internal_revenue_service number release date index number ---------------------- ------------------------ ------------------------------------- attn -------------------- --------------------- ------------------------------------------------------------ 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 ita b02 plr-130416-17 date date ty date legend taxpayer date date date date date a b c d dear ----------------- ---------------------- -------------- -------------------------- -------------------------- --------------------- ------------------ ------------------ ---- ------------- -------------------- --------------------------------------------- this is in response to your letter dated date requesting permission to file a copy of the request to use the alternative_cost_method with the a director for the region of your principal_place_of_business for your taxable_year ending date the copy of the request to use the alternative_cost_method was not timely filed with the a director for the region of your principal_place_of_business although it was required in order for taxpayer to use the alternative_cost_method of accounting in conformity with the requirements of revproc_92_29 1992_1_cb_748 the request is made in accordance with sec_301_9100-1 and sec_301_9100-3 of the procedure and administration regulations facts taxpayer represents the following plr-130416-17 taxpayer is a b real_estate builder and developer taxpayer files a consolidated federal_income_tax return taxpayer sold the initial home in one or more communities under development in the taxable_year beginning date and ending date taxpayer used the alternative_cost_method described in sec_4 of revproc_92_29 to compute the gain_or_loss on the homes sold in those communities during the year on its federal_income_tax return for the taxable_year ending date taxpayer filed its original federal_income_tax return for the taxable_year ending date on date taxpayer intended to determine the estimated cost of common improvements with regard to the ten-taxable year horizon as defined in section dollar_figure of revproc_92_29 taxpayer attached the following to its return for the taxable_year ending date i a request to use the alternative_cost_method on a project-by-project basis and ii a form_921 consent to extend the time to assess income_tax extending the period of limitation on the assessment of tax with respect to the use of the alternative_cost_method on a project-by-project basis taxpayer failed to file a duplicate of the request to use the alternative_cost_method with the a director for the region of its principal_place_of_business on or before the due_date of the return including extensions for the taxable_year ending date taxpayer’s c completed the duplicate request but failed to timely mail it taxpayer was in the process of d at the time the request was due and inadvertently misplaced the request taxpayer’s c discovered this oversight on date taxpayer represents that other than timely filing a duplicate copy of the request with the a director it qualifies to use the alternative_cost_method law revproc_92_29 1992_1_cb_748 provides rules for the treatment of common improvement costs and an automatic procedure for developers to follow to use the alternative_cost_method generally consent to use that method is conditioned on the following the developer must be contractually obligated or required_by_law to provide the common improvements and the cost of the common improvements must not be properly recoverable through depreciation by the developer the developer must file a request to use the alternative_cost_method on a project- by-project basis in accordance with the procedures set forth in section of revproc_92_29 these procedures include a requirement to file the request with the district_director for the internal_revenue_district in which is located the principal_place_of_business of the person required to make the return on or before the due_date of the developer’s original federal_income_tax return determined with regard to extensions of time for the taxable_year in which the first benefitted property in the project is sold plr-130416-17 the developer must sign a consent extending the period of limitation on the assessment of income_tax with respect to the use of the alternative_cost_method on a project-by-project basis as described in section of revproc_92_29 the developer must file an annual_statement for each project for which the developer has received permission to use the alternative_cost_method in accordance with section of revproc_92_29 the developer must file a supplemental request for each project if required pursuant to section of rev_proc taxpayer requests permission with this ruling_request to file a copy of the request to use the alternative_cost_method with the a director for the region of its principal_place_of_business sec_301_9100-1 provides that the commissioner has discretion to grant a reasonable extension of time under the rules set forth in sec_301_9100-2 and sec_301_9100-3 to make certain regulatory elections sec_301_9100-1 defines a regulatory election as an election whose due_date is prescribed by a regulation published in the federal_register or a revenue_ruling revenue_procedure notice or announcement published in the internal_revenue_bulletin sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make an election sec_301_9100-2 provides automatic extensions of time for making certain elections sec_301_9100-3 provides extensions of time for making elections that do not meet the requirements of sec_301_9100-2 sec_301_9100-3 provides that requests for extensions of time for regulatory elections other than automatic changes covered under sec_301_9100-2 will be granted when the taxpayer provides evidence including affidavits described in the regulations to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 provides that a taxpayer will be deemed to have acted reasonably and in good_faith if the taxpayer -- i requests relief before the failure to make the regulatory election is discovered by the internal_revenue_service irs ii failed to make the election because of intervening events beyond the taxpayer's control iii failed to make the election because after exercising reasonable diligence the taxpayer was unaware of the necessity for the election iv reasonably relied on the written advice of the irs or v reasonably relied on a qualified_tax professional and the tax professional failed to make or advise the taxpayer to make the election plr-130416-17 sec_301_9100-3 provides that a taxpayer will not be considered to have acted reasonably and in good_faith if the taxpayer -- i seeks to alter a return position for which an accuracy-related_penalty has been or could be imposed under sec_6662 at the time the taxpayer requests relief and the new position requires or permits a regulatory election for which relief is requested ii was informed in all material respects of the required election and related tax consequences but chose not to file the election or iii uses hindsight in requesting relief if specific facts have changed since the original deadline that make the election advantageous to a taxpayer the irs will not ordinarily grant relief sec_301_9100-3 provides that the commissioner will grant a reasonable extension of time to make a regulatory election only when the interests of the government will not be prejudiced by the granting of relief the interests of the government are prejudiced if granting relief would result in a taxpayer having a lower tax_liability in the aggregate for all taxable years affected by the election than the taxpayer would have had if the election had been timely made the interests of the government are ordinarily prejudiced if the taxable_year in which the regulatory election should have been made or any taxable years that would have been affected by the election had it been timely made are closed by the period of limitations on assessment under sec_6501 before the taxpayer's receipt of a ruling granting relief under this section sec_301_9100-3 provides special rules for accounting_method regulatory elections sec_301_9100-3 provides that the interests of the government are deemed prejudiced except in unusual or compelling circumstances if the accounting_method regulatory election for which relief is requested is subject_to the advance consent procedures for method changes requires a sec_481 adjustment would permit a change from an impermissible method_of_accounting that is an issue under consideration by examination or in any other setting and the change would provide a more favorable method or more favorable terms and conditions than if the change were made as part of an examination or provides a more favorable method_of_accounting or more favorable terms and conditions if the election is made by a certain date or taxable_year ruling based upon our analysis of the facts and representations provided taxpayer acted reasonably and in good_faith and granting relief will not prejudice the interests of the government therefore the requirements of sec_301_9100-1 and sec_301_9100-3 have been met taxpayer is granted an extension of days from the date of this ruling to file the copy of the request to use the alternative_cost_method with the a director for the region of its principal_place_of_business for its taxable_year ending date plr-130416-17 caveats 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 no opinion is expressed as to the federal tax treatment of the transaction under any other provisions of the internal_revenue_code and the treasury regulations that may be applicable or under any other general principles of federal income_taxation this letter_ruling is only applicable to matters under our jurisdiction see revproc_2018_1 2018_1_irb_1 sec_3 no opinion is expressed as to the tax treatment of any conditions existing at the time of or effects resulting from the transaction that are not specifically covered by the above ruling in particular no opinion is expressed as to whether taxpayer qualifies to use the alternative_cost_method this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent 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 the rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination enclosed is a copy of this letter_ruling showing the deletions proposed to be made in the letter when it is disclosed under sec_6110 we are sending a copy of this letter to the appropriate operating division director sincerely ______________________________ bridget e tombul branch chief branch office of the associate chief_counsel income_tax accounting- enc copy for sec_6110 purposes


uil release number release date legend org organization name org address department of the treasury internal_revenue_service fulton street floor brooklyn ny date address address person to contact contact telephone number in reply refer to te_ge review staff ein last date for filing a petition with the tax_court dear this is a final adverse determination as to your exempt status under sec_501 of the internal_revenue_code our adverse determination was made for the following reasons exemption from income_tax is a matter of legislative grace and taxpayers have the burden of establishing their entitlement to exemptions sec_6033 requires organizations exempt from tax to keep such records and render such statements as are required by such rules and regulations as the secretary may prescribe sec_1_6033-2 h requires organizations exempt from tax to submit such additional information as may be required by the internal_revenue_service for the purpose of inquiring into the organization’s exempt status despite numerous requests to you to provide information to conduct an examination of your form_990-pf for the year ended 20xx no requested information has been provided to us based upon the above we are revoking your organization's exemption from federal_income_tax under sec_501 of the internal_revenue_code retroactively to january 20xx contributions to your organization are no longer deductible under sec_170 of the internal_revenue_code you are required to file federal_income_tax returns on form_1120 these returns should be filed with the appropriate service_center for the year ending december 20xx and for all years thereafter processing of income_tax returns and assessment of any taxes due will not be delayed should a petition for declaratory_judgment be filed under sec_7428 of the internal_revenue_code if you decide to contest this determination in court you must initiate a suit for declaratory_judgment in the united_states tax_court the united_states claim court or the district_court of the united_states for the district of columbia before the day after the date this determination was mailed to you contact the clerk of the appropriate court for the rules for initiating suits for declaratory_judgment you also have the right to contact the office_of_the_taxpayer_advocate however you should first contact the person whose name and telephone number are shown above since this person can access your tax information and can help you get answers you can call and ask for taxpayer_advocate assistance or you can contact the taxpayer_advocate from the site where the tax_deficiency was determined by calling _ or writing to internal_revenue_service ' taxpayer_advocate assistance cannot be used as a substitute for established irs procedures formal appeals processes etc the taxpayer_advocate is not able to reverse legal or technically correct_tax determinations nor extend the time fixed by law that you have to file a petition in the united_states tax_court the taxpayer_advocate can however see that a tax matter that may not have been resolved through normal channels gets prompt and proper handling we will notify the appropriate state officials of this action as required by sec_6104 of the internal_revenue_code if you have any questions please contact the person whose name and telephone number are shown in the heading of this letter sincerely yours marsha a ramirez director eo examinations form 886a name of taxpayer org department of the treasury - internal_revenue_service explanation of items schedule no or exhibit year period ended 20xx12 legend org organization name co-2 president president company xx date website website xyz state co-1 company secretary secretary issue should the tax exempt status of org be revoked as of january 20xx for failing to provide the requested information to the internal_revenue_service should the tax exempt status of org be revoked as of january 20xx for failing to file the annual form_990-pf facts org was incorporated in the state of xyz on october 19xx in july of 19xx they filed a form_1023 with the internal_revenue_service requesting tax exempt status under sec_501 of the internal_revenue_code according to the articles of incorporation which were filed with internal_revenue_service as part of the form_1023 application_for exemption the organization was formed with the purpose to operate manage and do everything normally associated with establishing an educational and charitable youth services and community services center the corporation shall offer programs and services developed for children teens and ‘ulture through young adults including but not limited to teaching the appreciation of history music dance arts and crafts workshops programs will also be offered to promote education and enhance job development skills by the presentation of workshops seminars and lectures in the areas of job opportunities personal grooming and social works skills obtaining a high school or general education diploma and personal presentation techniques on august 19xx org was granted tax exemption under internal_revenue_code sec_501 the determination_letter stated that because the organization was a newly created entity a final_determination of their foundation status under sec_509 of the code would not be made at that time the organization was expected to be a publicly_supported_organization described in sec_509 and sec_170 during the advance_ruling period the organization would be treated as a publicly_supported_organization and not a private_foundation the advance_ruling period was set from october 19xx through december 19xx as following the conclusion of their advance_ruling period org did not file form_8734 required asa result the organization was reclassified to a private_foundation as of january 19xx research conducted of internal_revenue_service records indicated that org has never filed an information_return since their incorporation a revenue_officer was initially assigned the case in order to secure any delinquent returns the revenue_officer initially made contact with the executive officer executive officer on october 20xx executive officer informed the department of the treasury - internal revenue eee form 886-a rev service page -1- form 886a name of taxpayer department of the treasury - internal_revenue_service schedule no or exhibit year period ended explanation of items org 20xx12 legend org organization name co-2 president president company xx date xyz state co-1 company website website secretary secretary issue should the tax exempt status of org be revoked as of january 20xx for failing to provide the requested information to the internal_revenue_service should the tax exempt status of org be revoked as of january 20xx for failing to file the annual form_990-pf facts org was incorporated in the state of xyz on october 19xx inj uly of 19xx they filed a form_1023 with the internal_revenue_service requesting tax exempt status under section c of the internal_revenue_code according to the articles of incorporation which were filed with internal_revenue_service as part of the form_1023 application_for exemption the organization was formed with the purpose to operate manage and do everything normally associated with establishing an educational and charitable youth services and community services center the corporation shall offer programs and services developed for children teens and young adults including but not limited to teaching the appreciation of latin culture through history music dance arts and crafts workshops programs will also be offered to promote education and enhance job development skills by the presentation of workshops seminars and lectures in the areas of job opportunities personal grooming and social works skills obtaining a high school or general education diploma and personal presentation techniques on august 19xx org was granted tax exemption under internal_revenue_code section c the determination_letter stated that because the organization was a newly created entity a final_determination of their foundation status under sec_509 of the code would not be made at that time the organization was expected to be a publicly_supported_organization described in sec_509 and sec_170 during the advance_ruling period the organization would be treated as a publicly_supported_organization and not a private_foundation the advance_ruling period was set from october 19xx through december 19xx following the conclusion of their advance_ruling period org did not file form_8734 as required asa result the organization was reclassified to a private_foundation as of january 19xx research conducted of internal_revenue_service records indicated that org has never filed an information_return since their incorporation a revenue_officer was initially assigned the case in order to secure any delinquent returns the revenue_officer initially made contact with the executive officer executive officer on october 20xx executive officer informed the department of the treasury - internal revenue form 886-a rev service page -1- department of the treasury - internal_revenue_service explanation of items form 886a name of taxpayer org schedule no or exhibit year period ended 20xx12 revenue_officer that the power_of_attorney co-1 would prepare the delinquent returns the revenue_officer spoke to an individual at co-1 and it was indicated that co-1 only handled payroll issues the revenue_officer then spoke with secretary the secretary to set a deadline for securing the delinquent forms 990-pf the initial deadline was set for november 20xx and then extended to november 20xx the organization never submitted the requested delinquent forms 990-pf to the revenue_officer this case was then referred to examination in order to secure the delinquent forms 990-pf internal_revenue_service records indicated that the organization filed form sec_941 and w-2 through december 20xx mr executive officer the executive officer and ms secretary the secretary were issued w-2’s by the organization for the 20xx 20xx and 20xx calendar years executive officer received a total of dollar_figure dollar_figure and dollar_figure in wages respectively secretary received a total of dollar_figure dollar_figure and dollar_figure in wages respectively internal_revenue_service records also indicated that the organization received dollar_figure dollar_figure dollar_figure and dollar_figure from the city of xyz office of the comptroller during the periods ending december 20xx 20xx 20xx and 20xx further research conducted on website indicated that the organization was approved for a grant under the co-2 the contracts began on july 19xx and expired on june 20xx the first attempt to schedule an appointment was made on september 20xx using letter an information_document_request was included in the package mailed to the organization along with a copy of publication the organization did not respond to this request on october 20xx a second letter was sent certified mail the letter was returned unopened and stamped unclaimed by the post office additional letters were then sent on march 20xx april 20xx and november 20xx the letters were all sent certified mail the letters were once again returned to the service unopened and stamped unclaimed by the post office a message was left at the residence of secretary on march 20xx in which no phone call was returned on may 20xx a final adverse action letter was sent to the organization this letter stated that if we did not hear from the organization within seven days then adverse action would be proposed such as revocation of exempt status on may 20xx secretary had responded to the adverse action letter secretary indicated that as of june 20xx the organization no longer conducted any activities once the grant expired for the after school program conducted by the organization it was never renewed secretary stated that her ex-husband controlled the daily operations of the organization in addition there are no records available to examine secretary stated that she no longer has any contact with her ex-husband law sec_501 of the internal_revenue_code exempts from federal_income_tax organizations organized and operated exclusively for charitable educational and other exempt purposes department of the treasury - internal revenue form 886-a rev service page -2- 20xx12 form 886a name of taxpayer department of the treasury - internal_revenue_service schedule no or exhibit year period ended explanation of items org provided that no part of the organization's net_earnings inures to the benefit of any private_shareholder_or_individual sec_1_501_c_3_-1 provides that in order to be exempt as an organization described in sec_501 an organization must be both organized and operated exclusively for one or more of the purposes specified in such section if an organization fails to meet either the organizational_test or the operational_test it is not exempt internal_revenue_code sec_6001 provides that every person liable for any_tax imposed by the code or for the collection thereof shall keep adequate_records as the secretary of treasury or_his_delegate from time to time prescribe internal_revenue_code sec_6033 provides except as provided in sec_6033 every organization exempt from tax under sec_501 shall file an annual return stating specifically the items of gross_income receipts and disbursements and such other nformation for the purposes of carrying out the internal revenue laws as the secretary may by form or regulations prescribe and keep such records render under oath such statements make such other returns and comply with such rules and regulations as the secretary may from time to time prescribe sec_1_6001-1 in conjunction with sec_1_6001-1 provides that every organization exempt from tax under sec_501 and subject_to the tax imposed by sec_511 on its unrelated_business_income must keep such permanent books or accounts or records including inventories as are sufficient to establish the amount of gross_income deduction credits or other matters required to be shown by such person in any return of such tax such organizations shall also keep such books_and_records as are required to substantiate the information required by sec_6033 sec_1_6001-1 states that the books_or_records required by this section shall be kept at all times available for inspection by authorized internal revenue officers or employees and shall be retained so long as the contents thereof may become material in the administration of any internal revenue law sec_1_6033-1 provides that every organization which has established its right to exemption from tax whether or not it is required to file an annual return of information shall submit such additional information as may be required by the district_director for the purpose of enabling him to inquire further into its exempt status and to administer the provisions of subchapter_f sec_501 and the following chapter of the code and sec_6033 sec_1_6033-2 provides that every organization which is exempt from tax whether or not it is required to file an annual information_return shall submit such additional information as may be required by the internal_revenue_service for the purpose of inquiring into department of the treasury - internal revenue form 886-a rev service page -3- 20xx12 form 886a department of the treasury - internal_revenue_service schedule no or explanation of items exhibit year period ended name of taxpayer org its exempt status and administering the provisions of subchapter_f chapter of subtitle a of the code sec_6033 and chapter of subtitle d of the code revrul_59_95 1959_01_cb_627 concerns an exempt_organization that was requested to produce a financial statement and statement of its operations for a certain year however its records were so incomplete that the organization was unable to furnish such statements the service held that the failure or inability to file the required information_return or otherwise to comply with the provisions of sec_6033 and the regulations which implement it may result in the termination of the exempt status of an organization previously held exempt on the grounds that the organization has not established that it is observing the conditions required for the continuation of exempt status taxpayer’s position the organization has not stated whether they will agree or disagree to revocation governments position issue it is the government’s position that the tax exempt status of org under sec_501 of the internal_revenue_code should be revoked for failure to provide the information requested by the internal_revenue_service sec_1_6033-2 provides that every organization which is exempt from tax whether or not it is required to file an annual information_return shall submit such additional information as may be required by the internal_revenue_service for the purpose of inquiring into its exempt status and administering the provisions of subchapter_f chapter of subtitle a of the code sec_6033 and chapter of subtitle d of the code org did not file a form_990 when granted exemption as a public charity or a 990-pf when made a private_foundation for failing to file form_8734 at the end of their advance_ruling period the only information that the internal_revenue_service has received on the activities of the organization is their form_1023 application_for exemption however this does not provide any current information as to what org is currently doing the information_document_request mailed to the organization requested operational and financial information that would be used to determine that org continued to qualify for exemption under sec_501 of the internal_revenue_code as indicated by secretary the organization does not have any records to submit in accordance with the above cited provisions of the code and regulations under sec_6001 and sec_6033 organizations recognized as exempt from federal_income_tax must meet certain reporting requirements these requirements relate to the filing of a complete and accurate annual information and other required federal tax forms and the retention of records sufficient to determine whether such entity is operated for the purposes of which it was granted tax exempt status and to determine its liability for any unrelated_business_income department of the treasury - internal revenue form 886-a rev service page -4- form 886a name of taxpayer department of the treasury - internal_revenue_service schedule no or exhibit year period ended explanation of items org 20xx12 since the organization did not comply with the internal revenue service’s request for information and did not comply with sec_1_6033-2 we can not determine whether their activities are consistent with their exempt status under sec_501 of the internal_revenue_code since the organization does not meet the requirements of sec_1_501_c_3_-1 it is our position that their tax exempt status be revoked issue it is the government’s position that the tax exempt status of org under sec_501 of the internal_revenue_code should be revoked for failing to file their annual form_990-pf when required to do so internal_revenue_code sec_6033 states that except as provided in paragraph every organization_exempt_from_taxation under sec_501 a shall file an annual return internal_revenue_code sec_6033 states that the exceptions to file are a mandatory exceptions ii churches their integrated_auxiliaries and conventions or associations of churches any organization other than a private_foundation as defined in sec_509 described in subparagraph c the gross_receipts of which in each taxable_year are normally not more than dollar_figure or iii the exclusively religious activities of any religious_order b discretionary exceptions the secretary may relieve any organization required under paragraph to file an information_return from filing such a return where he determines that such filing is not necessary to the efficient administration of the internal revenue laws c certain organizations the organizations referred to in subparagraph a ii are- i ii iii iv v a religious_organization described in sec_501 an educational_organization described in sec_170 a charitable_organization or an organization for the prevention of cruelty to children and animals described in sec_501 if such organization is supported in whole or in part by funds contributed by the united_states or any state or political_subdivision thereof or is primarily supported by contributions of the general_public an organization described in sec_501 if such organization is operated supervised or controlled by or in connection with a religious_organization described in clause i an organization described in sec_501 and department of the treasury - internal revenue form 886-a rev service page -5- 20xx12 form 886a name of taxpayer department of the treasury - internal_revenue_service schedule no or exhibit year period ended explanation of items org vi an organization described in sec_501 if such organization is a corporation wholly owned by the united_states or any agency_or_instrumentality thereof or a wholly-owned subsidiary of such a corporation org did not meet any of the exceptions stated in sec_6033 of the internal_revenue_code a private_foundation is not excluded from filing a form_990-pf even if its gross_receipts in each taxable_year are normally not more than dollar_figure as per research conducted of internal_revenue_service records and the xyz city comptroller’s website the organization did receive this funds from december 20xx through december 20xx totaling dollar_figure information should have been reported to the internal_revenue_service on form_990-pf revrul_59_95 held that failure or inability to file the required information_return or otherwise to comply with the provision of sec_6033 of the internal_revenue_code and the regulations which implement it may result in the termination of the exempt status of an organization previously held exempt on the grounds that the organization has not established that it is observing the conditions required for the continuation of an exempt status using this revenue_ruling as precedent it is the government’s position that the tax exempt status of org under sec_501 of the internal_revenue_code should be revoked conclusion the tax exempt status of org under sec_501 of the internal_revenue_code should be revoked because the organization has not established that it is observing conditions required for the continuation of exempt status such as filing annual forms 990-pf information returns and failing to provide information that was requested from them by the internal_revenue_service the effective date of revocation is january 20xx the first day of the tax_year under examination the organization will be required to file form_1023 beginning in 20xx for all tax periods subsequent to the revocation of their tax exempt status department of the treasury - internal revenue form 886-a rev service page -6- tax_exempt_and_government_entities_division org address department of the treasury internal_revenue_service fulton street 5th floor brooklyn ny taxpayer_identification_number form tax_year s ended person to contact id number contact numbers telephone fax certified mail - return receipt requested dear we have enclosed a copy of our report of examination explaining why we believe revocation of your exempt status under sec_501 of the internal_revenue_code code is necessary if you accept our findings take no further action we will issue a final revocation letter if you do not agree with our proposed revocation you must submit to us a written request for appeals_office consideration within days from the date of this letter to protest our decision your protest should include a statement of the facts the applicable law and arguments in support of your position an appeals officer will review your case the appeals_office is independent of the director eo examinations the appeals_office resolves most disputes informally and promptly the enclosed publication the examination process and publication exempt_organizations appeal procedures for unagreed issues explain how to appeal an internal_revenue_service irs decision publication also includes information on your rights as a taxpayer and the irs collection process you may also request that we refer this matter for technical_advice as explained in if we issue a determination_letter to you based on technical_advice no publication further administrative appeal is available to you within the irs regarding the issue that was the subject of the technical_advice letter catalog number 34809f if we do not hear from you within days from the date of this letter we will process your case based on the recommendations shown in the report of examination if you do not -protest-this proposed determination within days from the date of this letter the irs will consider it to be a failure to exhaust your available administrative remedies sec_7428 of the code provides in part a declaratory_judgment or decree under this section shall not be issued in any proceeding unless the tax_court the claims_court or the district_court of the united_states for the district of columbia determines that the organization involved has exhausted its administrative remedies within the internal_revenue_service we will then issue a final revocation letter we will also notify the appropriate state officials of the revocation in accordance with sec_6104 of the code you have the right to contact the office_of_the_taxpayer_advocate taxpayer_advocate assistance is not a substitute for established irs procedures such as the formal appeals process the taxpayer_advocate cannot reverse a legally correct_tax determination or extend the time fixed by law that you have to file a petition in a united_states court the taxpayer_advocate can however see that a tax matter that may not have been resolved through normal channels gets prompt and proper handling you may call toll-free and ask for taxpayer_advocate assistance if you prefer you may contact your local taxpayer_advocate at if you have any questions please call the contact person at the telephone number shown in the heading of this letter the most convenient time to call if we need to contact you if you write please provide a telephone number and thank you for your cooperation sincerely marsha a ramirez director eo examinations enclosures publication publication report of examination letter catalog number 34809f


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 corp b04 plr-130165-17 date april legend parent -------------------------------------------------------------------- ------------------------------------------------------------- --------------------------- us sub x -------------------------------------------------------------------- ------------------------------------------------------------- ---------------------------------------- --------------------------------- us sub y -------------------------------------------------------------------- ------------------------------------------------------------- foreign_partnership -------------------------------------------------------------------------- ------------------------------------------------------------- ------------------------------------------- foreign de ----------------------------------------------------------------------------- ------------------------------------------------------------ ------------------------------------------------------ foreign sub x ------------------------------------------------------------------------ ---------------------------------------------------- --------------------------------------------- foreign sub y ------------------------------------ plr-130165-17 ----------------------------------------------------------------------------- ---------------------------------------------------- target ------------------------------------------------------------------------ ------------------------------------------------------------ -------------------------------------------- target sub ------------------------------------------------------------------------ ------------------------------------------------------------ ------------------------------ target sub ------------------------------------------------------------------ ---------------------------------------------------- ---------------------------------------------- target sub ----------------------------------------------------------------- --------------------------------------------------- ------------------------------------------ target sub ----------------------------------------------------------------------------- --------------------------------------------------- ------------------------------------ target sub ------------------------------------------------------------------ --------------------------------------------------- ------------------------------- target sub ------------------------------ ----------------------------------------------------------------- --------------------------------------------------- country x ------------------ seller a ------------------------------------------------------------------------ --------------------------------------------------- ------------------------------------------- -------------------------------- seller b ----------------------------------------------------------------------------- --------------------------------------------------- seller c ---------------------------------------------------------------- --------------------------------------------------- --------------------------------------------------- plr-130165-17 date a date b --------------------------- ---------------------------- corporate officer tax professional dear -------------- -------------------------------------------------------------------------- --------------------------------------------------------------------------------- ---------------------------------------------- this letter responds to a letter dated date submitted on behalf of parent the common parent of the consolidated_group which includes us sub y the united_states_shareholder of foreign sub y requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations to file an election parent is requesting an extension to file a sec_338 election under sec_338 with respect to foreign sub y's acquisition of the stock of target a country x corporation and the deemed acquisitions of the stock of target sub though target sub all foreign_corporations sometimes hereinafter referred to as the election on date a additional information was received in letters dated date date and date the material information is summarized below parent is the common parent of a consolidated_group which included its wholly owned subsidiary us sub x and us sub x's wholly owned subsidiary us sub y us sub x and us sub y together owned all the stock of foreign_partnership an entity taxable as a partnership for united_states federal_income_tax purposes foreign_partnership owned all of the interests of foreign de an entity disregarded as separate from its owner for united_states federal_income_tax purposes foreign de owned all the stock of foreign sub x which owned all the stock of foreign sub y on date a foreign sub y acquired all of the stock of target from seller a seller b and seller c collectively the sellers in exchange for cash target owned all the stock of target sub which owned all the stock of target sub and target sub target sub owned all the stock of target sub and target sub target sub owned all the stock of target sub parent has represented that foreign sub y's acquisition of the stock of target qualified as a qualified_stock_purchase as defined in sec_338 parent has also represented that foreign sub y is a controlled_foreign_corporation as defined in sec_957 taking into account sec_953 and is not required under sec_1_6012-2 other than sec_1_6012-2 to file a united_states income_tax return for its taxable_year that includes the acquisition_date parent as common parent of the consolidated_group which included us sub y the united_states_shareholder of the foreign purchasing_corporation foreign sub y intended to file the election the election was due on date b but for various reasons a valid election was not filed after the due_date for the election it was discovered that plr-130165-17 the election had not been filed subsequently this request was submitted under sec_301_9100-3 for an extension of time to file the election parent has represented that it is not seeking to alter a return position for which an accuracy-related_penalty has been or could be imposed under sec_6662 at the time parent requested relief and for which the new position requires or permits a regulatory election for which relief is requested parent has also represented that all united_states federal_income_tax and information returns have been timely and consistently filed as if a sec_338 election was made and nothing has been reported inconsistently sec_338 permits certain stock purchases to be treated as asset acquisitions if the purchasing_corporation makes or is treated as having made a sec_338 election or a sec_338 election and the acquisition is a qualified_stock_purchase pursuant to sec_1_338-2 the statement of sec_338 election may be filed by the united_states_shareholders of a foreign purchasing_corporation that is a controlled_foreign_corporation if certain requirements are met under sec_301_9100-1 the commissioner has discretion to grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make a regulatory election sec_301_9100-1 sec_301_9100-2 provides automatic extensions of time for making certain elections requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 in this case the time for filing the election is fixed by the regulations ie sec_1_338-2 therefore the commissioner has discretionary authority under sec_301_9100-3 to grant an extension of time for parent to file the election provided parent acted reasonably and in good_faith the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and granting relief will not prejudice the interests of the government information affidavits and representations submitted by parent and corporate officer tax professional explain the circumstances that resulted in the failure to timely file a valid election the information establishes that parent reasonably relied on a qualified_tax professional who failed to make or advise parent to make the election plr-130165-17 and that the request for relief was filed before the failure to make the election was discovered by the internal_revenue_service see sec_301_9100-3 and v based on the facts and information submitted including the representations made we conclude that parent has shown it acted reasonably and in good_faith the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and granting relief will not prejudice the interests of the government accordingly an extension of time is granted under sec_301_9100-3 until days from the date on this letter for parent to file the election with respect to foreign sub y's acquisition of the stock of target and the deemed acquisitions of the stock of target sub though target sub as described above within days of the date on this letter parent must file the election on form_8023 in accordance with sec_1_338-2 and e and the instructions to the form a copy of this letter must be attached to form_8023 within days of the date on this letter all relevant parties must amend any relevant return to attach a copy of this letter and a copy of form_8883 alternatively taxpayers filing their returns electronically may satisfy the requirement of attaching a copy of this letter by attaching a statement to their return that provides the date on and control number of the letter_ruling parent must also deliver written notice of the election and a copy of form sec_8023 and their attachments and instructions to united_states persons selling or holding stock in target see sec_1_338-2 the above extension of time is conditioned on the taxpayers' parent's consolidated group’s foreign partnership's foreign sub x's foreign sub y's target’s and target sub through target sub 6's tax_liability if any being not lower in the aggregate for all years to which the election applies than it would have been if the election had been timely made taking into account the time_value_of_money no opinion is expressed as to the taxpayers’ tax_liability for the years involved a determination thereof will be made by the applicable director’s office upon audit of the federal_income_tax returns involved we express no opinion as to whether the acquisition of the target stock qualifies as a qualified_stock_purchase under sec_338 or any other tax consequences arising from the election in addition we express no opinion as to the tax consequences of filing the election late under the provisions of any other section of the code and regulations or as to the tax treatment of any conditions existing at the time of or resulting from filing the election late that are not specifically set forth in the above ruling for purposes of granting relief under sec_301_9100-3 we relied on certain statements and representations plr-130165-17 made by the taxpayers and corporate officer tax professional however the director should verify all essential facts in addition notwithstanding that an extension is granted under sec_301_9100-3 to file the election penalties and interest that would otherwise be applicable if any continue to apply this letter is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent pursuant to the power_of_attorney on file in this office copies of this letter are being sent to your authorized representatives sincerely _________________________ ken cohen senior technician reviewer branch office of associate chief_counsel corporate