internal_revenue_service number info release date cc dom p si 1-cor-107034-00 date we are responding to correspondence submitted on your behalf by mrs requesting relief in order to establish date as the effective date for your s_corporation_election you are ineligible to receive automatic relief under revproc_97_48 because the memphis service_center continued to notify you about the deficient form_2553 after first notifying you within six months of the date your tax_return was filed although we are unable to respond to your request in its current form we are furnishing the following general information relating to your request the internal_revenue_service will not ordinarily issue a private_letter_ruling if the period of limitations on assessment under sec_6501 has lapsed for any taxable_year it appears that your taxable_year is considered closed under this rule please understand that we are only able to entertain requests for subsequent taxable years that remain open announcement copy enclosed provides guidance on seeking relief for late s_corporation elections and inadvertent invalid s_corporation elections generally to request relief for a late or invalid s_corporation_election you must request a private_letter_ruling from the national_office the procedures for requesting a private_letter_ruling are set out in revproc_2000_1 copy enclosed in addition revproc_2000_1 requires taxpayers to submit a user_fee along with their ruling_request the standard user_fee for a private_letter_ruling is dollar_figure however taxpayers with gross_income of less than dollar_figure million on their last-filed tax_return qualify for a reduced user_fee in the amount of dollar_figure if you are eligible to use the reduced fee provision you must include the statement described in b b of appendix a with your request please review appendix b for a sample format for requesting a private_letter_ruling if you decide to submit a formal request for a private_letter_ruling please explain why your form_2553 was filed late provide documents supporting your intention to be an s_corporation from inception and include the proper user_fee please refer your request to our office by adding the following to the address attn cc dom corp t p o box ben franklin station washington dc direct to cc dom p si br room please keep this letter with your tax records and feel free to provide a copy of it to your authorized representative we hope that the above information proves helpful sincerely yours s dianna k miosi dianna k miosi chief branch office of the assistant chief_counsel passthroughs and special industries enclosures announcement revproc_2000_1


internal_revenue_service department of the treasury number release date index number washington dc person to contact telephone number refer reply to cc psi -plr-118054-00 date date x a d1 dear this letter responds to a letter dated date and subsequent correspondence submitted on behalf of x by its authorized representative requesting a ruling under sec_1362 of the internal_revenue_code the information submitted states that x was incorporated on d1 a the sole shareholder of x represents that a intended for x to be an s_corporation effective d1 and submitted minutes of a meeting of x’s directors as evidence of that intent however a form_2553 election by a small_business_corporation was not timely filed for x sec_1362 of the code provides that if -- a an election under sec_1362 is made for any taxable_year after the date prescribed by sec_1362 for making such election for such taxable_year or no such election is made for any taxable_year and b the secretary determines that there was reasonable_cause for the failure to timely make such election the secretary may treat such an election as timely made for such taxable_year based solely on the facts and the representations submitted we conclude that x has established reasonable_cause for failing to make a timely election to be an s_corporation for x's first taxable_year accordingly provided that x makes an election to be an s_corporation by filing a completed form_2553 with the appropriate service_center effective d1 within days following the date of this letter then such election will be treated as timely made a copy of this letter should be attached to the form_2553 except as specifically set forth above no opinion is expressed concerning the federal tax consequences of the facts described above under any other provision of the code including whether x was or is a small_business_corporation under sec_1361 of the code 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 pursuant to a power_of_attorney on file with this office a copy of this letter is being sent to x’s authorized representative sincerely yours jeanne sullivan assistant to the chief branch office of the associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes


internal_revenue_service number release date index number ------------------------------------- ------------------------- -------------------------------- in re ----------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact ------------------------------ id no ------------ --------- telephone number --------------------- refer reply to cc psi b04 plr-116648-08 date date legend legend taxpayer taxpayer trust date date date year year x ----------------- --------------------- -------------------------------- ------------------------- --------------------- ------------------- ------- ------- -------------- dear ------------------------- this is in response to a letter dated date and subsequent correspondence from your authorized representative requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations and sec_2642 of the internal_revenue_code to allocate generation-skipping_transfer gst exemptions to a_trust the facts submitted and the representations made are as follows in year on date taxpayer formed and funded trust an irrevocable_trust for the benefit of taxpayer 1's issue trust has gst potential taxpayer sec_1 and retained an accountant to prepare their form sec_709 united_states gift and generation-skipping_transfer_tax returns reporting the transfer to trust on the form sec_709 taxpayer sec_1 and consented to have gifts made by either to third parties during year as made one-half by both pursuant to sec_2513 in preparing the form sec_709 the accountant inadvertently failed to allocate taxpayer 1’s and taxpayer 2’s gst exemptions to the transfer to trust in year as a result of an audit by the internal_revenue_service the value of the property transferred to trust was determined to be dollar_figurex during the audit the attorney for plr-116648-08 taxpayer sec_1 and discovered the failure to allocate gst_exemption to the transfer to trust on date in year a date prior to the enactment of sec_2642 taxpayer sec_1 and filed form sec_709 on which they made late allocations of their gst exemptions to the transfer to trust and pursuant to sec_26_2642-2 the taxpayers elected to treat the allocations as having been made on date it has been represented that since its creation no distributions to skip persons have been made from trust the following rulings are requested an extension of time pursuant to sec_2642 and sec_301_9100-3 to allocate taxpayer 1’s and taxpayer 2’s gst exemptions to the transfer to trust effective as of date and based on the value of the transfer on date and a ruling that pursuant to sec_26_2632-1 the late allocations of taxpayer 1’s and taxpayer 2’s gst exemptions are deemed to be void law and analysis sec_2601 imposes a tax on every gst a gst is defined under sec_2611 as a taxable_distribution a taxable_termination and a direct_skip sec_2631 in effect at the time of the transfer provides that for purposes of determining the gst tax every individual shall be allowed a gst_exemption of dollar_figure that may be allocated by such individual or his executor to any property with respect to which such individual is the transferor sec_2631 provides that any allocation under sec_2631 once made shall be irrevocable sec_26_2632-1 of the generation-skipping_transfer_tax regulations provides that an allocation of gst_exemption to property transferred during the transferor's lifetime other than in a direct_skip is made on form_709 an allocation of gst_exemption to a_trust is void to the extent the amount allocated exceeds the amount necessary to obtain an inclusion_ratio of zero with respect to the trust sec_2642 provides that except as provided in sec_2642 if the allocation of gst_exemption to any transfers of property is made on a gift_tax_return filed on or before the date prescribed by sec_6075 for such transfer or is deemed to be made under sec_2632 or c - a the value of such property for purposes of sec_2642 shall be its value as finally determined for purposes of chapter within the meaning of sec_2001 sec_2642 provides that the secretary shall by regulation prescribe such circumstances and procedures under which extensions of time will be granted to make an allocation of gst_exemption described in sec_2642 such regulations shall plr-116648-08 include procedures for requesting comparable relief with respect to transfers made before the date of the enactment of sec_2642 which was enacted into law on date sec_2642 provides that in determining whether to grant relief the secretary shall take into account all relevant circumstances including evidence of intent contained in the trust instrument or instrument of transfer and such other factors as the secretary deems relevant sec_2642 further provides that for purposes of determining whether to grant relief the time for making the allocation shall be treated as if not expressly prescribed by statute sec_301_9100-1 provides that the commissioner has discretion to grant a reasonable extension of time under the rules set forth in sec_301_9100-2 and sec_301_9100-3 to make a 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 code except subtitles e g h and i sec_301_9100-3 provides the standards used to determine whether to grant an extension of time to make an election whose due_date is prescribed by a regulation and not expressly provided by statute requests for relief under sec_301_9100-3 will be granted when the taxpayer provides the evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 provides that a taxpayer is deemed to have acted reasonably and in good_faith if the taxpayer 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 based on the facts submitted and the representations made we conclude that the requirements of sec_301_9100-3 have been satisfied therefore an extension of time of sixty days from the date of this letter is granted to allocate taxpayer 1’s and taxpayer 2’s available gst exemptions to the date transfer to trust the allocations will be effective as of date and will be based on the value of the transfer on date dollar_figurex the allocations should be made on supplemental form sec_709 for year and filed with the internal_revenue_service center cincinnati ohio a copy of this letter should be attached to the return because the allocations will be effective as of date the allocations will be deemed to precede in time the allocations taxpayer sec_1 and made on their respective form sec_709 filed on date to the extent taxpayer sec_1’s and taxpayer 2’s date allocations exceed the amount necessary to obtain an inclusion_ratio of zero with respect to trust under sec_26_2632-1 such allocations are void plr-116648-08 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 taxpayers requesting it sec_6110 provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative the rulings contained in this letter are based upon information and representations submitted by the taxpayers and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination sincerely william p o’shea william p o'shea associate chief_counsel passthroughs special industries enclosures copy for sec_6110 purposes


t c memo united_states tax_court david g turner petitioner v commissioner of internal revenue respondent docket no filed date david g turner pro_se linda j wise for respondent memorandum findings_of_fact and opinion goeke judge respondent determined a deficiency in petitioner’s federal_income_tax of dollar_figure a dollar_figure addition_to_tax under sec_6651 and a dollar_figure unless otherwise indicated all section references are to the internal_revenue_code in effect for the year in issue and all rule references are to the tax_court rules_of_practice and procedure penalty under sec_6662 and b after concessions the issues remaining for decision are whether petitioner received income during we hold that petitioner received income in and consequently is liable for federal income taxes whether petitioner is entitled to an additional personal_exemption for his spouse under sec_151 we hold that petitioner is not entitled to an additional personal_exemption for his wife because she had income during whether petitioner is entitled to deductions for charitable_contributions mortgage interest and real_property_taxes we hold that petitioner cannot deduct his claimed charitable_contributions but hold that petitioner can deduct the portion as so found of mortgage interest and real_property_taxes he paid in and whether petitioner is liable for the addition_to_tax for failing to file a return under sec_6651 and for the accuracy-related_penalty under sec_6662 and b we hold that petitioner is liable for the addition_to_tax under sec_6651 but hold that petitioner is not liable for the the parties stipulated at trial that petitioner did not receive wages from sunshine cos or river branch corp although the notice_of_deficiency included wages from each accuracy-related_penalty under a and b because petitioner’s form_1040 u s individual_income_tax_return did not constitute a valid_return findings_of_fact some of the facts have been stipulated the stipulation of facts and the attached exhibits are incorporated herein by this reference petitioner resided in atlanta georgia at the time his petition was filed during petitioner was employed by primerica financial services inc pfs at some point before petitioner submitted form_w-4 personal allowances worksheet to pfs instructing that pfs not withhold federal income taxes from his compensation petitioner filed form_1040 for the tax_year petitioner did not enter on the form any financial information for the tax_year but instead entered zeros on every line regarding income and reported his total income for as zero petitioner’s filing_status was married_filing_separately and he claimed the standard_deduction on the basis of his filing_status petitioner also claimed personal exemptions for himself and his spouse and a dependency_exemption for his daughter we are unable to discern from the record whether petitioner’s form_1040 was timely filed because it was stamped received by an internal_revenue_service on date even though petitioner signed and dated it date petitioner submitted a typewritten document attached to his form_1040 that attempted to explain many other reasons why he was not subject_to federal income taxes on date in response to petitioner’s document the internal_revenue_service irs issued a letter which stated that petitioner’s form_1040 and the attachment were frivolous the letter also stated that the irs would not respond to any future correspondence regarding these claims and provided petitioner with an opportunity to correct his return to prevent the imposition of a frivolous_return penalty under sec_6702 on date petitioner in a letter responded to the irs’s date letter petitioner claimed among other things that he was entitled to an administrative hearing before a sec_6702 penalty could be imposed and that his form_1040 was not frivolous since he relied on caselaw and the internal_revenue_code petitioner continued to send written communications to the irs repeating these same arguments on date the irs sent a letter to petitioner and enclosed among other things two copies of examination reports and requested a response before date petitioner was informed that if he failed to respond a notice_of_deficiency would be issued on date petitioner filed with the irs form request for appeals review requesting an appeals_office conference on date respondent issued a notice_of_deficiency to petitioner with respect to his taxable_year respondent computed petitioner’s income using third-party information returns after concessions the adjustments to petitioner’s income include form and payor amount_paid w-2 pfs dollar_figure 1099b citibank n a dollar_figure 1099-div hershey foods corp 1099-div southtrust corp 1099-div colonial bancgroup inc 1099-div citicorp preferred series 1099-int colonial bank dollar_figure dollar_figure dollar_figure dollar_figure dollar_figure total dollar_figure the notice_of_deficiency indicated that colonial bancgroup filed two separate form 1099-div information returns but attached to petitioner’s form_1040 was a copy of a single form 1099-div which aggregated the amounts on the two received by respondent the notice_of_deficiency also determined the addition_to_tax under sec_6651 and the penalty under sec_6662 and b opinion i petitioner’s protester arguments petitioner has asserted frivolous arguments to support his contention that he did not have to pay federal income taxes for the tax_year to educate petitioner we shall briefly address his arguments a petitioner received income petitioner argues that he did not receive income in this argument relies on petitioner’s assertion that the internal_revenue_code does not define the term income this court has consistently rejected this argument sec_61 defines gross_income to include income from whatever source derived more specifically sec_61 includes in an individual’s gross_income any compensation_for services interest payments dividend payments and gains derived from dealings in property clearly petitioner’s compensation from pfs interest payments from banks where he maintained accounts and dividend payments from corporations in which he held stock are gross_income for federal_income_tax purposes see 348_us_426 stating that gross_income includes all accessions to wealth that are clearly realized and under the control of the taxpayer 82_tc_235 77_tc_1169 additionally petitioner’s receipt of sale proceeds from his sale of citigroup inc stock is gross_income to the extent the amount_realized exceeded his basis see sec_1_61-7 income_tax regs petitioner failed to offer any evidence of his basis in the sold stock and respondent correctly included the full amount in petitioner’s gross_income petitioner also failed to show the date on which he purchased the stock and thus cannot benefit from the applicable long-term_capital_gains_rate b compliance with the federal_income_tax is not voluntary a federal_income_tax is imposed on the taxable_income of every married individual who does not make a single joint_return with his spouse sec_1 sec_6011 provides that any person liable for any_tax imposed by this title shall make a return or statement according to the forms and regulations prescribed by the secretary sec_6012 entitled persons required to make returns of income provides that an individual possessing gross_income for a taxable_year in excess of a specified amount shall file a tax_return numerous courts have held that the payment of federal income taxes is not voluntary 876_f2d_272 2d cir stating the average citizen knows that the payment of income taxes is legally required 848_f2d_1007 9th cir affg tcmemo_1987_225 832_f2d_986 7th cir 778_f2d_460 8th cir c respondent’s determinations were correct generally absent application of special statutory provisions or principles the commissioner's determinations in a notice_of_deficiency are presumptively correct and the taxpayer has the burden of proving that those determinations are erroneous rule a 290_us_111 however sec_6201 provides that the secretary shall have the burden of producing in addition to any information returns reasonable and probative information concerning a deficiency where a taxpayer has asserted a reasonable dispute regarding an item_of_income reported on a third-party information_return and has fully cooperated with the secretary see miner v commissioner tcmemo_2003_39 gussie v commissioner tcmemo_2001_302 respondent conceded at trial certain amounts determined in the notice_of_deficiency he had issued to petitioner petitioner acknowledged receiving the amounts indicated on the remaining third-party information returns but argued that the payments did not constitute income we find that petitioner’s argument does not raise a reasonable dispute with respect to the items of income reported in the information returns see 117_f3d_785 5th cir noting that the commissioner has no duty to investigate a third-party information_return that is not disputed by the taxpayer we are also unable to conclude on the basis of the record that petitioner has fully cooperated with respondent a failure to cooperate would also seem to render sec_7491 inapplicable petitioner asserted frivolous arguments to the irs through numerous submissions all of which relied on erroneous information the irs informed petitioner that his claims were groundless but instead of remitting the tax he owed petitioner decided to embark on this painstaking journey ii exemptions and deductions a exemptions petitioner claimed two personal exemptions one for himself and one for his wife and a dependency_exemption for his daughter respondent permitted the exemptions for petitioner and his daughter but disallowed the exemption for his wife the pertinent part of sec_151 provides a taxpayer with an exemption for a spouse if the taxpayer and the spouse do not file a joint_return and the spouse had no gross_income and is not dependent on another taxpayer during the calendar_year in which the taxpayer’s tax_year began any income the taxpayer’s spouse received during the applicable tax_year precludes the taxpayer from taking an additional personal_exemption see sec_1_151-1 income_tax regs petitioner contends that his wife did not receive income during respondent argues that petitioner’s wife had gross_income for the tax_year respondent provided evidence in the form of third-party information returns indicating petitioner’s wife was the sole recipient of dividend and interest_income therefore we find that petitioner is not entitled to claim an exemption under sec_151 for his wife b deductions as a general_rule deductions are a matter of legislative grace 503_us_79 it is incumbent upon a taxpayer to maintain records and substantiate any deductions claimed sec_1_6001-1 e income_tax regs donations to goodwill and the salvation army petitioner claims he made donations to goodwill and the salvation army petitioner did not offer any evidence substantiating these donations therefore petitioner is not entitled to any deductions for these claimed donations mortgage interest and real_property_taxes petitioner’s petition appears to request a redetermination of his tax_liability taking into account itemized_deductions mainly mortgage interest and real_property_taxes paid there is not a precise record before us regarding real_property_taxes and mortgage interest however in cases where we have some basis to estimate a taxpayer’s expenses we are permitted to make an approximation 245_f2d_559 5th cir stating that the trier of fact must be satisfied by the evidence that the estimated amount was spent or incurred for the stated purpose 39_f2d_540 2d cir the approximation may bear heavily upon the taxpayer whose inexactitude is of his own making id pincite the record establishes that petitioner paid real_estate_taxes and mortgage interest in connection with his residence in the tax_year we can infer from the information returns and the record that petitioner paid the two liabilities personally as he was the only member of his family with sufficient income to cover these costs respondent did not argue that the mortgage was never paid nor did he present any evidence that someone other than petitioner paid the mortgage instead at trial respondent agreed to the amount of the mortgage interest_paid in petitioner is thus entitled to a deduction for his mortgage interest_paid turning to the real_property_taxes the only figure respondent and petitioner presented at trial related to petitioner’s real_property_taxes it is quite possible that from the year in issue to petitioner’s home was reappraised altering his real_property tax_liability because petitioner’s lack of diligence created this inexactitude we find that he should receive a deduction for only one-half of the amount of the liability id iii addition_to_tax respondent determined a sec_6651 addition_to_tax against petitioner as an initial matter sec_7491 places the burden of production on the commissioner to show that the imposition of an addition_to_tax or a penalty on an individual is appropriate to satisfy this burden respondent must proffer sufficient evidence indicating that the imposition of the addition or penalty is appropriate see 116_tc_438 respondent satisfied his burden with respect to the addition_to_tax by introducing at trial copies of petitioner’s form_1040 third-party information returns relating to petitioner’s income and documents containing tax- protester rhetoric petitioner submitted to the irs sec_6651 generally provides that a taxpayer’s failure_to_file a timely federal_income_tax return taking into account extensions requires the imposition of an addition_to_tax unless the taxpayer shows that such failure was due to reasonable_cause and not due to willful neglect petitioner contends that he is not liable for an addition_to_tax under sec_6651 since he filed a form_1040 respondent argues that petitioner’s form_1040 does not constitute a valid tax_return for sec_6651 purposes because it failed to provide sufficient information the irs could rely on to calculate and assess petitioner’s tax_liability see eg 925_f2d_1379 11th cir affg in part revg in part and remanding tcmemo_1989_75 and tcmemo_1988_498 120_tc_163 as we have stated previously a taxpayer who received income beyond a certain amount during the taxable_year is required to file an income_tax return for that taxable_year see sec_6011 and sec_6012 to determine whether a taxpayer has filed a valid tax_return we follow the test enunciated in 82_tc_766 affd 793_f2d_139 6th cir to be a valid_return under beard first there must be sufficient data to calculate tax_liability second the document must purport to be a return third there must be an honest and reasonable attempt to satisfy the requirements of the tax law and fourth the taxpayer must execute the return under penalties of perjury a majority of the courts of appeals including the court_of_appeals for the eleventh circuit have determined that a filed form_1040 devoid of financial data is not a valid_return 672_f2d_875 11th cir finding that a return showing no financial information is not a return the caselaw of the court_of_appeals for the eleventh circuit is controlling in this case because it appears to be the proper court_of_appeals to review this decision see 54_tc_742 affd 445_f2d_985 10th cir for sec_7203 purposes 618_f2d_280 5th cir the court_of_appeals for the eleventh circuit in 661_f2d_1206 11th cir adopted as precedent the decisions of the former court_of_appeals for the fifth circuit additionally petitioner’s attachment of information returns to his form_1040 does not make his otherwise invalid return valid kartrude v commissioner supra pincite reiff v commissioner t c pincite8 halcott v commissioner tcmemo_2004_214 cumming v commissioner tcmemo_1992_329 petitioner’s form_1040 contained zero entries for every line regarding his income petitioner attached to his form_1040 documents containing tax-protester rhetoric and third-party information returns given these facts petitioner’s form_1040 with attachments was not a valid_return petitioner also did not argue nor do we find that his failure_to_file was due to reasonable_cause consequently we hold that petitioner is liable for an addition_to_tax under sec_6651 taylor v united_states aftr 2d ustc par big_number d c cir 738_f2d_157 6th cir 727_f2d_681 8th cir 638_f2d_182 10th cir 627_f2d_830 7th cir 604_f2d_232 3d cir 120_tc_163 the sole case that stands for the idea that a zero return is a valid_return is 618_f2d_74 9th cir iv accuracy-related_penalty respondent’s notice_of_deficiency imposed an accuracy- related penalty on petitioner pursuant to sec_6662 because petitioner’s underpayment_of_tax was attributable to negligence or disregard of rules or regulations see sec_6662 however sec_6664 provides that an accuracy-related_penalty under sec_6662 is applicable only where a return has been filed in 114_tc_136 we held that a taxpayer is not liable for a sec_6662 penalty if we find that the taxpayer’s return was invalid see hart v commissioner tcmemo_2001_306 in support of respondent’s determination that petitioner was liable for an addition_to_tax under sec_6651 respondent argued petitioner’s form_1040 was not a valid_return after carefully considering the issue supra we agreed respondent now contends that petitioner is liable for an accuracy-related_penalty with respect to the same form_1040 it is illogical and inconsistent with williams for respondent to argue that petitioner’s form_1040 was not a valid_return for sec_6651 purposes but that very same return was valid for purposes of imposing an accuracy-related_penalty under sec_6662 therefore we find that petitioner is not liable for the accuracy-related_penalty under sec_6662 and b to reflect the foregoing decision will entered under rule