of fact p is exempt under sec_501 of the code and is a private_foundation the officers and board_of directors of p currently consist of three individuals b s and a p annually makes grants and contributions to tax exempt_organizations in its geographic locale s a daughter of p’s original members live sec_120 miles away in another city s is active in charitable organizations in that city as a result of s’s desire to further charitable causes in her community she created j j is exempt under sec_501 of the code and is a private_foundation the officers and board_of directors of j consist of s and her husband m p’s board_of directors decided j could more effectively further charitable causes in j’s community if p transferred one-half of its assets to j the transfer the transfer is conditioned on the receipt of a favorable private_letter_ruling from the service p states it has never notified the service that it intends to terminate its private_foundation_status nor has p ever received notification its status as a private_foundation has been terminated furthermore p states it has not committed willful repeated acts or failures to act or a willful or flagrant act or failure to act giving rise to liability for tax under chapter of the code law sec_507 of the code and sec_1_507-1 of the income_tax regulations provide that a private_foundation may voluntarily terminate its private_foundation_status by submitting to the internal_revenue_service a statement of its intention to voluntarily terminate its private_foundation_status pursuant to sec_507 and by paying any termination_tax under sec_507 of the code sec_507 of the code impose excise_tax on a private_foundation which voluntarily terminates its private_foundation_status under sec_507 of the code and provides that this sec_507 tax is equal to the lower_of the aggregate tax benefits that have resulted from the private foundation's exempt status under sec_501 of the code or the value of the net assets of the private_foundation sec_507 of the code provides that in the case of a transfer of any private_foundation to another private_foundation pursuant to any liquidation merger redemption recapitalization or other adjustment the transferee foundation shall not be treated as a newly created organization for purposes of sec_507 sec_1_507-3 of the regulations provides a transfer under sec_507 of the code includes a transfer of assets from one private_foundation to one or more other private_foundations pursuant to any reorganization including a significant disposition of or more of the transferor foundation's assets sec_1_507-1 of the regulations provides that a private_foundation which transfers all of its net assets is not required to file annual information returns required by sec_6033 of the code for subsequent tax years after its tax_year of such transfer when it has no assets or activities sec_1_507-3 of the regulations provides that a transferor private_foundation is required to meet its charitable distribution_requirements under sec_4942 of the code even for any_tax year in which it makes a transfer of its assets to another private_foundation pursuant to sec_507 of the code also where a private_foundation transfers all of its assets any recordkeeping requirements under sec_4942 of the code do not apply when the foundation has no assets sec_1_507-3 of the regulations provides that where the transferor has disposed of all of its assets during any period in which the transferor has no assets sec_4945 and h shall not apply to the transferee or the transferor with respect to any 'expenditure responsibility' grants made by the transferor however the exception contained in this subparagraph shall not apply with respect to any information reporting requirements imposed by sec_4945 and the regulations there under for any year in which any such transfer is made sec_1_507-3 of the regulations provides that if a private_foundation transfers assets to one or more private_foundations which are effectively controlled directly or indirectly within the meaning of sec_1_482-1 of the regulations by the same persons who effectively control the transferor foundation each transferee foundation will be treated as if it were the transferor foundation for purposes of sec_4940 through and sec_507 through of the code each transferee is treated as its transferor in the proportion which the fair_market_value of the transferor's assets transferred to the transferee bears to the fair_market_value of all of the transferor's assets immediately before the transfer sec_1_507-3 of the regulations provides that a transfer of assets under sec_507 of the code does not relieve the transferor private_foundation from filing its own final tax_year return as required by sec_6043 of the code sec_1_507-1 and sec_1_507-3 of the regulations provide that a transferor foundation's transfer of assets under sec_507 of the code will not constitute any termination of the transferor foundation's private_foundation_status under sec_509 of the code sec_4941 of the code imposes excise_tax on any act of self-dealing between a private_foundation and any of its disqualified persons under sec_4946 of the code sec_53_4946-1 of the regulations provides that for purposes of self-dealing under sec_4941 of the code an exempt_organization under sec_501 of the code is not a disqualified_person sec_4942 of the code requires that a private_foundation must expend annual qualifying distributions under sec_4942 of the code for the conduct of exempt purposes sec_4942 of the code defines the term qualifying_distribution to mean-- a any amount including that portion of reasonable and necessary administrative expenses paid to accomplish one or more purposes described in sec_170 other than any contribution to i an organization controlled directly or indirectly by the foundation or one or more disqualified persons with respect to the foundation or ii a private_foundation which is not an operating_foundation or b any amount_paid to acquire an asset used or held for use directly in carrying out one or more purposes described in sec_170 sec_4942 of the code defines the term qualifying_distribution to included a contribution to a sec_501 organization described in paragraph a i or ii if-- a not later than the close of the first taxable_year after its taxable_year in which such contribution is received such organization makes a distribution equal to the amount of such contribution and such distribution is a qualifying_distribution within the meaning of paragraph or without regard to this paragraph which is treated under subsection h as a distribution out of corpus or would be so treated if such sec_501 organization were a private_foundation which is not an operating_foundation and b the private_foundation making the contribution obtains adequate_records or other_sufficient_evidence from such organization showing that the qualifying_distribution described in subparagraph a has been made by such organization revrul_78_387 1978_2_cb_270 describes the carryover of a transferor private foundation's excess qualifying distributions under sec_4942 of the code where the transferor and the transferee foundations are controlled by the same persons under sec_1_507-3 of the regulations the transferee is treated as the transferor so that the transferee can reduce its own distributable_amount under sec_4942 of the code by its share of the transferor foundation's excess qualifying distributions under sec_4942 of the code sec_4944 of the code imposes tax upon a private_foundation which invests any amount in such a manner as to jeopardize the carrying out of any of its exempt purposes sec_4945 of the code imposes excise_tax on any private foundation's making of a taxable_expenditure under sec_4945 of the code sec_53_4945-6 allows a private_foundation to transfer its assets to exempt_organizations under sec_501 of the code including private_foundations pursuant to sec_507 of the code without the transfers being taxable_expenditures under sec_4945 of the code sec_4945 of the code requires that in order to avoid making a taxable_expenditure a transferor private_foundation must exercise expenditure_responsibility under sec_4945 of the code on its grants to another private_foundation sec_4945 of the code on expenditure_responsibility provides in part that the grantor private_foundation must obtain proper reports from its grantee private_foundation as to the grantee's uses of the grant sec_53_4945-5 of the regulations provides that expenditure_responsibility includes a requirement that the grantor private_foundation must make a pre-grant inquiry of the prospective grantee private_foundation thus before making a grant the grantor must conduct a limited inquiry of the potential grantee such pre-grant inquiry must be complete enough to give a reasonable person assurance that the grantee will use the grant for the proper exempt purposes this inquiry should concern matters such as the identity prior history and experience of the grantee organization and its managers and any knowledge which the grantor has based on prior experience or other information which is readily available concerning the management activities and practices of the grantee foundation the scope of this inquiry may vary from case to case depending upon the size and purpose of the grant the period of time over which it is to be paid and the prior experience which the grantor has had with respect to the capacity of the grantee to use the grant for the proper purposes sec_53_4945-5 of the regulations provides that in order to exercise expenditure_responsibility the grantor private_foundation must require that the grantee organization be made subject_to a written commitment signed by an appropriate officer director or trustee of the grantee to repay any portion of the amount granted which is not used for the purposes of the grant to submit full and complete annual reports on the manner in which the grant funds are spent and the progress made in accomplishing the purposes of the grant to maintain records of receipts and expenditures and to make its books_and_records available to the grantor at reasonable times and not to use any of the funds to carry on propaganda or otherwise attempt to influence legislation within sec_4945 of the code or to influence the outcome of any specific public election or to carry on any voter registration drive within the meaning of sec_4945 or to make any grant which does not comply with the requirements of sec_4945 or sec_4945 or to undertake any activity for any purpose other than one specified in sec_170 of the code the agreement must clearly specify the purposes of the grant such purposes may include contributing for capital endowment provided that neither the grants nor the income there from may be used for purposes other than those in sec_170 of the code sec_53_4945-5 of the regulations on capital endowment grants made to private_foundations provides that if a private_foundation makes a grant to another private_foundation for endowment or for other capital purposes the grantor foundation must require reports from the grantee foundation on the uses of the principal and the income if any from the grant funds the grantee must make such reports annually for its tax_year in which the grant was made and for its immediately succeeding two tax years only if it is reasonably apparent to the grantor before the end of such grantee's second succeeding tax_year that neither the principal nor the income from the grant funds has been used for any purpose which would result in liability for tax under sec_4945 of the code may the grantor then allow the grantee's reports to be discontinued analysis under sec_507 of the code and sec_1_507-3 of the regulations a transfer under sec_507 of the code includes a transfer of assets from one private_foundation to one or more other private_foundations pursuant to any reorganization or liquidation which includes any significant disposition of or more of the transferor's assets because p will be transferring approximately one-half of its assets p's transfer of assets to j will be a transfer under sec_507 of the code p's transfer of assets to j will not be investment_income will not be a taxable disposition of property and will not result in tax under sec_4940 of the code under sec_4944 of the code p's transfer of its assets to j will not constitute a jeopardizing investment or result in tax under that section p's transfer of assets will be made for p’s and j’s sec_501 exempt purposes under sec_53_4946-1 of the regulations j is not a disqualified_person under sec_4946 of the code for purposes of sec_4941 because j is exempt from federal_income_tax under sec_501 because p's transfer of assets will not be a transfer to a disqualified_person under sec_4946 of the code p's transfer will not be an act of self-dealing under sec_4941 sec_1_507-3 of the regulations provides that for purposes of chapter and sec_507 through of the code j will be treated as if it were p in the proportion to which the fair_market_value of the assets less encumbrances transferred to j bears to the fair_market_value of the assets less encumbrances of p immediately before the transfer the attributes under chapter and sec_507 through of the code transferred to j from p include the minimum distribution_requirements under sec_4942 and the right to reduce its distributable_amount under sec_4942 by the amount of any excess qualifying_distribution carryover the proposed transfer of assets from p to j is for endowment purposes and j will not make a qualifying_distribution equal to the amount of the grant it will receive from p thus the proposed transfer from p to j will not be treated by p as a qualifying_distribution under sec_4942 of the code under sec_53_4945-6 of the regulations a private_foundation can transfer its assets to private_foundations pursuant to sec_507 of the code without the transfer being a taxable_expenditure under sec_4945 thus p's transfer of assets will not be a taxable_expenditure under sec_4945 of the code p must exercise expenditure_responsibility under sec_4945 of the code and sec_53_4945-5 of the regulations on its transfer of some of its assets to j because the exception under sec_1_507-3 to expenditure_responsibility for a transfer of all assets does not apply to p because p's transfer to j consists of approximately one-half rather than all of p's assets conclusion accordingly based on the information furnished we rule as follows the transfer of one-half of the assets from p to j will qualify as a transfer under sec_507 of the code because p will not terminate p will not be subject_to any_tax under sec_507 of the code the proposed transfer of assets from p to j will not give rise to net_investment_income and therefore will not give rise to the imposition of tax under sec_4940 of the code for p p will not be required to pay the tax imposed by sec_4940 in the tax_year of distribution and p and j will report their share of net_investment_income for the year of distribution and pay the tax imposed by sec_4940 on such share based on investment_income earned by the respective foundation the proposed transfer of assets to j will not be treated as an investment that jeopardizes the charitable purposes of p the proposed transfer of assets from p to j will not constitute an act of self-dealing which will result in an excise_tax under sec_4941 of the code assuming j pays the distribution_requirements of p p will not be required to meet p’s distribution_requirements under sec_4942 for the taxable_year in which p transfers one-half of its assets p’s and j's minimum distributable_amount will be determined on a prorata basis determined on asset ownership during the taxable_year of the transfer likewise p and j will be credited with a proportionate amount of the qualifying distributions actually made by the respective foundation in the fiscal_year of the transfer the proposed transfer of assets from p to j will not constitute a taxable_expenditure within the meaning of sec_4945 of the code because p will be required to exercise expenditure_responsibility with respect to one-half of the assets it transferred to j j however will not be required to exercise expenditure responsibilities over the assets transferred by p this ruling is based on the understanding there will be no material changes in the facts upon which it is based this ruling does not address the applicability of any section of the code or regulations to the facts submitted other than with respect to the sections described this ruling is directed only to the organization that requested it sec_6110 of the code provides it may not be used or cited as precedent if you have any questions about this ruling please contact the person whose name and telephone number are shown in the heading of this letter in accordance with the power_of_attorney currently on file with the internal_revenue_service we are sending a copy of this letter to your authorized representative michael seto manager exempt_organizations technical group sincerely


tcmemo_2007_195 united_states tax_court jennifer c shaw petitioner v commissioner of internal revenue respondent docket no filed date larry d harvey for petitioner randall l preheim for respondent memorandum opinion vasquez judge this case is before the court on respondent’s motion for summary_judgment pursuant to rule unless otherwise indicated all rule references are to the tax_court rules_of_practice and procedure and all section references are to the internal_revenue_code in effect for the year in issue after a concession the sole issue for decision is whether petitioner can exclude from income wages earned during from working in antarctica background at the time she filed the petition petitioner resided in centennial colorado during petitioner performed services at mcmurdo station in ross island antarctica on her federal_income_tax return petitioner excluded wage income earned and received during for services performed in antarctica i summary_judgment discussion rule a provides that either party may move for summary_judgment upon all or any part of the legal issues in controversy full or partial summary_judgment may be granted only if it is demonstrated that no genuine issue exists as to any material fact and that the legal issues presented by the motion may be decided as a matter of law see rule b 98_tc_518 affd 17_f3d_965 7th cir we conclude that there is no genuine issue as to any material fact and that a decision may be rendered as a matter of law respondent concedes that no penalty pursuant to sec_6662 is due from petitioner for ii in general sec_61 provides that gross_income means all income from whatever source derived accordingly citizens of the united_states generally are taxed on income earned outside the geographical boundaries of the united_states unless the income is specifically excluded from gross_income 117_tc_95 affd sub nom 68_fedappx_44 9th cir affd sub nom 357_f3d_1108 10th cir exclusions from income are construed narrowly and taxpayers must bring themselves within the clear scope of the exclusion id iii sec_911 in 126_tc_89 473_f3d_790 7th cir arnett ii we addressed the arguments made by the parties herein regarding sec_911 the u s court_of_appeals for the seventh circuit agreed with our analysis of sec_911 and affirmed our conclusion that antarctica is not a foreign_country pursuant to sec_911 and the regulations thereunder arnett v commissioner f 3d pincite we shall not repeat our analysis from arnett i herein we follow our analysis and holding in arnett i and the analysis and holding of the court_of_appeals in arnett ii in 126_tc_89 affd 473_f3d_790 7th cir we concluded our opinion with a citation of sec_863 suggesting that sec_863 provided an continued iv conclusion accordingly for the reasons stated in arnett i arnett ii and herein we conclude that petitioner cannot exclude from gross_income wages earned during from working in antarctica to reflect the foregoing an appropriate order and decision will be entered continued additional reason to rule against the taxpayer id pincite see also sec_863 providing that income earned in antarctica by a u_s_person is sourced in the united_states in arnett v commissioner f 3d pincite the u s court_of_appeals for the seventh circuit addressed sec_863 in greater detail stating at the outset we think that it is important to note that considering antarctica not to be a foreign_country is compatible with the general statutory scheme notably sec_911 is found under subtitle a chapter subchapter_n of the irc which is designated tax based on income from sources within or without the united_states part i of this subchapter entitled source_rules and other general rules relating to foreign_income deems any activity in antarctica to be space_or_ocean_activity in turn the united_states is designated the source country of income from such activity when earned by a citizen_of_the_united_states sec_863 although this provision does not provide a definitive answer as to whether antarctica is a foreign_country it supports the conclusion that sec_911 is not intended to apply to income earned for services provided in antarctica we take this opportunity to state our agreement with the court of appeals’ conclusion set forth above see also 450_us_1


department of the treasury internal_revenue_service tege eo examinations mail stop dal commerce st dallas texas date date taxpayer_identification_number person to contact employee identification_number employee telephone number phone fax release number release date legend org organization name xx date address address org address certified mail -- return receipt dear this is a final adverse determination regarding your exempt status under sec_501 of the internal_revenue_code the code our favorable determination_letter to you dated may 19xx is hereby revoked and you are no longer exempt under sec_501 of the code effective august 20xx the revocation of your exempt status was made for the following reason s organizations described in sec_501 and exempt under sec_501 must be both organized and operated exclusively for exempt purposes you have failed to produce documents to establish that you are operated exclusively for exempt purposes and that no part of your net_earnings inures to the benefit of private shareholders or individuals you failed to respond to repeated reasonable requests to allow the internal_revenue_service to examine your records regarding your receipts expenditures or activities as required by sec_6001 and sec_6033 of the code and revrul_59_95 1959_1_cb_627 contributions to your organization are no longer deductible under sec_170 after august 20xx you are required to file income_tax returns on form_1120 these returns should be filed with the appropriate service_center for the tax_year ending july 20xx and for all tax years thereafter in accordance with the instructions of the return processing of income_tax returns and assessments of any taxes due will not be delayed should a petition for declaratory_judgment be filed under sec_7428 of the internal_revenue_code if you decide to contest this determination under the declaratory_judgment provisions of sec_7428 of the code a petition to the united_states tax_court the united_states claims_court or the district_court of the united_states for the district of columbia must be filed before the ' day after the date this determination was mailed to you please contact the clerk of the appropriate court for rules regarding filing petitions for declaratory judgments by referring to the enclosed publication you may write to the united_states tax_court at the following address you also have the right to contact the office_of_the_taxpayer_advocate taxpayer_advocate assistance is not a substitute for established irs procedures such as the formal appeals process the taxpayer_advocate cannot reverse a legally correct_tax determination or extend the time fixed by law that you have to file a petition in a united_states court the taxpayer_advocate can however see that a tax matter that may not have been resolved through normal channels gets prompt and proper handling you may call toll-free and ask for taxpayer_advocate assistance if you prefer you may contact your local taxpayer_advocate at if you have any questions please contact the person whose name and telephone number are shown in the heading of this letter sincerely nanette m downing director eo examinations enclosures publication rfs fs id er - tax_exempt_and_government_entities_division org address department of the treasury internal_revenue_service tege eo examinations commerce street dallas tx date taxpayer_identification_number form tax_year s ended person to contact id number contact numbers telephone fax certified mail - return receipt requested dear we have enclosed a copy of our report of examination explaining why we believe revocation of your exempt status under sec_501 of the internal_revenue_code code is necessary lf you accept our findings take no further action we will issue a final revocation letter if you do not agree with our proposed revocation you must submit to us a written request for appeals_office consideration within days from the date of this letter to protest our decision your protest should include a statement of the facts the applicable law and arguments in support of your position an appeals officer will review your case the appeals_office is independent of the director eo examinations the appeals_office resolves most disputes informally and promptly the enclosed publication the examination process and publication exempt_organizations appeal procedures for unagreed issues explain how to appeal an internal_revenue_service irs decision publication also includes information on your rights as a taxpayer and the irs collection process you may also request that we refer this matter for technical_advice as explained in publication if we issue a determination_letter to you based on technical_advice no further administrative appeal is available to you within the irs regarding the issue that was the subject of the technical_advice letter catalog number 34809f if we do not hear from you within days from the date of this letter we will process your case based on the recommendations shown in the report of examination if you do not protest this proposed determination within days from the date of this letter the irs will consider it to be a failure to exhaust your available administrative remedies sec_7428 of the code provides in part a declaratory_judgment or decree under this section shall not be issued in any proceeding unless the tax_court the claims_court or the district_court of the united_states for the district of columbia determines that the organization involved has exhausted its administrative remedies within the internal_revenue_service we will then issue a final revocation letter we will also notify the appropriate state officials of the revocation in accordance with sec_6104 of the code you have the right to contact the office_of_the_taxpayer_advocate taxpayer_advocate assistance is not a substitute for established irs procedures such as the formal appeals process the taxpayer_advocate cannot reverse a legally correct_tax determination or extend the time fixed by law that you have to file a petition in a united_states court the taxpayer_advocate can however see that a tax matter that may not have been resolved through normal channels gets prompt and proper handling you may call toll-free and ask for taxpayer_advocate assistance if you prefer you may contact your local taxpayer_advocate at if you have any questions please call the contact person at the telephone number shown in the heading of this letter the most convenient time to call if we need to contact you if you write please provide a telephone number and thank you for your cooperation sincerely nanette m downing acting director eo examinations enclosures publication sec_892 form_6018 form_886 report of examination letter catalog number 34809f -- sec_86a department of the treasury - internal_revenue_service explanation of items name of taxpayer org ein year period ended 20xx07 20xx07 20xx07 20xx07 schedule no or exhibit legend org state state organization name xx date address address city city president president dir-1 director issue whether an organization’s exempt status under internal_revenue_code sec_501 should other documents in be revoked because it accordance with internal_revenue_code sec_6001 and sec_1_6001-1 to provide books records and has failed facts the case was assigned to the field on february 20xx based on an outside referral org did not file form_990 in fiscal years 20xx 20xx 20xx and 20xx although research confirms the eo received revenues in excess of dollar_figure in each of these fiscal tax periods e e e e as shown on president’s ebay website the eo is in march 20xx website research identifies the org as sellers of artworks created by listed as the organization president where payment for artwork should be made additionally the eo terms and conditions of sale of the artwork include this work is original this work is certified to be free from all defects due to faulty craftsmanship or faulty if flaws shall appear during materials for a period of twelve month from date of sale this time repairs shall be made by us copyright of the work is held by the org resale of transfer of work requires that the org be informed of the new owner and the price of the sale should the price be more than dollar_figure over the original price stated herein according to state and state state law of amount over the original price shall be given to artist by seller these terms only apply to sales made in the states of state and state the org shall have the right to photograph scan or through any other means of media reproduce the piece if necessary for publicity or reproduction purposes you are only buying the original not the reproduction rights the org shall have the indefinitely upon days notice insurance costs for participation in retrospective shows if artwork is rented out by purchaser org shall receive of rental income artwork can not be exhibited in public without written approval of the org retrospective shows include the artwork in we will pay for any necessary shipping or right to e e e e the above information supports the internal revenue service's decision to request additional information from the org to determine if the eo had a filing requirement and if unrelated if filing_requirements existed it was tege business income existed in the audited period division's responsibility to secure the required delinquent returns form 886-acrev department of the treasury - internal_revenue_service page -1- department of the treasury - internal_revenue_service schedule no or exhibit poem 886a explanation of items name of taxpayer org ein year period ended 20xx07 20xx07 20xx07 20xx07 on april 20xx after making several telephone attempts for contact letter our initial appointment when no prior telephone contact with taxpayer has been made was prepared and mailed certified on april 20xx to the eo office address located at address city state the the updated appointment was scheduled for may 20xx pincite 00pm a return receipt was received on april 20xx signed and dated april 20xx public website named accurint address was secured through a on may 20xx arrive at the address referenced above to meet with dir-1 as outlined in the only organization located at this address was us post my initial appointment letter office inc a mail box service provider the attendant on duty confirmed the address and said also visited the agent for service of process this was the only entrance for that address address at address city state located nearby there were no listings for dir-1 or the eo at that address further research confirmed the org received approximately dollar_figure 20xx-20xx resulting in 20xx and 20xx file in revenue for the period a form_990 filing requirement in fiscal tax periods 20xx 20xx contributions were made by a city non-profit see tax_return copies in additional information research about the organization’s current location produced no additional the eo was notified by mail on june 20xx that third party contacts would be employed the envelope wa sec_1 20xx per i r m dollar_figure a third party letter was mailed on july returned unopened by the postal service to tege on august 20xx the manager on august 20xx the post office box services manager was interviewed the org is a current client the address given by the manager as address city stated state is the only address on file the client pays their bill and picks up their mail as long as the client pays the bill additional address information is not required on september 20xx a day demand to file letter was prepared per il r m dollar_figure and a signed return mailed certified to dir-1 executive director org at address city state receipt was received on september 20xx the receipt was signed by the manager of the postal service on september 20xx periodic telephone calls were made monthly to make contact with the taxpayer without results the day period expired on december 20xx to date dir-1 nor the eo have not responded to our attempts to contact them law form 886-a rev department of the treasury - internal_revenue_service page -2- department of the preasury - internal_revenue_service poa 886a name of taxpayer org ein year period ended 20xx07 20xx07 20xx07 20xx07 explanation of items schedule no or exhibit section of the code provides that every person liable for any_tax imposed by the code or for the collection thereof shall keep such records render such returns and comply with such rules and regulations as the secretary may from time to time prescribe the sec_6033 of the code provides except as provided in sec_6033 every stating organization exempt from tax under sec_501 shall other specifically information for the purposes of carrying out the internal revenue laws as the secretary may such by forms statements make such other returns and comply with such rules and regulations as the secretary may from time to time prescribe and disbursements and render under oath an annual return regulations prescribe of gross records receipts income items keep such such and file or sec_1 6001-i a in conjunction with sec_1_6001-1 provides that every organization exempt from tax under sec_501 of the code and subject_to the tax imposed by sec_511 on its unrelated_business_income must keep such permanent books or accounts or records including inventories as are sufficient to establish the amount of gross_income deduction credits or other matters required to be shown by such person in any return of such tax such organization shall also keep such books_and_records as are required to substantiate the information required by sec_6033 rreasury regulation sec_1_6001-1 states that the books_or_records required by this section shall be kept at all times available for inspection by authorized internal revenue officers or in the employees and shall be retained as long as the contents thereof may be material administration of any internal revenue law regulation h has treasury is required to file an annual established its right to exemption from tax whether or not it return of information shall submit such additional information as may be required by the district_director for the purpose of enabling him to inquire further into its exempt status and to of the administer the provisions of subchapter_f sec_501 and the following chapter code and sec_6033 organization provides which every that c b concerns an exempt_organization that was revrul_59_95 requested to produce a financial statement and statement of its operations for a certain year however its records were so incomplete that the organization was unable to furnish such statements the service held that the failure or inability to file the required information_return or otherwise to comply with the provisions of sec_6033 of the code and the regulations which implement it may result in the termination of the exempt status of an organization is previously held exempt on the grounds that the organization has not established that it observing the conditions required for the continuation of exempt status form 886-aev department of the treasury - internal_revenue_service page -3- department of the hersut - internal_revenue_service schedule no or exhibit hann rs6a explanation of items name of taxpayer org ein year period ended 20xx07 20xx07 20xx07 20xx07 in accordance with the above cited provisions of the code and regulations under sec_6001 and sec_6033 organizations recognized as exempt from federal_income_tax must meet of a complete and certain reporting requirements accurate annual information and other required federal tax forms and the retention of records sufficient to determine whether such entity is operated for the purposes for which it for any unrelated business was granted tax-exempt status and to determine its income_tax these requirements relate to the filing liability not organized or freasury regulation c -1 d ii provides an organization is of this operated exclusively for one or more of the purposes specified in subdivision i thus to meet the subparagraph unless it serves a public rather than a private interest is not requirement of this subdivision it organized or operated for the benefit of private interests such as designated individuals the his family shareholders of the organization or persons controlled directly or creator or indirectly by such private interests is necessary for an organization to establish that it conclusion is the internal based on the facts presented above and no response from the taxpayer it revenue service's position that the eo failed to meet the reporting requirements under sec_6001 and sec_6033 and does not qualify as an organization exempted from federal income accordingly the proposed revocation of the org's tax exempt tax under sec_501 status is effective beginning august 20xx a form_1120 u s income_tax return must be filed for fiscal tax years ending july 20xx 20xx 20xx and 20xx subsequent returns if any should be sent to the following mailing address the effective date of the revocation will be the first day after the end of the 90-day period 91st day form 886-acrev department of the treasury - internal_revenue_service page -4-


department of the treasury employer_identification_number ificati contact person - id number contact telephone number uil internal_revenue_service p o box cincinnati oh release number release date date ate legend m scholarship program n organization p organization q amount r organization s number x state y number z organization dear you asked for advance approval of your employer-related scholarship grant procedures under internal_revenue_code sec_4945 this approval is required because you are a private_foundation that is exempt from federal_income_tax you requested approval of your scholarship program to fund the education of certain qualifying students our determination we approved your procedures for awarding employer-related scholarships based on the information you submitted and assuming you will conduct your program as proposed we determined that your procedures for awarding employer-related scholarships meet the requirements of code sec_4945 as a result expenditures you make under these procedures won't be taxable also awards made under these procedures are scholarship or fellowship grants and are not taxable to the recipients if they use them for qualified_tuition_and_related_expenses subject_to the limitations provided in code sec_117 description of your request your letter indicates you will operate an employer-related scholarship program called m letter catalog number 58264e is to provide scholarships to deserving students who are members of n is a c organization with in excess of big_number members up to s awards in the purpose of m n the amount of q will be awarded annually employees and children of employees of p its subsidiaries affiliates and or sponsoring organizations as well as of r are eligible applicants employees must have a minimum of one year of employment as of the application deadline date there are currently organizations that are subsidiaries p r and n will publicize scholarship affiliates and sponsoring organizations of p materials in company publications the m will not be used by p any subsidiaries affiliates and or sponsoring organizations of p or the r to recruit employees or induce employees to continue their employment applicants must be high school seniors graduates or current postsecondary undergraduates enrolled or planning to enroll in a full time accredited program at a two or four year college university or vocational-technical schoo located in the state of x which constitutes an educational_organization described in sec_170 of the internal_revenue_code applicants must have a minimum grade point average of y recipients of m will be selected based upon standards that are unrelated to the employment of the recipients’ parents or the line_of_business of r p and any subsidiaries affiliates and or sponsoring organizations of p additionally courses of study of recipients are not limited to those that would be of a benefit to r p and any subsidiaries affiliates and or sponsoring organizations the selection criteria will include past academic performance future potential leadership participation in school and community activities work experience and a statement of career and educational goals and objectives financial need will not be considered when an m grant is awarded there will be no requirement that the recipient or parent is expected to render future employment services to r p or any subsidiaries affiliates and or sponsoring organizations the grants are not automatically renewable but applicants may re-apply for grants for up to three successive years or until a bachelor's degree is earned whichever is first the standards for re-application will be based solely on non-employment related factors you have entered into an agreement with z to administer m z is exempt from federal_income_tax under sec_501 of the internal_revenue_code and has been classified as a publicly_supported_organization under the terms of the agreement you will make annual contributions to z to fund scholarships z will prepare and furnish application forms receive all applications determine the recipients notify the recipients of the award confirm enrollment in an educational_institution and make payment of the award z will publicize the m by providing a publicity blitz to guidance counselors z will choose the selection committee and it will be made up of individuals who are knowledgeable in the education field and who have the background and knowledge to properly evaluate the potential of applicants the selection committee will be totally independent and separate from r p and any subsidiaries affiliates and or sponsoring organizations of p also obtain reports that determine whether the grant recipient has performed the activities that the grant was intended to finance and z will investigate any possible misuse of funds letter catalog number 58264e z will by the recipient withhold any further funds during the investigation if a misuse is discovered and seek the recovery_of any misused funds basis for our determination the law imposes certain excise_taxes on the taxable_expenditures of private_foundations code sec_4945 a taxable_expenditure is any amount a private_foundation pays as a grant to an individual for travel study or other similar purposes however a grant that meets all of the following requirements of code sec_4945 is not a taxable_expenditure the foundation awards the grant on an objective and nondiscriminatory basis the irs approves in advance the procedure for awarding the grant the grant is a scholarship or fellowship subject_to code sec_117 the grant is to be used for study at an educational al organization described in code sec_170 revproc_76_47 1976_2_cb_670 provides guidelines to determine whether grants a private_foundation makes under an employer-related program to employees or children of employees are scholarship or fellowship grants subject_to the provisions of code sec_117 if the program satisfies the seven conditions in sections dollar_figure through dollar_figure of revproc_76_47 and meets the applicable_percentage tests described in section dollar_figure of revproc_76_47 we will assume the grants are subject_to the provisions of code sec_117 you represented that your grant program will meet the requirements of either the percent or percent percentage_test in revproc_76_47 these tests require that e e e the number of grants awarded to employees’ children in any year won't exceed percent of the number of employees’ children who were eligible for grants were applicants for grants and were considered by the selection committee for grants or the number of grants awarded to employees’ children in any year won't exceed percent of the number of employees’ children who were eligible for grants whether or not they submitted an application or the number of grants awarded to employees in any year won't exceed percent of the number of employees who were eligible for grants were applicants for grants and were considered by the selection committee for grants you further represented that you will include only children who meet the eligibility standards described in revproc_85_51 1985_2_cb_717 when applying the percent test applicable to employees’ children in determining how many employee children are eligible for a scholarship under the percent test a private_foundation may include only those children who submit a written letter catalog number 58264e statement or who meet the foundation's eligibility requirements they must also satisfy certain enrollment conditions you represented that your procedures for awarding grants under this program will meet the requirements of revproc_76_47 in particular an independent selection committee whose members are separate from you your creator and the employer will select individual grant recipients you will not use grants to recruit employees nor will you end a grant if the employee leaves the employer you will not limit the recipient to a course of study that would particularly benefit you or the employer other conditions that apply to this determination this determination only covers the grant program described above this approval will apply to succeeding grant programs only if their standards and procedures don't differ significantly from those described in your original request this determination is in effect as long as your procedures comply with sections dollar_figure through dollar_figure of revproc_76_47 and with either of the percentage tests of sec_4 if you establish another program covering the same individuals that program must also meet the percentage_test this determination applies only to you it may not be cited as a precedent you cannot award grants to your creators officers directors trustees foundation managers or members of selection committees or their relatives you cannot rely on the conclusions in this letter if the facts you provided have changed substantially you must report any significant changes to your program to the cincinnati office of exempt_organizations at internal_revenue_service exempt_organizations determinations p o box cincinnati oh all funds distributed to individuals must be made on a charitable basis and further the purposes of your organization you cannot award grants for a purpose that is inconsistent with code sec_170 you should keep adequate_records and case histories so that you can substantiate your grant distributions with the irs if necessary letter catalog number 58264e please keep a copy of this letter in your records if you have questions please contact the person listed at the top of this letter sincerely director exempt_organizations letter catalog number 58264e


internal_revenue_service department of the treasury index number dollar_figure washington dc number release date person to contact telephone number refer reply to cc dom corp plr-102962-00 date date legend foreign parent us parent holding sub a sub b country z state w business x business y dear we respond to your letter dated date requesting rulings concerning the federal_income_tax consequences of a proposed transaction the information submitted for consideration is summarized below foreign parent is a country z corporation that wholly owns us parent a state w corporation that is the common parent of an affiliated_group_of_corporations that files a consolidated united_states federal_income_tax return the parent group the parent group includes holding and its subsidiaries holding is a holding_company incorporated in state w holding wholly owns sub a and sub b which are also state w corporations sub a engages through its subsidiaries in business x sub b engages through its subsidiaries in business y for what the taxpayer represents are valid business reasons the following plr-102962-00 transaction is proposed under state w law us parent will cause holding to merge with and into or otherwise convert into a single member limited_liability_company the llc which will be wholly owned by us parent and which will succeed to all of holding’s assets operations and liabilities the conversion after the conversion the llc will distribute percent of the stock of sub b to us parent the taxpayer has made the following representations about the proposed transaction a us parent on the date of adoption of the plan for merging or otherwise converting holding into llc the conversion plan and at all times thereafter until the conversion is completed will own percent of the single outstanding class of holding stock b no shares of holding have been redeemed during the three years preceding the adoption of the conversion plan c the llc will not elect or claim to be treated as a corporation for federal_income_tax purposes d the conversion will take place within a single taxable_year e f g h effective as of the effective date of the conversion the corporate existence of holding will cease under applicable local law holding as a corporation will not retain any assets following the conversion holding will not have acquired assets in any nontaxable_transaction except for i acquisitions of assets in connection with transactions qualifying under sec_351 of the internal_revenue_code code and ii acquisitions occurring more than three years prior to the date of adoption of the conversion plan no assets of holding have been or will be disposed of by either holding or us parent since the formation of holding except for dispositions in the ordinary course of business and ii dispositions occurring more than three years prior to the date of adoption of the conversion plan plr-102962-00 i j k l the conversion will not be preceded by or followed by the reincorporation in or transfer or sale to a recipient corporation of any of the businesses or assets of holding if persons holding directly or indirectly as determined under sec_318 as modified by sec_304 more than twenty percent in value of the holding stock also hold directly or indirectly more than twenty percent in value of the stock of the recipient corporation prior to the adoption of the conversion plan no assets of holding will have been distributed in_kind transferred or sold to us parent except for i transactions occurring in the normal course of business and ii transactions occurring more than three years prior to the date of adoption of the conversion plan holding will report all earned_income represented by assets that will be deemed distributed to us parent such as receivables being reported on a cash_basis unfinished contracts commissions due etc the fair_market_value of the assets of holding will exceed its liabilities both at the date of adoption of the conversion plan and immediately prior to the time the conversion occurs m at the time of the conversion there will be no intercorporate debt existing between us parent and holding except for temporary intercompany accounts that arise in the ordinary course of business and are usually settled within one year and no such intercorporate debt will have been canceled forgiven or discounted except for transactions that occurred more than three years prior to the date of adoption of the conversion plan n neither us parent nor holding is an organization that is exempt from federal_income_tax under sec_501 or another provision of the code o each party to the proposed transactions will pay its own expenses based solely on the information submitted and the representations set forth above we rule as follows the conversion will be treated as a distribution by holding to us parent in complete_liquidation under sec_332 and sec_1 d of the income_tax regulations no income gain_or_loss will be recognized by us parent on the deemed receipt of the assets and liabilities of holding pursuant to the plr-102962-00 conversion sec_332 and sec_1_332-7 no income gain_or_loss will be recognized by holding on the deemed_distribution of its assets and liabilities to us parent in the conversion sec_337 the basis of each asset of holding deemed received by us parent pursuant to the conversion will equal the basis of that asset in the hands of holding immediately before the conversion sec_334 the holding_period of each asset of holding deemed received by us parent in the conversion will include the period during which us parent held such asset provided the asset is a capital_asset as defined in sec_1221 or property described in sec_1231 in the hands of holding sec_1223 the transfer by llc of the sub b stock to us parent will be disregarded for federal_income_tax purposes and no gain_or_loss will be recognized by llc or us parent upon such transfer sec_301 b ii and a we express no opinion concerning the federal_income_tax treatment of the transactions under other provisions of the code or regulations or about the tax treatment of any conditions existing at the time of or effects resulting from the transactions that are not specifically covered by the above rulings this ruling is directed only to the taxpayer s requesting it sec_6110 provides that it may not be used or cited as precedent a copy of this letter should be attached to the federal_income_tax returns of the taxpayers involved for the taxable_year in which the transaction covered by this supplemental letter_ruling was consummated in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representatives sincerely assistant chief_counsel corporate by mark s jennings acting chief branch


internal_revenue_service number release date index number -------------------------------------------------------- ----------------------------------- ---------------------------------------- ---------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact -------------------- id no ------------------ telephone number ---------------------- refer reply to cc fip b02 plr-121796-16 date december legend parent ---------------------------------------------------------------------------------------- --------------------------------------------------- ---------------------------------------- subsidiary --------------------------------------------------- -------------------------- partnership --------------------- trust advisor state state date date date date date date ---------------------- ----------------------- -------------- -------------- ------------------- --------------------------- -------------------- ------------------ ----------------- --------------------------- plr-121796-16 x ---- dear --------------------- this ruling responds to a letter dated date submitted on behalf of parent and subsidiary parent and subsidiary request an extension of time under sec_301_9100-1 and sec_301_9100-3 of the procedure and administration regulations to jointly make an election under sec_856 of the internal_revenue_code code to treat subsidiary as a taxable_reit_subsidiary trs of parent effective date facts subsidiary was formed as a corporation on date under the laws of state subsidiary is wholly owned by partnership when subsidiary was formed partnership was owned by trust a real_estate_investment_trust reit for federal_income_tax purposes trust and subsidiary jointly elected to treat subsidiary as a trs on form_8875 taxable_reit_subsidiary election effective date parent was formed as a corporation on date under the laws of state on date trust merged into parent with parent surviving parent currently holds x ownership interests in partnership at the time of the merger advisor failed to advise parent and subsidiary that the previously filed trs election on form_8875 was no longer effective since trust no longer existed in date during the course of an audit advisor requested a copy of form_8875 for subsidiary effective from the date of the merger at that time parent and subsidiary realized that a trs election on form_8875 was not filed by parent and subsidiary to treat subsidiary as a trs of parent parent and subsidiary intended to treat subsidiary as a trs of parent effective from the date of the merger parent filed its initial federal_income_tax return for the taxable_year ended date on a form 1120-reit u s income_tax return for real_estate_investment_trusts on which parent elected to be treated as a reit under sec_856 of the code parent and subsidiary make the following additional representations in connection with their request for an extension of time the request for relief was filed before the failure to make the regulatory election was discovered by the internal_revenue_service service granting the relief requested will not result in parent and subsidiary having a lower tax_liability in the aggregate for all years to which the election applies than they would have had if the election had been timely made taking into account the time_value_of_money plr-121796-16 parent and subsidiary do not seek to alter a return position for which an accuracy- related penalty has been or could have been imposed under sec_6662 of the code at the time they requested relief and the new position requires or permits a regulatory election for which relief is requested being fully informed of the required regulatory election and related tax consequences parent and subsidiary did not choose to not file the election parent and subsidiary are not using hindsight in making the decision to seek the relief requested no specific facts have changed since the due_date for making the election that make the election advantageous to the taxpayers the period of limitations on assessment under sec_6501 has not expired for parent and subsidiary for the taxable_year in which the election should have been filed nor for any taxable_year s that would have been affected by the election had it been timely filed in addition affidavits on behalf of parent and subsidiary have been provided as required by sec_301_9100-3 of the procedure and administration regulations law and analysis sec_856 of the code provides that a reit and a corporation other than a reit may jointly elect to treat such corporation as a trs to be eligible for treatment as a trs sec_856 provides that the reit must directly or indirectly own stock in the corporation and the reit and the corporation must jointly elect such treatment the election is irrevocable once made unless both the reit and the subsidiary consent to its revocation in addition sec_856 specifically provides that the election and any revocation thereof may be made without the consent of the secretary in announcement 2001_1_cb_716 the service announced the availability of new form_8875 taxable_reit_subsidiary election according to the announcement this form is to be used for taxable years beginning after for eligible entities to elect treatment as a trs the instructions to form_8875 provide that the subsidiary and the reit can make the election at any time during the taxable_year however the effective date of the election depends on when the form_8875 is filed the instructions further provide that the effective date cannot be more than months and days prior to the date of filing the election or more than months after the date of filing the election if no date is specified on the form the election is effective on the date the form is filed with the service sec_301_9100-1 of the procedure and administration regulations provides that the commissioner has discretion to grant a reasonable extension of time to make a plr-121796-16 regulatory election or a statutory election but no more than months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301_9100-1 defines a regulatory election as an election whose due_date is prescribed by regulations or by a revenue_ruling revenue_procedure notice or announcement published in the internal_revenue_bulletin sec_301_9100-3 through c sets forth rules that the service generally will use to determine whether under the particular facts and circumstances of each situation the commissioner will grant an extension of time for regulatory elections that do not meet the requirements of sec_301_9100-2 sec_301_9100-3 provides that requests for relief subject_to this section will be granted when the taxpayer provides the evidence including affidavits described in sec_301_9100-3 to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and the grant of relief will not prejudice the interests of the government sec_301_9100-3 provides that a taxpayer is deemed to have acted reasonably and in good_faith if the taxpayer i requests relief under this section before the failure to make the regulatory election is discovered by the service ii failed to make the election because of intervening events beyond the taxpayer’s control iii failed to make the election because after exercising reasonable diligence taking into account the taxpayer’s experience and the complexity of the return or issue the taxpayer was unaware of the necessity for the election iv reasonably relied on the written advice of the service or v reasonably relied on a qualified_tax professional including a tax professional employed by the taxpayer and the tax professional failed to make or advise the taxpayer to make the election a taxpayer will be deemed to have not acted reasonably and in good_faith if the taxpayer i seeks to alter a return position for which an accuracy-related_penalty has been or could be imposed under sec_6662 at the time the taxpayer requests relief and the new position requires or permits a regulatory election for which relief is requested ii was informed in all material respects of the required election and related tax consequences but chose not to file the election or iii uses hindsight in requesting relief sec_301_9100-3 provides that a reasonable extension of time to make a regulatory election will be granted only when the interests of the government will not be prejudiced by the granting of relief sec_301_9100-3 provides that the interests of the government are prejudiced if granting relief would result in the taxpayer having a lower tax_liability in the aggregate for all taxable years affected by the election than the taxpayer would have had if the election had been timely made taking into account the time_value_of_money sec_301_9100-3 provides that the interests of the government are ordinarily prejudiced if the taxable_year in which the regulatory election should have been made or any taxable years that would have been affected by the election had it been timely made are closed by the period of limitations on assessment under sec_6501 before the taxpayer’s receipt of a ruling granting relief under this section plr-121796-16 conclusion based upon the facts and representations submitted we conclude that parent and subsidiary have shown good cause for granting a reasonable extension of time to elect under sec_856 to treat subsidiary as a trs of parent the extension of time to make this election i sec_90 days from the date of this letter this ruling is limited to the timeliness of the filing of form_8875 this ruling’s application is limited to the facts representations and code and regulation sections cited herein no opinion is expressed as to whether parent otherwise qualifies as a reit or whether subsidiary otherwise qualifies as a trs under subchapter_m of the code no opinion is expressed with regard to whether the tax_liability of parent and subsidiary is not lower in the aggregate for all years to which the election applies than such tax_liability would have been if the election had been timely made taking into account the time_value_of_money upon audit of the federal_income_tax returns involved the director’s office will determine such tax_liability for the years involved if the director’s office determines that such tax_liability is lower that office will determine the federal_income_tax effect except as specifically provided otherwise no opinion is expressed on the federal_income_tax consequences of the transaction described above this ruling is directed only to the taxpayers that requested it sec_6110 of the code provides that it may not be used or cited as precedent in accordance with the terms of a power_of_attorney on file in this office copies of this letter are being sent to your authorized representatives sincerely k scott brown__________________ k scott brown branch chief branch office of the associate chief_counsel financial institutions and products enclosures copy of this letter copy for sec_6110 purposes


internal_revenue_service number release date index number ------------------------------ ----------------------------- ------------------------------- ---------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact -------------------- id no ------------- telephone number --------------------- refer reply to cc psi b02 plr-130476-07 date date ------------- ---------------------- -------------------------- ----------------------------------------------- ------------------------------ ------------------------ legend x y country d1 d2 dear -------------- this is in response to your letter dated date and subsequent correspondence submitted on behalf of x requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations to file an election to be classified as a disregarded_entity for federal tax purposes facts the information submitted states that x was formed in country on d1 as an entity eligible to make a classification election x is wholly owned by y x’s default status was as an association_taxable_as_a_corporation for federal tax purposes x intended to be classified as a disregarded_entity for federal tax purposes however a form_8832 entity classification election for x to elect to be treated as a disregarded_entity effective d2 was not timely filed plr-130476-07 law and analysis sec_301_7701-2 generally provides that a business_entity is any entity recognized for federal tax purposes that is not properly classified as a_trust under sec_301_7701-4 or otherwise subject_to special treatment under the internal_revenue_code sec_301_7701-3 provides that so long as a business_entity is not classified as a corporation under sec_301_7701-2 or an eligible_entity it may elect its classification for federal tax purposes sec_301_7701-3 further provides that an eligible_entity with at least two members can elect to be classified as either an association and thus a corporation under sec_301_7701-2 or as a partnership and an eligible_entity with a single owner can elect to be classified as an association or to be disregarded as an entity separate from its owner sec_301_7701-3 provides that an eligible_entity may elect to be classified other than as provided under sec_301_7701-3 by filing a form_8832 with the appropriate service_center under sec_301_7701-3 this election will be effective on the date specified by the entity on form_8832 or on the date filed if no such date is specified on the election form the date specified on form_8832 cannot be more than days prior to the date on which the election is filed and cannot be more than months after the date on which the election is filed sec_301_9100-1 provides that the commissioner may grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the code except subtitles e g h and i sec_301_9100-1 defines the term regulatory election as including an election with a deadline prescribed by a regulation published in the internal_revenue_bulletin sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make an election sec_301_9100-2 provides automatic extensions of time for making certain elections sec_301_9100-3 provides extensions of time for making elections that do not meet the requirements of sec_301_9100-2 sec_301_9100-3 provides that request for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government plr-130476-07 conclusion based solely on the facts submitted and representations made we conclude that the requirements of sec_301_9100-3 have been satisfied accordingly x is granted an extension of sixty days from the date of this letter to elect to be classified as a disregarded_entity for federal tax purposes effective d2 the election should be made by filing form_8832 with the appropriate service_center a copy of this letter should be attached to the election except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter this ruling is directed only to the taxpayer requesting it sec_6110 of the internal_revenue_code provides that it may not be used or cited as precedent sincerely william p o’shea associate chief_counsel passthroughs and special industries copy of this letter copy for sec_6110 purposes enclosures


department of the treasury internal_revenue_service washington d c date o f f ic e o f c h ief c o u n sel cc tege eoeg et2 conex-144669-01 uil - number info release date dear this responds to your letter dated date concerning publishing information about the tax requirements for frequent flyer miles earned on employer-paid business travel you recommended that information be published in the internal_revenue_manual the internal_revenue_manual provides information on internal_revenue_service operating procedures and policies this is different from treasury regulations which expand on the internal_revenue_code and provide guidance and examples on how the tax law should be implemented if the internal_revenue_service publishes guidance on the taxation of frequent flyer miles it will likely be in the form of a regulation a revenue_ruling or other published guidance rather than in the internal_revenue_manual we have previously corresponded with you concerning regulations and the guidance plan on date we hope this information is useful to you we appreciate your interest in this matter the attorney assigned to this matter is he can be reached at sincerely jerry e holmes chief employment_tax branch office of the assistant chief_counsel exempt_organizations employment_tax government entities


internal_revenue_service number release date index number ----------------------- --------------------------- ----------------------- ------------------------ - department of the treasury washington dc third party communication none date of communication not applicable_person to contact --------------------------- id no ------------- telephone number --------------------- refer reply to cc psi b01 plr-113522-06 date date legend x state date1 --------------------------- ----------------------- ------------- -------------------- dear -------------- this letter responds to your letter dated date submitted on behalf of x requesting a ruling under sec_1362 of the internal_revenue_code the information submitted states that x was incorporated on date1 under the laws of state the shareholder of x intended that x be treated as an s_corporation effective date1 but the election to be treated as an s_corporation was not timely filed facts law and analysis sec_1362 provides that a small_business_corporation may elect to be an s_corporation sec_1362 provides the rule on when an s election will be effective if an s election is made within the first two and one-half months of a corporation's taxable_year then the corporation will be treated as an s_corporation for the year in which the election is made if the election is made after the first two and one-half months of a corporation's plr-113522-06 taxable_year then the corporation will not be treated as an s_corporation until the taxable_year after the year in which the s election is made sec_1362 provides that if no election is made pursuant to sec_1362 or if made the election is made after the date prescribed for making such an election and the secretary determines there was reasonable_cause for the failure to timely make the election then the secretary may treat such an election as timely made for such taxable_year and effective as of the first day of that tax_year x did not file a timely election to be treated as an s_corporation under sec_1362 effective date1 x has however established reasonable_cause for not making a timely election and is entitled to relief under sec_1362 conclusion based solely on the facts submitted and representations made and provided that x otherwise qualifies as a subchapter_s_corporation we conclude that x will be recognized as an s_corporation effective date1 within days from the date of this letter x should submit a properly completed form_2553 with a copy of this letter attached to the relevant service_center except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter this ruling is directed only to the taxpayer requesting it sec_6110 of the code provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being mailed to your authorized representative sincerely david r haglund senior technician reviewer branch passthroughs special industries enclosures copy of this letter copy for sec_6110 purpose


department of the treasury washington dc third party communication none date of communication not applicable_person to contact -------------------------- id no ---------------- ---------------------------------------------------- telephone number --------------------- refer reply to cc tege eb hw plr-111065-12 date date internal_revenue_service number release date index number ---------------------------------------- --------------------- --------------------------------------------------- ------------------------------------------ legend legend city state --------------------- ------------- agreement a ------------------------------------------------------------------------- -------------------------------------------------------------------------------- agreement b --------------------------------------------------------------------------- -------------------------------------------------------------------------------- agreement c --------------------------------------------------------------------------- -------------------------------------------------------------------------------- agreement d ---------------------------------------------------------------------------- -------------------------------------------------------------------------- --------------------------- agreement e --------------------- ------------------------------------------------- -------------------------------------------------------------------------------- dear -------------------- this is in response to your letter of date in which you request rulings on behalf of city concerning the proper treatment of contributions that are made to a retiree health trust and account city is a charter city and is a political_subdivision of state city entered into agreements a through e with employee groups that require city and employees to contribute to a retiree health trust and account under each agreement plr-111065-12 city is required to contribute a specified percentage of an employee’s base salary to fund retiree medical benefits employees are also required to contribute a specified percentage of base salary the retiree health trust makes distributions payable to city’s health_plans to subsidize retiree medical coverage employer and employee contributions may also be held in a general account by city according to the information submitted city’s employees may not elect to receive salary in lieu of making the mandatory_contributions sec_61 of the internal_revenue_code the code and sec_1_61-21 of the income_tax regulations provide that except as otherwise provided in subtitle a of the code gross_income includes compensation_for services including fees commissions fringe_benefits and similar items however sec_106 of the code provides that gross_income of an employee does not include employer-provided coverage under an accident_or_health_plan sec_1_106-1 of the regulations provides that the gross_income of an employee does not include contributions which his employer makes to an accident_or_health_plan for compensation through insurance or otherwise to the employee for personal injuries or sickness incurred by him his spouse or his dependents as defined in sec_152 the employer may contribute to an accident_or_health_plan either by paying the premium or a portion of the premium on a policy of accident_or_health_insurance covering one or more of his employees or by contributing to a separate trust or fund including a fund referred to in sec_105 which provides accident and health benefits directly or through insurance to one or more of his employees however if the insurance_policy trust or fund provides other_benefits in addition to accident or health sec_106 applies only to the portion of the contributions allocable to accident or health benefits coverage provided under an accident_and_health_plan to former employees and their spouses and dependents is excludable from gross_income under sec_106 see revrul_62_199 1962_2_cb_32 revrul_82_196 1982_2_cb_53 sec_3101 imposes taxes under the federal_insurance_contributions_act fica on an employee’s wages sec_3306 imposes taxes under the federal_unemployment_tax_act futa sec_3121 and sec_3306 provide that with certain exceptions for fica and futa_tax purposes the term wages means all remuneration for employment including the cash_value of all remuneration including benefits paid in any medium other than cash however sec_3121 and sec_3306 provide that the term wages does not include any payment including any amount_paid by an employer for insurance made to or on behalf of an employee or any of his dependents for medical or hospitalization expenses sec_3401 of the code provides that for purposes of federal_income_tax withholding wages means all remuneration for services performed by an employee for his employer including the cash_value of all remuneration including benefits paid in any medium other than cash however rev plr-111065-12 rul 1956_2_cb_101 holds that when premiums_paid by an employer under policies providing hospital and surgical services are excludable from the employees' gross_income under sec_106 of the code the amounts paid_by the employer are not subject_to federal_income_tax withholding revrul_75_539 1975_2_cb_45 describes two labor contracts contract a provides that upon retirement an employee will receive a portion of accumulated unused sick leave credits as a cash payment or at the election of the employee the payment may be applied to continue the employee’s participation in the employer’s health plan contract b provides that the value of a portion of the accumulated unused sick leave credits will be used to pay for continued participation in the employer’s health plan under no circumstances under contract b may the retired employee or his spouse or dependents elect to receive this payment in cash revrul_75_539 holds that under contract a the value of unused accumulated sick leave credits used to continue health coverage is includible in the retired employee’s gross_income however under contract b the value of the unused accumulated sick leave credits is excludable from the retired employee’s gross_income based on the information submitted and representations made we conclude as follows mandatory employee contributions that are made to the retiree health trust or to city’s retiree medical benefits account pursuant to agreements are treated as employer contributions and are excludable from city employees’ gross_income under sec_106 of the code mandatory employee contributions made pursuant to agreements are not wages and are not subject_to fica_taxes under sec_3121 futa taxes under sec_3306 or income_tax_withholding under sec_3401 of the code no opinion is expressed concerning the federal tax consequences under any other provision of the code other than those specifically stated herein this ruling is directed only to the taxpayer requesting it sec_6110 of the code provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative sincerely harry beker branch chief health and welfare office of division counsel associate chief_counsel tax exempt and government entities