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-112736-08 date date legend oldco --------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------- ------------------------------------------------ newco ---------------------------------------------------------------------------- -------------------------------------------------------------------- ------------------------------------------------------ acquiror ---------------------------------------------------------------------------- -------------------------------------------------------------------- --------------------- llc -------------------------------------------------------------------------------------------- -------------------------------------------------------------------- ------------------------------------------ llc --------------------------------------------- -------------------------------------------------------------------------------------------- -------------------------------------------------------------------- llc -------------------------------------------------------------------------------------------- -------------------------------------------------------------------- --------------------------------------- sub ---------------------------------------------------------------------------- -------------------------------------------------------------------- ----------------------------------- sub ---------------------------------------------------------------------------- -------------------------------------------------------------------- ------------------------ plr-112736-08 type membership type membership business a business b date a a b c d e f g h i state y ----------------------------------------------------------------------- ------------------ ----------------------------------------------------------------------- --------------------------------- ------------------------------------------------------------------------ ------------------------------------------------------------------------ ------------------------------------------------------------------------ ------------------------------ ------------------------------------------------------------------------ ---------------------- ------------------------ ---- -- ----- ---- --------------- ------------- ---- ------------- ------ ------------- plr-112736-08 dear --------------- this letter responds to your date request for rulings on certain federal_income_tax consequences of a proposed transaction the information submitted in that request and in later correspondence is summarized below the rulings contained in this letter are based on facts and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by the appropriate party this office has not verified any of the materials submitted in support of the request for rulings verification of the information representations and other data may be required as part of the audit process summary of facts oldco is a non-stock not-for-profit corporation which files a consolidated federal_income_tax return as a subchapter_c_corporation oldco is engaged in business a through llc oldco directly owns a of llc the remaining b of llc is owned by sub a wholly owned subsidiary of oldco oldco has issued and outstanding c type memberships and d type memberships together the oldco memberships each oldco membership entitles the member to elect directors and to vote on any other matter at any meeting of oldco members and to share with other then-existing members in any liquidating_distribution in the event of any voluntary or involuntary liquidation dissolution or winding up of oldco’s affairs as provided for in oldco’s organizational documents additionally the holders of the type memberships are entitled to access certain facilities of oldco acquiror is a widely-held publicly-traded corporation acquiror is engaged in business b through its various subsidiaries acquiror currently has approximately e shares of acquiror common_stock that are issued and outstanding for valid business reasons oldco and acquiror have agreed to merge pursuant to a plan of merger dated as of date a the merger agreement oldco and its subsidiaries will engage in a series of transactions including the demutualization of oldco these transactions and the merger of oldco and acquiror will occur on or about the same date proposed transaction to achieve their business objectives oldco and acquiror have agreed to consummate the following steps collectively the proposed transaction i sub will merge with and into oldco the sub merger plr-112736-08 ii oldco will merge into newco a for-profit stock corporation wholly owned and created by oldco in anticipation of the merger the demutualization merger in the demutualization merger the oldco memberships will be converted into shares of newco common_stock newco common_stock as follows each issued and outstanding type membership will be converted into the right to receive a number of shares of newco common_stock that is the same as the number of shares of common_stock of the acquiror acquiror common_stock worth approximately dollar_figuref calculated using the volume-weighted average price of acquiror common_stock during the g consecutive trading days immediately preceding the acquiror oldco merger as defined below the pre-closing period and each issued and outstanding type membership will be converted into the right to receive a number of shares of newco common_stock that is the same as the number of shares of acquiror common_stock worth approximately dollar_figureh calculated using the volume-weighted average price of acquiror common_stock during the pre-closing period iii simultaneously with the demutualization merger llc which after step i above will be a disregarded_entity for federal_income_tax purposes will merge into llc a newly created limited_liability_company that is a disregarded_entity for federal_income_tax purposes iv immediately after the demutualization merger newco will merge into llc a newly created limited_liability_company wholly-owned by acquiror that is disregarded for federal_income_tax purposes the acquiror oldco merger in the acquiror oldco merger each share of newco common_stock will be converted into one share of acquiror common_stock the initial consideration however cash will be paid in lieu of issuing fractional shares of acquiror common_stock in addition under specified circumstances the former oldco members will be entitled to receive additional shares of acquiror common_stock the contingent consideration upon the sale of certain assets held by oldco and its subsidiaries the unwanted assets because there exists uncertainty regarding the fair_market_value of the unwanted assets the parties to the merger agreement agreed to provide for the contingent consideration the amount of which will be determined by reference to x the net_proceeds from the sale of the unwanted assets as determined pursuant to the merger agreement if such sale occurs within a specified time period of not more than approximately i years and certain other conditions are satisfied and y the volume-weighted average price of acquiror common_stock over a measurement_period specified in the merger agreement the terms of the contingent consideration are intended to comply with the guidelines established in dollar_figure of revproc_84_42 1984_1_cb_521 specifically pursuant to the merger agreement all acquiror common_stock will be issued within five years of the acquiror oldco merger the uncertainty regarding the value of the unwanted assets constitutes a business reason for not issuing all the plr-112736-08 acquiror common_stock immediately the maximum number of shares of acquiror common_stock which may be issued as contingent consideration is stated at least of the maximum number of shares of acquiror common_stock which may be issued pursuant to the acquiror oldco merger is issued at the effective time of the merger the merger agreement prohibits assignment of the contingent consideration the right to contingent consideration can give rise to the receipt only of additional shares of acquiror common_stock the issuance of the contingent consideration is dependent on a successful sale of the unwanted assets ie an event the occurrence or non-occurrence of which is not within the control of shareholders such stock issuance will not be triggered by the payment of additional tax or reduction in tax paid as a result of a service audit of the shareholders or the corporation and the mechanism for the calculation of the continent consideration to be issued is objective and readily ascertainable v following the above-described transactions acquiror may transfer all of the membership interests in llc to sub a direct wholly-owned subsidiary of acquiror representations the following representations are made by oldco with respect to the sub merger a oldco on the date of the adoption of the merger agreement and at all times until the effective time of the sub merger will be the owner of at least of the single outstanding class of sub stock b no shares of sub stock will have been redeemed during the three years preceding the adoption of the merger agreement c all distributions from sub to oldco pursuant to the merger agreement will be made within a single taxable_year of sub d sub will retain no assets following the sub merger e the stock of sub1 will be cancelled and sub will cease to exist at the effective time of the sub merger f sub will not have acquired assets in any nontaxable_transaction at any time except for acquisitions occurring more than years prior to the adoption of the merger agreement plr-112736-08 g no assets of sub have been or will be disposed of either by sub or oldco except for i dispositions in the ordinary course of business or ii dispositions occurring more than three years prior to the adoption of the merger agreement h the sub merger will not be preceded or followed by the reincorporation in or transfer or sale to a recipient corporation recipient of any of the businesses or assets of sub if persons holding directly or indirectly more than in value of the sub stock also hold directly or indirectly more than in value of the stock in recipient for purposes of this representation ownership will be determined by application of the constructive_ownership rules of sec_318 as modified by sec_304 i prior to the adoption of the merger agreement no assets of sub will have been distributed in_kind transferred or sold to oldco except for i transactions occurring in the normal course of business and ii transactions occurring more than three years prior to the adoption of the merger agreement j the fair_market_value of the assets of sub will exceed its liabilities both at the date of the adoption of the merger agreement and immediately prior to the effective time of the sub merger k there is no intercorporate debt existing between oldco and sub and none has been cancelled forgiven or discounted except for transactions that occurred more than three years prior to the adoption of the merger agreement l oldco is not an organization that is exempt from federal_income_tax under sec_501 or any other provision of the code m all other transactions undertaken contemporaneously with in anticipation of in conjunction with or in any way related to the sub merger have been fully disclosed the following representations are made by oldco with respect to the demutualization merger n the fair_market_value of the newco common_stock received by each oldco member will be approximately equal to the fair_market_value of the oldco membership surrendered in the demutualization merger o immediately following consummation of the demutualization merger the oldco members will own all outstanding shares of newco common_stock and will own such stock solely by reason of their ownership of the oldco memberships immediately prior to the demutualization merger plr-112736-08 p at the time of the demutualization merger oldco will not have outstanding any warrants options convertible securities or any other type of right pursuant to which any person could acquire membership interests in oldco q immediately before the demutualization merger newco will not be engaged in any business activity and will hold no assets except for nominal assets necessary for the purpose i of paying incidental_expenses and ii for maintaining newco’s status under state y law r immediately after the demutualization merger newco will hold all of the assets held by oldco immediately prior to the demutualization merger except for the assets used to pay expenses_incurred in connection with the demutualization merger no assets will be distributed in the demutualization merger assets used to pay expenses will constitute less than one percent of the fair_market_value of the net assets of oldco immediately prior to the demutualization merger s transaction newco has no plan or intention to reacquire any of its stock issued in the t the liabilities of oldco assumed by newco were incurred by oldco in the ordinary course of its business and are associated with the assets transferred u oldco members will pay their respective expenses if any incurred in connection with the transaction v oldco is not under the jurisdiction of a court in a title_11_or_similar_case within the meaning of sec_368 w none of the compensation received by any oldco member who is also an employee of oldco member-employee will be separate consideration for or allocable to any of their oldco memberships none of the shares of newco common_stock received by any member-employee will be separate consideration for or allocable to any employment agreement and the compensation paid to any member-employee will be for services actually rendered and will be commensurate with amounts paid to third parties bargaining at arm’s length for similar services the following representations are made by oldco and acquiror with respect to the acquiror oldco merger for purposes of these representations acquiror unit shall mean acquiror and all disregarded entities the assets of which are treated as owned by acquiror for federal_income_tax purposes and newco unit shall mean newco and all disregarded entities the assets of which are treated as owned by newco for federal_income_tax purposes plr-112736-08 x the fair_market_value of the acquiror common_stock received by each shareholder of newco will be approximately equal to the fair_market_value of newco common_stock surrendered in the exchange y at least of the proprietary interest in newco will be exchanged for shares of acquiror common_stock and will be preserved within the meaning of sec_1 e z neither acquiror unit nor any person related to acquiror unit within the meaning of sec_1_368-1 has any plan or intention to reacquire any acquiror common_stock issued in the transaction in exchange for any consideration other than acquiror common_stock aa acquiror unit has no plan or intention to sell or otherwise dispose_of any of the assets of newco acquired in the transaction except for dispositions made in the ordinary course of business or transfers described in sec_368 or described in sec_1_368-2 bb the liabilities of newco unit assumed by acquiror unit were incurred by newco unit in the ordinary course of its business and are associated with the assets transferred cc following the transaction acquiror unit will continue the historic_business of newco unit or use a significant portion of newco unit’s historic_business_assets in a business dd acquiror unit newco unit and the shareholders of newco will pay their respective expenses if any incurred in connection with the transaction except that expenses_incurred in connection with the filing printing and mailing of the proxy statement prospectus will be shared equally by oldco and acquiror ee there is no intercorporate indebtedness existing between newco unit and acquiror unit ff no parties to the transaction are investment companies as defined in sec_368 and iv gg neither newco nor any disregarded_entity within the meaning of sec_1 b i a the assets of which are treated as owned by newco for federal_income_tax purposes is under the jurisdiction of a court in a title_11_or_similar_case within the meaning of sec_368 hh the fair_market_value of the assets of newco unit to be transferred to acquiror unit will equal or exceed the sum of the liabilities assumed by acquiror unit plr-112736-08 the total adjusted_basis of the assets of newco unit transferred to acquiror unit will equal or exceed the sum of the liabilities assumed by acquiror unit ii none of the compensation received by any newco shareholder who is also an employee of newco unit shareholder-employee will be separate consideration for or allocable to any of their shares of newco common_stock none of the shares of acquiror common_stock received by any shareholder-employee will be separate consideration for or allocable to any employment agreement and the compensation paid to any shareholder-employee will be for services actually rendered and will be commensurate with amounts paid to third parties bargaining at arm’s length for similar services jj the aquiror oldco merger will be effected pursuant to a statute as a result of the operation of which the following events will occur simultaneously at the effective time of the merger i all of the assets other than those distributed in the transaction and liabilities except to the extent satisfied or discharged in the transaction of each member of newco unit will become the assets and liabilities of one or more members of acquiror unit and ii newco will cease its separate legal existence for all purposes rulings based solely on the information submitted and the representations set forth above we rule as follows sub merger sec_332 sec_337 no gain_or_loss will be recognized by oldco on the sub merger no gain_or_loss will be recognized by sub on the sub merger oldco’s basis in each asset received from sub will be the same as the basis of that asset in the hands of sub immediately before the sub merger sec_334 oldco’s holding_period in each asset received from sub as a result of the sub merger will include the period during which that asset was held by sub sec_1223 oldco will succeed to and take into account the items of sub described in sec_381 subject_to the conditions and limitations specified in sec_381 sec_382 sec_383 and sec_384 and the regulations thereunder sec_381 and sec_1_381_a_-1 plr-112736-08 the demutualization merger the demutualization merger will constitute a reorganization within the meaning of sec_368 oldco and newco will each be a party to the reorganization within the meaning of sec_368 no gain_or_loss will be recognized by oldco on the transfer of assets to newco in the exchange for newco stock and newco’s assumption of oldco’s liabilities pursuant to the demutualization merger sec_361 and sec_357 newco will not recognize any gain_or_loss upon the receipt of the assets of oldco and the assumption of the liabilities of oldco pursuant to the demutualization merger sec_1032 the basis of oldco’s assets in the hands of newco will be the same as the basis of such assets in the hands of oldco immediately before the demutualization merger sec_362 the holding_period of oldco’s assets in the hands of newco will include the period during which oldco held such assets sec_1223 no gain_or_loss will be recognized by oldco upon the distribution to the oldco members of the newco stock sec_361 no gain_or_loss will be recognized by and no amount will be included in the income of oldco members upon their exchange of oldco memberships for shares of newco common_stock sec_354 the basis of the newco common_stock received by each oldco member in the demutualization merger will be the same as the basis of the oldco membership for which they are exchanged sec_358 the holding_period of the newco common_stock received in the demutualization merger will include the holding_period of the oldco membership surrendered in exchange therefor provided the oldco membership was held as a capital_asset on the date of the exchange sec_1223 the acquiror oldco merger provided that the acquiror oldco merger qualifies as a statutory merger the proposed merger of newco into llc will qualify as a reorganization within the meaning of sec_368 newco and acquiror will each be a party to the reorganization within the meaning of sec_368 plr-112736-08 newco will not recognize gain_or_loss upon the transfer of the assets of the newco unit to acquiror unit solely in exchange for acquiror common_stock and the assumption_of_liabilities by acquiror unit sec_361 and sec_357 acquiror will not recognize gain_or_loss upon acquiror unit’s receipt of newco unit’s assets in exchange for shares of acquiror common_stock sec_1032 the basis of newco unit’s assets in the hands of acquiror unit will be the same as the basis of such assets in the hands of newco unit immediately before the acquiror oldco merger sec_362 the holding_period of newco unit’s assets in the hands of acquiror unit will include the period during which newco unit held such assets sec_1223 the possible contribution by acquiror of its membership interests in llc to sub after the acquiror oldco merger will not prevent the acquiror oldco merger from qualifying as a reorganization under sec_368 sec_368 except to the extent any portion of acquiror common_stock is treated as unstated_interest under sec_483 no gain_or_loss will be recognized by newco shareholders who receive solely acquiror common_stock in exchange for their newco common_stock sec_354 the basis of acquiror common_stock received by newco shareholders will be the same as the basis of the newco common_stock surrendered in exchange therefore sec_358 before the issuance of the contingent consideration or the determination that no contingent consideration will be payable the interim basis of the acquiror common_stock received in the exchange by the newco shareholders not including that portion of each share if any representing interest will be determined pursuant to sec_358 as though the maximum number of shares to be issued not including that portion of each share if any representing interest has been received by the newco shareholders rev_proc sec_2 c b the holding_period of acquiror common_stock including any shares of acquiror common_stock to be received as contingent consideration but excluding that portion of each share if any representing interest received by shareholders of newco will include the period during which the newco common_stock surrendered in exchange therefor was held provided the newco common_stock was held as a capital_asset on the date of the exchange sec_1223 newco shareholders who receive cash in lieu of fractional shares of acquiror common_stock will recognize gain_or_loss measured by the difference between the basis of the fractional share received as determined above and the amount of cash received sec_1001 if the fractional share qualifies as a capital_asset in the hands of the plr-112736-08 shareholder the gain_or_loss will be a capital_gain or loss subject_to the provisions of subchapter_p of chapter of the code because no payment other than the contingent consideration is due or possibly due after the date of the acquiror oldco merger no portion of the contingent consideration will be treated as unstated_interest under sec_483 if payment of the contingent consideration pursuant to the merger agreement is made not more than one year after the date of the acquiror oldco merger in the event a portion of the contingent consideration is treated as unstated_interest under sec_483 the amount treated as interest is equal to the excess of i the fair_market_value of the contingent consideration paid to a newco shareholder determined as of the date of the payment the fmv amount over ii the present_value of the fmv amount the present_value of the fmv amount is determined by discounting the fmv amount from the date paid to the newco shareholder to the date of the acquiror oldco merger the discount rate used to determine the present_value of the fmv amount is the appropriate applicable_federal_rate afr under sec_1_1274-4 for a debt_instrument if the debt_instrument were issued on the date of the acquiror oldco merger and matured on the date of the payment to the newco shareholder sec_1_483-4 and sec_1_1275-4 caveats no opinion is expressed about the federal tax treatment of the proposed transaction under other provisions of the code and regulations or on the tax treatment of any conditions existing at the time of or effects resulting from the proposed transaction that are not specifically covered by the above rulings procedural statements 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 a copy of this letter must be attached to any income_tax return to which it is relevant alternatively a taxpayer filing its return electronically may satisfy this requirement by attaching a statement to the return that provides the date and control number of this letter_ruling plr-112736-08 pursuant to a power_of_attorney on file in this office a copy of this letter_ruling will be sent to your authorized representatives sincerely __________________________ richard k passales senior counsel branch office of associate chief_counsel corporate cc


t c memo united_states tax_court thomas christopher broome petitioner v commissioner of internal revenue respondent docket no filed date thomas christopher broome pro_se john f driscoll for respondent memorandum findings_of_fact and opinion vasquez judge on date respondent issued a notice of final_determination disallowing petitioner’s request for abatement of interest on income_tax liabilities for and the sole issue for decision is whether respondent’s decision pursuant to section not to abate assessments of interest relating to petitioner’s and taxable years was an abuse_of_discretion findings_of_fact some of the facts have been stipulated and are so found the stipulation of facts and the attached exhibits are incorporated herein by this reference at the time he filed the petition petitioner resided in mississippi petitioner was one of two shareholders in t c broome construction co inc broome construction an s_corporation petitioner owned percent of broome construction petitioner filed his and federal_income_tax returns on date and respectively the internal_revenue_service irs audited broome construction’s returns for the and taxable years in date the audit included a review of petitioner’s and returns on or about date the examining agent sent a proposed final examination_report to petitioner regarding his and returns petitioner filed a request for consideration with the irs office of appeals on or about date on date petitioner signed a form_872 consent to extend the time to all section references are to the internal_revenue_code in effect for the years in issue unless otherwise indicated and all rule references are to the tax_court rules_of_practice and procedure assess tax which extended the period to assess tax for until date appeals officer penny young ms young received the case on date ms young worked on the case for years and experienced some delay in processing the appeal one delay resulted from a tropical storm in the area ms young had to travel from new orleans louisiana to mobile alabama to meet with petitioner and his representatives regarding the determinations therefore the meetings occurred roughly every few months on at least one occasion petitioner’s representatives’ failure to attend the meeting resulted in rescheduling the longest delay resulted from waiting for records to be sent from petitioner and his representatives to ms young so she could process petitioner’s appeal as a result of the delays ms young requested three more form sec_872 while processing petitioner’s appeal petitioner signed his second form_872 on date extending the period to assess tax for until date petitioner’s representative signed the third form_872 on date extending the period to assess tax for and until date petitioner signed the fourth and final form_872 on date extending the period to assess tax for and until date ms young mailed the last form_872 to petitioner before date but did not receive the signed form_872 back until january of in date petitioner and respondent reached a tentative settlement agreement for which settlement documents were prepared petitioner signed a form 870-ad offer to waive restrictions on assessment and collection of tax_deficiency and to accept overassessment with respect to his personal income_tax_liability determination for taxable years and on date ms young received the signed form 870-ad on date respondent’s review of the form 870-ad concluded in date and respondent officially closed petitioner’s case respondent assessed the deficiencies for and on date on date respondent credited overpayments from and to petitioner’s balance for and resulting from the assessment of deficiencies thereafter petitioner’s outstanding balance was zero on date petitioner filed a form_843 claim_for_refund and request for abatement for his taxable years and respondent did not act on this request for abatement of interest petitioner filed another form_843 on date in june of respondent assigned irs examiner patricia wood ms wood to review the request petitioner filed on date ms wood reviewed petitioner’s date request for abatement of interest and respondent issued an irs letter do tentatively denying the date request on date petitioner failed to respond to the irs letter do and respondent issued a final_determination letter on date i sec_6404 opinion pursuant to sec_6404 the commissioner may abate the assessment of interest in two situations when a deficiency is attributable to an error or delay by an officer_or_employee of the irs in performing a ministerial_act or when interest is assessed on any payment of certain taxes including income_tax to the extent that an error or delay in such payment is attributable to an officer_or_employee of the irs being erroneous or dilatory in performing a ministerial_act an error or delay by an officer_or_employee of the irs shall be taken into account only if no significant aspect of such error or delay can be attributed to the taxpayer involved and after the irs ha sec_2 in sec_6404 was amended by the taxpayer bill of right sec_2 publaw_104_168 110_stat_1457 to permit the commissioner to abate the assessment of interest attributable to irs errors or delays in performing both managerial and ministerial acts the amendment applies to interest accruing with respect to deficiencies for taxable years beginning after date and therefore does not apply to the matter before us contacted the taxpayer in writing with respect to such deficiency or payment id a ministerial_act is a procedural or mechanical act that does not involve the exercise of judgment or discretion and that occurs during the processing of a taxpayer’s case after all prerequisites to the act such as conferences and review by supervisors have taken place sec_301_6404-2t b temporary proced admin regs fed reg date a decision concerning the proper application of federal tax law or other federal or state law is not a ministerial_act id even where errors or delays are present the commissioner’s decision to abate interest remains discretionary see sec_6404 mekulsia v commissioner tcmemo_2003_138 affd 389_f3d_601 6th cir when congress enacted sec_6404 it did not intend the provision to be used routinely to avoid payment of interest rather congress intended abatement of interest to be used only where failure to do so would be widely perceived as grossly unfair h rept pincite final regulations under sec_6404 were issued on date and contain the same definition of a ministerial_act as do the temporary regulations see sec_301_6404-2 proced admin regs the final regulations generally apply to interest accruing on deficiencies or payments of tax described in sec_6212 for taxable years beginning after date and do not apply to the years at issue in this case see sec_301 d proced admin regs 1986_3_cb_1 s rept pincite 1986_3_cb_1 ii standard of review and burden_of_proof when reviewing the commissioner’s determination not to abate interest we apply an abuse_of_discretion standard see sec_6404 camerato v commissioner tcmemo_2002_28 the taxpayer bears the burden_of_proof with respect to establishing an abuse_of_discretion see rule a in order to prevail the taxpayer must establish that in not abating interest the commissioner exercised his discretion arbitrarily capriciously or without sound basis in fact or law 113_tc_145 112_tc_19 iii analysis petitioner contends that respondent’s treatment of him during the audit and appeals process was unfair and harsh and has resulted in the accrual of interest that should be abated petitioner’s general allegations of unfair treatment by the irs do not establish a ministerial error by respondent such that interest accrued on petitioner’s deficiencies should be abated during the trial petitioner’s testimony strayed repeatedly from ministerial error to the underlying tax_liability which petitioner himself accepted by signing the settlement documents petitioner alleged that respondent failed to inform him that he was not required to sign the form sec_872 ms young testified that she explained to petitioner and his representatives the option of either signing the form sec_872 or having a notice_of_deficiency issued regardless all form sec_872 were sent to petitioner before the effective date of sec_6501 which provides the secretary shall notify the taxpayer of the taxpayer’s right to refuse to extend the period of limitations or to limit such extension to particular issues or to a particular period of time on each occasion when the taxpayer is requested to provide such consent congress enacted sec_6501 in and it is effective for requests for consent to extend the period to assess tax made after date internal_revenue_service restructuring and reform act of publaw_105_206 sec b c 112_stat_764 thus sec_6501 is inapplicable to the form sec_872 petitioner signed because respondent’s requests that petitioner sign them were all made prior to date petitioner has not established an error or delay by respondent in performing a ministerial_act within the meaning of sec_6404 that would require abatement of interest we conclude that respondent’s determination not to abate interest was not arbitrary capricious or without sound basis in fact or law in reaching all of our holdings herein we have considered all arguments made by the parties and to the extent not mentioned above we find them to be irrelevant or without merit to reflect the foregoing decision will be entered for respondent


internal_revenue_service number info release date cc psi 1-cor-112494-00 date uilc we are responding to correspondence requesting relief in order to establish as the effective year for your s_corporation_election the information submitted explains that your form_2553 submitted under revproc_97_48 was rejected by the ogden service_center although we are unable to respond to to your request as submitted this letter provides useful information relating to your request in revproc_97_48 the internal_revenue_service provides two situations under which it will automatically grant relief to taxpayers who meet certain eligibility requirements based on information provided to us it appears that you were notified about the form_2553 deficiency within six months of the date your return was filed for the taxable_year this timely notification by the service_center precludes you from eligibility under sec_4 d of rev_proc announcement copy enclosed provides guidance on seeking relief for late s_corporation elections and inadvertent invalid s_corporation elections generally to request relief for a late or invalid s_corporation_election you must request a private_letter_ruling from the national_office the procedures for requesting a private_letter_ruling are set out in revproc_2000_1 copy enclosed in addition revproc_2000_1 requires taxpayers to submit a user_fee along with their ruling_request the standard user_fee for a private_letter_ruling is dollar_figure however taxpayers with gross_income of less than dollar_figure million on their last-filed tax_return qualify for a reduced user_fee in the amount of dollar_figure if you are eligible to use the reduced fee provision you must include the statement described in b b of appendix a with your request please review appendix b for a sample format for requesting a private_letter_ruling if you decide to submit a formal request for a private_letter_ruling please include the proper user_fee and refer your request to our office by adding the following to the address attn cc p a p o box ben franklin station washington dc direct to cc psi b01 room please keep this letter with your tax records and feel free to provide a copy of it to your authorized representative we hope that the above information proves helpful sincerely yours s dianna k miosi dianna k miosi chief branch associate chief_counsel passthroughs and special industries enclosures announcement revproc_2000_1


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 tege eoeg teb presp-143397-06 date date dear ------------- pursuant to sec_54 of the internal_revenue_code the code and notice_2005_98 2005_52_irb_1211 and after review of your application submitted on date including supplements thereto we have determined that the project described in appendix a attached hereto is qualified for purposes of sec_54 and will be owned by one or more qualified borrowers we allocate authority to ---------------------- the issuer a qualified issuer under sec_54 to issue up to dollar_figure------------- of clean renewable energy bonds crebs bonds issued pursuant to this allocation must be designated by the issuer as bonds for purposes of sec_54 for the project described in appendix a up to the amount allocated for each project described in appendix a bonds so designated must be issued on or before date please be aware that in order for bonds to be crebs the applicable_requirements of the code including without limitation sec_54 notice_2005_98 and notice_2006_7 2006_10_irb_559 must be met please note that creb proceeds may be used to reimburse capital expenditures paid_by qualified borrowers for qualified projects only if the provisions of sec_54 are met if you have any questions with respect to this allocation please contact --------------------- ------------------------------------------------------------------------------------------------------------------- - -------- or ---------------------------- of the office of division counsel associate chief_counsel tax-exempt and government entities on --------------------- not a toll-free call 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 for purposes of the renewable_electricity_production_credit under sec_45 of the code no inference may be drawn from this allocation that any project listed in appendix presp-143397-06 a is a qualified_facility or that electricity to be produced at such project s is electricity from a qualified_energy resource at a qualified_facility within the meaning of sec_45 this determination is directed only to the applicant named above sec_6110 of the code provides that it may not be used or cited as precedent a copy of this letter must be attached to any form 8038-g information_return for tax- exempt governmental obligations filed for bonds issued pursuant to this allocation the allocation contained in this letter is based upon information and representations submitted by the applicant for the creb allocation 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 application_for an allocation it is subject_to verification on examination sincerely assistant chief_counsel exempt_organizations employment_tax government entities tax exempt government entities by timothy l jones senior counsel tax-exempt_bonds branch presp-143397-06 appendix a borrower name project type project location ---------------------- solar_energy_facility -------------------------------- -------------------------------- -------------------------------- -------------------------------- ------------------------- amount allocated dollar_figure--------------


significant index number department of the treasury dollar_figure internal_revenue_service washington d c jan sec_2011 t ep la ad re taxpayer dear this letter constitutes notice that approval has been granted for your request for a 5-year automatic_extension for amortizing the unfunded liabilities as of date for the above-named plan which are described in sec_431 and sec_431 of the internal_revenue_code code and sec_304 and sec_304 of the employee_retirement_income_security_act_of_1974 erisa this extension is effective with the plan_year beginning january this extension applies to the eligible amortization charge bases as identified in your application submission established as of date the extension of the amortization periods of the unfunded liabilities of the plan was granted in accordance with sec_431 of the code sec_431 of the code requires the secretary to extend the period of time required to amortize any unfunded_liability of a plan for a period of time not in excess of years if the plan submits an application meeting the criteria stated in sec_431 the plan has submitted the required information to meet the criteria in sec_431 including a certification from the plan’s actuary that i absent the extension under subparagraph a the plan would have an accumulated_funding_deficiency in the current plan_year or any of the succeeding plan years ii the plan_sponsor has adopted a plan to improve the plan's funding status iii the plan is projected to have sufficient assets to timely pay expected benefits and anticipated expenditures over the amortization period as extended and iv the notice required under paragraph a has been provided we have sent a copy of this letter to the to the authorized representative pursuant to a power_of_attorney on file in this office and to your this ruling is directed only to the taxpayer that requested it sec_6110 of the internal_revenue_code provides that it may not be used or cited by others as precedent if you require further assistance in this matter please contact sincerely yours sm z_ak david m ziegler manager ep actuarial group


significant index no department of the treasury internal_revenue_service washington d c sep tax_exempt_and_government_entities_division re pian ein - pian sponsor dear ter ra ald plan no this letter constitutes notice that approval has been granted for your request for an automatic_extension for amortizing the unfunded liabilities as of january or the above-named plan this approval applies to such unfunded liabilities which are described in sec_431 and sec_431 of the internal_revenue_code code and sec_304 and sec_304 of the employee_retirement_income_security_act_of_1974 erisa this extension is effective with the plan_year beginning january _ identified in your application submission that are established as of january shown in the table below this approval will extend the amortization periods for years and applies to the eligible amortization charge bases as as outstanding type of base date established balance as of _ plan amendment plan amendment actuarial loss actuarial loss actuarial loss actuarial loss actuarial loss change in assumptions actuarial loss actuarial loss ee aaa _ continued oa sac ae tpeeioese change in assumptions change in assumptions a actuarial loss change in assumptions actuarial loss established -_- the extension of the amortization periods of the unfunded liabilities of the plan was granted in accordance with sec_431 of the code sec_431 of the code requires the secretary to extend the period of time required to amortize any unfunded_liability of a plan for a period of time not in excess of years if the plan submits an application meeting the criteria stated in sec_431 b the plan has submitted the required information to meet the criteria in sec_431 including a certification from the plan's actuary that i ii iii iv absent the extension under subparagraph a the plan would have an accumulated_funding_deficiency in the current plan_year or any of the succeeding plan years the plan_sponsor has adopted a plan to improve the plan's funding status the plan is projected to have sufficient assets to timely pay expected benefits and anticipated expenditures over the amortization period as extended and the notice required under paragraph a has been provided in accordance with section dollar_figure of revproc_2010_52 _ in granting this ruling it is expected that i ii iii the plan's assumptions and methods will be reviewed and updated as appropriate so that each prescribed assumption is applied in accordance with applicable law and regulations each other assumption is reasonable taking into account the experience of the plan and reasonable expectations and such other assumptions in combination offer the best estimate of anticipated experience under the plan and the plan_sponsor obtained the appropriate approvals for any changes in assumptions or funding methods whether through an individual private_letter_ruling or by qualifying for automatic approvals available in the code treasury regulations or other generally applicable guidance furthermore we are not expressing any opinion as to the accuracy of any material submitted with your request your attention is called to sec_412 of the code and sec_302 of erisa which describe the consequences that would result in the event the plan is amended to increase benefits change the rate in the accrual_of_benefits or to change the rate of vesting while the amortization extension remains in place please note that any amendment that increases liabilities for a profit sharing plan or any other retirement plans whether qualified or unqualified maintained by the trustees of the plan and covering participants of the plan to which this ruling applies would be considered an amendment for purposes of sec_412 of the code and sec_302 of erisa we have sent a copy of this letter to the manager ep classification in baltimore maryland and to the manager ep compliance unit in chicago illinois with the power_of_attorney on file in this office a copy of this ruling has not been sent to your authorized representative if necessary you should forward a copy directly to him in accordance this ruling is directed only to the taxpayer that requested it sec_6110 of the internal_revenue_code provides that it may not be used or cited by others as precedent if you require further assistance concerning this matter please contact id jat - sincerely yours david m ziegler manager employee_plans actuarial group cc manager ep classification baltimore maryland manager ep compliance unit chicago illinois


internal_revenue_service department of the treasury number release date index number 6050e washington dc person to contact telephone number refer reply to cc pa apjp plr-116158-00 date re letter_ruling request regarding the information filing_requirements associated with a local real_property tax rebate program legend taxpayer state x tax rebate act fiscal_year dollar_figurex date date dear this responds to your letter dated date requesting a ruling on whether taxpayer is required to create and furnish information returns under sec_6041 and sec_6050e of the internal_revenue_code in connection with payments made pursuant to a local real_property tax rebate program authorized under state law facts on date state x enacted the tax rebate act which provides individual owners of homestead property in state x with a rebate of certain real_property_taxes imposed by school districts for fiscal_year under the provisions of the tax rebate act a homeowner is eligible for the plr-116158-00 rebate if the homeowner is a state x resident occupied a homestead as his or her primary residence during any part of fiscal_year was the owner of record of the homestead property as of date and paid real_property tax to a school district on the homestead property for fiscal_year a homestead is defined as an owner- occupied primary residence the parcel of land on which it is situated and any improvements located on the parcel the tax rebate act authorizes the rebates on a one-time basis each homestead property situated within state x even if jointly owned is entitled to only one rebate the tax rebate is calculated as follows the homestead property owner can receive a rebate for of the real_property tax paid to the school district for fiscal_year but only up to the sum of dollar_figurex an amount less than dollar_figure taxpayer is the agency of state x taxpayer is authorized to administer the provisions of the tax rebate act under the act taxpayer is responsible for making eligibility determinations for the rebates and issuing the rebates to the homeowners in your ruling_request you have asked whether state x has an income reporting requirement under sec_6041 and sec_6050e of the code as a result of the tax rebate act law sec_6041 of the code provides that all persons engaged in a trade_or_business and making payment in the course of such trade_or_business to another person of rent salaries wages premiums annuities compensations remunerations emoluments or other fixed or determinable gains profits and income other than payments to which sec_6042 sec_6044 sec_6047 sec_6049 or sec_6050n applies and other than payments with respect to which a statement is required under the authority of sec_6042 sec_6044 or sec_6045 of dollar_figure or more in any taxable_year shall render a true and accurate return to the secretary under such regulations and in such form and manner and to such extent as may be prescribed by the secretary setting forth the amount of such gains profits and income and the name and address of the recipient of such payment sec_6050e of the code provides that every person who with respect to any individual during any calendar_year makes payments of refunds of state or local_income_taxes or allows credit or offsets with respect to such taxes aggregating dollar_figure or more shall make a return according to forms or regulations prescribed by the secretary setting forth the aggregate amount of such payments credits or offsets and the name and address of the individual with respect to whom such payment credit or offset was made conclusion plr-116158-00 based on the facts as represented and the relevant law as set forth above we conclude as follows taxpayer does not have an income reporting requirement under sec_6041 of the code as a result of the tax rebate act because the amount of the tax rebate issued to each homeowner will be less than dollar_figure taxpayer does not have an income reporting requirement under sec_6050e of the code as a result of the tax rebate act because the tax rebates under the act are not refunds of income taxes and sec_6050e only applies to the refund of income taxes except as specifically ruled upon above no opinion is expressed or implied regarding whether the rebate satisfies the fixed or determinable requirement or any other requirements under sec_6041 of the code or the income_tax consequences of the tax rebate act any transaction or any item discussed or referenced in this letter this ruling is directed only to the taxpayer requesting it sec_6110 of the code provides that it may not be used or cited as precedent 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 sincerely pamela w fuller acting assistant to the branch chief branch office_of_chief_counsel administrative provisions judicial practice enclosures copy of this letter copy of sec_6110 purposes cc district_director chief examination_division


internal_revenue_service department of the treasury index number washington dc person to contact telephone number refer reply to cc intl br1-plr-111396-98 date date number release date do ty tin legend a date b country c date d date e year f dear this is in response to your letter dated date and supplemental letters submitted by your authorized representatives 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 information submitted for consideration is substantially as set forth below the rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by penalty of perjury statements executed by the taxpayer 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 a was born on date b and became a citizen of country c by reason of his birth in country c a moved to the united_states in year f and became a naturalized citizen_of_the_united_states on date d a formally renounced his united_states citizenship on date e by making an oath of renunciation at the united_states consulate in country c on the date of a’s expatriation his net_worth exceeded the applicable_threshold set forth in sec_877 of the code 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 on u s source income as modified by sec_877 for such taxable_year unless such loss did not have for one if 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 u s 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 former citizen or former long-term_resident 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 under notice_98_34 1998_27_irb_30 modifying notice_97_19 1997_1_cb_394 an eligible former citizen will not be presumed to have a principal purpose of tax_avoidance if that former citizen 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 is eligible to request a ruling under sec_877 because he is described in the categories of individuals eligible to submit ruling requests a is eligible to submit a request because a is a citizen of country c the country in which he was born a submitted all the information required by notice_98_34 including any additional information requested by the service after review of the submission accordingly based solely on the information submitted and the representations made it is held that a has made a complete and good_faith submission in accordance with sec_877 and notice_98_34 and therefore a will not be presumed to have expatriated with a principal purpose of tax_avoidance however because the information submitted does not clearly establish the existence or lack of a principal purpose to avoid taxes under subtitle a or b of the code no opinion is expressed as to whether a’s expatriation had for one of its principal purposes the avoidance of such taxes while this ruling rebuts the presumption of tax_avoidance under sec_877 it is not conclusive as to whether a subsequently may be found to have a principal purpose of tax_avoidance under sec_877 sec_2107 and sec_2501 based on all the facts and circumstances see sec_877 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 in addition no opinion is expressed as to a’s u s tax_liability for taxable periods prior to his loss of u s citizenship or for taxable periods after his loss of u s citizenship 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 your authorized representative a copy of this letter must be attached to any income_tax return to which it is relevant cc sincerely edward williams senior technical reviewer branch no associate chief_counsel international assistant_commissioner international international district operations op in d chief examination_division


internal_revenue_service number release date index number ---------------------- ---------------------------------------------- ---------------------------- ------------------------- ----------------------------- department of the treasury washington dc third party communication date of communication month dd yyyy person to contact ---------------------- id no ------------- telephone number -------------------- refer reply to cc intl plr-111461-05 date date legend legend ---------------------------------------------------------------------------------------------- ------------------------- -------------------------------- ------------------------------------------------ ---------------------- ---------------------------- --------------- ---------------------------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- ------------------ ---------------------------------------- ------------------------- ------------------------ -------------------------------------------------- --------------------- ------------ ----------- taxpayer sub sub individual a cpa firm a cpa firm b cpa firm c year year year year year year de a de b de c de d de e country a country b country c plr-111461-05 dear ------------ this replies to your representative’s letter dated date in which your representative requested on behalf of taxpayer an extension of time under sec_301_9100-3 for taxpayer to file the election and agreement described in sec_1 g i and the annual certification described in sec_1_1503-2 in accordance with exhibits c through h which are attached to and made a part of this ruling letter you submitted additional information in letters dated date and date the information submitted for consideration is substantially as set forth below the ruling contained in this letter is predicated upon facts and representations submitted by taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party this office has not verified any of the material submitted in support of the request for a ruling verification of the factual information representations and other data may be required as a part of the audit process during year through year taxpayer directly owned and carried on business operations outside the united_states through the entities listed on exhibit a these entities were dual resident corporations under sec_1_1503-2 with the exception of two domestic subsidiaries with active foreign_branch operations sub1 and sub2 elections under sec_301_7701-3 were filed to treat these entities as disregarded entities these elections were effective at all times during year through year during year through year the entities listed on exhibit a incurred net operating losses as listed on exhibit b these net operating losses were dual consolidated losses dcls under sec_1_1503-2 individual a assumed the position of corporate vice president of finance for taxpayer after year however individual a previously held other tax function positions with taxpayer in those other positions individual a had responsibility for all tax functions including the review and filing of all consolidated federal_income_tax returns and any forms schedules statements agreements and certifications necessary to comply with the internal_revenue_code for year through year during year taxpayer’s tax department developed internal compliance procedures intended to meet the requirements of sec_1503 and the regulations thereunder these procedures were based on a memorandum prepared by cpa firm a which addressed the technical requirements of sec_1503 and the regulations thereunder taxpayer believed that its dcl procedures complied with those requirements plr-111461-05 for year through year cpa firm a reviewed taxpayer’s consolidated federal_income_tax returns and signed them as the preparer taxpayer relied on cpa firm a to advise it whether all forms elections and agreements required to include the dcls listed on exhibit b in taxpayer’s consolidated_returns were properly completed and included with the returns for those years individual a states in his affidavit that at no time during year through year did cpa firm a or any member of taxpayer’s tax department inform him that the consolidated_returns and supporting statements schedules and agreements as filed did not meet the requirements of sec_1_1503-2 and vi b thus individual a assumed that the consolidated_returns as filed appropriately included the dcls as listed on exhibit b incurred by the entities listed on exhibit a during those tax years and that any required elections and certifications were included with those returns cpa firm b reviewed taxpayer’s consolidated federal_income_tax return for year and signed that return as the preparer during its review cpa firm b questioned whether taxpayer’s internal dcl compliance procedures satisfied the annual certification requirement of sec_1_1503-2 cpa firm b also indicated that three elections and agreements required under sec_1_1503-2 and listed on exhibits c d and e had been inadvertently omitted from the consolidated_returns these omissions led cpa firm b and taxpayer’s tax personnel to jointly undertake an analysis of taxpayer’s compliance with the requirements of sec_1503 and the regulations thereunder for year through year it was determined that the procedures did not meet those requirements and that in addition to the failure to include the elections referred to above it was determined that the annual certifications listed on exhibits d through h were either defective or omitted shortly thereafter members of taxpayer’s tax department discussed the matter with cpa firm c the discussion led taxpayer to submit this request for relief taxpayer represents that the income_tax laws of country a losses expenses or deductions of de a and de b to offset income of another person because the separate units are also subject_to income_taxation by another country on their worldwide income or on a residence basis taxpayer represents that the income_tax laws of country b losses expenses or deductions of de c to offset income of another person because the separate_unit is also subject_to income_taxation by another country on its worldwide income or on a residence basis do not deny the use of do not deny the use of do not deny the use of plr-111461-05 taxpayer represents that the income_tax laws of country c losses expenses or deductions of de d and de e to offset income of another person because the separate units are also subject_to income_taxation by another country on their worldwide income or on a residence basis taxpayer represents that it filed this application_for relief before the internal_revenue_service discovered the failure_to_file the election and agreement described in sec_1_1503-2 and the annual certification described in sec_1_1503-2 for the entities and tax years set forth on exhibits c through h sec_301 b i sec_301_9100-1 provides that the commissioner has discretion to grant a taxpayer a reasonable extension of time under the rules set forth in sec_301_9100-3 to make a regulatory election under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301_9100-1 provides that an election includes an application_for relief in respect of tax and defines a regulatory election as an election whose due_date is prescribed by a regulation a revenue_ruling revenue_procedure notice or announcement sec_301_9100-3 provides that requests for relief subject_to this section will be granted when the taxpayer provides evidence including affidavits described in sec_301_9100-3 to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith within the meaning of sec_301_9100-3 subject_to the conditions set forth in sec_301_9100-3 and the grant of relief will not prejudice the interests of the government within the meaning of sec_301_9100-3 in the present situation the election and agreement and the annual certification described in sec_1_1503-2 and vi b respectively are regulatory elections as defined in sec_301_9100-1 therefore the commissioner has discretionary authority under sec_301_9100-1 to grant taxpayer an extension of time provided that taxpayer satisfies the rules set forth in sec_301_9100-3 based on the facts and information submitted we conclude that taxpayer satisfies the standards for relief as set forth in sec_301_9100-3 accordingly taxpayer is granted an extension of time of days from the date of this ruling letter for taxpayer to file the election and agreement described in sec_1_1503-2 and the annual certification described in sec_1_1503-2 in accordance with exhibits c through h plr-111461-05 the granting of an extension of time is not a determination that taxpayer is otherwise eligible to file the elections and agreements and the annual certifications sec_301_9100-1 for example a taxpayer that is subject_to mirror legislation enacted by a foreign_country may be ineligible to file election agreements pursuant to sec_1 c iv a copy of this ruling letter should be associated with the elections and agreements and the annual certifications this ruling is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent no ruling has been requested and none is expressed as to the application of any other section of the code or regulations to the facts presented specifically no opinion is expressed as to whether the dollar amounts of the dcls reported on exhibit b are correct pursuant to a power_of_attorney on file in this office a copy of this ruling letter is being furnished to your authorized representative sincerely associate chief_counsel international by richard l chewning richard l chewning senior counsel office of the associate chief_counsel international enclosures exhibits a through h copy for purposes cc ------------------ ---------------------------------------------- -------------------------------------------------- -------------------------------------- plr-111461-05 exhibit a entity classifications entity --------------------------------------- --------------------------------------------------------------------------- --------------------------------------------------------------------------- --------------------------------------------------------------------------- ---------------- -------------------------- ---------------------------------------------- -------------------------- ------------------------- --------------------------------- ---------------------------- -------------------------------- -------------------------------------- ------------------------ ------------------------------------ -------------------------------------------- --------------------------------------------------------------------------- --- --------------------------------------------------- ------------------------------------------------ -------------------------------------------- ------------------------------------------ ----------------------------------------- foreign location classification ----------------- ----------------- -------------- ----------------------- ----- ----------------------- ------ ------------ -------- ------------------ -------------- ----------------- --------------- ---------------- ---------- ---------------- ---------------- -------------- -------- ----------------------- ------ ----------------- ------------------ ------------------------ --------- ------------------------ --------- ------------------------ --------- ------------------------ --------- ------------------------ --------- ------------------------ --------- ------------------------ --------- ------------------------ --------- ------------------------ --------- ------------------------ --------- ------------------------ --------- ------------------------ --------- ------------------------ --------- ------------------------ --------- ------------------------ --------- ------------------------ --------- ------------------------ --------- ------------------------ --------- ------------------------ --------- ------------------------ plr-111461-05 -------------------------------------------- -------------- ---------------------------------------------------------------- ----------------- ---------------------------------------------------------------- ---------------------- ------------------------------------------ ------------------ -------------------------------------------------------------- ------------- --------- ------------------------ --------- ------------------------ --------- ------------------------ --------- ------------------------ ---------------------- ------------------------ ---------------------- plr-111461-05 exhibit b table of dcls for tax years ended -------------------- through -------------------- the amounts stated below were deducted as losses in computing -------------- u s taxable_income for the years indicated entity ----------- ----------- ----------- ----------- ----------- ----------- ----- ----- --- ----- ------------------ -------- ------------------ -------- ------------------ -------- ----- ----------------- --------- ----- ----- ----- ------------------ -------- ----- ----------------- --------- --------------------------------------- --------------------------------------------- --------------------------------------------- --------------------------------------------- --------------- --------------------------------------------- --------------------------------------------- - -------------------------- --------------------------------------------- - -------------------------- ------------------------- --------------------------------- ---------------------------- -------------------------------- -------------------------------------- ------------------------ ------------------------------------ ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -------------------------------------------- ----- ----- --------------------------------------------- --------------------------------- --------------------------------------------- ------ --------------------------------------------- --- -------------------------------------------- ------------------ ----- ----- ------------------------------------------ -------- ----- ----------------------------------------- ----- -------------------------------------------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ------------------ -------- ----- ----- ----- ----- ----- ----- ------------------ -------- --- ------------------ -------- ----- ------------------ -------- ------------------ -------- ----- ------------------ -------- ----- ------------------ -------- ------------------ -------- ------------------ -------- ----- ----- ----- ----- ----- ------------------ -------- ------------------ -------- ------------------ -------- ------------------ -------- ------------------ -------- ------------------ -------- ------------------ -------- ------------------ -------- ------------------ -------- ------------------ -------- ------------------ -------- ------------------ -------- ------------------ -------- ------------------ -------- ------------------ -------- ------------------ -------- ------------------ -------- ------------------ -------- ------------------ -------- ------------------ -------- ------------------ -------- ----- ----- ----------------- --------- ----------------- --------- ----------------- --------- ----------------- --------- ----------------- --------- ----------------- --------- ----------------- --------- ----------------- --------- ----------------- --------- ----- ----------------- --------- ----- ----------------- --------- ----- ----- ----------------- --------- --- --- --- --- --- --- ----------------- -- --- --- --- ----------------- -- --- --- --- --- --- --- --- --- --- --- plr-111461-05 --------------------------------------------- ------------------- --------------------------------------------- ------------------- ------------------------------------------ ----- ----- ----- --------------------------------------------- ----------------- --- ------------------ -------- ----- ----- --- ------------------ -------- ------------------ -------- ------------------ -------- --- ------------------ -------- ------------------ -------- ------------------ -------- ------------------ -------- ----------------- --------- ----------------- --------- ----------------- --------- ----------------- --------- --- ----------------- ---- ----------------- -- ----------------- --------- plr-111461-05 exhibit c relief requested for tax_year ended --------------------- the election and agreement required under sec_1_1503-2 for the loss incurred by -------------------------------- for the tax_year ended ----------------- plr-111461-05 exhibit d relief requested for tax_year ended --------------------- the election and agreement required under sec_1_1503-2 for the loss incurred by -------------------------------- for the tax_year ended ----------------- the annual certification required under sec_1_1503-2 for the loss incurred by -------------------------------- in the tax_year ended ----------------- plr-111461-05 exhibit e relief requested for tax_year ended --------------------- the election and agreement required under sec_1_1503-2 for the loss incurred by --------------------------------- foreign_branch operations in ------------for the tax_year ended ----------------- the annual certifications required under sec_1_1503-2 respect to the following entities and their losses for the following years ----------------------------------- ------------------------------------------------ -------------------------------------------------------- - exhibit f relief requested for tax_year ended --------------------- the annual certifications required under sec_1_1503-2 with respect to the following entities and their losses for the following years ------------------------------------- ------------------------------------------------------------------------------------------------------- --------------------- ----------------------------------------------------------------------------- --------------------------- --------------------------- -------------------------- ----------------------------- ------------------------------------------ ------------------------- ----------------------------------- ------------------------------------------------ -------------------------------------- -------------------------------------- --------------------------------------- --------------------------------------------------------------- ------------------------------------------------------- --------------------------------------- plr-111461-05 exhibit g relief requested for tax_year ended --------------------- the annual certifications required under sec_1_1503-2 with respect to the following entities and their losses for the following years -------------------------------------------- ------------------------------------------------------------------------------------------------------- --------------------- ----------------------------------------------------------------------------- ---------------------------------- ------------------------------------------- ---------------------------------- --------------------------------- -------------------------------- ------------------------------------ -------------------------------- ------------------------------------------ -------------------------------- ------------------------------------------ ------------------------------------------- -------------------------------------------------------------------- --------------------------------------------- -------------------------------------------- -------------------------------------------------------- --------------------------------------------- --------------------------------------------- ---------------------------------------------- --------------------------------------------------------------- -------------------------------------------------------------- ---------------------------------------------- ----------------------------------------------------- plr-111461-05 exhibit h relief requested for tax_year ended ---------------------- the annual certification required under sec_1_1503-2 for the loss incurred by ---------------------------------- in the tax_year ended --------------------


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 ita plr-103928-09 date date in re ------------------------------------------------ legend act ----------------------------------------------------------------------------------------- agency ---------------------------------------------------- agreement ---------------------------------------- b -------------------------- court ------------------------------------------------------------------------------- department ---------------------------------------------------------------------------- entity1 -------------------------------------------------------- entity2 --------------------------------- entity2 claimants ------------------ incident ------------------------------------------------------------------------------------------------------- ------- plr-103928-09 t -------------------------------------- z ------------------------------------------------ c ----------- date ------------------- date ---------------- date -------------------- date ---------------------- year ------- year ------- year ------- f ---------------------- dollar_figureq dollar_figure----------------- dollar_figurer dollar_figure----------------- dollar_figuret dollar_figure------------------- dollar_figurev dollar_figure------------------- w ----- dollar_figurex dollar_figure--------------- dollar_figurey dollar_figure----------------- dear -------------- this is in reply to your request for a ruling that dollar_figurex you received in year and any payment you receive from department for the wrongful death of b your c are excludable from your gross_income under sec_104 of the internal_revenue_code facts plr-103928-09 your c was one of w individuals killed in incident in year the estates of those killed and their survivors including you entered into a joint prosecution agreement jpa to pursue claims for damages against entity1 and its officials who were responsible for incident the jpa sets forth how the plaintiffs will divide any amounts they recover in litigation or settlement of their claims initial litigation the estates of those killed and their survivors initially sued entity1 in court in year the causes of action included claims for survivorship wrongful death and intentional infliction of severe emotional distress you sought recovery for loss of consortium and intentional infliction of severe emotional distress caused by the death of your c in year court granted summary_judgment for plaintiffs on the issue of liability in year court awarded the plaintiffs an aggregate recovery_of dollar_figurev for compensatory_damages prejudgment_interest and punitive_damages you were awarded an aggregate of dollar_figurey dollar_figurer against t and dollar_figureq against z sale of damage award while court award of damages was on appeal and no later than date you sold your rights to a portion of your damage award to an investor for an immediate cash payment of dollar_figurex plus a graduated rate of return on that amount you received the dollar_figurex on or about date several other plaintiffs also sold portions of their damage awards to the investor legislative settlement subsequently on date entity2 passed the act to provide fair compensation to all entity2 claimants who have f claims for wrongful death and physical injury including claims for emotional distress against entity1 through a comprehensive settlement of those claims upon entity1’s payment to entity2 the act voided all prior court proceedings and judgments for f claims by entity2 claimants against entity1 or its officials and permanently precluded entity2 claimants from asserting f claims against entity1 or its officials on date entity1 and entity2 entered into the agreement to resolve all f claims against entity1 entity1 then transferred dollar_figuret to entity2 which will be paid to claimants covered by the agreement thus pursuant to the act court award of damages to the plaintiffs was voided and has been vacated agency has established procedures to compensate victims pursuant to the agreement as a survivor of an individual killed in incident you must file a claim with department to recover damages for claims of wrongful death based on the death of your c law and analysis sec_104 provides in general that gross_income does not include the amount of any damages received whether by suit or agreement on account of personal physical injuries or physical sickness sec_1_104-1 of the income_tax regulations provides that the term damages received whether by suit or agreement means an amount received through plr-103928-09 prosecution of a legal suit or action based upon tort or tort type rights or through a settlement agreement entered into in lieu of such prosecution section of the small_business job protection act of limits the exclusion_from_gross_income provided by sec_104 to amounts received on account of personal physical injuries or physical sickness subject_to one exception in h_r conf_rep no pincite congress expressed its intent concerning the treatment of wrongful death damages and emotional distress damages attributable to a physical injury d amages other than punitive_damages received on account of a claim of wrongful death continue to be excludable from taxable_income as under present law because all damages received on account of physical injury or physical sickness are excludable from gross_income the exclusion_from_gross_income applies to any damages received based on a claim of emotional distress that is attributable to physical injury or physical sickness the action you brought in court and the claim you file with department each seek recovery_of damages for emotional distress attributable to a personal physical injury these claims are based in tort under sec_1_104-1 court granted summary_judgment on the issue of liability on your claims of loss of consortium and intentional infliction of severe emotional distress due to the death of your c and had awarded dollar_figurey for compensatory_damages interest and punitive_damages you exchanged your right to recover a portion of the award for an immediate cash payment of dollar_figurex that dollar_figurex takes the place of court’s award to the extent that the dollar_figurex represents compensatory_damages awarded for wrongful death and associated emotional distress it is excludable from your income under sec_104 under the act any recovery_of compensatory_damages that department awards you is for the wrongful death of your c this wrongful death recovery as adjusted by the jpa is excludable from your income under sec_104 conclusions based strictly on the information submitted and the representations made we conclude that- the amount you receive from department as adjusted by the jpa for the wrongful death of your c is excludable from your gross_income under sec_104 except for any interest received the portion of the dollar_figurex representing amounts received on account of a personal physical injury is excludable from your gross_income under sec_104 plr-103928-09 we do not express or imply an opinion on the federal tax consequences of any aspect of these transactions other than those expressed in conclusion sec_1 and above specifically we do not express an opinion about what portion if any of dollar_figurex is properly allocable to damages received on account of a personal physical injury see sec_4 of revproc_2009_3 2009_1_irb_107 in addition we do not express any opinion whether your transaction with the investor constituted a sale for federal_income_tax purposes see sec_4 of revproc_2009_3 pincite this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent the rulings contained in this letter are based upon information and representations that you submitted under penalties of perjury 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 you must attach to any income_tax return to which it is relevant a copy of this letter or if you file your returns electronically a statement providing the date and control number of this letter_ruling in accordance with the power_of_attorney on file with this office we are sending a copy of this letter to your authorized representative sincerely michael j montemurro branch chief office of associate chief_counsel income_tax accounting


internal_revenue_service number release date index numbers ------------------ ----------------------------- ---------------------------------------- --------------------- 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 b03 plr-100922-10 date date company ------------------------------------------------------------------------------------------------- ------------------------- date -------------------------- country ----------------- dear ---------------- this letter responds to a letter dated date and subsequent correspondence submitted on behalf of company by company’s authorized representative requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations to file an election to be classified as a disregarded_entity for federal tax purposes facts company was formed under country law on date company represents that it is a foreign_entity eligible to elect to be classified as a disregarded_entity for federal tax purposes company intended that it be classified as a disregarded_entity effective date however due to inadvertence a valid form_8832 entity classification election to treat company as a disregarded_entity effective date was not timely filed law and analysis sec_301_7701-3 provides that a business_entity that is not classified as a corporation under sec_301_7701-2 or an eligible_entity can elect its classification for federal tax purposes as provided in sec_301_7701-3 an eligible plr-100922-10 entity with at least two members can elect to be classified as either an association and thus a corporation under sec_301_7701-2 or a partnership sec_301_7701-3 provides that unless the entity elects otherwise a foreign eligible_entity is a a partnership if it has two or more members and at least one member does not have limited_liability b an association if all members have limited_liability or c disregarded as an entity separate from its owner if it has a single owner that does not have limited_liability sec_301_7701-3 provides that an eligible_entity may elect to be classified other than as provided in sec_301_7701-3 or to change its classification by filing form_8832 with the service_center designated on form_8832 sec_301_7701-3 provides that an election made under sec_301_7701-3 will be effective on the date specified by the entity on form_8832 or on the date filed if no date is specified on the election form the effective date specified on form_8832 can not be more than days prior to the date on which the election is filed and can not be more than months after the date on which the election is filed sec_301_9100-1 provides that the commissioner may grant a reasonable extension of time under the rules set forth in sec_301_9100-2 and sec_301_9100-3 to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the code except subtitles e g h and i sec_301_9100-1 defines a regulatory election to include an election whose due_date is prescribed by a regulation published in the federal_register sec_301_9100-2 provides the rules governing automatic extensions of time for making certain elections sec_301_9100-3 provides the standards the commissioner will use to determine whether to grant an extension of time for regulatory elections that do not meet the requirements of sec_301_9100-2 sec_301_9100-3 provides that requests for relief subject_to sec_301_9100-3 will be granted when the taxpayer provides the evidence including affidavits described in sec_301_9100-3 to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and the grant of relief will not prejudice the interests of the government conclusion based solely on the information submitted and the representations made we conclude that the requirements of sec_301_9100-3 have been satisfied as a result company is granted an extension of time of days from the date of this letter to file a form_8832 with the appropriate service_center and elect to be treated as a disregarded plr-100922-10 entity for federal tax purposes effective date a copy of this letter should be attached to the form_8832 a copy is enclosed for that purpose this ruling is contingent on the owner of company filing within days of this letter all required returns and amended income_tax returns consistent with the requested relief being effective date to the extent appropriate these returns must include but are not limited to the following forms i forms information_return of u s persons with respect to certain foreign_corporations ii forms return of u s persons with respect to certain foreign_partnerships and iii forms information_return of u s persons with respect to disregarded entities such that these forms reflect the consequences of the relief granted in this letter except as specifically set forth above no opinion is expressed or implied concerning the federal tax consequences of the facts described above under any other provision of the code this ruling is directed only to the taxpayer requesting it sec_6110 of the internal_revenue_code provides that it may not be used or cited as precedent pursuant to a power_of_attorney on file with this office a copy of this letter is being sent to company’s authorized representative sincerely associate chief_counsel passthroughs special industries by s ________________________________ james a quinn senior counsel branch office of the associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes cc