internal_revenue_service department of the treasury index number washington dc person to contact number release date telephone number refer reply to cc dom p si 1-plr-113562-99 date sept legend x date this responds to a letter dated date submitted on behalf of x requesting relief under sec_1362 of the internal_revenue_code facts x was incorporated on date the sole shareholder of x desired that x elect s_corporation treatment for x effective on date but the election to be treated as an s_corporation was not timely filed accordingly x requests a ruling that it will be treated as an s_corporation effective date law and analysis sec_1362 provides that a small_business_corporation may elect to be an s_corporation sec_1362 provides the rule on when an s election will be effective sec_1362 provides in relevant part that if an s election is made within the first two and one-half months of a corporation's taxable_year then the corporation will be treated as an s_corporation for the year in which the election is made under sec_1362 however if an s election is made after the first two and one-half months of a corporation's taxable_year then that corporation will not be treated as an s_corporation until the taxable_year after the year in which the s election is filed plr-113562-99 sec_1362 provides that if no sec_1362 election is made for any taxable_year and the secretary determines that there was reasonable_cause for the failure to timely make such election then the secretary may treat such an election as timely made for such taxable_year and sec_1362 shall not apply x did not file an election to be treated as an s_corporation under sec_1362 x has however established reasonable_cause for not making a timely s election and is entitled to relief under sec_1362 conclusion based solely on the facts submitted and the representations made and provided that x otherwise qualifies as an s_corporation we conclude that x will be treated as an s_corporation effective date within days from the date of this letter x should submit a properly completed form_2553 with a copy of this letter attached to the relevant service_center except as specifically set forth above no opinion is expressed or implied as to the federal_income_tax consequences of the transaction described above under any other provision of the code specifically no opinion is expressed concerning whether x is in fact an s_corporation for federal tax purposes this ruling is directed only to the taxpayer s 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 signed dianna k miosi sincerely dianna k miosi branch chief branch office of the assistant chief_counsel passthroughs and special industries 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 fip branch presp-141565-08 date date dear -------------- this letter is in response to the application and the accompanying documents the application of --------------------------------- the applicant submitted on its behalf by its authorized representative for the allocation of the dollar_figure------------------national limitation of authority the qfcb national limitation to issue qualified forestry conservation bonds the qfcbs proceeds of the qfcbs are to be used to acquire approximately --------- ----------- acres of forest and forest land in the ----------------------- as described in the application the qfcb land for qualified forestry conservation purposes pursuant to sec_54b of the internal_revenue_code the code and notice_2008_70 2008_36_irb_575 date based upon our review of the application and the certifications received pursuant to f of notice_2008_70 from the united_states forest service the usfs the internal_revenue_service the irs has determined that the applicant is a qualified issuer under sec_54 and that the purpose for which the applicant requests an allocation of the qfcb national limitation is a qualified forestry conservation_purpose under sec_54b and therefore subject_to sec_54a and sec_54b of the code notice_2008_70 and this letter we allocate dollar_figure----------------- of the qfcb national limitation to the applicant to be used for a qualified forestry conservation_purpose the application contains an election pursuant to sec_54b by the applicant to treat percent of the qfcb allocation as payment of tax and requests a refund of such deemed payment in lieu of issuing qfcbs we approve the requested refund thus the applicant may not issue any qfcbs pursuant to the allocation described above for purposes of sec_54a and sec_54b and notice_2008_70 the refund of the deemed payment of dollar_figure----------------- the refund to the applicant must be used exclusively for one or more qualified forestry conservation purposes as required by sec_54 presp-141565-08 the applicant must comply with sec_54a and sec_54b and notice_2008_70 including without limitation the requirement that the applicant expend percent of the available project proceeds to acquire the qfcb land within three years of the receipt of the allocation proceeds and the requirement that no later than six months after the acquisition of the qfcb lands subject_to extension by the irs the applicant transfer the qfcb land to the usfs or enter into a contract with the usfs for the transfer of the qfcb land to the usfs that satisfies e iv of notice_2008_70 the executory agreement from the date on which the applicant receives the project proceeds to the date on which the applicant expends percent of the such proceeds for the acquisition of the qfcb land the applicant must comply with the security requirements of the last paragraph of sec_3 of notice_2008_70 or as otherwise appropriately required by the irs we will forward the refund to you pending finalization of applicable security requirements in addition if any of the qfcb land is scheduled to be transferred to the usfs pursuant to the executory agreement more than three years after the execution of the executory agreement the applicant must comply with the security requirements of e vi of notice_2008_70 or as otherwise appropriately required by the irs in accordance with sec_54b if the applicant fails to use any of the available project proceeds including any proceeds received from investing the allocation proceeds for a qualified forestry conservation_purpose including any qualified transaction costs the applicant must rebate the unused portion of such proceeds to the united_states this letter is based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative if you have any questions with respect to this letter please contact --------------------------- -------- or ---------------------------- of the office of associate chief_counsel financial institutions and products on --------------------- not a toll-free call sincerely stephen larson associate chief_counsel financial institutions products cc


department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division aug q q uniform issue list be t eppa ti kk k e k e k wk rk legend taxpayer a taxpayer b ira c account d account e transfer agent f trustee g amount h dear the following facts and representations have been submitted under penalty of this is in response to your letter dated date supplemented by faxed information dated date and date in which you request a waiver of the 60-day rollover requirement contained in sec_408 of the internal_revenue_code code perjury in support of the ruling requested prior to january ' taxpayer a maintained ira c an individual_retirement_arrangement ira described in code sec_408 in his name trustee g was the trustee for ira c where it was held in a government money market fund on approximately december taxpayer a was hospitalized for heart surgery during the following four months taxpayer a was only able to return home for a few days and was unable to handle any affairs taxpayer a had previously handled all of the financial affairs of taxpayer b his spouse and himself and possibly consented to a liquidation of ira c without taxpayer b’s knowledge trustee g closed ira c and sent a liquidation check for amount h to taxpayer a’s home through transfer agent f this liquidation check was addressed to taxpayer a ira and was dated january amount of amount h and was in the and does not know taxpayer b did not discover the check until march when the check was received in her home as taxpayer a had not told her to expect the check prior to march taxpayer b expected taxpayer a to return home and resume handling their financial affairs however on that date taxpayer b realized that taxpayer a’s condition was deteriorating and that he would not be returning home due to the advanced state of his illness furthermore taxpayer b also realized that she needed to provide the necessary information to their tax preparer to enable him to file their returns being unaware of the circumstances surrounding the issuance of the january check and unable to discuss the check with taxpayer a due to his incapacity taxpayer b deposited the check into account d on march taxpayer a moved the amount deposited into account on april come tax d on march separate from other funds into account e for the purpose of keeping these funds taxpayer b represents that she was not familiar with transfer agent f which unfamiliarity contributed to her not discovering the january march the 60-day rollover requirement and with respect to the january believed that the 60-day period began to run as of the date of the check check until furthermore she represents that she had limited expertise with check taxpayer a died on april taxpayer b was the sole primary beneficiary of ira c furthermore she is the sole beneficiary and executrix of taxpayer a’s estate also taxpayer b had general power_of_attorney over taxpayer a’s affairs during the period in which her husband taxpayer a was hospitalized based on the facts and representations you request that the service waive the 60-day rollover requirement with respect to the distribution of amount h from ira c because the failure to waive such requirement would be against equity or good conscience sec_408 of the code provides that except as otherwise provided in sec_408 of the code any amount_paid or distributed out of an ira should be included in gross_income by the payee or distributee as the case may be in the manner provided under sec_72 of the code sec_408 of the code defines and provides the rules applicable to ira_rollovers sec_408 of the code provides that sec_408 of the code does not apply to any amount_paid or distributed out of an ira to the individual for whose benefit the ira is maintained if i the entire amount received including money and any other_property is paid into an ira for the benefit of such individual not later than the day after the day on which the individual receives the payment or distribution or the entire amount received including money and any other_property is paid into an eligible_retirement_plan other than an ira for the benefit of such individual not later than the day after the date on which the payment or distribution is received except that the maximum amount which may be paid into such plan may not exceed the portion of the amount received which is includible in gross_income determined without regard to sec_408 of the code sec_408 of the code provides that sec_408 of the code does not apply to any amount described in sec_408 of the code received by an individual from an ira if at any time during the 1-year period ending on the day of such receipt such individual received any other amount described in sec_408 of the code from an ira which was not includible in gross_income because of the application of sec_408 of the code sec_408 of the code provides a similar 60-day rollover period for partial rollovers sec_408 of the code provides that the secretary may waive the day requirement under sec_408 and sec_408 of the code where the failure to waive such requirement would be against equity or good conscience including casualty disaster or other events beyond the reasonable control of the individual subject_to such requirement only distributions that occurred after date are eligible for the waiver under sec_408 of the code revproc_2003_16 2003_4_irb_359 date provides that in determining whether to grant a waiver of the 60-day rollover requirement pursuant to sec_408 the service will consider all relevant facts and circumstances including errors committed by a financial_institution inability to complete a-rollover due to death disability hospitalization incarceration restrictions imposed by a foreign_country or postal error the use of the amount distributed for example in the case of payment by check whether the check was cashed and the time elapsed since the distribution occurred the information presented by taxpayer b demonstrates that taxpayer a did not timely roll over the check dated january because of his hospitalization and incapacitation taxpayer b was not expecting the check and did not discover it until march a date that she believed was beyond the 60-day rollover period the distribution check was not cashed until it was discovered and deposited on march _ the funds have not been used or spent and the request for this ruling was made within one month from the date on which the check was discovered payable to taxpayer a ira therefore pursuant to sec_408 of the code the service hereby waives the 60-day rollover requirement with respect to the distribution of amount g taxpayer b as executrix surviving_spouse and sole beneficiary of taxpayer a’s estate is granted a period of days from the issuance of this ruling letter to contribute amount h to an ira in taxpayer a’s name provided all other requirements of sec_408 of the code except the 60-day requirement are met with respect to such contribution said contribution will be considered a rollover_contribution within the meaning of sec_408 of the code this ruling does not authorize the rollover of amounts that are required to be distributed by sec_401 of the code made applicable to iras under sec_408 of the code the service notes that the ira into which amount h will be rolled over will not have a designated_beneficiary as that term is defined in code sec_401 no opinion is expressed as to the tax treatment of the transaction described herein under the provisions of any other section of either the code or regulations whith may be applicable thereto this letter 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 if you wish to inquire about this ruling please contact d at please address all correspondence to se t ep ra t3 - sincerely yours - employee_plans technical group n manager enclosures deleted copy of this letter notice of intention to disclose notice


internal_revenue_service number release date index number ------------------ ---------------------------------- ---------------------------------------- --------------------------------- department of the treasury washington dc person to contact ----------- id no ------------- telephone number --------------------- refer reply to cc psi b01 - plr-120618-03 date march legend x --------------------- ----------------------- ----------------------------- ------ ----------------------------------------- a --------------------------------------------------- country b --------------------------------------------------- d1 dear ----------------- correspondence written on behalf of x requesting an extension of time pursuant to sec_301_9100-3 of the procedure and administration regulations to file a late form_8832 entity classification election this letter responds to your letter dated date and related --------------------- facts the information submitted discloses that a is engaged in business activities in country a directly and indirectly owns b which operates as a project company in country a and b formed x as a sociedades de responsabilidad limitada srl under the laws of country on d1 a and b intended that x make an entity classification election effective d1 however due to inadvertence form_8832 was not timely filed law and analysis sec_301_7701-3 provides that a business_entity not classified as a sec_301_7701-3 provides guidance on the classification of a foreign_corporation under sec_301_7701-2 or an eligible_entity can elect its classification for federal tax purposes eligible_entity for federal tax purposes sec_301_7701-3 provides that except as provided in sec_301_7701-3 unless the entity elects otherwise a foreign eligible_entity is classified as a partnership if it has two or more members and at least one member does not have limited_liability an association if all members have limited_liability or disregarded as an entity separate from its owner if it has a single owner that does not have limited_liability classified other than as provided under ' b by filing form_8832 entity classification election with the appropriate service_center under ' c iii this election will be effective on the date specified by the entity on form_8832 or on the date filed if no such date is specified the date specified on form_8832 cannot be more than days prior to the date on which the election is filed sec_301_7701-3 provides that an eligible_entity may elect to be under sec_301_9100-1 the commissioner may grant a reasonable sec_301_9100-2 and sec_301_9100-3 provide the standards the commissioner extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the code except e g h and i sec_301_9100-1 defines the term regulatory election as including an election whose deadline is prescribed by a regulation published in the internal_revenue_bulletin will use to determine whether to grant an extension of time to make an election sec_301_9100-2 provides automatic extensions of time for making certain elections sec_301_9100-3 provides extensions of time for making elections that do not meet the requirements of sec_301_9100-2 requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government conclusion based solely on the facts submitted and representations made we conclude that the requirements of sec_301_9100-3 are satisfied as a result x is granted an extension of time of days from the date of this letter to make an entity classification election by filing a form_8832 effective d1 with the appropriate service_center a copy of this letter should be attached to the election a copy of this letter is attached for this purpose except as specifically set forth above we express or imply no opinion concerning the federal tax consequences of the facts described above under any other provision of the code this ruling is directed only to the taxpayer requesting it sec_6110 of the code provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being mailed to the taxpayer sincerely heather c maloy associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for ' purposes


t c summary opinion united_states tax_court bradley d becnel petitioner v commissioner of internal revenue respondent docket no 23877-04s filed date bradley d becnel pro_se scott t welch for respondent couvillion special_trial_judge this case was heard pursuant to sec_7463 i r c in effect when the petition was filed the decision to be entered is not reviewable by any other court and this opinion should not be cited as authority 1unless otherwise indicated subsequent section references are to the internal_revenue_code in effect for the year at issue respondent determined a deficiency of dollar_figure in petitioner’s federal_income_tax for and an accuracy-related_penalty under sec_6662 of dollar_figure petitioner concedes the deficiency but challenges the accuracy-related_penalty the sole issue therefore is whether petitioner is liable for the accuracy-related_penalty under sec_6662 for some of the facts were stipulated and those facts with the annexed exhibits are so found and are incorporated herein by reference petitioner was a legal resident of the state of louisiana at the time the petition was filed a notice_of_deficiency was issued to petitioner for based upon his failure to include as income on his federal_income_tax return for that year payments that had been made to him by four payors these payments had been reported as income to the internal_revenue_service on information returns petitioner does not challenge the payments as includable in gross_income the amounts which were as follows donaldson lufkin jenrette securities dollar_figure hibernia national bank big_number ordinary dividend sec_447 capital_gain dividends total dollar_figure respondent also determined that petitioner is liable for an accuracy-related_penalty of dollar_figure under sec_6662 for negligence or disregard of rules or regulations and for a substantial_understatement_of_income_tax during the year petitioner was a student at loyola university new orleans college of law petitioner graduated from the college of law in with respect to the determination in the notice_of_deficiency he alleged in his petition in while attending loyola law school i acquired a severe eye infection in both eyes which required hospitalization and consults from physicians in texas and louisiana because i was unable to see read i submitted all of my tax documents to thomas vicknair who prepared my return in and the previou sec_4 or years in mr vicknair had a sudden stroke heart attack and died in because he was a sole_proprietor i have had difficulty retrieving many of my tax documents from his widow i reasonably relied on the professional tax_advice provided by mr vicknair and because of his untimely and sudden death i am unable to explain why he neglected to claim certain income despite being provided with proof of same because of my own health problems particularly my impaired vision i was unable to verify the contents of my return in despite reasonable efforts with respect to the sole issue before the court sec_6662 imposes an accuracy-related_penalty in the amount of percent of any portion of an underpayment_of_tax that is attributable to causes set forth in subsection b however under sec_6664 no penalty shall be imposed under sec_6662 with respect to any portion of an underpayment if it is shown that there was reasonable_cause for the underpayment and that the taxpayer acted in good_faith with respect to the underpayment the commissioner has the burden of production with respect to the penalty but the taxpayer retains the burden of proving reasonable_cause sec_7491 116_tc_438 sec_6662 provides that the causes justifying the imposition of the accuracy-related_penalty include inter alia negligence or disregard of rules or regulations and any substantial_understatement_of_income_tax negligence is defined for purposes of sec_6662 as any failure to make a reasonable attempt to comply with the provisions of the internal revenue laws or to exercise ordinary and reasonable care in the preparation of a tax_return sec_1_6662-3 income_tax regs sec_6662 defines disregard as any careless reckless or intentional disregard under sec_6662 a substantial_understatement exists where the amount of the understatement exceeds the greater of percent of the tax required to be shown on the return for the taxable_year at issue or dollar_figure for purposes of sec_6662 understatement is defined as the excess of tax required to be shown on the return over the amount of tax that is shown on the return reduced by any rebates sec_6662 the understatement is reduced by the portion of the understatement attributable to an item for which there was either substantial_authority for its treatment or adequate_disclosure of the relevant facts and a reasonable basis for its treatment sec_6662 petitioner reported a tax due of dollar_figure on his federal_income_tax return for he failed to include on his return the income reported on forms 1099-b proceeds from broker and barter_exchange transactions and 1099-div dividends and distributions outlined above for the year at issue aside from failing to disclose on the return the relevant facts related to these items of income petitioner has not presented any substantial_authority for his failure to include these items on his return because the understatement exceeds both percent of the total_tax required to be shown on the return and dollar_figure there was a substantial_understatement of tax sec_6662 consequently the penalty under sec_6662 applies unless petitioner had reasonable_cause for the underpayment and acted in good_faith with respect to the underpayment sec_6664 the determination of whether a taxpayer acted with reasonable_cause and in good_faith is made on a case-by-case basis taking into account all of the relevant facts and 2petitioner’s form_1040 u s individual_income_tax_return for showed a tax due in the amount of dollar_figure the total_tax required to be shown on the return was dollar_figure thus petitioner understated his income_tax_liability by dollar_figure this amount exceeds both dollar_figure percent of the total_tax required to be shown on the return and dollar_figure circumstances sec_1_6664-4 income_tax regs the most important factor is the extent of the taxpayer’s effort to assess his proper tax_liability see id an honest misunderstanding of fact or law that is reasonable in light of the experience knowledge and education of the taxpayer may indicate reasonable_cause and good_faith remy v commissioner tcmemo_1997_72 further reliance by the taxpayer on the advice of a qualified adviser constitutes reasonable_cause and good_faith if under all of the facts and circumstances the reliance by the taxpayer was reasonable and the taxpayer acted in good_faith sec_1_6664-4 income_tax regs in his petition petitioner alleges that his health-related problems rendered him incapable of verifying the accuracy of hi sec_2002 income_tax return he contends that an infection in both eyes left him unable to see or read in date the time when the return for taxable_year was filed at trial petitioner testified that he acquired a serious bacterial infection in his left eye sometime in date he acknowledged that his eyes were examined by a professional and that the infection’s effects were limited to his left eye notwithstanding the infection in his left eye petitioner was able to finish his coursework at loyola university new orleans college of law take his exams and graduate from law school in because the infection which originated in date only impaired one eye the court is not convinced that he was unable to see as petitioner asserted in his petition and was incapable of verifying the information on his income_tax return for the year at issue petitioner also contends in his petition that thomas vicknair mr vicknair his accountant and return preparer despite receiving information returns for petitioner for taxable_year failed to include these items of income on hi sec_2002 income_tax return petitioner alleged and testified that mr vicknair died after preparing petitioner’ sec_2002 return and that petitioner had difficulty obtaining his tax information from mr vicknair’s estate daniel e becnel jr mr becnel petitioner’s father testified at trial that mr vicknair was a banker who served as the family’s bookkeeper that mr vicknair ordinarily prepared the family’s returns and that he died on date when questioned as to how mr vicknair could have prepared petitioner’ sec_2002 income_tax return in date since mr vicknair died on date mr becnel testified that mr vicknair did not as alleged in the petition prepare petitioner’s return for the year at issue accordingly petitioner’s contention that he reasonably relied on mr vicknair’s professional tax_advice when filing the income_tax return for is unfounded since mr vicknair died without preparing petitioner’s return for the year at issue according to mr becnel’s testimony after mr vicknair died mr becnel contacted mr vicknair’s widow requested his family’s tax records and provided them to a different return preparer mr becnel testified that he assumed mr vicknair’s widow had provided him with all the information necessary to prepare petitioner’ sec_2002 return mr becnel further testified that the failure to report the income at issue did not come to his attention until petitioner received the notice_of_deficiency for the sole issue is whether petitioner acted in good_faith and with reasonable_cause in the filing of hi sec_2002 federal_income_tax return under the scenario described even if the court were to accept petitioner’s contention that he did not receive the forms 1099-b and 1099-div for taxable_year from mr vicknair’s widow that fact does not establish per se reasonable_cause for the understatement of income_tax or good_faith on petitioner’s part the facts and circumstances in this case indicate that petitioner exerted little effort to assess his proper tax_liability for mr becnel testified that stockbrokers managed the accounts that gave rise to petitioner’s omitted income and that petitioner never received a report or other information that would show how petitioner’s accounts performed in although petitioner might not have 3all of the monthly reports and other information related to these accounts were at mr becnel’s behest sent directly to the continued had sufficient information to determine his precise tax_liability for he did not attempt to estimate the omitted income he received during the year at issue petitioner could have approximated his investment_income based on past annual reports or previously filed returns knowing that the accounts that produced the omitted income existed petitioner could have contacted the businesses where these accounts were located and requested that copies of the forms 1099-b and 1099-div or duplicates thereof be sent to him even if petitioner were unable to obtain any information regarding the omitted income prior to filing his income_tax return for he could have attached a statement to the return explaining the relevant facts and circumstances and indicating that an amended_return would later be filed instead petitioner relied upon his father to assess his tax_liability and ignored the matter until respondent issued the notice_of_deficiency while the court sympathizes with petitioner and understands the difficulties financial and otherwise he encountered from his bacterial infection and mr vicknair’s death those continued brokers who managed the accounts these brokers provided mr becnel and his family with annual updates concerning their accounts’ performances because most people monitor their investments the court inquired as to why petitioner’s financial affairs were not so monitored mr becnel addressed this concern by testifying well when you do the tobacco settlement and you settle the case for dollar_figure billion and you get paid four times a year money is irrelevant difficulties in the court’s view did not constitute reasonable_cause for an understatement of federal_income_tax within the meaning of sec_6664 income was knowingly omitted from petitioner’s return and he did not include any information with the return that would have alerted respondent that the omitted income and the tax due thereon would be reported later when the necessary information would be available the record therefore reflects that petitioner failed to make a sufficient effort to ascertain his proper tax_liability for accordingly respondent is sustained on the imposition of the accuracy-related_penalty under sec_6662 reviewed and adopted as the report of the small_tax_case division decision will be entered for respondent


t c memo united_states tax_court rajalakshmi sriram petitioner v commissioner of internal revenue respondent docket no filed date jonathan p decatorsmith and ariel erbacher specially recognized for petitioner mayer y silber grubert r markley and robert m romashko for respondent memorandum findings_of_fact and opinion laro judge petitioner petitioned the court under sec_6015 in response to a notice_of_determination denying her request for relief from joint_and_several_liability under sec_6015 the issue to be decided is whether petitioner is entitled to equitable relief from joint_and_several_liability under sec_6015 for tax related to a joint federal_income_tax return we hold she is not findings_of_fact some facts have been stipulated and are so found the stipulation of facts and accompanying exhibits are incorporated herein by this reference petitioner resided in illinois when she petitioned the court petitioner was born in in kumbakonam india she graduated from a high school in india and has taken some college-level courses in the united_states although petitioner’s native language is tamil she began taking english classes in india in the first grade she first emigrated from india to the united_states in at which time she settled with her uncle’s family in the suburbs of chicago illinois chicago 1unless otherwise indicated section references are to the internal_revenue_code and rule references are to the tax_court rules_of_practice and procedure 2although petitioner asserts in the petition that she is entitled to relief under sec_6015 we deem that issue conceded because it was not addressed at trial or on brief see 117_tc_117 n in any event petitioner is ineligible for relief under that subsection because she seeks relief from an underpayment_of_tax and not an assessed deficiency see sec_6015 121_tc_73 after living and working in the united_states during and through part of petitioner returned to india to marry krishnaswami sriram dr sriram in a marriage arranged by their families petitioner and dr sriram collectively the srirams have been married for more than years and they were married as of the date of the trial in this case the srirams have three children who at the time of the trial in this case were and years old respectively at least two of those children are college educated over the years petitioner has demonstrated at least a basic proficiency in the english language she earned a letter grade of b in a data processing and word processing course taught in english and she received passing grades in english- taught courses at moraine valley community college between and she worked at the state bank of india as an office employee with makita corp and as an attorney’s assistant petitioner speaks to her children in tamil and she understands them when they speak to her in english although petitioner used a tamil-english translator at trial she often but not always understood questions asked of her in english and she responded mostly in english during direct and cross examination the srirams lived in india until approximately when they moved to the united_states dr sriram worked as a medical doctor and petitioner established herself as the family’s homemaker by dr sriram practiced medicine through a limited_liability_company and a sole_proprietorship which generated aggregate gross_income of more than dollar_figure million in that year petitioner did not work outside the home from through at least the srirams had accumulated financial wealth throughout their marriage though the record is scant concerning their finances at the time of trial in they purchased a home in lake forest illinois for dollar_figure lake forest residence and by they jointly owned that property free and clear of any mortgages in they jointly owned rental properties in arlington illinois and peekskill new york peekskill property collectively rental properties they jointly owned a certificate of deposit cd which was worth approximately dollar_figure million in in they purchased a car for dollar_figure cash dr sriram controlled most if not all of the family’s finances at all relevant times petitioner purchased household_items such as groceries using joint funds or credit cards she was not aware of the family’s credit card balances but charge sec_3although petitioner testified at trial that she may or may not have owned the peekskill property we conclude that she did on the basis of statements in the notice_of_determination that she reported rental income from that property on her federal_income_tax returns for through to those cards were always accepted at dr sriram’s direction petitioner handled basic banking activities such as making deposits and withdrawals in or around date dr sriram was indicted in the u s district_court for the northern district of illinois for in addition to other offenses criminal tax_fraud for through he was subsequently enjoined from practicing medicine and the srirams’ assets were frozen by court order while the record is clear that the united_states seized certain assets belonging to the srirams it is not clear as to which assets were seized or in what amounts neither the lake forest residence nor the rental properties were seized by the united_states and regardless of the seizure the srirams continued to receive financial_assets in the form of a monthly allowance apparently paid_by dr sriram’s attorneys in date the srirams signed and filed a joint federal_income_tax return return that a certified_public_accountant had prepared the return reported net business income of dollar_figure from dr sriram’s medical practice interest_income of dollar_figure from joint bank accounts and total rental income of dollar_figure it also reported tax due of dollar_figure and an addition_to_tax for failing to pay estimated income_tax of dollar_figure the srirams remitted dollar_figure with the return they also attached a statement explaining that they could not pay the tax due because a court had ordered their assets frozen and prohibited dr sriram from practicing medicine the statement reported that each of the srirams was the subject of an ongoing criminal investigation and that they had provided thousands of pages of documents relating to the srirams’ personal finances and dr sriram’s medical practice petitioner filed with respondent a form_8857 request for innocent spouse relief seeking equitable relief under sec_6015 for through an affidavit attached to the form_8857 and stipulated by the parties offered numerous reasons why petitioner did not believe that divorcing dr sriram was a viable alternative the affidavit also asserted that petitioner and her children would suffer financial hardship if she was not granted innocent spouse relief on date respondent’s office of appeals appeals issued to petitioner a notice_of_determination denying her request for relief under sec_6015 c and f appeals explained its decision in a form 886-a explanation of items and evaluated petitioner’s equitable relief claim under the guidelines set 4petitioner filed with respondent two forms the first dated date and the second dated date the parties agree that the request was timely and we refer to the later filed form_8857 for purposes of our discussion 5the notice_of_determination stated that appeals explained its decision in an enclosed form_5278 appeals audit statement however the parties stipulated that appeals explained its determination in form 886-a we consider the notice of determination’s reference to form_5278 a typographical error forth in revproc_2003_61 2003_2_cb_296 in relevant part appeals found that petitioner would not suffer economic hardship if she was held liable for the unpaid tax in support thereof an individual in appeals settlement officer examined the srirams’ financial records the settlement officer noted that the srirams earned interest_income in each of the years through of dollar_figure dollar_figure dollar_figure dollar_figure dollar_figure dollar_figure and dollar_figure respectively the settlement officer also found that in each of the years through the srirams deposited cash net of interaccount transfers and nontaxable items of dollar_figure dollar_figure dollar_figure dollar_figure and dollar_figure respectively the settlement officer determined that in addition to various money market retirement and bank accounts the srirams owned a cd with a yearend balance of dollar_figure finally the settlement officer found that the rental properties generated net rental income or loss inclusive of rental expenses and depreciation expense of dollar_figure dollar_figure dollar_figure dollar_figure dollar_figure and dollar_figure in each of the years through respectively for each of the years following dr sriram’s indictment petitioner filed federal_income_tax returns electing married_filing_separately status she has mostly been in compliance with her federal_income_tax obligations since though we note that the form 886-a stated that she filed her federal_income_tax return late petitioner petitioned the court and a trial of this case was held in chicago on date at the time of trial petitioner was employed with the circuit_court of cook county cook county earning an annual salary of dollar_figure she and dr sriram resided in separate areas of the same house opinion a husband and wife generally may elect to file a joint federal_income_tax return sec_6013 after making such an election each spouse becomes jointly and severally liable for the tax due on the spouses’ aggregate income see sec_6013 an individual who has made a joint_return may elect to seek relief from joint_and_several_liability under subsections b c and f of sec_6015 sec_6015 f where the commissioner denies a requesting spouse equitable relief under sec_6015 that individual may petition the court to determine the appropriate relief available as petitioner has done sec_6015 we determine whether a taxpayer is entitled to equitable relief de novo see id 132_tc_203 and petitioner bears the burden of proving her entitlement to such relief see rule a 6respondent asserts on brief that notwithstanding our decision in 132_tc_203 the settlement officer’s determination should be reviewed for abuse_of_discretion in porter a court-reviewed opinion we held that the scope and standard of our review in cases requesting equitable relief from continued a requesting spouse who is unable to qualify for relief under sec_6015 or c may nonetheless avoid joint_and_several_liability if taking into account all the facts and circumstances it is inequitable to hold that individual liable for any unpaid tax or deficiency sec_6015 because petitioner is ineligible for relief under subsection b or c of sec_6015 we decide only whether she is entitled to relief under sec_6015 we hold she is not pursuant to his grant of authority under sec_6015 the commissioner has fashioned guidelines for determining whether an individual qualifies for equitable relief in revproc_2003_61 supra the court considers these guidelines in the light of the attendant facts and circumstances to determine whether equitable continued joint_and_several income_tax_liability are de novo id pincite we see no reason to disturb our holding in porter and we adopt the reasoning therein insofar as we review petitioner’s entitlement to equitable relief de novo 7on date respondent released notice_2012_8 2012_4_irb_309 concerning a proposed revenue_procedure that if finalized would revise the factors to be examined in determining the requesting spouse’s claim for equitable relief under sec_6015 among other changes the proposed revenue_procedure expands the effect of the nonrequesting spouse’s abuse and or financial control on a requesting spouse’s entitlement to equitable relief id we continue to apply the factors in revproc_2003_61 2003_2_cb_296 in view of the fact that the proposed revenue_procedure is not final and because the comment period under the notice only recently closed because our holding does not turn on any single factor as revised in the proposed revenue_procedure we call attention to the effect if any of a revised factor only where we deem it necessary to do so for clarity relief is appropriate but is not bound by them see 136_tc_432 mcghee v commissioner tcmemo_2010_259 100_tcm_473 n the guidelines begin by establishing threshold requirements that the commissioner contends must be satisfied before an equitable relief request should be considered see revproc_2003_61 sec_4 c b pincite they next set forth certain safe_harbor conditions which if met may result in a grant of equitable relief see id sec_4 c b pincite finally they provide a nonexclusive list of factors that should be considered in determining whether sec_6015 relief is proper see id sec_4 c b pincite i threshold conditions revproc_2003_61 sec_4 sets forth seven threshold conditions that a requesting spouse must satisfy before a request for relief under sec_6015 will be considered those conditions are the requesting spouse filed a joint_return for the taxable_year for which relief is sought relief is not available to the requesting spouse under sec_6015 or c the requesting spouse applies for relief no later than two years after the date of the internal revenue service’s first collection activity with respect to the taxpayer that occurs after date the spouses did not transfer assets between themselves as part of a fraudulent scheme the nonrequesting spouse did not transfer disqualified assets to the requesting spouse the requesting spouse did not file or fail to file the return with fraudulent intent and absent certain enumerated exceptions the tax_liability from which the requesting spouse seeks relief is attributable to an item of the nonrequesting spouse respondent concedes that petitioner meets the first six conditions but asserts that she only partially satisfies the last enumerated condition ie that the liability from which relief is sought is attributable to an item of the nonrequesting spouse according to respondent of the interest_income from the srirams’ jointly held bank accounts and of the rental income from the rental properties is attributable to petitioner petitioner on the other hand asserts that those items are attributable solely to dr sriram because they were purchased or funded with income from his medical practice although petitioner does not explicitly claim 8notice sec_3 i r b pincite eliminates the two-year deadline to request equitable relief and replaces it with the period of limitations provided by sec_6502 relating to collection or sec_6511 relating to filing a claim for credit or refund our analysis is unchanged by this revision given the parties’ stipulation that petitioner’s request was timely 9as discussed infra p petitioner asserts that dr sriram abused her physically at some point between and she does not assert nor do we continued entitlement to the nominal ownership exception contained in revproc_2003_61 sec_4 b c b pincite we understand her to do so according to the context of her argument revproc_2003_61 sec_4 b creates a rebuttable_presumption that an item titled in the requesting spouse’s name is attributable to that spouse through an example the revenue_procedure provides that the presumption of ownership may be rebutted by showing fraudulent conduct on the part of the nonrequesting spouse with respect to the requesting spouse that the requesting spouse did not fund the disputed item and that the requesting spouse did not hold himself or herself out as owning the disputed item see id we are not persuaded that petitioner has rebutted the presumption of ownership continued conclude that the alleged abuse made her fearful of retaliation such that she would not have questioned the treatment of items reported on the return and attributable to her see thomassen v commissioner tcmemo_2011_88 101_tcm_1397 revproc_2003_61 sec_4 d c b pincite the commissioner now provides that equitable relief may be granted where the requesting spouses establishes that he or she was the victim of abuse before the return was signed even though the underpayment_of_tax is attributable in part or in full to an item of the requesting spouse see notice_2012_8 sec_4 d i r b pincite petitioner would not be eligible for relief under the proposed revenue_procedure because as we find she has failed to meet her burden of proving that she was a victim of abuse first petitioner did not prove that dr sriram acted fraudulently towards her with respect to the rental or interest_income reported on the return second she failed to prove that she did not contribute to the purchase of the rental properties or otherwise fund the jointly held bank accounts through for example her personal savings or familial gifts third she did not prove her lack of involvement in managing the rental properties or in performing banking activities with respect to the bank accounts petitioner has failed to persuade us that income relating to the rental properties and the bank accounts is not attributable to her we hold that petitioner is not eligible for equitable relief from joint_and_several_liability on the underpayment_of_tax arising from items allocable to her namely her share of the rental and interest_income dollar_figure we next decide whether petitioner is entitled to relief from joint_and_several_liability on the portion of the underpayment allocable to dr sriram namely all of the income from his medical practice dollar_figure and one-half of the rental and interest_income dollar_figure ii safe_harbor conditions where the threshold conditions are met equitable relief with respect to an underpayment_of_tax reported on a joint_return may be granted where each of three 10calculated as one-half of the interest_income dollar_figure divided by or dollar_figure plus one-half of the rental income dollar_figure divided by or dollar_figure safe_harbor conditions is met these conditions are when the relief is requested the requesting spouse is no longer married to or is legally_separated from the nonrequesting spouse or has not been a member of the same household as the nonrequesting spouse at any time during the months before the request for relief when the requesting spouse signed the joint_return he or she did not know or have reason to know that the nonrequesting spouse would not pay the tax_liability and the requesting spouse will suffer economic hardship if relief is not granted revproc_2003_61 sec_4 as we discuss below petitioner fails to meet any of these safe_harbor conditions iii facts_and_circumstances_test our statutory charge under sec_6015 is to determine whether a taxpayer is entitled to equitable relief on the basis of all the facts and circumstances we review a claim for equitable relief under sec_6015 de novo see porter v commissioner t c pincite where a requesting spouse satisfies each of the threshold requirements but fails to satisfy the safe_harbor conditions under revproc_2003_61 sec_4 the requesting spouse is nevertheless eligible for equitable relief under sec_6015 if taking into account all of the facts and circumstances it is inequitable to hold the requesting spouse liable for an underpayment sec_6015 revproc_2003_61 sec_4 c b pincite- lists eight nonexclusive factors to consider in determining whether it is inequitable to hold the requesting spouse liable for all or any part of the unpaid tax no single factor is determinative rather all factors are weighed in the light of the surrounding facts and circumstances to determine whether equitable relief is appropriate id sec_4 marital status the first factor to be weighed is whether the requesting spouse is legally_separated living apart or divorced from the nonrequesting spouse id sec_4 a i the srirams have been married continuously since and they have resided together in the same house the fact that petitioner and dr sriram lived in separate areas of the same residence is despite petitioner’s insistence inconsequential because a husband and wife who reside in the same house are considered members of the same household cf sec_1_6015-3 income_tax regs relating to proportionate relief under sec_6015 notice_2012_8 sec_4 a iv i r b pincite spouses are considered members of the same household for any period in which they maintain the same residence this factor weighs against reliefdollar_figure 11unlike revproc_2003_61 sec_4 a i c b pincite the commissioner now asserts in notice_2012_8 sec_4 a i r b pincite continued economic hardship the second factor for consideration is whether the requesting spouse would suffer economic hardship were relief not granted revproc_2003_61 sec_4 a ii c b pincite our analysis of whether such economic hardship would occur is directed to the taxpayer’s economic circumstances at the time of trial porter v commissioner t c pincite n petitioner claims without legal or financial analysis that making her liable for the tax will paralyze her financially and render her insolvent for the rest of her life we are not persuaded economic hardship for purposes of sec_6015 occurs where the requesting spouse is unable to pay his or her reasonable basic living_expenses if held liable for the tax owed see sec_301_6343-1 proced admin regs a taxpayer’s ability to pay basic living_expenses is determined by considering among other factors the individual’s age employment status and history ability to earn and number of dependents the amount reasonably necessary for food clothing housing medical_expenses transportation and current tax_payments the cost of living in the geographic area in which the taxpayer resides and any continued that the marital status factor is neutral where a husband and wife are still married extraordinary circumstances see sec_301_6343-1 proced admin regs while an inquiry into the reasonableness of basic living_expenses considers the individual taxpayer’s unique circumstances it does not require an allowance to maintain affluent or luxurious standards of living see sec_301_6343-1 proced admin regs petitioner was employed by cook county earning dollar_figure per year when the trial of this case was held each of her children is older than years of age and at least two of them are college educated although the record concerning her financial status at the time of trial is inadequately developed we conclude that petitioner was able to meet her basic living expensesdollar_figure the lake forest residence and each of the rental properties were owned free and clear of any encumbrances in the most current_year for which financial data was presented petitioner earned interest_income of dollar_figure and net rental income of dollar_figure she also owned a cd with a yearend balance of more than dollar_figure million the fact that 12petitioner failed to prove that she did not own the lake forest residence or the rental properties or that the cd was not available for her use in the absence of such evidence we presume that it did not exist or that it was not favorable to her position see 6_tc_1158 the rule is well established that the failure of a party to introduce evidence within his possession and which if true would be favorable to him gives rise to the presumption that if produced it would be unfavorable aff’d 162_f2d_513 10th cir moreover other than a claim of general economic hardship the record does specify the amount of petitioner’s basic living_expenses the srirams paid cash for a new car in also shows we believe that they were able to meet their basic living_expenses whereas petitioner relies upon her testimony to prove economic hardship we do not because her testimony is uncorroborated notwithstanding the fact that the srirams presented thousands of pages of financial records in connection with their criminal investigation this factor weighs against reliefdollar_figure knowledge or reason to know the third factor in the case of an underpayment_of_tax contemplates whether the requesting spouse knew or had reason to know that the nonrequesting spouse would not pay the income_tax_liability when the return was signeddollar_figure see toppi v commissioner tcmemo_2008_156 95_tcm_1612 petitioner 13the commissioner now states in notice_2012_8 sec_4 b i r b pincite that the economic hardship factor should be considered neutral where denying relief from joint_and_several_liability will not result in economic hardship to the requesting spouse 14under notice_2012_8 sec_4 c ii i r b pincite the knowledge factor weighs in favor of relief where the requesting spouse because of abuse and fear of retaliation was unable to question the treatment of items on the return or the payment of tax due or challenge the nonrequesting spouse’s assurances of payment also under the proposed revenue_procedure abuse may render the significant benefit factor neutral see notice_2012_8 sec_4 e i r b pincite in failing to prove abuse by a preponderance_of_the_evidence see infra p petitioner may not successfully assert that abuse negates her knowledge that dr sriram might not pay the tax due or the significant benefit she received from failing to pay the tax due argues that she had no reason to believe that her husband would not pay the liability reported on the return we disagree we have interpreted the knowledge requirement in an underpayment case as focusing on whether the taxpayer knew that his or her spouse would not pay the tax within a reasonably prompt time after filing the joint_return see banderas v commissioner tcmemo_2007_129 93_tcm_1247 cf notice_2012_8 sec_4 c ii i r b pincite attached to the return was a statement acknowledging that the srirams were each subjects of an ongoing criminal investigation and stating that they could not pay the tax due until court-frozen assets were released to them or until dr sriram was allowed to practice medicine we look to that attachment which was stated in plain and simple terms as persuasive circumstantial evidence that petitioner knew or had reason to know that dr sriram would not pay the unpaid tax within a reasonably short time such nonpayment might occur if for example dr sriram could not practice medicine or the frozen assets were used for restitution this factor weighs against relief nonrequesting spouse’s legal_obligation the fourth factor for consideration is whether the nonrequesting spouse was under a legal_obligation to pay the outstanding tax_liability under a divorce decree or other agreement the record does not show dr sriram was legally obligated under a divorce decree or other contractual arrangement to pay the tax_liability on the return this factor is neutral significant benefit the fifth factor to be weighed is whether the requesting spouse benefited from the unpaid income_tax_liability beyond normal support see revproc_2003_ sec_4 a v c b pincite a significant benefit may be direct or indirect sec_1_6015-2 income_tax regs in failing to pay their tax_liability through withholding or estimated_tax payments the srirams were able to repay the mortgage on the lake forest residence maintain the rental properties and fund the cd in part in not paying the liability from through the srirams earned dollar_figure of interest_income dollar_figure in dollar_figure in dollar_figure in dollar_figure in and dollar_figure in they maintained the rental properties throughout those years and earned dollar_figure of rental income therefrom dollar_figure in dollar_figure in dollar_figure in dollar_figure in and dollar_figure in they purchased a car for dollar_figure in cash finally at least two of petitioner’s children attended college though the record is not clear whether petitioner or dr sriram contributed money to either child’s education we conclude that petitioner received a significant benefit from the unpaid income_tax liabilities accordingly this factor weighs against relief compliance with tax laws the sixth tax compliance factor weighs in favor of relief if the requesting spouse has made a good-faith effort to comply with income_tax laws in years after the year for which relief is requested see revproc_2003_61 sec_4 a vi respondent states on brief that petitioner was in compliance with the federal tax laws in the years after and that this factor should be construed as neutraldollar_figure in recent caselaw we have consistently recognized that a taxpayer’s good-faith effort to comply with income_tax laws in the years following the year for which relief is requested is a factor weighing in favor of relief see eg pullins v commissioner t c pincite haggerty v commissioner tcmemo_2011_284 102_tcm_563 hiramanek v commissioner tcmemo_2011_280 102_tcm_546 karam v commissioner t c 15respondent states on brief that there is no evidence of petitioner’s noncompliance with the federal tax laws since we note that the form 886-a states that petitioner filed her federal_income_tax return late the scant record before us does not include an internal_revenue_service account transcript or any evidence that allows us to reconcile these inconsistent statements in any event we need not do so because we treat respondent’s statement on brief as a concession of petitioner’s compliance see estate of johnson v commissioner tcmemo_2001_182 82_tcm_206 and cases cited thereat aff’d 129_fedappx_597 11th cir memo 102_tcm_311 indeed the commissioner now contends in notice_2012_8 sec_4 f i r b pincite that full compliance with the tax laws weighs in favor of relief and that good-faith partial compliance should be considered neutral we conclude that this factor favors relief abuse abusive behavior by the nonrequesting spouse toward the requesting spouse is a factor favoring relief revproc_2003_61 sec_4 b i c b pincite abuse may be physical or mental nihiser v commissioner tcmemo_2008_135 95_tcm_1531 allegations of abuse require substantiation or at a minimum specificity see eg fox v commissioner tcmemo_2006_22 91_tcm_731 accepting a requesting spouse’s claim of abuse where corroborated by a police incident report knorr v commissioner tcmemo_2004_212 88_tcm_273 deeming the abuse factor neutral where the requesting spouse provided uncorroborated and generalized claims of physical and emotional abuse collier v commissioner tcmemo_2002_144 83_tcm_1799 finding absence of abuse without specific details abuse is a genuine reason to grant relief from joint_and_several_liability and we are sensitive to the legal issues and the emotions related thereto however we are not persuaded by petitioner’s allegation of abuse that is unaccompanied by details and corroboration petitioner alleges that dr sriram assaulted her on one occasion between and she provided no details of this alleged assault and did not offer corroborating evidence to support her statement she claims to have reported the event to the lake forest police but she has not offered a police incident report and cannot identify the date when this allegedly happened to carry one’s burden_of_proof on the issue of abuse it is helpful to have some corroborating evidence or substantiation cf thomassen v commissioner tcmemo_2011_88 101_tcm_1397 psychological abuse found where supported with testimony that one child was driven to attempt suicide while another child’s friends urged the taxpayer to find shelter for herself and her younger children petitioner has none she claims that certain cultural factors restrain her from buttressing her testimony but at the end of the day we have only her vague testimony making an allegation of even a single act of physical abuse is serious enough yet we decline to confirm its accuracy by petitioner’s self-serving testimony alone we consider this factor neutral mental or physical health the final enumerated factor focuses on whether the requesting spouse was in poor mental or physical health on the date she signed the tax_return or when relief was requested revproc_2003_61 sec_4 b ii where the requesting spouse is not in poor mental or physical health this factor is considered neutral see id sec_4 b petitioner does not claim that she was in poor mental or physical health when she signed the return or when she requested equitable relief this factor is neutral conclusion of the factors listed in revproc_2003_61 sec_4 one favors relief compliance with tax laws four weigh against relief marital status economic hardship knowledge or reason to know and significant benefit and three are neutral legal_obligation physical abuse and mental or physical health on the basis of our analysis as informed by revproc_2003_61 supra we conclude that petitioner is not entitled to equitable relief after applying notice_2012_8 sec_4 two previously negative factors marital status and economic hardship turn neutral this rebalance of factors however does not alter our perception that petitioner is not entitled to equitable relief to be sure petitioner realized a significant economic benefit from failing to pay the federal tax_liability and she knew or had reason to know that dr sriram could not fully pay the tax within a reasonable_time after signing the return in that respect the record does not favor her had petitioner established abuse by a preponderance_of_the_evidence which she did not the last two negative factors knowledge or reason to know and significant benefit might have tipped the scales of equity in her favor but she did not prove abuse and may therefore not be held harmless for the tax_liability after balancing the record as a whole and with due consideration of the equitable considerations presented we hold that petitioner is not entitled to relief from joint_and_several_liability under sec_6015 in so deciding we have considered all of petitioner’s arguments for a contrary holding and to the extent not discussed herein we conclude they are irrelevant moot or without merit to reflect the foregoing decision will be entered for respondent


internal_revenue_service department of the treasury index number washington dc number release date person to contact telephone number refer reply to cc psi br - plr-113043-00 date date legend x state d1 this responds to your letter dated date submitted on behalf of x requesting relief under sec_1362 of the internal_revenue_code facts x began doing business under state law on d1 the shareholders of x intended that x elect to be treated as an s_corporation effective d1 however the election to be treated as an s_corporation was not timely filed law and analysis sec_1362 provides that a small_business_corporation can elect to be treated as an s_corporation sec_1362 provides when an s election becomes effective if an s election is made within the first two and one-half months of a corporation’s taxable_year then that corporation will be treated as an s_corporation for the year in which the election was made if an election is made after the first two and one-half months of a corporation’s taxable_year then the corporation will generally not be treated as an s_corporation until the following taxable_year however sec_1362 provides that if no election is made pursuant to sec_1362 or if the election is made after the date prescribed for making such an election and the secretary determines reasonable_cause existed for the failure to timely make the election then the secretary can treat such an election as timely made for that taxable_year and effective as of the first day of that taxable_year in the present case x failed to timely elect s_corporation treatment effective d1 plr-113043-00 however x has established reasonable_cause for not making a timely election and is thus 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 d1 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 s 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 the taxpayer s dianna k miosi sincerely chief branch office of the associate chief_counsel passthroughs special industries 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 b01 plr-152034-05 date date ----------------------- ------------------------ ------------------------------------- legend legend x -------------------------------------------------- country d dear ------------- correspondence written on behalf of x requesting an extension of time under ' and ' of the procedure and administration regulations to elect to be treated as a partnership for federal tax purposes this letter responds to the letter dated date and related facts the information submitted states that x was incorporated under the laws of country on d x intended to file a form_8832 entity classification election to be treated as a partnership for federal tax purposes effective d however the election was not timely filed law and analysis sec_301_7701-3 provides that a business_entity that is not classified as a corporation under ' b or an eligible_entity can elect its classification for federal tax purposes elections are necessary only when an plr-152034-05 eligible_entity does not want to be classified under the default classification or when an eligible_entity chooses to change its classification sec_301_7701-3 provides that except for certain existing entities described in sec_301_7701-3 unless a foreign eligible_entity elects otherwise the entity is a a partnership if it has two or more members and at least one member does not have limited_liability b an association if all members have limited_liability or c disregarded as an entity separate from its owner if it has a single member that does not have limited_liability sec_301_7701-3 provides that an eligible_entity may elect to be classified other than as provided under ' b by filing form_8832 with the appropriate service_center under ' c iii this election will be effective on the date specified by the entity on form_8832 or on the date filed if no such date is specified the date specified on form_8832 cannot be more than days prior to the date on which the election is filed under sec_301_9100-1 the commissioner may grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the code except e g h and i sec_301_9100-1 defines the term regulatory election as including an election whose deadline is prescribed by a regulation published in the federal_register commissioner will use to determine whether to grant an extension of time to make an election sec_301_9100-2 provides automatic extensions of time for making certain elections sec_301_9100-3 provides extensions of time for making elections that do not meet the requirements of sec_301_9100-2 requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-1 through provide the standards the conclusion based solely on the facts submitted and representations made we conclude that x has satisfied the requirements of and and therefore it is granted an extension of time of sixty days from the date of this letter to file a form_8832 to elect to be treated as a partnership for federal tax purposes effective d a copy of this letter should be attached to the election a copy is enclosed for that purpose plr-152034-05 except as specifically set forth above we express no opinion concerning the federal tax consequences of the facts described above under any other provision of the internal_revenue_code this ruling is directed only to the taxpayer requesting it sec_6110 of the code provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being mailed to your authorized representative sincerely heather c maloy associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for ' purposes cc


internal_revenue_service number release date index number -------------------------------- ------------------------------------ ------------------------------------ ---------------------------------- ------------------- 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-150566-08 date date x --------------------------------------------------- ---------------------------------- --------------- ---------------- -------------------------- country d1 d2 dear ------------ this letter responds to a letter dated date submitted on behalf of x by its authorized representative requesting a ruling under sec_301_9100-1 and sec_301_9100-3 of the procedure and administration regulations that x be granted an extension of time to file an election to be classified as a disregarded_entity under sec_301_7701-3 effective d2 facts the information submitted states that x was formed on d1 as a limited_company under the laws of country x intended to be treated as a disregarded_entity for federal tax purposes effective d2 however due to inadvertence x failed to file a timely form_8832 entity classification election law and analysis sec_301_7701-3 provides that a business_entity that is not classified as a corporation under sec_301_7701-2 or an eligible_entity can elect its classification for federal tax purposes as provided in sec_301_7701-3 plr-150566-08 sec_301_7701-3 provides that unless it elects otherwise a foreign eligible_entity is a a partnership if it has two or more members and at least one member does not have limited_liability b an association if all members have limited_liability or c disregarded as an entity separate from its owner if it has a single owner that does not have limited_liability sec_301_7701-3 provides that an eligible_entity may elect to be classified other than as provided in sec_301_7701-3 or to change its classification by filing form_8832 with the service_center designated on form_8832 sec_301_7701-3 provides that an election made under sec_301 c i will be effective on the date specified by the entity on form_8832 or on the date filed if no date is specified on the election form the effective 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 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 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 a regulatory election to include an election whose due_date is prescribed by a regulation published in the federal_register sec_301_9100-2 provides the rules governing automatic extensions of time for making certain elections sec_301_9100-3 sets forth the standards the commissioner will use to determine whether to 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 sec_301_9100-3 will be granted when the taxpayer provides 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 granting relief will not prejudice the interests of the government conclusion based on the facts submitted and the representations made we conclude that the requirements of sec_301_9100-1 and sec_301_9100-3 have been satisfied as a result x is granted an extension of time of days from the date of this letter to file form_8832 with the appropriate service_center and to elect to be classified as a disregarded_entity for federal tax purposes effective d2 a copy of this letter should be attached to the form_8832 a copy is enclosed for that purpose plr-150566-08 except as expressly set forth above we express or imply no opinion concerning the federal tax consequences of the facts discussed above under any other provision of the code this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent in accordance with a power_of_attorney on file with this office we are sending a copy of this letter to x’s authorized representative sincerely curtis g wilson curtis g wilson associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes


t c memo united_states tax_court mung thi huynh petitioner v commissioner of internal revenue respondent docket no filed date mung thi huynh pro_se jack h klinghoffer for respondent memorandum findings_of_fact and opinion gerber judge respondent determined a dollar_figure deficiency in petitioner’s federal_income_tax and an addition_to_tax under sec_6651 and a penalty under sec_6662 in the amounts of dollar_figure and dollar_figure respectively the issues for section references are to a internal_revenue_code in effect for the period under consideration rule references are to this court’s rules_of_practice and procedure our consideration are whether petitioner has shown that she is entitled to deduct any part of the dollar_figure that she claimed as commissions and fees and whether petitioner is liable for the penalty and addition_to_tax determined by respondent findings_of_fact petitioner resided in pomona california at the time her petition was filed in this case her federal_income_tax return was filed on date on schedule c petitioner reported gross_receipts of dollar_figure from her business as a dress maker operating under the name california fashion after accounting for returns and allowances and cost_of_goods_sold a gross_income of dollar_figure was reported among other expenses petitioner claimed commissions and fees in the amount of dollar_figure the sole adjustment by respondent to petitioner’s schedule c reporting was the disallowance of the entire amount claimed for commissions and fees petitioner’s business involved the manufacture of dresses on a piecework basis jose antonio garcia juarez2 was employed by petitioner during he was paid approximately dollar_figure to dollar_figure per week he worked long hours and he knew how to perform all tasks involved in the operation of the business mr juarez did not share in petitioner’s business profits for at some mr juarez has also been known as mr garcia in portions of the record time late in or early in mr juarez left petitioner’s employ and he became associated with her again in approximately date when mr juarez became reassociated with petitioner they entered into an arrangement under which mr juarez would act as some form of intermediary between petitioner and the customer or consumer of the manufactured piecework mr juarez operated under this arrangement beginning around date using the name lemarant fashion’s the documents offered by petitioner in an attempt to show that this type of arrangement existed in had been falsified by changing the year from to ultimate finding of fact petitioner failed to show that she is entitled to deduct any part of the dollar_figure that she claimed as commissions and fees which were disallowed by respondent opinion this case presents a clearly defined factual question respondent disallowed dollar_figure that petitioner had claimed as commissions and fees on her schedule c petitioner in support of her position that she is entitled to deduct the questioned amount testified that mr juarez was paid the amount as an intermediary between herself and the customer petitioner also offered a purchase order book reflecting transactions with mr juarez mr juarez testified that he had signed the purchase orders that were offered into evidence by petitioner during further he testified that the purchase order forms were blank when he had signed them petitioner admitted that the forms were signed by mr juarez during in addition respondent produced evidence supporting mr juarez’ testimony that his business activity with petitioner other than in the relationship of employer-employee began during petitioner also produced a form 1099-misc in mr juarez’ name reflecting nonemployee compensation_for respondent to counter petitioner’s production of this evidence provided credible_evidence that no such form 1099-misc was received by the internal_revenue_service for the tax_year it also appears that the last two digits had been altered from some other year to on the form 1099-misc that was offered by petitioner we hold that petitioner’s position is without merit and that her evidence and testimony are not believable respondent determined an accuracy-related_penalty due to negligence under sec_6662 for petitioner’s taxable_year the accuracy-related_penalty is equal to percent of any portion of an underpayment attributable to a taxpayer’s negligence or disregard of rules or regulations sec_6662 and b the term negligence includes any failure to do what a reasonable and ordinarily prudent person would do under the same circumstances 85_tc_934 the term disregard includes any careless reckless or intentional disregard sec_6662 the penalty does not apply to any portion of an underpayment for which there was reasonable_cause and with respect to which the taxpayer acted in good_faith sec_6664 petitioner has failed to show reasonable_cause and or that she acted in good_faith under the circumstances of this case respondent’s determination of a penalty pursuant to sec_6662 is sustained with respect to the entire underpayment respondent also determined that petitioner’s income_tax return was not timely filed within the meaning of sec_6651 that section provides for a 5-percent per month up to a 25-percent maximum addition_to_tax with respect to a late- filed return unless it is shown that the late filing was due to reasonable_cause and not to willful neglect petitioner’s federal_income_tax return was due_date the return was not signed until date or filed until date petitioner stated that she filed late because she did not have the funds with which to pay the tax in that regard petitioner’s return reflected no estimated payments and a balance due of dollar_figure this is in contrast to dollar_figure reported as gross_receipts on the schedule c of the same return under these circumstances we hold that petitioner is liable for this addition_to_tax as determined by respondent to reflect the foregoing decision will be entered for respondent


internal_revenue_service number release date index number ------------------------------------------ ------------------------------------------ ---------------------------------- -------------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact ------------------- id no ------------- telephone number --------------------- refer reply to cc psi b01 plr-128497-07 date date ------------------------------------------- legend x ------------------------------------------- state d1 dear -------------- ---------------------- ---------- this responds to the letter dated date submitted on behalf of x requesting relief under ' b of the internal_revenue_code facts according to the information submitted x was incorporated on d1 under the laws of state the shareholder of x intended that x be treated as an s_corporation effective on d1 but the election to be treated as an s_corporation was not timely filed accordingly x requests a ruling that it will be treated as an s_corporation effective d1 law and analysis sec_1362 provides that a small_business_corporation may elect to be an s_corporation sec_1362 provides the rule on when an s election will be effective sec_1362 provides in relevant part that if an s election is made within the first two and one-half months of a corporation's taxable_year then the corporation will be treated as an s_corporation for the year in which the election is made under plr-128497-07 ' b however if an s election is made after the first two and one-half months of a corporation's taxable_year then that corporation will not be treated as an s_corporation until the taxable_year after the year in which the s election is filed sec_1362 provides that if no ' a election is made for any taxable_year and the secretary determines that there was reasonable_cause for the failure to timely make such election then the secretary may treat such an election as timely made for such taxable_year and ' b shall not apply x did not timely file an election to be treated as an s_corporation under ' a x has however established reasonable_cause for not making a timely s election and is entitled to relief under ' b conclusion based solely on the facts submitted and the representations made and provided that x otherwise qualifies as an s_corporation we conclude that x will be treated as an s_corporation effective d1 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 appropriate service_center except as specifically set forth above no opinion is expressed or implied as to this ruling is directed only to the taxpayer requesting it sec_6110 the federal tax consequences of the facts described above under any other provision of the code specifically no opinion is expressed concerning whether x is in fact an s_corporation for federal tax purposes provides that it may not be used or cited as precedent enclosures dianna k miosi chief branch office of associate chief_counsel passthroughs and special industries copy of this letter copy for sec_6110 purposes sincerely


department of the freasury internal_revenue_service washington d c contact p danny smith identification_number telephone number t eo ra t pa nt 51k legend dear sir or madam this is in reference to your letter of date requesting advance approval of your grant procedures under sec_4945 of the internal_revenue_code the information submitted indicates that grants will be administered and supervised by b b is exempt from federal_income_tax under sec_501 of the internal_revenue_code of and has been classified as other than a private_foundation under sec_509 and b a vi your scholarship program is called c under the terms of an agreement you will make annual contributions to b to fund scholarships for the children of the employees of d b will prepare and furnish application forms receive all applications determine the recipients and amount to be awarded notify the recipients of the award confirm enrollment in an educational_institution make payment of the award and supervise and investigate the use of the grant funds by the recipients in their educational programs recipients are determined solely by b utilizing selection criteria whereby each candidate is evaluated based on the following scholastic aptitude as measured by performance on the scholastic aptitude test scholastic performance measured by rank in class counselor appraisal and interests activities and leadership contributions financial need will not be taken into consideration in the selection of recipients the scholarships will not be used as a means of inducement to recruit employees for d nor will a grant be terminated if the employee leaves the company scholarships will only be awarded to students that plan to enroll in an institution that meets the requirements of sec_170 of the code the recipient will not be restricted in his her course of study b will supply statistical information on applications received and grants made which will enable you to o2 maintain the records required by revproc_76_47 1976_2_cb_670 you will ensure compliance with the percentage tests under section dollar_figure of revproc_76_47 in the aggregate with respect to your other scholarship programs available to the same individuals sec_4945 of the code provides for the imposition of taxes on each taxable_expenditure of a private_foundation sec_4945 of the code provides that the term taxable_expenditure means any amount_paid or incurred by a private_foundation as a grant to an individual for travel study or other similar purposes by such individual unless such grant satisfies the requirements of sec_4945 sec_4945 of the code provides that sec_4945 shall not apply to an individual grant awarded on an objective and nondiscriminatory basis pursuant to a procedure approved in advance by the secretary if it is demonstrated to the satisfaction of the secretary that the grant constitutes a scholarship or fellowship_grant which is subject_to the provisions of sec_117 and is to be used for study at an educational_institution described in sec_170 of the code revproc_76_47 1976_2_cb_670 sets forth guidelines for a private_foundation conducting an employer related grant program to obtain advance approval of its procedures for conducting such a program under sec_4945 of the code sections dollar_figure through dollar_figure set forth seven conditions which a private_foundation must fneet in order to obtain advance approval of its procedures under sec_4945 of the code section dollar_figure provides that a private_foundation which makes scholarship awards to children of employees of a company or to the employees themselves will meet this test if it limits these grants to of all eligible applicants or of all those shown to be eligible in any given year renewals of grants awarded in prior years will not be considered in determining the number of grants awarded in a current_year based upon the information submitted and assuming your program will be conducted as proposed with a view to providing objectivity and nondiscrimination in the awarding of scholarship grants we rule that your grants to b for the awarding of scholarship grants comply with the requirements of sec_4945 of the code expenditures made in accordance with these procedures will not constitute taxable_expenditures within the meaning of sec_4945 of the code and as such are eligible for the exclusion from income provided for in sec_117 of the code to the extent that such grants are actually used for qualified_tuition_and_related_expenses within the meaning of sec_117 of the code this ruling is conditioned on the understanding that there will be no material changes in the facts upon which it is based it is further conditioned on the understanding that no grants will be awarded to your organization’s creators officers directors trustees or members of the selection committee or for a purpose inconsistent with the purposes described in sec_170 of the code the approval of your grant-making procedures is a one time approval of your system of standards and procedures for selecting recipients of grants that meet the requirements of sec_4945 of the code thus approval will apply to succeeding grant programs only as long as the standards and procedures under which they are conducted do not differ materially from those described in your request we are informing the ohio te_ge office of this action please keep a copy of this ruling with your organization’s permanent records this ruling is directed only to the organization that requested it sec_6110 of the code provides that it may not be used or cited as precedent sincerely berata v beck gerald v sack manager exempt_organizations technical group ol


department of the treasury internal_revenue_service hopkins plaza room baltimore md tax_exempt_and_government_entities_division number release date uil ---------------------------- taxpayer_identification_number form_990 tax_year s ended person to contact id number contact numbers date date certified mail telephone ----------------------- ---------------------------------------------------------------------------------------------------------- dear ---- this is a final_determination regarding your exempt status under sec_501 of the internal_revenue_code irc recognition of your exemption from federal_income_tax as an organization described in sec_501 is retroactively revoked to date because it is determined that you have not established that you are observing the conditions required for the continuation of an exempt status you have agreed with us and have signed on --------------------a form 6018-a consent to proposed adverse action revoking your exempt status if you still accept our findings you do not need to take further action ------------------------------ we have received your form_1120 returns for the --------------------------- through -------------- ---------- ------years and will process them you will be required to file federal_income_tax returns form_1120 u s_corporation income_tax return for all future years file these returns with the appropriate service_center indicated in the instructions for those returns since this ruling has become final it will be made available for public inspection under sec_6110 of the internal_revenue_code after certain deletions of identifying information are made if you have any questions please call the contact person at the telephone number shown in the heading of this letter thank you for your cooperation sincerely r c johnson director eo examinations