internal_revenue_service p o box cincinnati oh release number release date date date department of the treasury employer_identification_number contact person - id number contact telephone number legend uil c dollars d x dollars y zz dear you asked for advance approval of your educational grant procedures under internal_revenue_code sec_4945 this approval is required because you are a private_foundation that is exempt from federal_income_tax our determination we approved your procedures for awarding educational grants based on the information you submitted and assuming you will conduct your program as proposed we determined that your procedures for awarding educational grants meet the requirements of code sec_4945 as a result expenditures you make under these procedures won't be taxable effective date the date you submitted your request for advance approval description of your request your letter indicates that you will operate an educational grant program called x your purpose is to promote the culinary arts by inspiring culinary excellence and building a broader community of young american professionals that are knowledgeable and confident in their career pursuits and will be life-long ambassadors of quality in the culinary world the purpose of your program is to help young culinary professionals find the right educational opportunities to develop their unique skills and passions so that they can advance their development and in turn help to inspire and elevate the culinary arts in the united_states the x is part of your commitment to providing an ongoing legacy of mentorship to the next generation of great american talent and building the culinary heritage and legacy in the united_states applicants to the x can apply for a grant for the study of food wine or culinary service at a particular restaurant the purpose of each grant under the x is to allow that individual to study at a restaurant of their choice under their chosen mentors a grant will typically be in an amount of dollar_figure x dollars on average and cover living costs for that individual for anywhere from y months depending on the host restaurant and the applicant's proposed plan approved grants are for the purpose of covering living costs and expenses for the duration of the program the recipient will estimate the amount he she will need and all costs are reviewed and qualified as part of your review process you will inform the public about your program and applications through your website and social media you will also publicize your program through your reputation within the culinary community and through the y a large network of america's finest chefs and culinary entrepreneurs individuals who desire to be considered for the x will complete an application anyone in the culinary fields with a minimum of three years of culinary work experience who is eligible to work in the united_states may apply for x you will evaluate the following in deciding to award stages how the experience will contribute to the applicant's growth and development how the development may benefit the culinary arts in the united_states overall applicants will provide to you the following as criteria for evaluation proof of eligibility to work in the united_states including valid working credentials such as a visa proof of u s citizenship etc minimum of three years of culinary work experience ad word essay to outline the applicant's area_of_interest food wine or service duration proposed and goals the applicant hopes to achieve two letters of recommendation with at least one being from the applicant’s current or most recent employer resume list of awards honors or distinctions received letter catalog number 58222y schoo records transcripts if applicable sign one year non-compete agreement recipients currently working in restaurants are expected to return back to the place of employment after completing x you may also use young chef competitions to award stages in certain circumstances young chef competitions are events you plan to hold where a small_group of young chefs will prepare dishes evaluated by established chefs the winner would receive a stage grant as well the application_for the young chef competitions would be similar to the application questions described above in the first year of x you made z grants and plan to keep the number of grants at around b each year the total value of grants given out to date under x is dollar_figure c dollars and you anticipate that the total value will remain near this level each year the amount of each individual grant is set by evaluating the costs of the proposed plan and the restaurant selected for that particular applicant recipients of stage grants must maintain the ability to work legally in the united_states as a condition of the grant to continue to qualify for the stage recipients must work at the restaurant selected for the agreed upon length of time and must not misuse grant funds once approved under your program the applicant will receive an official packet which includes a congratulatory letter the non-compete agreement all required tax forms a presentation outline that the individual will use to document his her experience and guidelines on managing personal expenses appropriately to ensure grant funds are not misused each recipient is instructed to provide proper documentation including receipts for all of their expenses as well to ensure that the funds are being used according to the guidelines after a recipient has started his or her stage your z also conducts an update once per week for the duration of the stage to ensure that you receive feedback from the individual on his her development and progress on an ongoing basis you will also conduct a feedback session with the host restaurant to gain their feedback on the experience process and the recipient's progress as well you will require all recipients to prepare a written report documenting their experience and how it contributed to their personal culinary development which will be shared with your board these reports will be reviewed by your staff as they are submitted each year if a stage recipient were to violate the terms of the grant you would contact the individual and seek the return of any misused funds through appropriate legal action if necessary if a recipient does not appear at the restaurant where the stage is to take place without sufficient explanation the grant will be terminated letter catalog number 58222y ' decisions to award grants to applicants are made based on an individual's goals needs for the grant written essay and recommendations from current and past employers the decisions are made without any bias toward any one individual or any specific group and are made on an objective non- discriminatory basis after your selection committee reviews the applicants they will submit to your board for their recommendations for review and final approval the selection committee members will be expected to serve on the committee for at minimum one year members of the committee may be replaced and new members of the committee selected by action of your board you do not prohibit the relatives of members of the selection committee or of its officers directors or donors from applying for grants through your program if a relative of a member of the selection committee or of an officer or director were to apply you will ensure that the selection committee member officer or director with the relationship to the applicant was recused from all decisions related to that applicant you will rely on substantial objective standards when evaluating candidates for stages including their experiences and training in the culinary arts you require all applicants to have a minimum of three years of experience and will use resumes transcripts letters of recommendation and the essays submitted by applicants themselves to make decisions on awarding stage grants further you may use regional young chef competitions to award x these competitions use blind judging to ensure an objective basis for selection of promising young talent based purely on culinary skills basis for our determination the law imposes certain excise_taxes on the taxable_expenditures of private_foundations code sec_4945 a taxable_expenditure is any amount a private_foundation pays as a grant to an individual for travel study or other similar purposes however a grant that meets all of the following requirements of code sec_4945 is not a taxable_expenditure e e e the foundation awards the grant on an objective and nondiscriminatory basis the irs approves in advance the procedure for awarding the grant the grant is - - ascholarship or fellowship subject_to sec_117 and is to be used for study at an educational_organization described in sec_170 or a prize or award subject_to the provisions of sec_74 if the recipient of the prize or award is selected from the general_public or to achieve a specific objective produce a report or similar product or improve or enhance a literary artistic musical scientific teaching or other similar skill or talent of the recipient to receive approval of its educational grant procedures sec_53_4945-4 requires that a private_foundation show letter catalog number 58222y e e e the grant procedure includes an objective and nondiscriminatory selection process the grant procedure results in the recipients performing the activities the grants were intended to finance the foundation plans to obtain reports to determine whether the recipients have performed the activities that the grants were intended to finance other conditions that apply to this determination e e e e e e this determination covers only the grant program described above this approval will apply to succeeding grant programs only if their standards and procedures don't differ significantly from those described in your original request this determination applies only to you it may not be cited as precedent you cannot rely on the conclusions in this letter if the facts you provided have changed substantially you must report any significant changes in your program to the cincinnati office of exempt_organizations at internal_revenue_service exempt_organizations determinations p o box cincinnati oh you cannot make grants to your creators officers directors trustees foundation managers or members of selection committees or their relatives all funds distributed to individuals must be made on a charitable basis and must further the purposes of your organization you cannot award grants for a purpose that is inconsistent with code sec_170 b you should keep adequate_records and case histories so that you can substantiate your grant distributions with the irs if necessary we've sent a copy of this letter to your representative as indicated in your power_of_attorney please keep a copy of this letter in your records if you have any questions please contact the person listed at the top of this letter sincerely director exempt_organizations letter catalog number 58222y


department ot tne reasury washington dc person to contact telephone number refer fep ly tp ot date arn internal_revenue_service significant index nos 01-o1 legend taxpayer a company b plan x time period month quantity c quantity d sum e dear mr this is in response to the letter submitted on your behalf by your authorized representative as supplemented by correspondence dated march which you request a’letter ruling under sec_402 e d of the internal_revenue_code representations support your ruling_request the following facts and in taxpayer a who has not attained age terminated during month taxpayer a received a single sum employment with company b distribution of the full amount standing to his credit under plan x a plan sponsored by company b which your authorized representative asserts meets the qualification requirements found in code sec_401 a his employer during time period in accordance with taxpayer a’s instructions quantity c shares of company b common_stock were distributed directly to taxpayer a in accordance with provisions of plan x quantity d shares of company b common_stock and sum e of cash were directly transferred into an individual_retirement_arrangement ira maintained in the name of taxpayer a -- based on the above facts and representations you through your authorized representative request the following letter_ruling the distribution within one taxable_year of taxpayer a's entire account balance from plan x either directly to taxpayer a or to taxpayer a s ira lump sum distribution as that term is defined in code sec_402 d sec_402 e b as described above constitutes a qualifying for purposes of code with respect to your ruling_request code sec_402 provides that an amount actually distributed to a taxpayer by a_trust described in sec_401 which is exempt from tax under sec_501 taxpayer in the year of distribution except as otherwise provided in sec_402 shall be taxable to the code sec_402 d provides that the term lump without regard to the minimum period sum distribution has the meaning given such term by subsection d a of service requirement in subsection d f sec_402 a provides in pertinent part term lump sum distribution means the distribution or payment within one taxable_year of the recipient of the balance_to_the_credit of the employee which becomes payable on account of the employee’s separation_from_service from a_trust which forms part of a a and which is exempt from tax under code section a plan described in code section code that the code sec_402 e b provides that for purposes in the case of any lump sum of code sec_402 distribution which includes securities_of_the_employer_corporation there shall be excluded from gross_income the net_unrealized_appreciation attributable to that part of the distribution which consists of securities_of_the_employer_corporation code sec_402 c provides that for purposes of subparagraph b resulting adjustments to basis shall be determined in accordance with regulations prescribed by the secretary net_unrealized_appreciation and the code sec_402 provides that the term eligible an employee rollover_distribution means any distribution to of all or any portion of the balance_to_the_credit of the employee in a qualified_trust except the following distributions a any distribution which is one of a series of substantially_equal_periodic_payments not less frequently than annually made- i ii or life expectancy of the for the life employee or the joint lives expectancies of the employee and the employee's designated_beneficiary or and for a period of years or more or joint life b any distribution to the extent the distribution is required under sec_401 sec_402 i retirement_plan as described in sec_408 annuity described in sec_408 contract retirement_plan and sec_403 a sec_401 iii ii iv of the code defines eligible an individual_retirement_account an individual retirement other than an endowment of the code qualified an annuity plan described in sec_402 of the code provides generally that sec_402 distribution made after the 60th day following the day on which the distributee received the property distributed shall not apply to any transfer of a sec_401 a of the code provides that a_trust shall constitute a sec_401 qualified_trust only if the plan of which such trust is distributee of any eligible rollover distribution- a part provides that if the i elects to have such distribution paid directly to an eligible_retirement_plan and ii specifies such eligible_retirement_plan to which such distribution is form and at such time as the plan_administrator may prescribe to be paid in such such distribution shall be to-trustee transfer to the eligible_retirement_plan so specified in the form of a direct trustee- sec_401 b of the code provides that subparagraph a eligible_rollover_distribution would be includible in gross shall apply only to the extent that the income if not transferred as provided in subparagraph a - determined without regard to sec_402 a and the term eligible_rollover_distribution when used in of the code has the same meaning as when sec_401 a used in sec_402 of the code the term eligible_retirement_plan when used in of the code includes iras defined in sec_401 sec_408 and sec_408 of the code generally a direct trustee-to-trustee transfer described in sec_401 direct_rollover of an eligible_rollover_distribution and is entitled to tax-deferred treatment pursuant to sec_402 of the code constitutes a of the code sec_1 a -1 of the income_tax regulations question and answer provides that an eligible_rollover_distribution that is paid to an eligible_retirement_plan in a direct_rollover is not currently includible in the distributee’s gross_income under code sec_402 sec_1 a -1 of the income_tax regulations that a question and answer provides in pertinent part direct_rollover is eligible_rollover_distribution and not a transfer of assets and liabilities a distribution and rollover of the in this case taxpayer a who has not attained age a result separated from the service of company b of said separation taxpayer a received a single sum distribution of the full amount standing to his credit under plan x securities of company b taxpayer a s distribution consisted in part as of taxpayer a’s distribution is a lump sum distribution d as that term is used in code sec_402 furthermore neither the code nor the regulations promulgated thereunder preclude a distribution from being treated a sec_402 d portion of the distribution is either rolled over or directly transferred into an ira a lump sum distribution under code section for purposes of sec_402 b even if a thus with respect to your ruling_request we conclude as follows the distribution within one taxable_year of taxpayer a’s entire account balance from plan x ss as described above constitutes a qualifying either directly to taxpayer a or to taxpayer a's ira lump sum distribution as that term is defined in code sec_402 d sec_402 e b for purposes of code this letter_ruling assumes that taxpayer a’s plan x distribution was made in accordance with the terms of plan x meets the requirements of code sec_408 a it also assumes that taxpayer a’s ira referenced above pursuant to a power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative sincerely yours aut b foe frances v sloan chief employee_plans technical branch enclosures deleted copy of letter_ruling form_437


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 b6 plr-116792-12 date date ---------------------------------------- legend taxpayer ---------------------------------------------------- company a company b company c company d company e company f company g company h location a location b state a additive additive date date date date sec_4 a b -------------------------------------------------------------------------------- research center --------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------- energy center ---------------------------------- ----------------------------------- ---------------------------------------- -------------------------------- ---------------------------------- ------------------------------------------------------------------ ----------------------- ------------------------------------ ---------------------------- ------------------ -------------- ---------------------- -------------------------------------- ---------------------- --------------------------- --------------------------- ------------------------------------------------ ----- --------------- -------------------------------------- -------------------------------------------------------------------------------- --------------------------------------------------------------------------------- --------------------- plr-116792-12 test report dear --------------- this is in response to your request for rulings submitted by your authorized representative concerning the federal_income_tax consequences of the transaction described below background taxpayer is a state a limited_liability_company that is a disregarded_entity for federal tax purposes taxpayer is a calendar_year taxpayer and employs the accrual_method of accounting for both book and tax purposes the sole member of taxpayer is company a a state a limited_liability_company company a is a wholly-owned subsidiary of company b and has elected to be taxable as a corporation for federal tax purposes effective date company b is wholly owned by company c which is wholly owned by company d company b is engaged in the business of developing and managing various energy-related projects throughout the united_states including backup power generation projects power-house operations cogeneration facilities coke batteries and similar energy-related projects company d is the holding_company for a number of operating companies engaged in energy-related businesses company d is also the parent company of company e a regulated public electric utility other subsidiaries of company d sell coal and coal transportation services throughout the united_states company d and its affiliates are calendar-year taxpayers and employ the accrual_method of accounting for book and tax purposes the facilities taxpayer constructed a facility consisting of two parallel independent production lines each individually a facility and collectively the facilities that are designed to produce refined_coal product the facilities are located at energy center company f owns and operates energy center energy center is composed of one coal-fired generating unit with an electric generating capacity of approximately a megawatts energy center consumes approximately b tons of coal a year all of the product is used as a fuel at energy center to produce steam for the generation of electricity taxpayer contracted with a contractor to design engineer and construct the facilities certain material handling equipment and a building to enclose the facilities and equipment mechanical completion of the facilities was achieved on date plr-116792-12 taxpayer assumed care custody and control of the facilities from the contractor on that same day mechanical completion included the completion of all mechanical and electrical equipment necessary to the operation of the facilities for the production of refined_coal after a brief start-up and testing_period the facilities began production of the product on date process and feedstock the process for production of refined_coal currently employed at the facilities involves the mixing of proprietary chemicals additives with feedstock coal prior to combustion the process the patent for the process is owned by company g and is licensed to taxpayer test results described herein have shown that when mixed with coal the proprietary additives result in reduced nox so2 and mercury emissions during combustion different chemicals are targeted at specific pollutants based on the characteristics of the feedstock coal burned at the dcec taxpayer has chosen a combination of additives that target the reduction of nox and mercury in the case of nox taxpayer understands that additive is believed to cause a portion of the nox to adhere to or react with the additive so that it can be captured and is not emitted in the case of mercury taxpayer understands that additive is believed to react with the elemental mercury in the feedstock coal so that it is converted into a chemical species of mercury mercury oxide that can be effectively captured by particulate control devices emissions reduction testing company c engaged research center to conduct tests on behalf of taxpayer at its pilot-scale combustion furnace ctf to determine the emission reductions associated with burning the product compared to the feedstock coal company c has been working with research center for several years in order to investigate and understand the ability of the additives to reduce emissions the research center report described below states for purposes of qualifying the product produced at the facilities research center conducted several pilot-scale combustion tests at its ctf specifically research center conducted tests on four blends of feedstock coals of the type typically burned at the energy center location a location b location a location b location a location b and location a location b because the facilities were not yet operational at the time of that test research center reports that it mixed the coal and additives in a manner consistent with the mixing that would occur at the facilities the test report states that each of the four test results indicate that the refined_coal samples achieved the required reductions in both nox and total mercury emissions plr-116792-12 both determined on a lb btu basis to satisfy the requirements of at least nox reduction and at least mercury reduction test report states that it is expected that qualifying emissions reductions reported would be achieved at full scale when utilizing the additive levels tested to produce the refined_coal for all location a-location b blends containing at least location a subbituminous coal tested coal energy center currently burns a blend of subbituminous coal from a number of mines in the location a and bituminous coal from location b energy center uses a blend of location a and location b coals to generate electricity and taxpayer intends to produce the product using a blend of location a and location b coals variations in the coal blend result from the supply and availability of the location a and location b coals and the needs of energy center company c requested that research center test blends of location a and location b coal that represent the range of location a and location b coal blends to be used by taxpayer to produce product that will be burned to produce steam at energy center the coal blend contains at least location a and no more than location b coal accordingly research center tested a location a coal location b coal blend a location a coal location b coal blend a location a coal location b coal blend and a location a coal location b coal blend in each case research center states that the refined_coal produce with each coal blend met the required emission reduction requirements when compared to the feedstock coal the test report states that it is expected that qualifying emissions reductions reported would be achieved at full scale when utilizing the additive levels tested to produce the refined_coal for all location a and location b blends containing at least location a subbituminous coal accordingly for purposes of this ruling_request the term tested coal refers to a blend of coals containing at least location a and no more than location b coal taxpayer expects to continue to operate with the blends and additive levels discussed in the test report which would be consistent with long-term patterns for coal consumed by the energy center if so samples will be taken for redetermination testing within six months after the last emissions test satisfying the qualified_emission_reduction requirement thereafter within six months after such date another set of samples will be taken for redetermination testing in each case samples of feedstock and samples of refined_coal will be obtained from the facilities using automatic samplers initially taxpayer will collect and test samples from each facility and test each set of samples separately if the testing results from both samples demonstrate satisfaction of the qualified_emission_reduction requirement and substantially_similar results taxpayer plans to collect samples for redetermination testing alternating between the two facilities this sampling and testing procedure is intended to satisfy the six-month redetermination requirement set forth in section dollar_figure of notice_2010_54 plr-116792-12 although taxpayer does not currently anticipate making changes to its coal feedstock or additive levels additional testing will be conducted prior to i adding coal from any other coal rank to the facilities’ coal feedstock mix ii changing the percentages of the coal feedstock blend ie using less than location a coal or more than location b coal in the location a location b coal blend or iii changing the minimum levels of additives such testing will include testing of samples at the endpoints of the new coal feedstock blend and at intermediate blends between the endpoints as the qualified expert advises is necessary to conclude that a qualified emissions reduction would be expected for any combination within the limits of the blend in the case of a change in additive levels tests will also be run at the new minimum levels of additive as the qualified expert advises is necessary to conclude that a qualified emissions reduction will be expected for the new levels of additive in addition in the future taxpayer may collect and test composite samples of feedstock and product to determine the sulfur and mercury content of the samples if such samples are collected a rolling six-month average of the laboratory analyses would be computed to determine whether there has been a change_of the sulfur or mercury content by more than ten percent agreements under the company g license agreement company g granted a license to taxpayer to use the process the term of the company g license agreement is through the date that the sec_45 tax_credit is no longer available for the facilities’ production unless earlier terminated for cause as set forth in the company g license agreement taxpayer has entered into various agreements with company f with respect to the installation and operation of the facilities at a portion of the energy center site site taxpayer has the right to place the facilities on the site pursuant to a license and services agreement that agreement provides taxpayer with the rights necessary to place the facilities at the site as well as support services such as utility connections necessary to operate the facilities in addition the agreement allows taxpayer to operate the facilities under certain permits and approvals issued to company f taxpayer has entered into a coal handling and consulting agreement with company f under which company f provides certain coal preparation and handling services in addition because of company f’s expertise in the coal markets company f assists and advises taxpayer in procuring coal and transportation services under the coal handling and consulting agreement plr-116792-12 taxpayer has entered into a refined_coal supply agreement with company f under which company f purchases all of its requirements for coal and coal-based fuel from taxpayer taxpayer has entered into an operation and maintenance agreement with an affiliate of company d to operate and maintain the facilities in addition such affiliate has entered into another operation and maintenance agreement with company h to provide the labor necessary for the operation and maintenance of the facilities taxpayer entered into a coal feedstock purchase agreement with company f under which taxpayer will purchase the coal feedstock for the facilities from company f rulings requested the refined_coal produced by using the process constitutes refined_coal within the meaning of sec_45 of the code provided that such refined_coal is from feedstock coal that is the same rank as the tested coal and provided further that the refined_coal satisfies the qualified_emission_reduction test stated in sec_45 of the code provided that the feedstock coals used to produce refined_coal during any determination_period are from the same coal source regions and of the same rank as the tested coal all feedstock coal that satisfies that criteria shall be treated as feedstock coal of the same source and rank for purposes of section dollar_figure of notice_2010_54 2010_40_irb_403 regardless of the mine from which such feedstock coal is purchased testing by research center for qualified emissions reduction as set forth in its test reports satisfies the requirements of notice_2010_54 pilot scale testing conducted at research center or a similar pilot-scale combustion testing facility under notice_2010_54 and subsequent permitted laboratory testing as required for a redetermination described in section a or b of notice to satisfy the qualified_emission_reduction test of sec_45 of the code may be relied pursuant to section b of notice_2010_54 the redetermination requirement of section dollar_figure of notice_2010_54 may be satisfied by laboratory analysis establishing that the sulfur and mercury content of both the feedstock coal and the refined_coal on average do not vary by more than ten percent from the sulfur and mercury content of the feedstock coal and the refined_coal used in the most recent determination that meets the requirements of section dollar_figure of notice_2010_54 plr-116792-12 provided a facility was placed-in-service prior to date within the meaning of sec_45 relocation of a facility to a different location or replacement of a part of a facility will not result in a new placed-in-service date for purposes of sec_45 provided that the fair_market_value of the original property is more than percent of the facility’s total fair_market_value at the time of relocation law and rationale process and testing of refined_coal sec_45 of the code generally provides a credit against federal_income_tax for_the_use_of renewable or alternative resources to produce electricity or fuel for the generation of steam sec_45 of the code provides that in the case of a producer of refined_coal the credit available under sec_45 of the code for any taxable_year shall be increased by an amount equal to dollar_figure5 per ton of qualified refined_coal i produced_by_the_taxpayer at a refined_coal_production_facility during the 10-year period beginning on the date that the facility was originally placed_in_service and which is ii sold by the taxpayer to an unrelated_person during such 10-year period and such taxable_year for purposes of sec_45 of the code section dollar_figure of notice_2010_54 provides that the term refined_coal means a fuel which -- i is a liquid gaseous or solid fuel including feedstock coal mixed with an additive or additives produced from coal including lignite or high carbon fly ash including such fuel used as a feedstock ii is sold by the taxpayer with the reasonable expectation that it will be used for purpose of producing steam and iii is certified by the taxpayer as resulting when used in the production of steam in a qualified_emission_reduction section dollar_figure of the notice provides that the term qualified_emission_reduction means in the case of refined_coal produced at a facility placed_in_service after date a reduction of at least twenty percent of the emissions of nitrogen oxide and at least of the emissions of either sulfur dioxide or mercury released when burning the refined_coal excluding any dilution caused by materials combined or added during the production process as compared to the emissions released when burning the feedstock coal or comparable coal predominantly available in the marketplace as of date in the case of production at a facility placed_in_service before date a reduction of at least percent of the emissions of nox and at least percent of the emissions of either so2 or mercury released when burning the refined_coal excluding any dilution caused by materials combined or added during the production process as compared to the emissions released when burning the feedstock coal or comparable coal predominantly available in the marketplace as of date sec_45 of the code generally provides that the term refined_coal_production_facility means a facility which is placed_in_service after date and before date plr-116792-12 section dollar_figure of notice_2010_54 generally provides that a qualified emissions reduction does not include any reduction attributable to mining processes or processes that would be treated as mining as defined in sec_613 a c or i if performed by the mine owner or operator accordingly in determining whether a qualified_emission_reduction has been achieved the emissions released when burning the refined_coal must be compared to the emissions that would be released when burning the feedstock coal feedstock coal is the product resulting from processes that are treated as mining and are actually applied by a taxpayer in any part of the taxpayer’s process of producing refined_coal from coal sec_613 of the code describes treatment processes that are not considered as mining unless they are provided for in sec_613 or any necessary or incidental to a process provided for in sec_613 any cleaning process such as a process that uses ash separation dewatering scrubbing though a centrifugal pump spiral concentration gravity concentration flotation application of liquid hydrocarbons or alcohol to the surface of the fuel particles or to the feed slurry provided such cleaning does not change the physical or chemical structure of the coal and drying to removed free water provided such drying does not change the physical or chemical identity of the coal will be considered as mining section of the notice provides in part that emissions reduction may be determined using continuous emission monitoring system cems field testing section a provides in part that cems field testing is testing that meets all the following requirements i the boiler used to conduct the test is coal-fired and steam-producing and is of a size and type commonly used in commercial operations ii emissions are measured using a cems iii if epa has promulgated a performance standard that applies at the time of the test to the pollutant emission being measured the cems must conform to that standard iv emissions for both the feedstock coal and the refined_coal are measured at the same operating conditions and over a period of at least hours during which the boiler is operating at a steady state at least percent of full load v a qualified_individual verifies the test results in a manner that satisfies the requirement of section b section of the notice provides that methods other than cems field testing may be used to determine the emissions reduction if a method other than cems field testing is used the service may require the taxpayer to provide additional proof that the emission reduction has been achieved the permissible methods include a testing using a demonstration pilot-scale combustion furnace if it established that the method accurately measures the emission reduction that would be achieved in a boiler described in section a a i and a qualified_individual verifies the test results in a manner that satisfies the requirements of section c i ii v and vi of the notice b a laboratory analysis of the feedstock coal and the refined_coal that complies plr-116792-12 with a currently applicable epa or astm standard and is permitted under section b i or ii section of the notice provides that a taxpayer may establish that a qualified_emission_reduction determined under section dollar_figure applies to production from a facility by a determination or redetermination that is valid at the time the production occurs a determination or redetermination is valid for the period beginning on the date of the determination or redetermination and ending with the occurrence of the earliest of the following events i the lapse of six months from the date of such determination or redetermination ii a change in the source or rank of feedstock coal that occurs after the date of such determination or iii a change in the process of producing refined_coal from the feedstock coal that occurs after the date of such determination or redetermination section of the notice provides that in the case of a redetermination required because of a change in the process of producing refined_coal from the feedstock coal the redetermination required under section dollar_figure must use a method that meets the requirements of section in any other case the redetermination requirement may be satisfied by laboratory analysis establishing that - a the sulfur s or mercury content of the amount of refined_coal necessary to produce an amount of useful energy has been reduced by at least percent percent in the case of facilities placed_in_service after date in comparison to the s or mercury content of the amount of feedstock coal necessary to produce the same amount of useful energy excluding any dilution caused by materials combined or added during the production process b the s or mercury content of both the feedstock coal and the refined_coal do not vary by more than percent from the s and mercury content of the feedstock coal and refined_coal used in the most recent determination that meets the requirements of the notice finally section dollar_figure of the notice provides that the certification requirement of sec_3 c of the notice is satisfied with respect to fuel for which the refined_coal credit is claimed only if the taxpayer attached to its tax_return on which the credit is claimed a certification that contains the following a a statement that the fuel will result in a qualified emissions reduction when used in the production of steam b a statement indicating whether cems field testing was used to determine the emissions reduction if cems field testing was not used to determine the emissions reduction a description of the method used a statement that the emissions reduction was determined or redetermined within the six months preceding the production of the fuel and that there have been no changes in the source or rank of feedstock coal used or in the process of producing refined_coal from the feedstock coal since the emissions reduction was determined or was most recently determined and a declaration signed by the taxpayer in the following form under penalties of perjury i declare that i have examined this certification and to the best of my knowledge and belief it is true correct and complete plr-116792-12 addition or improvement to an existing facility sec_45 of the code provides that a refined_coal_production_facility must be placed_in_service within certain timeframes for purposes of the refined_coal credit allowable with respect to steel_industry_fuel the facility or any modification to the facility must be placed_in_service before date for purposes of the refined_coal credit allowable with respect to refined_coal other than steel_industry_fuel the facility must be placed_in_service after date and before date section dollar_figure of the notice provides that the year in which property is placed_in_service is determined under the principles of sec_1_46-3 of the regulations ie when the property is placed in a condition or state of readiness and availability for a specifically assigned function section dollar_figure of the notice provides that a refined_coal_production_facility will not be treated as placed_in_service after date if more than percent of the facility’s total value the cost of the new property plus the value of the used_property is attributable to property placed_in_service on or before date the notice also states that the irs will not issue private letter rulings relating to when a refined_coal_production_facility has been placed_in_service with respect to the first issue the process starts with several chemical additives added to the feedstock coal prior to its combustion in a furnace the additives provide the chemical structure that result in the reduction of emissions from nox so2 and mercury during combustion section dollar_figure of the notice provides generally that a qualified_emission_reduction does not include any reduction attributable to mining processes or processes that would be treated as mining as further defined in the code if performed by the mine owner or operator sec_613 describes certain treatment processes that are not considered as mining unless they are provided for in sec_613 or are necessary or incidental to a process provide for in sec_613 of the code for example of the notice provides in part that any cleaning process such as the application of liquid hydrocarbons or alcohol to the surface of the fuel particle or to the feed slurry provided such cleaning does not change the physical or chemical structure of the coal will be considered mining in the instant case the process is not a mining process further section dollar_figure of the notice clarifies sec_45 of the code and specifically provides that refined_coal includes feedstock coal mixed with an additive or additives thus additive processes which mix certain chemicals or other additives with the coal in order to achieve emission reductions may qualify for the production_tax_credit for refined_coal additionally section dollar_figure defines comparable coal as coal that is of the same rank as the feedstock coal and that has an emissions profile comparable to the emissions profile of the feedstock coal accordingly we conclude that the coal produced by using the process constitutes refined_coal within the meaning of sec_45 of the code provided that the refined_coal i is produced from feedstock coal that is the same source or rank as the tested coal and ii satisfies the qualified_emission_reduction test stated in sec_45 of the code plr-116792-12 with respect to the second issue the emissions profile of the refined_coal product is compared to the emissions profile of either the feedstock coal or a comparable coal predominantly available in the market place as of date section dollar_figure of the notice provides that a comparable coal is defined as coal that is of the same rank as the feedstock coal and that has an emissions profile comparable to the emissions profile of the feedstock coal section dollar_figure provides that a determination or redetermination of a qualified emissions reduction is valid until the occurrence of the earliest of the following events six months have passed since the date of such determination or redetermination a change in the source or rank of feedstock coal that occurs after the date of such determination or redetermination or a change in the process of producing refined_coal that occurs after the date of such determination or redetermination in the instant case research center has tested various blends of location a and location b coals ranging from location a to location a location b coals accordingly we conclude that provided that the feedstock coals during any determination_period are from the same coal source regions and of the same rank as tested coal all feedstock coal that satisfies that criteria shall be treated as feedstock coal of the same source or rank for purposes of section dollar_figure of notice_2010_54 regardless of the mine from which such feedstock coal is purchased with respect to the third and fourth issues section of the notice provides that any permissible testing method provided for in the notice can be used in emission testing for any pollutant that is a taxpayer can use different testing methods for each of nox so2 or mercury provided the method used for any pollutant is a permissible method section provides that an emission test establishing a qualified_emission_reduction qualifies the refined_coal for a six-month period provided there is no change in the process for producing the refined_coal or in the source or rank of the feedstock coal therefore a taxpayer must redetermine the emission reductions to qualify for the succeeding six-month period using one or more approved methods section provides that in the context of redetermination that the redetermination requirement may be satisfied by laboratory analysis establishing either that i the sulfur or mercury content of the amount of refined_coal necessary to produce an amount of useful energy has been reduced by at least in the case of facilities placed_in_service after date in comparison to the sulfur or mercury content of the amount of useful thermal energy excluding any dilution used by materials combined or added during the production process or ii the sulfur or mercury content of both the feedstock coal and the refined_coal do not vary by more than from the sulfur or mercury content of the feedstock coal and refined_coal used in the most recent determination that meets the requirements of the testing methods for emissions reductions in section dollar_figure of the notice in the instant case company c engaged research center to conduct test at its ctf to determine the emission reductions associated with burning the refined_coal product compared to the feedstock for purposes of qualifying the refined_coal produced at the facilities research center conducted pilot-scale combustion tests at plr-116792-12 its ctf in its test report on the blend of feedstock coals burned at energy center because the facilities were not yet in service research center mixed the coal and additives in a manner consistent with the mixing that would occur at the facilities in test report research center conducted tests on feedstock and refined_coal product samples collected from and produced by the facilities in test report the research center reported that the test results indicated that the blend of coal and additives achieved the required emissions reductions the test results in test report indicated that the refined_coal samples achieved the required emissions reductions based on the foregoing we conclude that i testing by research center for qualified emission reductions as set forth in its test report satisfies the requirements of notice_2010_54 taxpayer may establish a qualified_emission_reduction through testing by research center at its combustion research facility or similar pilot- scale combustion testing facilities under notice_2010_54 and ii pursuant to section of notice_2010_54 the redetermination requirement of section dollar_figure of notice_2010_54 may be satisfied by laboratory analysis establishing that the sulfur and mercury content of both the feedstock coal and the refined_coal on average do not vary by more than ten percent from the sulfur and mercury content of the feedstock coal and the refined_coal used in the most recent determination that meets the requirements of section dollar_figure of notice_2010_54 with respect to the fifth issue we understand that a facility may be relocated to another location in the future in that case all of the essential components of the facility will be relocated and retained similarly during the life of facility it may be necessary to replace certain major components in the event of relocation of a facility or replacement of a component there should be no change in the placed_in_service_date of a facility so long as the test described in dollar_figure of the notice has been met based on the foregoing we conclude that provided a facility was placed_in_service prior to date within the meaning of sec_45 relocation of a facility to a different location after date or replacement of part of a facility after that date will not result in a new placed_in_service_date for a facility for purposes of sec_45 provided the fair_market_value of the original property is more that percent of facility’s total fair_market_value at the time of relocation this ruling expresses no opinion about any issue not specifically addressed in this ruling letter including whether any person has sold refined_coal to an unrelated_person or when the facility was placed_in_service in particular we express or imply no opinion that the taxpayer has sufficient risks and rewards of the production activity to qualify as the producer of the refined_coal the service may challenge an attempt to transfer the credit to a taxpayer who does not qualify as a producer including transfers structured as partnerships sales or leases that do not also transfer sufficient risks and rewards of the production activity plr-116792-12 in accordance with the power_of_attorney on file with this office we are sending a copy of this letter to your authorized representatives a copy of this ruling must be attached to any income_tax return to which it is relevant alternatively taxpayers filing their returns electronically may satisfy this requirement by attaching a statement to their return that provides the date and control number of the letter_ruling this ruling is directed only to the taxpayer who requested it sec_6110 of the code provides it may not be used or cited as precedent we are sending a copy of this letter_ruling to the industry director sincerely peter c friedman senior technician reviewer branch office of associate chief_counsel passthroughs special industries


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 fip plr-145720-07 date date --- legend number a dear --------------- this letter responds to the letter submitted by your authorized representative dated date requesting a modification to the letter_ruling we issued to taxpayer on date plr the prior ruling letter capitalized terms retain the meanings assigned in the prior ruling letter the prior ruling letter addresses the treatment under sec_1_817-5 of the regulations of certain funds that offer beneficial interests to plans that are intended to constitute qualified_pension or retirement plans within the meaning of sec_1_817-5 and revrul_94_62 1994_2_cb_164 the prior ruling letter concludes that satisfaction of the requirements of sec_1_817-5 by a fund shall not be prevented by reason of beneficial interests in the fund that are held by a plan provided that each fund satisfies the terms and conditions set forth in the prior ruling letter paragraph b of the prior ruling letter states that a fund must satisfy these terms and conditions with respect to any plan or regulated_investment_company currently holding a beneficial_interest in a fund the fund ha sec_180 days from the date of this ruling letter to comply taxpayer has indicated that it has attempted to comply with paragraph b of the prior ruling letter and that it has complied in most cases however taxpayer is still plr-145720-07 working to comply with the terms and conditions of the prior ruling letter with respect to approximately number a plans that held beneficial interests in the funds as of the date the prior ruling letter was issued taxpayer expects to meet all such terms and conditions with respect to these remaining plans but may not be able to do so before the 180-day period described in paragraph b of the prior ruling letter expires as a result taxpayer has requested a 90-day extension of that period based on the information submitted we grant taxpayer the requested extension accordingly paragraph b of the prior ruling letter is hereby modified to read as follows a fund must satisfy these terms and conditions with respect to any plan or regulated_investment_company currently holding a beneficial_interest in a fund the fund ha sec_270 days from the date of this ruling letter to comply the modification above applies as if included in the prior ruling letter as originally issued therefore each fund ha sec_270 days from date to comply with the terms and conditions of the prior ruling letter in the case of any plan or regulated_investment_company that held a beneficial_interest in the fund as of date the terms and conditions of the prior ruling letter otherwise remain in full force and effect the ruling contained in this letter is based upon information and representations submitted by 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_ruling it is subject_to verification on examination 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 a copy of this letter must be attached to any income_tax return to which it is relevant alternatively taxpayers filing their returns electronically may satisfy this requirement by attaching a statement to their return that provides the date and control number of the letter_ruling this ruling is directed only to the taxpayer requesting it sec_6110 of the code provides that it may not be used or cited as precedent plr-145720-07 in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative sincerely donald j drees jr donald j drees jr senior technician reviewer branch financial institutions products


internal_revenue_service index no number release date department of the treasury p o box ben franklin station washington dc person to contact telephone number refer reply to cc dom p si plr-109586-99 date date re legend decedent year corporation z child trust grandchild grandchild grandchild state this is in response to your letter dated november and prior correspondence in which rulings were requested concerning the gift estate and generation-skipping_transfer_tax consequences of the proposed transactions described below facts the facts and representations submitted are as follows decedent died in year predeceased by his spouse under paragraph e of article i of decedent’s will the residue of decedent’s estate was divided into three equal shares each held in a separate trust for the benefit of one of decedent’s three children trust for the benefit of child is the subject of this ruling at his death decedent owned shares of stock representing a significant interest in corporation corporation has approximately shareholders and is neither publicly traded nor closely held decedent’s issue collectively own or control a significant fraction of the outstanding shares of corporation child does not currently serve as an employee or board member of corporation under a restrictive stock agreement corporation has the right_of_first_refusal in any sale of corporation stock for this purpose the board_of directors updates the value of the stock every months decedent’s stock in corporation passed to the children’s trusts each trust receives dividends of approximately dollar_figurez annually and distributes all trust income currently the only assets in trust are shares of common voting_stock in corporation the trusts for decedent’s children are administered under identical provisions under paragraph e of article i of decedent’s will during child 1’s life child is to receive the income from trust and any amount of principal the trustee other than child thinks advisable for the support of child and child 1’s spouse or the support education and welfare of child 1’s children and their spouses paragraph e of article i provides each child who survives decedent shall have the power to withdraw principal from his or her share from time to time provided that the aggregate of such withdrawals in any calendar_year shall not exceed the greater of i five thousand dollars dollar_figure or ii five per cent of the value of the principal of the share at the time of the last withdrawal in the calendar_year and provided further that no voting shares of corporation shall be so withdrawn or sold to permit such withdrawals without the consent of my trustees paragraph e of article i provides each child who survives decedent shall have the power by signed writings delivered to the trustees during his or her life or by will specifically referring to this power to appoint the principal of his or her share either outright or in further trust for any one or more of a class composed of the child’s spouse the child’s issue and their spouses my other children their spouses and issue and charities under paragraph d of article ii child has the right subject_to the restrictive stock agreement to purchase any part of the stock_or_securities in corporation held in the trusts created under decedent’s will it is represented that currently child is the sole trustee of trust child proposes to exercise by deed the special_power_of_appointment granted under paragraph e of article i the deed will provide that child 1’s exercise of the power is irrevocable and that upon child 1’s death the remaining principal of trust will be divided into shares for child 1’s then living issue per stirpes each share for a grandchild or more remote descendant of child will be paid outright each share for a child of child will be held in trust for that child’s life such trust will pay net_income to the child beneficiary quarterly and any principal the trustees deem appropriate for the child’s health support and maintenance at the death of that child any remaining principal of that child’s trust will be distributed to that child’s then living issue per stirpes or if none to child 1’s then living issue per stirpes any trust created under this exercise of child 1’s special power must terminate and be distributed outright to its income_beneficiary not later than years after the death of the survivor among the issue of child who were living at decedent’s death pursuant to paragraph e of article i the deed will recite that child as trustee of trust acknowledges receipt of the deed of exercise and authorizes the recording of the deed as appropriate under applicable state law immediately after child 1’s exercise of the special_power_of_appointment and the recording of the deed child will resign as trustee of trust and appoint his three children grandchild grandchild and grandchild as cotrustees it is represented that all three grandchildren of decedent are adults and that child does not financially support any of them nor do any of them financially support child you have requested that we rule as follows under sec_2514 of the internal_revenue_code and sec_25_2514-3 of the gift_tax regulations child 1's resignation as trustee of trust does not cause a transfer for federal gift_tax purposes because the resignation is deemed to be a lapse of a general_power_of_appointment over less than percent of the value of the assets of trust under example of sec_20_2041-3 of the estate_tax regulations and example sec_25_2514-3 the appointment of succeeding life estates in trust to child 1's children grandchild grandchild and grandchild will give grandchild grandchild and grandchild a substantial interest in trust adverse to that of child under sec_2514 after child 1's proposed exercise of the special_power_of_appointment and the appointment of grandchild grandchild and grandchild as successor cotrustees of trust child 1's noncumulative power to withdraw the greater of dollar_figure or percent of the value of the trust corpus annually and power under paragraph e of article i will not constitute a general_power_of_appointment over corporation voting_stock held by trust for purposes of sec_2514 under sec_2041 after child 1's proposed exercise of the special_power_of_appointment and the appointment of grandchild grandchild and grandchild as successor cotrustees of trust child 1' sec_5 and power will not constitute a general_power_of_appointment over corporation voting_stock held by trust and will not result in the inclusion under sec_2041 in child 1's gross_estate of any corporation stock over which the power could be exercised as a trustee of trust none among grandchild grandchild and grandchild will possess a general_power_of_appointment pursuant to paragraph e of article i under either sec_2041 or sec_2514 after child 1's proposed exercise of the special_power_of_appointment and the appointment of grandchild grandchild and grandchild as successor cotrustees of trust although percent of the value of trust assets other than corporation stock will be included in child 1's gross_estate under sec_2041 for federal estate_tax purposes the value of corporation stock held by trust will not be includible in child 1's gross_estate under sec_2035 even if his death occurs immediately after the proposed transactions the proposed trustee resignation and successor trustee appointments will not constitute an addition to trust under sec_26_2601-1 of the generation-skipping_transfer_tax regulations or a modification of trust that will cause trust to lose exempt status for generation-skipping_transfer_tax gstt purposes law and analysis sec_2041 and sec_2514 sec_2041 of the internal_revenue_code provides that the value of the gross_estate shall include the value of all property to the extent of any property with respect to which the decedent has at the time of death a general_power_of_appointment created after date or with respect to which the decedent has at any time exercised or released such a power_of_appointment by a disposition that is of such nature that if it were a transfer of property owned by the decedent such property would be includible in the decedent's gross_estate under sec_2035 to inclusive sec_2041 provides that the term general_power_of_appointment means a power that is exercisable in favor of the individual possessing the power his estate his creditors or the creditors of his estate under sec_2041 a power_of_appointment created after date a post-1942 power which is exercisable by the decedent only in conjunction with another person shall not be deemed a general_power_of_appointment if the power is not exercisable by the decedent except in conjunction with the creator of the power or in conjunction with a person having a substantial interest in the property subject_to the power which is adverse to exercise of the power in favor of the decedent under sec_2041 the lapse of a power_of_appointment created after date during the life of the individual possessing the power shall be considered a release of such power during any calendar_year to the extent that the property which could have been appointed by exercise of such lapsed power exceeds in value the greater of dollar_figure or percent of the aggregate value of the assets out of which or the proceeds of which the exercise of the lapsed power could be satisfied sec_20_2041-1 of the estate_tax regulations provides that a power_of_appointment is not a general power if by its terms it is either a exercisable only in favor of one or more designated persons or classes other than the decedent or his creditors or the decedent's_estate or the creditors of his estate or b expressly not exercisable in favor of the decedent or his creditors or the decedent's_estate or the creditors of his estate under sec_20_2041-3 example the decedent and r are trustees of a_trust under which the income is to be paid to the decedent for life and then to m for life r is the remainderman the trustees have the power to distribute corpus to the decedent since r's interest is substantially adverse to an exercise of the power in favor of the decedent the decedent does not have a general_power_of_appointment if m and the decedent were trustees m’s interest would also be adverse to that of the decedent sec_20_2041-3 provides that the failure to exercise a power_of_appointment created afer date within a specified time so that the power lapses constitutes a release of the power however such a lapse during any calendar_year is treated as a release only to the extent that the property which could have been appointed by exercise of such lapsed power exceeds in value the greater of dollar_figure or percent of the aggregate value of the assets out of which or the proceeds of which the exercise of the lapsed power could be satisfied sec_2501 of the code provides for a gift_tax on the transfer of property by gift sec_2511 provides that the gift_tax imposed by sec_2501 shall apply whether the transfer is in trust or otherwise whether the gift is direct or indirect and whether the property is real or personal tangible or intangible under sec_2514 the exercise or release of a general_power_of_appointment created after date is deemed the transfer of property by the individual possessing such power under sec_2514 general_power_of_appointment is defined as a power which is exercisable in favor of the individual possessing the power the possessor his estate his creditors or creditors of his estate however under sec_2514 a power_of_appointment created after date is not a general_power_of_appointment if it is exercisable by the possessor only in conjunction with another person having a substantial adverse_interest in the property subject_to the power which is adverse to exercise of the power in favor of the possessor under sec_25_2514-1 a power_of_appointment is not a general power if by its terms it is either a exercisable only in favor of one or more designated persons or classes other than the decedent or his creditors or the decedent's_estate or the creditors of his estate or b expressly not exercisable in favor of the decedent or his creditors or the decedent's_estate or the creditors of his estate under sec_25_2514-3 example the taxpayer and r are trustees of a_trust under which the income is to be paid to the taxpayer for life and then to m for life r is the remainderman the trustees have the power to distribute corpus to the taxpayer since r's interest is substantially adverse to an exercise of the power in favor of the taxpayer the taxpayer does not have a general_power_of_appointment if m and the taxpayer were trustees m's interest would also be adverse to that of the taxpayer sec_2514 provides that the lapse of a power_of_appointment created after date during the life of the power holder is considered a release of such power during any calendar_year to the extent that the property which could have been appointed by exercise of such lapsed power exceeds in value the greater of dollar_figure or percent of the aggregate value of the assets out of which or the proceeds of which the exercise of the lapsed power could be satisfied under sec_25_2514-3 the failure to exercise a general_power_of_appointment created after date within a specified time so that the power lapses constitutes a release of the power the regulation further provides that if a trustee has in his capacity as trustee a power which is considered a general_power_of_appointment his resignation or removal as trustee will cause a lapse of his power however under sec_2514 a lapse during any calendar_year is considered as a release for gift_tax purposes only to the extent that the property which could have been appointed exceeds the greater of dollar_figure or percent of the aggregate value at the time of the lapse of the assets out of which or the proceeds of which the exercise of the lapsed power could be satisfied under paragraph e of article i of decedent's will child as beneficiary has the power to withdraw in each calendar_year principal from trust with an aggregate value not exceeding the greater of dollar_figure or percent of the value of the principal of trust at the time of the last withdrawal under sec_2041 and sec_2514 such a withdrawal power is a general_power_of_appointment paragraph e of article i further provides that no voting shares of corporation shall be so withdrawn or sold to permit such withdrawals without the consent of my trustees thus to the extent that the assets of trust consist of voting shares of corporation stock child can only appoint property from trust to himself with the consent of the trustee it is represented that child is the sole trustee of trust therefore currently child 1's power to withdraw voting shares of corporation stock from trust is exercisable only in conjunction with a trustee who has no substantial adverse_interest to child under sec_2041 and sec_2514 while child or any other person without interests substantially adverse to those of child is the trustee of trust child 1' sec_5 and power under paragraph e of article i over voting shares of corporation stock remains a general_power_of_appointment thus as the beneficiary child holds a general_power_of_appointment over all of the trust assets other than voting_stock in corporation as beneficiary and trustee child holds a general_power_of_appointment over the voting_stock in corporation held by trust child proposes to exercise the special_power_of_appointment granted under paragraph e of article i of decedent’s will under the proposed exercise grandchild grandchild and grandchild will each receive on the date of exercise the right to be paid a share of trust income_for_life beginning upon the death of child if the grandchild is then living after exercising the special_power_of_appointment child will resign as trustee and appoint grandchild grandchild and grandchild as his successor cotrustees under sec_25_2514-3 child 1's resignation will cause a lapse of child 1's general_power_of_appointment however under this regulation the lapse will not be treated as a release of a general power because the property subject_to the general power child holds as trustee cannot exceed the greater of dollar_figure or percent of the aggregate value of trust assets at the time of the resignation accordingly based on the facts submitted and representations made we conclude that under sec_2514 and sec_25_2514-3 child 1's resignation as trustee will not constitute a taxable transfer under sec_2511 for federal gift_tax purposes after child 1's exercise of the special power his resignation as trustee and the appointment of successor trustees grandchild grandchild and grandchild will each have interests in trust similar to the interests in example sec_1 of sec_20_2041-3 and sec_25_2514-3 each grandchild will have an income_interest succeeding that of child and will have the power to consent to child 1's exercise of the and withdrawal power granted under paragraph e of article i accordingly based on the facts submitted and representations made we conclude that for purposes of sec_2041 and sec_2514 upon child 1's exercise of child 1's special_power_of_appointment under paragraph e of article i assuming the exercise is valid under state law grandchild grandchild and grandchild will each have a substantial interest in trust adverse to that of child after child resigns as trustee and the grandchildren are appointed as successor cotrustees child 1' sec_5 and power to withdraw corporation stock under paragraph e of article i will be exercisable only in conjunction with grandchild grandchild and grandchild who will have substantial adverse interests to those of child accordingly based on the facts submitted and representations made we conclude that under sec_2514 after child 1's proposed exercise of the special_power_of_appointment assuming the exercise is valid under state law and that the grandchildren or some other person with a substantial interest in trust adverse to that of child is acting as trustee for purposes of sec_2514 child 1' sec_5 and withdrawal power under paragraph e of article i will not constitute a general_power_of_appointment over corporation voting_stock held by trust we further conclude that under sec_2041 after child 1's proposed exercise of the special_power_of_appointment assuming the exercise is valid under state law and that the grandchildren or some other person with a substantial interest in trust adverse to that of child is acting as trustee child 1’ sec_5 and withdrawal power under paragraph e of article i will not constitute a general_power_of_appointment over corporation voting_stock held by trust and will not result in the inclusion under sec_2041 in child 1's gross_estate of any corporation stock over which the power could be exercised as discussed above consent of the trustees is not required under paragraph e of article i for child to exercise the power to withdraw assets other than corporation stock thus after the grandchildren are appointed as successor cotrustees child will continue to have a general_power_of_appointment under paragraph e of article i for purposes of sec_2041 and sec_2514 over any trust assets other than corporation stock accordingly based on the facts submitted and representations made we conclude that at the death of child trust assets other than corporation stock will be includible in child 1's gross_estate to the extent of child 1' sec_5 and withdrawal power under paragraph e of article i under paragraph e of article i a trustee other than child may distribute to child any amount of principal the trustee deems advisable for the support of child and child 1's spouse or the support education and welfare of child 1's children and their spouses as trustee of trust child has no power of any kind under this provision to distribute principal to himself consequently child 1's resignation as trustee and the appointment of grandchildren as successor cotrustees does not result in the exercise lapse or release of a power_of_appointment by child under paragraph e of article i pursuant to sec_2514 further when child 1's children grandchild grandchild and grandchild become trustees of trust they will be authorized under paragraph e of article i to make distributions of principal measured by their own needs but will only be permitted to make these distributions to child it is represented that no grandchild has any legal_obligation to support child and child has no legal_obligation to support any grandchild therefore the provisions of paragraph e of article i do not create in grandchild grandchild or grandchild as trustees a general_power_of_appointment for purposes of sec_2041 and sec_2514 over any of the assets of trust accordingly based on the facts submitted and representations made we conclude that as trustees of trust neither grandchild grandchild or grandchild will possess a general_power_of_appointment pursuant to paragraph e of article i under either sec_2041 or sec_2514 sec_2035 sec_2035 provides for the inclusion in the gross_estate of property transferred within three years of the decedent's death if the property would have been included under sec_2036 sec_2037 sec_2038 or sec_2042 if the decedent had retained the transferred property until death other transfers made within three years of death are not includible in the gross_estate sec_2036 sec_2037 and sec_2038 provide for the inclusion in the gross_estate of property of which the decedent has made a transfer and in which the decedent has either retained an interest in the property or a power over the property sec_2042 provides for the inclusion in the gross_estate of the proceeds of life_insurance over which the decedent has retained any incidents_of_ownership based on the facts submitted and representations made we conclude that after child 1's proposed exercise of the special_power_of_appointment his resignation as trustee and the appointment of grandchild grandchild and grandchild as successor cotrustees of trust although percent of the value of trust assets other than corporation stock will be included in child 1's gross_estate under sec_2041 for federal estate_tax purposes the value of corporation stock held by trust will not be includible in child 1's gross_estate under sec_2035 even if child 1's death occurs immediately after the proposed transactions sec_2601 sec_2601 imposes a tax on each generation-skipping_transfer gst under a of the tax_reform_act_of_1986 the generation- skipping transfer_tax gstt is generally applicable to generation- skipping transfers made after date however under b a of the tax reform act and sec_26_2601-1 of the generation-skipping_transfer_tax regulations the tax does not apply to a transfer from a_trust if the trust was irrevocable on date and no addition actual or constructive was made to the trust after that date sec_26_2601-1 provides that except as provided under sec_26_2601-1 where any portion of a_trust remains in the trust after the post-date release exercise or lapse of a power_of_appointment over that portion of the trust and the release exercise or lapse is treated to any extent as a taxable transfer under chapter or chapter the value of the entire portion of the trust subject_to the power that was released exercised or lapsed is treated as if that portion had been withdrawn and immediately retransferred to the trust at the time of the release exercise or lapse sec_26_2601-1 provides a special rule for certain powers of appointment this section provides that the release exercise or lapse of a power_of_appointment other than a general_power_of_appointment as defined in sec_2041 will not be treated as an addition to a_trust if such power_of_appointment was created in an irrevocable_trust that is not subject_to chapter under sec_26_2601-1 and in the case of an exercise such power_of_appointment is not exercised in a manner that may postpone or suspend the vesting absolute ownership or power of alienation of an interest in property for a period measured from the date of creation of the trust extending beyond any life in being at the date of creation of the trust plus a period of years as concluded above under sec_25_2514-3 child 1's resignation as trustee will be treated as a lapse of a general_power_of_appointment that does not constitute a taxable transfer for federal gift_tax purposes further the appointment of grandchild grandchild and grandchild as successor cotrustees will not confer any additional powers or beneficial interests upon them accordingly based on the facts submitted and representations made we conclude that the proposed trustee resignation and successor trustee appointments as discussed above will not constitute an addition to trust under sec_26_2601-1 of the generation-skipping_transfer_tax regulations or a modification of trust that changes the quality value or timing of any beneficial_interest provided for under the trust therefore the proposed trustee resignation and appointments will not cause trust to lose exempt status for gstt purposes except as we have specifically ruled herein we express no opinion on the federal tax consequences of the transactions under the cited provisions of the code or under any other provisions of the code this ruling letter is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent sincerely assistant chief_counsel passthroughs and special industries branch by katherine a mellody senior technician reviewer enclosure copy for sec_6110 purposes


department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division apr se i e - ia uniform issue list xkxxkxxxkxkxkxkkkkxkkk xxxxkxkxkkkkxkkkkkk mxkkxkkkkkkkkkkkk legend taxpayer a xxxxxxkxxxxx plan x xxxkxxxxxxkxxk xxxkkkkkkkkk financial advisor b xxxxxxxxxxxx financial_institution c kxxxkkkkkkmk account y xxxxxxxxxxkx ira x xxxxxxxxkxxkx xxxkxxxxkxxkxkk financial_institution d xxxxxxxxxxxx amount n amount o date date date date xxxxxxxxxxkx xxxxxxxxxkxkx xxxxxxxxxxkk xxxxxxxxxxkx xxxxxxxxxxxx xxxkxxkxxxxxxxk xxxxxxxxxxx page of dear xxxxxxxx ot this is in response to your letter dated date as supplemented by correspondence dated date date and date submitted on your behalf by your authorized representative in which you request a waiver of the 60-day rollover requirement contained in sec_402 of the internal_revenue_code the code’ the following facts and representations have been submitted under penalties of perjury in support of your ruling_request on date taxpayer a age received a distribution of amount n from plan x which she intended to roll over into an ira which had been established at financial_institution c taxpayer a asserts that due to an error by financial advisor b amount n was not rolled over timely into an ira on date plan x issued a check payable to taxpayer a for amount n the check for amount n represented the lump sum payment minus percent federal withholding_tax of the non-annuity portion of taxpayer a’s retirement benefit in plan x plan x distributed_amount n to taxpayer a pursuant to the distribution method taxpayer a had elected when she filed for retirement prior to date but a few months after taxpayer a had filed her retirement papers taxpayer a met with financial advisor b of financial_institution c who advised taxpayer a to rescind her election to have the non-annuity portion of plan x distributed to her and to elect instead to have the non-annuity portion of plan x rolled over directly from plan x into an ira to be maintained at financial_institution c taxpayer a contacted plan x and filed paperwork to change her election of distribution method to a direct_rollover however because plan x had already begun to process taxpayer a’s non-annuity payment in accordance with her initial election and in spite of efforts by both taxpayer a and financial advisor b to persuade plan x to perform the direct_rollover to financial_institution c taxpayer a received a check for amount n on date as plan x's final_decision on the matter documentation shows that during a meeting between financial advisor b and taxpayer a financial advisor b in anticipation of the direct_rollover from plan x established an ira at financial_institution c on behalf of taxpayer a on date the check for amount n was presented to financial advisor b who deposited amount n into account y a non-ira account at financial_institution c instead of into the ira which had been established months earlier to receive the direct_rollover from plan x xxxxxkxkkkkx page of rpg gk taxpayer a represents that at the time she presented the check from plan x to financial advisor b he informed taxpayer a that since taxes had been withheld from the payment it did not matter as to which type of account amount n could be deposited taxpayer a asserts that she relied on financial advisor b and that she believed that amount n was tax-sheltered in account y during date when account y experienced significant losses taxpayer a transferred amount o the remainder of amount n to an account maintained at financial_institution d on date financial_institution d placed amount o into ira x based on the above facts and representations you request a ruling that the internal_revenue_service waive the 60-day rollover requirement contained in sec_402 of the code with respect to the distribution of amount n sec_402 of the code provides that if any portion of the balance_to_the_credit of an employee in a qualified_trust is paid to the employee in an eligible_rollover_distribution and the distributee transfers any portion of the property received in such distribution to an eligible_retirement_plan and in the case of a distribution_of_property other than money the amount so transferred consists of the property distributed then such distribution to the extent transferred shall not be includible in gross_income for the taxable_year in which paid sec_402 states that such rollover must be accomplished within days following the day on which the distributee received the property an individual_retirement_account ira constitutes one form of eligible_retirement_plan sec_402 of the code provides in relevant part that the secretary may waive the 60-day requirement under sec_402 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_402 of the code revproc_2003_16 r b provides that in determining whether to grant a waiver of the 60-day rollover requirement pursuant to sec_402 of the code 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 xkxxkxxxkxkkkx page of the information presented and documentation submitted is consistent with your assertion that taxpayer a’s failure to accomplish a timely rollover of amount n into an ira was caused by an error by financial advisor b therefore pursuant to sec_402 of the code the service hereby waives the 60-day rollover requirement with respect to the distribution of amount n from plan x taxpayer a is granted a period of days from the issuance of this ruling letter to contribute amount n less amount o into a rollover ira provided all other requirements of sec_402 of the code except the day requirement are met the contribution of amount n will be considered a valid rollover_contribution within the meaning of sec_402 of the code in addition the contribution of amount o into an ira on date will be considered a valid rollover_contribution within the meaning of sec_402 of the code this ruling assumes plan x satisfied the qualification requirements of sec_401 of the code at all times relevant to this transaction no opinion is expressed as to the tax treatment of the transactions described herein under the provisions of any other section of either the code or regulations which may be applicable thereto this ruling is directed only to the taxpayer that requested it sec_6110 of the code provides that it may not be used or cited by others as precedent a copy of this letter is being sent to your authorized representative pursuant to a power_of_attorney on file in this office if you wish to inquire about this ruling please contact xxxxxxxx id number xxxxxx by telephone at xxx xxx-xxxx please address all correspondence to se t ep ra t sincerely yours a chew rev fe laura b warshawsky manager employee_plans technical group enclosures deleted copy of letter_ruling notice of intention to disclose


internal_revenue_service department of the treasury number release date index number washington dc person to contact telephone number refer reply to cc intl br1-plr-127957-02 date date legend a date b date c country d ty dear this is in response to your letter dated date requesting a ruling under sec_877 of the internal_revenue_code_of_1986 code that a’s loss of citizenship did not have for one of its principal purposes the avoidance of u s taxes under subtitle a or subtitle b of the code the ruling contained in this letter is based upon information and representations submitted by the taxpayer and accompanied by 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 a ruling it is subject_to verification on examination the information submitted for consideration is substantially as set forth below a expatriated on date b a was born in the united_states on date c and is a u s citizen on date c she also became a citizen of country d sec_877 generally provides that a citizen who loses u s citizenship or a u s long-term_resident who ceases to be taxed as a lawful permanent resident individuals who expatriate within the 10-year period immediately preceding the close of the taxable_year will be taxed under sec_877 and the special rules of sec_877 for such taxable_year unless such loss did not have for one of its principal purposes the avoidance of u s taxes sec_2107 and sec_2501 provide special estate and gift_tax regimes respectively for individuals who expatriate with a principal purpose to avoid u s taxes a former citizen or former long-term_resident will be treated as having expatriated with a principal purpose to avoid u s taxes for purposes of sec_877 sec_2107 and sec_2501 if the individual’s average income_tax_liability or the individual’s net_worth on the date of expatriation exceed certain thresholds see sec_877 sec_2107 and sec_2501 a former citizen or former long-term_resident whose net_worth or average tax_liability exceeds these thresholds however will not be presumed to have a principal purpose of tax_avoidance if that person is described within certain statutory categories and submits a request for a ruling within one year of the date of loss of u s citizenship for the secretary’s determination as to whether such loss had for one of its principal purposes the avoidance of u s taxes see sec_877 sec_2107 and sec_2501 a c under notice_98_34 1998_2_cb_29 modifying notice_97_19 1997_1_cb_394 a former long-term_resident whose net_worth or average tax_liability exceeds the applicable thresholds will not be presumed to have a principal purpose of tax_avoidance if that former resident is described within certain categories and submits a complete and good_faith request for a ruling as to whether such loss had for one of its principal purposes the avoidance of u s taxes notice_98_34 requires that certain information be submitted with a request for a ruling that an individual’s expatriation did not have for one of its principal purposes the avoidance of u s taxes a’s net_worth exceeded the sec_877 threshold on date b a is eligible to request a ruling because at birth a became a citizen_of_the_united_states and country d and after renouncing her u s citizenship she continued to be a citizen of country d a submitted all the information required by notice_98_34 based on the facts submitted and the representations made we conclude that a has made a complete and good_faith submission in accordance with sec_877 and notice_98_34 we further conclude that a will not be treated under sec_877 as having as one of her principal purposes of expatriating the avoidance of u s taxes because the information submitted clearly establishes the lack of a principal purpose to avoid taxes under subtitle a or b of the code except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any transaction or item discussed or referenced in this letter in addition no opinion is expressed as to a’s u s tax_liability for taxable periods prior to her loss of permanent resident status or for taxable periods after her loss of permanent residence status under sections of the code other than sec_877 sec_2107 and sec_2501 a copy of this letter must be attached to a’s u s income_tax return for the year in which a obtained the ruling whether or not a is otherwise required to file a return this ruling is directed only to the taxpayer requesting it sec_6110 of the code provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to a sincerely elizabeth u karzon chief branch office of the associate chief_counsel intl


internal_revenue_service department of the treasury number info release date index number washington dc person to contact telephone number refer reply to cc intl cor-111525-00 date date legend taxpayer office x dear taxpayer this replies to your letter dated date which was addressed to office x we contacted office x about your letter office x informs us that it has been in contact with you concerning your letter since office x is handling this matter we are closing our file on your letter sincerely s allen goldstein allen goldstein reviewer office of the associate chief_counsel international