department of the treasury washington dc third party communication none date of communication not applicable_person to contact ---------------------- id no ----------------- telephone number --------------------- refer reply to cc fip b05 plr-100702-09 date july internal_revenue_service number release date index number -------------------------- ----------------------------------------------- -------------------- --------------------------------------------- legend legend county a ---------------------------- county b ------------------------- state ------------------------ state iso ---------------------------------------------------------------------- state puc ------------------------------------------------- a --------------------------------------------------------------------- change ------------------------------------------------------- dear ------------- this is in response to your request for a ruling to eliminate the annual net importer test described below as a prerequisite to satisfy the character requirement described below in order for the utility to qualify its system as facilities for local furnishing of electric energy within the meaning of sec_142 of the internal_revenue_code the code in the event that the request is denied you have requested an alternative ruling that the annual net importer test disregard outbound flows caused by wheeling of electricity generated by resources not controlled by or for the benefit of utility and outbound flows caused by wholesale sales of excess electricity from utility’s generating units defined below if such sales are required pursuant to federal or state regulations rules orders decisions or mandatory protocols plr-100702-09 facts and representations utility provides retail electric delivery service and retail electric supply service within most of county a and a contiguous portion of county b the service area utility is authorized to provide retail electric services solely to customers within the service area pursuant to the state puc’s certificate of public convenience and necessity utility is the sole system to provide bundled electric service on a priority basis to customers in the service area utility wholly owns and operates or by long-term power purchase agreements controls an integrated system of electric generation transmission and distribution facilities that are directly connected to each other and that comprise most of utility’s facilities used to provide electric service throughout the service area the local system the irs has issued previous rulings regarding utility and the local system in determining whether the local system constitutes facilities for the local furnishing of electric energy the irs has required utility to demonstrate that the local system has not been designed differently sized larger built sooner or constructed in a more costly fashion than is reasonably required solely for the purpose of serving the service area and none of such facilities would have been planned or constructed for any reason other than to provide electric service to the retail customers served by utility within the service area taken all together the character requirement the irs adopted the standard that utility be a net importer of electric energy measured on an annual basis the annual net importer test to substantiate that the local system meets the character requirement the local system continues to satisfy the character requirement absent an order from ferc under sec_211 or sec_213 of the federal power act per sec_142 of the code utility has not constructed or acquired any component of the local system larger sooner more costly or of any different design than was or will be reasonably considered necessary for the provision of electric service to utility’s retail customers within the service area the local retail customers utility’s transmission facilities do not have aggregate transmission capability in excess of that needed to meet the needs of the local retail customers and reliability requirements including the reserve requirements imposed by federal and state regulators nevertheless fundamental changes in the electric utility industry require utility to wheel electricity from generating sources not controlled by or used for the benefit of utility for ultimate delivery to consumers who are not local retail customers utility’s transmission resources are held on a priority basis to serve the local retail customers use of the transmission facilities in wheeling transactions reflects the use of transmission capacity that is not then needed to service those local retail customers and is pursuant to open access orders or mandatory protocols of the federal energy regulatory commission ferc the state puc and or the state iso plr-100702-09 mandated wheeling could cause utility’s outbound flows of electricity to exceed inbound flows needed for local retail customers utility’s local and remote generating units including all generation controlled by or for the benefit of utility utility’s generating units do not have aggregate generating capability in excess of that required by the state puc and the ferc-approved state iso tariff to meet the needs of the local retail customers including the reserve requirements however fundamental industry changes have also affected utility’s generating units the state puc and the state iso in order to ensure a supply of energy thoughout the state require utility to comply with least-cost best-fit dispatch orders or mandatory protocols these orders or protocols may require utility’s generating units to run even though utility has sufficient energy to supply the service area the state iso requires utility to acquire generation equal to its peak period load plus a reliability reserve of an additional a some of utility’s generating units cannot reduce generation from these required levels in order to accommodate off-peak periods without at times resulting in excess energy pursuant to orders or mandatory protocols of the state puc and or the state iso utility is required to sell excess energy to wholesale customers that may be outside of the service area utility’s generating unitsare held on a priority basis to serve the local retail customers so wholesale sales which cause utility to incur outbound flows of generated power reflect the use of generating capacity that is not then needed to service actual loads of the local retail customers and are pursuant to least-cost best-fit dispatch orders or mandatory protocols of the state puc and or the state iso the state iso implemented the change subsequent to the filing of the ruling_request under the change utility is no longer required to match its generating units to the local retail customer demand it is now permitted to bid all its generation supply resources into the state iso spot market and to bid all its forecast local retail customer demand into the state iso spot market to the extent utility’s generating units are not needed on a priority basis at a particular moment in time to provide reliable service to the local retail customers the state puc’s least-cost best-fit principles are applied to ensure that utility’s generating units are available for spot sales through the state iso or otherwise on the bilateral wholesale market these principles also are applied to ensure that utility purchase electric energy through the state iso or otherwise on the bilateral spot market rather than taking electric energy from utility’s generating units if doing so will result in lower overall costs to the local retail customers law and analysis sec_142 provides that for purposes of subtitle a chapter 1b part iv of the code the term exempt_facility_bond means any bond issued as part of an issue percent or more of the net_proceeds of which are to be used to provide facilities_for_the_local_furnishing_of_electric_energy_or_gas plr-100702-09 sec_142 provides that the local furnishing of electric energy or gas shall only include furnishing solely within the area consisting of a city and one contiguous county or two contiguous counties sec_142 provides that a facility shall not be treated as failing to meet the local furnishing requirement of sec_142 by reason of electricity transmitted pursuant to an order of the federal energy regulatory commission under sec_211 or sec_213 of the federal power act as in effect on the date of the enactment of sec_142 if the portion of the cost of the facility financed with tax-exempt_bonds is not greater than the portion of the cost of the facility which is allocable to the local furnishing of electric energy determined without regard to sec_142 sec_142 was enacted as part of the energy policy act of pub_l_no the legislative_history states the committee believes further that in applying the irs ruling position that a local furnishing utility that is interconnected with other utilities other than for emergency transfers of electricity must be a net importer of electricity the determination of whether the utility is a net importer should be made without regard to electricity generated by another party that is wheeled by the utility to a point outside its service area pursuant to a ferc order authorized under the bill h_r rept no 102d cong 2d sess pincite sec_1_103-8 of the income_tax regulations provides that the term facilities_for_the_local_furnishing_of_electric_energy_or_gas means property which- a is either property of a character subject_to the allowance for depreciation provided in sec_167 or land b is used to produce collect generate transmit store distribute or convey electric energy or gas c is used_in_the_trade_or_business of furnishing electric energy or gas and d is a part of a system providing service to the general populace of one or more communities or municipalities but in no event more than contiguous counties or a political equivalent whether or not such counties are located in one state a facility for the generation of electric energy otherwise qualifying under this subdivision will not be disqualified because it is connected to a system for interconnection with other public_utility systems for the emergency transfer of electric energy due to industry restructuring the state puc and the state iso require utility to maintain a reliability reserve of a of utility’s generating units at peak periods the plr-100702-09 requirement to maintain this reserve coupled with utility’s inability to adjust some generation down for off-peak periods can result in utility’s generating units producing electricity beyond that required for the local retail customers additionally the state puc’s and the state iso’s least-cost best fit policy requires utility to run its generating units at times without regard to the needs of the local retail customers and to sell this excess generation in wholesale sales that may be outside of the service area although sec_142 only applies to wheeling transactions mandated by ferc we believe that both federal and state regulatory mandated sales of excess electricity outside the service area should be excepted from the annual net importer test in both situations utility has no control_over the transactions and both occur in the course of utility's business as a local furnisher and both result in outbound flows of electricity cf sec_1_141-7 which excepts mandated wheeling due to both federal and state regulatory authority from the deliberate action rules we disagree that the annual net importer test should be eliminated as a means of demonstrating whether the local system are facilities for local furnishing under sec_142 instead we conclude that modifying the annual net importer test to disregard outbound flows caused by wheeling of electricity generated by resources not controlled by or for the benefit of utility and outbound flows caused by wholesale sales of excess electricity from utility’s generating units if required pursuant to federal or state regulations rules orders decisions or mandatory protocols the amended annual net importer test accurately addresses the constraints imposed on utility due to industry restructuring that are beyond utility’s control and required in the course of utility’s business to serve the local retail customers within the service area however wholesale sales of excess power may be exempted from outbound flows only if for each calendar_year the total amount of electric energy supplied by utility to the local retail customers equals or or exceeds the total amount of electric energy generated by utility’s generating units less i line losses ii a reserve iii the state puc and or the state iso least-cost best-fit orders and iv excess due to utility’s inability to reduce generation from peak levels during off-peak periods the amended annual net importer test as so applied constitutes the revised standard to substantiate that the local system meets the character requirement in addition even if the local system meets the definition of facilities for local furnishing of electric energy utility must comply with the requirements of sec_142 that the portion of the cost of the local system financed with tax-exempt_bonds may not exceed the portion of the cost of the local system allocable to the local furnishing of electric energy in determining the portion of use of the local system as defined in sec_1 f iii that is allocable to the local furnishing of electric energy utility must aggregate the components of the local system described in sec_1_103-8 conclusion plr-100702-09 based solely on the representations and facts submitted by utility we conclude that for purposes of determining that the local system are facilities for local furnishing utility may demonstrate compliance with the character requirement based on the amended annual net importer test however for purposes of complying with sec_142 to the extent that the portion of the cost of the local system financed with tax-exempt_bonds is greater than the portion of the cost of the local system allocable to the local furnishing of electric energy utility must redeem tax-exempt_bonds except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative the rulings contained in this letter are based upon information and representations submitted by the 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 timothy l jones sr counsel branch associate chief_counsel financial institutions and products


department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division - feb a ee an ‘ uniform issue list no keke kkkkekrkekrerkkrkekekererekekkkrkerkekreeker krekkkekkekkekkeekkkkeke kk krrekkekerkrekekkerekker attention krrkkkkkkkkkk krkkkkkekk kkk kkk ek legend employer c ts fir re rrr ehh eek eere plan x rrr rr kkk kk kek kkk kkk kkk kkk kkk kkk kkkkkk kek kk kkk kek kkk custodian m rrr kr kek kkk keke kkk kkk kkk keke keke rk keke kerr kkk kekekr eker keke kkekekkkekrekerekkee kerr kkk krkekkeekkkekkke keke krkkekekeekekekekkekkekrkeer ladies and gentlemen this is in response to letters dated krkekk eker kkekekkrkekere kerr rrr rrr kr keke eker err kkk kr ere keke rkrkrererekeeee kkk kk kkk re kek ike kkk eker kr keke kr keke kkk kkkk kk kek in which your authorized representative requested a letter_ruling concerning plan x under sec_403 b of the internal_revenue_code the following facts and representations have been submitted in support of this request employer c provides management services to not-for- profit corporations that provide health care and psychiatric services to residents in its area by letter dated the service issued a ruling which determined that employer c was exempt from tax under sec_501 of the code as an organization described in sec_501 effective date employer c adopted plan xx plan x together with amendments submitted on keke kkkkrr eker ker keke kkk kek keke kk rk kee kee kr kek ree keke kk re kkk kekkekkkrerekk kk kkkkekekkkkkekrrkekkkekekkekkekkkekekekeke is intended co meet the applicable_requirements of sec_403 of the code under sec_3_1 each eligible_employee shall be the employer shall give each eligible_employee eligible to participate in salary deferral contributions on the first payroll date on or after he or she has been employed written notice of his or her eligibility to participate in the plan when he or she is employed eligible for matching_contributions for plan years ending after completing an eligibility year_of_service and attaining age a participant shall be article iv of plan x provides for five types of voluntary_employee_contributions employee contributions pursuant to a salary discretionary employer contributions reduction agreement nonelective employer contributions matching_contributions equal to percent of the participant's salary deferral contributions and voluntary_employee_contributions and salary reduction contributions up to are considered for purposes of matching_contributions catch-up_contributions percent of compensation only section of plan x provides that salary deferral contributions are nonforfeitable and one hundred percent vested at all times custodian m is named as the custodian in the salary under the representations submitted in reduction agreement this case custodian m operates a_trust department that is regulated state-chartered trust company under the provisions of state statutes and is subject_to examination and regulation by the state commissioner of banks a under the salary reduction agreement under plan x an eligible_employee may reduce his or her eligible compensation by a dollar subject_to a minimum of dollar_figure per plan_year amount or by any full percentage of compensation between and each pay_period and the employer agrees to contribute this amount on the employee’s behalf to the investment options selected by the employee of the salary reduction or terminate the agreement by filing a written notice of such change or termination with the employer days prior to the date the employee wishes the change to take effect the employee may change the amount article iv of plan x limits salary deferral contributions in accordance with sec_402 and increased contributions within the limitations under sec_402 c of the code including catch-up and g section dollar_figure of plan x provides that salary deferral of the earliest date on which such contributions accumulated through payroll deductions shall be paid to the custodian as contributions can reasonably be segregated from the employer's general assets but in any event no later than the 15th business_day of the month following the month in which the salary deferral contributions are received by the employer or the 15th business_day of the month following the month in which amounts would otherwise have been payable to the participant in cash section dollar_figure of plan x provides that the maximum annual_additions credited to a participant's accounts under all plans of the employer for any limitation_year shall not exceed the sec_415 contribution limitation for such limitation_year sec_4 11b describes the alternate elections set forth in sec_415 of the code sec_5 of plan x describes the investment powers of custodian m and provides that amounts paid_by the employer to the fund shall be invested only in regulated_investment_company stock which shall be held by the fund article vii of plan x provides that no distribution shall be paid or made available to a participant before the participant dies attains age separates from service or becomes disabled within the meaning of code sec_72 rm sections and dollar_figure of plan x concerning the of the calendar_year ii terminates service whichever is later and the required_beginning_date for before-death distribution provides that a participant's entire_interest must commence to be distributed no later than april following the year in which the participant i attains age or after-death distribution rules satisfy the requirements of sec_401 b participant and a surviving_spouse may be recalculated annually at the option of the participant and or the spouse additionally plan x provides for distribution in the form of a joint_and_survivor_annuity preretirement survivor annuity and a single_life_annuity the life expectancy of of the code a section of the plan provides that if the value of a terminated participant's vested benefit derived from employer and employee contributions has never exceeded dollar_figure the entire vested benefit to be paid to such participant ina single lump sum as soon as practicable section dollar_figure of plan x provides for an optional direct trustee-to-trustee transfer of an eligible_rollover_distribution to an eligible_retirement_plan as required by sec_401 of the code plan x is not intended to meet the requirements of sec_403 of the code based on the foregoing facts and representations the following rulings are requested that plan x meets the requirements of sec_403 b including sec_403 b but excluding sec_403 b that the salary reduction agreement maintained under plan x satisfies the requirements of code sec_401 a that amounts contributed by employer c to the custodial account of plan x shall be excluded from the gross_income of the employee for the taxable_year of the contributions to the extent that aggregate of such amounts does not exceed the limitations of sec_415 for such year sec_403 of the code provides in part that amounts contributed by an employer to purchase an annuity_contract for an employee are excludable form the gross_income of the employee in the year contributed provided employee performs services for an employer which is exempt from tax under sec_501 sec_501 educational_institution as defined in section a state a political_subdivision of b a ii which is a state or an agency_or_instrumentality of one or more of the such annuity_contract is not subject_to section foregoing a nonforfeitable except for failure to pay future premiums and provides a salary reduction agreement the contract meets the requirements of sec_401 a the employee's rights under the contract are or the employee performs services for an a contract purchased under a plan which as an organization described in in the case of the sec_403 of the code provides further that the employee shall include in his gross_income the amounts actually distributed under such contract in the year distributed as provided in sec_72 addition except as provided in sec_403 b b custodial_account described in sec_403 an annuity_contract for all purposes of the code of the code in a is treated as sec_403 of the code defines includible_compensation to mean the amount of compensation received from the employer in the employee's most recent one-year period_of_service which is includible in the employee's gross_income sec_403 of the code requires that arrangements pursuant to sec_403 must satisfy requirements similar to those of sec_401 death_benefit requirements of sec_401 this section provides that any amount transferred in a direct trustee-to-trustee transfer in accordance with sec_401 a taxable_year of the transfer and similar to the incidental in addition shall not be includible in gross_income for the sec_401 of the code in general provides for a mandatory benefit_commencement_date of april following the plan_year in which the participant attains age retires whichever is later and specifies required minimum or distribution rules for the payment of benefits from qualified_plans sec_403 of the code provides that the amounts paid_by a qualifying employer to a custodial_account shall be treated as amounts contributed by the employer for an annuity_contract for his employee if the amounts are invested in regulated_investment_company stock to be held in that custodial_account and under the custodial_account no such amounts may be paid or made available to any distributee before the employee dies attains age separates from service becomes disabled within the meaning of sec_72 sec_415 of the code provides in pertinent that a plan will not be considered a plan described part under sec_403 unless amounts contributed under the plan satisfy the limitations of sec_415 sec_403 e of the code provides that in the of the code concerning a_trust which is part of a contract purchased under a salary reduction case of agreement the contract meets the requirements of sec_401 a sec_401 a limitations of elective_deferrals provides that in the case a plan including sec_403 b of plans under which elective_deferrals within the meaning of sec_402 which includes salary reduction amounts may be made with respect to any individual during a calendar_year such trust shall not constitute a qualified_trust under this subsection unless the plan provides that the amount of such deferrals under such plan and all other plans contracts or arrangements of an employer maintaining such plan may not exceed the amount of the limitation in effect under sec_402 year for the taxable_year beginning in such calendar sec_402 of the code provides generally that the elective_deferrals of any individual for any taxable_year shall be included in such individual's gross_income to the extent the amount of such deferrals exceeds the applicable_dollar_amount increases in the dollar amount for employees who have completed years_of_service with the employer sec_402 c provides that employees who will have attained sec_402 provides for certain a taxable_year may make additional age by the end of elective_deferrals during such plan_year within certain specified amounts that will not be treated as exceeding the limitations of sec_402 and or in this case employer c is an organization described in sec_501 which is exempt under sec_501 which has established plan x for the benefit of its employees participants salary reduction contributions and earnings thereon are fully non-forfeitable at all times a the program satisfies the requirement under sec_403 b a of the code accounts shall be invested in regulated_investment_company stock held by custodian c distributed before the participant's attainment of age death disability or termination of employment and no such amounts shall be that amounts held in custodial the program satisfies the distribution_requirements of sec_403 distribution and incidental death_benefit requirements are satisfied of the code because the minimum the salary deferral agreement limits contributions in accordance with sec_402 satisfies the applicable_requirements of sec_403 the code and of the code plan x of therefore with respect to ruling_request number one we conclude that plan x meets the requirements of sec_403 b of the code including b b conclude that the salary reduction agreement maintained under plan x satisfies the requirements of code sec_401 a with respect to ruling_request number two we but excluding section the third ruling_request concerns the exclusion of sec_403 amounts contributed to plan x provides in effect that the amounts contributed to custodial_account described in sec_403 b employer which is described in sec_501 which is exempt from tax under sec_501 excludable from the employee's gross_income in the taxable_year in which such amounts are contributed contributed as salary reduction contributions on behalf of for an employee are the amounts a by an of the code an a custodial_account under plan x are not in excess employee to of the limitations under sec_415 and sec_402 the requirements for exclusion from income concerning ruling_request three we conclude that amounts contributed by employer c to plan x custodial fund shall be excluded from the gross_income to the employee for the taxable_year of the contributions to the extent that aggregate of such amounts does not exceed the applicable limits under the code for such taxable_year and satisfy therefore this letter_ruling is not effective unless the proposed amendments reflected in the letters dated may are adopted by plan x date date august and january this ruling is limited to the form of plan x and does not extend to any operational violations of sec_401 or sec_415 of the code by plan x now or in the future this letter is not a ruling as contracts that may be used or distributed by plan x will satisfy the requirements of sec_403 to whether the annuity of the code b finally this letter_ruling is directed only to the taxpayer that requested it may not be used or cited by others as precedent sec_6110 of the code provides that it any questions concerning this ruling should be addressed co - at a copy of this ruling is being sent to your authorized representative in accordance with a power_of_attorney on file in this office sincerely yours al pipkin manager employee_plans technical group tax exempt government entities division


internal_revenue_service department of the treasury number release date index number washington dc person to contact telephone number refer reply to cc psi 2-plr-113413-00 date date x a d1 year dear this responds to a letter dated date and subsequent correspondence written on behalf of x requesting a ruling under sec_1362 of the internal_revenue_code the information submitted states that x was incorporated on d1 a x's sole shareholder represents that he intended for x to be treated as an s_corporation for federal tax purposes as of year x's first taxable_year at the time of incorporation a informed x’s attorneys of his interest in x being treated as an s_corporation for federal tax purposes however after completing x’s formation x’s attorneys were forced to terminate the attorney-client relationship with x due to a conflict of interest with an existing client consequently a timely form_2553 election by a small_business_corporation was not filed for x for year a represents that x and a filed their tax returns for year and all subsequent years consistent with the treatment of x as an s_corporation sec_1362 of the code provides that if a an election under sec_1362 is made for any taxable_year after the date prescribed by sec_1362 for making such election for such taxable_year or no such election is made for any taxable_year and b the secretary determines that there was reasonable_cause for the failure to timely make such election the secretary may treat such an election as timely made for such taxable_year based solely on the facts and the representations submitted we conclude that x has established reasonable_cause for failing to make a timely election to be an s plr-113413-00 corporation for x’s first taxable_year accordingly provided that x makes an election to be an s_corporation by filing a completed form_2553 with the appropriate service_center effective for its year taxable_year within days following the date of this letter then such election will be treated as timely made for x’s year taxable_year a copy of this letter should be attached to the form_2553 except as specifically set forth above no opinion is expressed concerning the federal tax consequences of the facts described above under any other provision of the code including whether x was or is a small_business_corporation under sec_1361 of the code this ruling is directed only to the taxpayer who requested it sec_6110 of the code provides that it may not be used or cited as precedent pursuant to a power_of_attorney on file with this office a copy of this letter is being sent to x acting branch chief branch office of the associate chief_counsel passthroughs and special industries sincerely yours j thomas hines enclosures copy of this letter copy for sec_6110 purposes


t c memo united_states tax_court lawrence everette hill and jessie hill petitioners v commissioner of internal revenue respondent docket no filed date lawrence everette hill and jessie hill pro_se noelle c white for respondent memorandum findings_of_fact and opinion goeke judge respondent determined a deficiency of dollar_figure in petitioners’1 federal_income_tax the issue for decision is whether petitioner must recognize cancellation of indebtedne sec_1ms hill is a party to this action because she filed a joint_return for the year at issue with mr hill references to petitioner are to mr hill coi income under sec_61 of dollar_figure for the reasons stated herein we find that petitioner must recognize the coi income findings_of_fact petitioner resided in maryland at the time of filing the petition on date petitioner applied for and received a credit card from provident bank provident petitioner used the credit card but did not make the required_payments on date provident obtained a judgment of dollar_figure plus interest against petitioner in maryland state court petitioner filed for bankruptcy shortly thereafter on date the u s bankruptcy court for the district of maryland issued an order confirming petitioner’s installment_plan the installment_plan required petitioner to make payments of dollar_figure a month for months petitioner did not make the required_payments and on date an order was issued dismissing petitioner’s bankruptcy case for material default provident maintained records of petitioner’s debt and sent annual letters informing petitioner of his account balance in provident forgave petitioner’s debt provident issued a form 1099-c cancellation of debt to petitioner which reported 2unless otherwise indicated all section references are to the internal_revenue_code and all rule references are to the tax_court rules_of_practice and procedure dollar_figure in income due to cancellation of debt in petitioner filed a joint form_1040 u s individual_income_tax_return for but did not include the dollar_figure in gross_income on date respondent issued a notice_of_deficiency the notice to petitioner for respondent determined in the notice that petitioner was required to include dollar_figure of dividend income and dollar_figure of coi in gross_income on date petitioner timely petitioned this court for a redetermination of his tax_liability petitioner concedes the receipt of dollar_figure of dividend income that was not included in gross_income opinion in general the commissioner’s determination as set forth in a notice_of_deficiency is presumed correct and the burden_of_proof is on the taxpayer to prove otherwise rule a 290_us_111 however under certain circumstances the burden shifts where a taxpayer introduces credible_evidence with respect to any factual issue relevant to ascertaining the income_tax_liability of the taxpayer sec_7491 petitioner does not claim that the burden_of_proof shifts to respondent under sec_7491 in any event petitioner has failed to establish that he has satisfied the requirements of sec_7491 and accordingly the burden_of_proof does not shift to respondent under sec_7491 sec_6201 provides that in any court_proceeding if a taxpayer asserts a reasonable dispute with respect to any item_of_income reported on an information_return such as a form_1099 filed by a third party and the taxpayer has fully cooperated with the internal_revenue_service the commissioner has the burden of producing reasonable and probative information concerning the deficiency in addition to information on the return itself petitioner disputes the information on the form 1099-c provident issued and argues that his debt was discharged in bankruptcy however the record shows that petitioner’s bankruptcy case was dismissed because he did not meet the obligations of the bankruptcy plan petitioner has not asserted a reasonable dispute with respect to the coi income on the form 1099-c accordingly sec_6201 does not shift the burden to respondent generally a taxpayer must include income from the discharge_of_indebtedness sec_61 sec_1_61-12 income_tax regs caselaw indicates that where indebtedness from a credit card account is being discharged the amount of income as a result of the discharge equals the difference between the amount due on the obligation and the amount_paid for the discharge or if no consideration is paid for the discharge then the entire amount of the debt is considered the amount of income that the debtor must include in income see eg cronin v commissioner tcmemo_1999_22 there are exceptions to this general_rule sec_108 provides in relevant part that a taxpayer may exclude income from the discharge_of_indebtedness if the discharge occurs in a bankruptcy case or when the taxpayer is insolvent petitioner has not shown that he qualifies for any of the exceptions in sec_108 petitioner does not dispute the amount of his debt to provident or the amount of interest accrued thereon only that it was dealt with in his bankruptcy case as discussed above petitioner’s debt to provident was not discharged in bankruptcy petitioner defaulted on his payment plan his bankruptcy case was dismissed and his original debts were restored sec_108 provides that gross_income does not include any amount which would be includable in income because of the discharge_of_indebtedness if the discharge occurs when the taxpayer is insolvent sec_108 provides that a taxpayer is insolvent if his liabilities exceed the fair_market_value of his assets see tabrezi v commissioner tcmemo_2006_61 bressi v commissioner tcmemo_1991_651 affd without published opinion 989_f2d_486 3d cir petitioner has not shown that he was insolvent in when provident forgave his debt petitioner did not produce any evidence showing that his liabilities exceeded the fair_market_value of his assets and has failed to meet his burden of proving his insolvency at the time his debt was forgiven because provident forgave petitioner’s debt and because petitioner has not shown that he qualifies for any of the exceptions in sec_108 petitioner is required to include the coi income in gross_income accordingly for respondent decision will be entered


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 intl b04 plr-140358-08 date date t t1 t2 t3 t4 t5 t6 t7 t8 t9 legend ---------------------------------------------------- ------------------------------- ----------------------- ------------------------------------------- ------------------------------ ----------------------- ------------------------------ ------------------------------ ---------------------------------------------------- ----------------- ------------------------------------------ ------------------------------ ------------------------------------ ------------------------------ ------------------------------------ ------------------------------- ------------------- ------------------------------- ----------------------- plr-140358-08 t10 country a country b date date date date date amount dear ---- -------- ---------------------------------------- ------------------------------- ----------------------- --------------------- ------------- ---------------------- -------------------------- -------------------------- ------------- ------------- ----------------- this is in response to a letter dated date requesting an extension of time under sec_301_9100-3 to submit a request for t1 to enter into a closing_agreement with the internal_revenue_service pursuant to revproc_2000_42 2000_2_cb_394 additional information was received in a letter dated 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 the taxpayers and accompanied by a penalty of perjury statement executed by the appropriate parties 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 t2 a domestic_corporation was a subsidiary of t3 a country a corporation prior to date on date t2 and t3 were acquired by t4 a country a subsidiary of t5 a country b corporation t2 was managed and controlled in country a until date therefore t2 was subject_to income_tax on its worldwide income in country a until date and was a dual_resident_corporation as defined in sec_1_1503-2 and sec_1_1503-2 until date t2 incurred a net_operating_loss pursuant to sec_172 for the tax_year ending date of amount except for the amount allocable to the period after date through date this was a dual_consolidated_loss as defined in sec_1_1502-2 plr-140358-08 t2 failed to timely file an election pursuant to sec_1_1503-2 for tax_year ending date with respect to the dual_consolidated_loss but subsequently requested and was granted an extension of time pursuant to sec_301_9100-3 to file a late election pursuant to that relief an election under treas reg g was filed in date t5 transferred the stock of t4 to t6 a country a subsidiary of t5 this resulted in t5 owning the stock of t2 indirectly through t6 in date t2 merged into t7 a domestic_corporation which was an indirect subsidiary of t5 in a transaction intended to qualify as a reorganization under sec_368 by virtue of sec_368 t7 was owned by t8 a domestic_corporation and parent of a consolidated_group the date merger resulted in the assets of t2 becoming part of t8’s domestic consolidated_group and was a triggering event pursuant to sec_1_1503-2 t7 and t8 later changed their names to t9 and t10 respectively and both subsequently merged through a series of transactions into t1 which is owned by t to avoid the recapture of the dual_consolidated_loss incurred by t2 t9 and t10 were required to enter into a closing_agreement with the internal_revenue_service pursuant to sec_1_1503-2 accordingly t1 as successor_in_interest to both t9 and t10 and its consolidated parent t are requesting relief under sec_301_9100-1 and -3 to obtain an extension of time to enter into the closing_agreement section dollar_figure of revproc_2000_42 provides that a taxpayer must enter into a closing_agreement with the internal_revenue_service before the taxpayer files its tax_return for the taxable_year of a triggering event alternatively the taxpayer may submit its request for a closing_agreement by the due_date of its return including extensions for the year of the triggering event t9 and t10 neglected to enter into such agreement in a timely manner 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_9100-1 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_9100-3 provides that requests for relief subject_to this section 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 plr-140358-08 in the present situation the request to enter into a closing_agreement is a regulatory election as defined in sec_301_9100-1 therefore the commissioner has discretionary authority under sec_301_9100-1 to grant an extension of time provided the requirements set forth in sec_301_9100-3 are satisfied based on the facts and information submitted we conclude that t1 and t have satisfied sec_301_9100-3 accordingly t1 as the successor_in_interest to both t9 and t10 and t t1’s consolidated parent are granted an extension of time of days from the date of this ruling letter to submit a request to enter into a closing_agreement pursuant to revproc_2000_42 with respect to the dual_consolidated_loss incurred by t2 in the tax_year ending date in anticipation of being granted the extension request herein t1 and t have already filed the request to enter into the closing_agreement with the internal_revenue_service based on the relief granted in this ruling the request to enter into a closing_agreement will now be considered the granting of an extension of time is not a determination that t1 is otherwise eligible to enter into a closing_agreement sec_301_9100-1 a copy of this ruling letter should be associated with the request to enter into the closing_agreement previously filed this ruling is directed only to the taxpayers 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 pursuant to a power_of_attorney on file in this office a copy of this ruling letter is being furnished to the taxpayers’ authorized representatives sincerely ____________ david b bailey senior technical reviewer branch office of associate chief_counsel international enclosure copy for purposes cc


internal_revenue_service p o box cincinnati oh number release date date date department of the treasury employer_identification_number contact person - id number contact telephone number legend uil b scholarship program c related employer x number y dollars dollar amount dear you received advance approval for your grant making programs on date under these programs you operated an employee scholarship program and a community scholarship program you are revising your employee scholarship grant-making program and are now requesting advance approval of your revised grant making procedures this approval is required because you are a private_foundation that is exempt from federal_income_tax our determinatio11 we approved your procedures for awarding employer-related scholarships based on the information you submitted and assuming you will conduct your program as proposed we determined that your procedures for awarding employer-related scholarships meet the requirements of code sec_4945 as a result expenditures you make under these procedures won't be taxable also awards made under these procedures are scholarship or fellowship grants and are not taxable to the recipients if they use them for qualified_tuition_and_related_expenses subject_to the limitations provided in code sec_117 description of your request your letter indicates you operate an employer-related scholarship program called b you will be awarding up to x annual scholarship grants to dependent_children of current full-time employees of c each grant will be in the range of y dollars and is not renewable the scholarship must be used by the recipient at a post-secondary education at either a two-year or four-year institution of higher learning described in sec_170 of the internal_revenue_code_of_1986 as amended the code letter catalog number 58264e furthermore the award must be used only for tuition fees books and supplies required for courses of instruction recipients are free to pursue any course of study at a qualified educational_institution there is no commitment understanding or obligation conditional or unconditional suggesting that the course of study undertaken by the grant recipient is for the benefit of c a scholarship grant is made for the exclusive purpose of assisting the recipient in obtaining an education solely for the recipient's personal benefit there is no express or implied obligation that a scholarship recipient renders any future employment services to you or c once awarded the scholarship will not be revoked due to termination of an employee of c regardless of the reason for termination to be eligible for a scholarship grant a recipient must be a dependent_child of a full-time_employee of c a full time employee is any employee who has completed one year_of_service at the time his or her dependent_child files an application_for a grant and works a minimum of hours per week the grants are made available to children of all full-time employees without regard to the employee's position services or duties you will provide information about b to the employees of c by direct mailings company newsletters bulletin boards and meetings at the work locations of c dependents of eligible employees will be invited to submit applications which are available from c's human resource department you will rank the applicants who have demonstrated academic achievement and extracurricular participation and leadership as follows a gpa on a scale b work experience while attending school c community volunteer activities d extracurricular activities you will apply a ranking formula with the most emphasis placed on gpa and then present the ranked list to your board without the need for a separate scholarship committee you will award the scholarships solely based on the rankings with no variation no subjective criteria will be used and there are no limitations or restrictions in the selection process based upon race creed color religion national heritage geographical residence or employment location or the employment position of the employee your officers employees and directors may not derive either directly or indirectly any personal benefit from grants awarded by you accordingly scholarship aid shall not be given to an applicant who is a disqualified_person with respect to you as defined in sec_4946 of the internal_revenue_code the awards will be granted for the fall semester and will be made payable jointly to the recipient and the educational_institution the educational_institution will be required to letter catalog number 58264e acknowledge in writing that the scholarship award can be used only for tuition fees books or supplies and must be attested to by an appropriate_official of the educational_institution additionally within one semester of the use of the scholarship funds all scholarship recipients will be required to account to you and describe the manner in which the grant was expended upon reviewing the acknowledgements of the educational institutions and the accountings you will seek recovery_of any misused funds if there are variances from the intended usage any recovered monies will be utilized for future scholarship grants although you expect to make x scholarship grants each year the grants in any year will not exceed of the number of eligible children of employees of c who were i eligible ii applicants for such grants and iii considered or of the number of eligible children of employees of c who can be shown to be eligible for grants whether or not they submitted an application in that year basis for our determination the law imposes certain excise_taxes on the taxable_expenditures of private_foundations code sec_4945 a taxable_expenditure is any amount a private_foundation pays as a grant to an individual for travel study or other similar purposes however a grant that meets all of the following requirements of code sec_4945 is not a taxable_expenditure the foundation awards the grant on an objective and nondiscriminatory basis the irs approves in advance the procedure for awarding the grant the grant is a scholarship or fellowship subject_to code sec_117 the grant is to be used for study at an educational_organization described in code sec_170 a ii revproc_76_47 1976_2_cb_670 provides guidelines to determine whether grants a private_foundation makes under an employer-related program to employees or children of employees are scholarship or fellowship grants subject_to the provisions of code sec_117 if the program satisfies the seven conditions in sections dollar_figure through dollar_figure of revproc_76_47 and meets the applicable_percentage tests described in section dollar_figure of revproc_76_47 we will assume the grants are subject_to the provisions of code sec_117 you represented that your grant program will meet the requirements of either the percent or percent percentage_test in revproc_76_47 these tests require that the number of grants awarded to employees' children in any year won't exceed percent of the number of employees' children who were eligible for grants were applicants for grants and were considered by the selection committee for grants or letter catalog number 58264e the number of grants awarded to employees' children in any year won't exceed percent of the number of employees' children who were eligible for grants whether or not they submitted an application or the number of grants awarded to employees in any year won't exceed percent of the number of employees who were eligible for grants were applicants for grants and were considered by the selection committee for grants you further represented that you will include only children who meet the eligibility standards described in revproc_85_51 1985_2_cb_717 when applying the percent test applicable to employees' children in determining how many employee children are eligible for a scholarship under the percent test a private_foundation may include only those children who submit a written_statement or who meet the foundation's eligibility requirements they must also satisfy certain enrollment conditions you represented that your procedures for awarding grants under this program will meet the requirements of revproc_76_47 in particular an independent selection committee whose members are separate from you your creator and the employer will select individual grant recipients you will not use grants to recruit employees nor will you end a grant if the employee leaves the employer you will not limit the recipient to a course of study that would particularly benefit you or the employer other conditions that apply to this determination this determination only covers the grant program described above this approval will apply to succeeding grant programs only if their standards and procedures don't differ significantly from those described in your original request this determination is in effect as long as your procedures comply with sections dollar_figure through dollar_figure of revproc_76_47 and with either of the percentage tests of sec_4 if you establish another program covering the same individuals that program must also meet the percentage_test this determination applies only to you it may not be cited as a precedent you cannot rely on the conclusions in this letter if the facts you provided have changed substantially you must report any significant changes to your program to the cincinnati office of exempt_organizations at internal_revenue_service exempt_organizations determinations p o box cincinnati oh letter catalog number 58264e you cannot award grants to your creators officers directors trustees foundation managers or members of selection committees or their relatives all funds distributed to individuals must be made on a charitable basis and further the purposes of your organization you cannot award grants for a purpose that is inconsistent with code sec_170 you should keep adequate_records and case histories so that you can substantiate your grant distributions with the irs if necessary please keep a copy of this letter in your records if you have questions please contact the person listed at the top of this letter sincerely jeffrey i cooper director exempt_organizations rulings and agreements letter catalog number 58264e


significant index number department of the treasury internal_revenue_service washington d c jan qe ter pa az gott exempt and division 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 b and b of the intemal 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 bases established as of date which result in a net unfunded_liability of dollar_figure this extension applies to the eligible amortization charge as of that date the extension of the amortization periods of the unfunded liabilities of the plan was granted in accordance with section d 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 pian submits an application meeting the criteria stated in sec_431 1‘b the plan has submitted the required information to meet the criteria in sec_431 b 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 pian 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 and to the this ruling is directed only to the taxpayer that requested it sec_61 kx 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 ht david m ziegler manager ep actuarial group


internal_revenue_service number release date index number 468a -------------------------- --------------------------------------------------- ----------------------------------- ----------------------------- ------------------------------------------------ department of the treasury washington dc third party communication none date of communication not applicable_person to contact ------------------- id no ------------- telephone number --------------------- refer reply to cc psi b6 plr-117445-06 date april legend taxpayer plant parent director location commission a commission b method fund order dear ------------------ --------------------------------------------------------------------------------- -------------------------------------- ---------------------------------------------------------- ----------------------------------- -------------------------------- -------------------------------- ---------------------------------------------------------------------------------- ----------------------------------- ------------------------------------------------- ----------------------------------------------------- ---------------------- ------------------------------------------- ----------------------------------------------------------- this letter responds to your request dated date for a schedule of deduction amounts and a revised schedule of ruling amounts pursuant to sec_468a of the internal_revenue_code and sec_1_468a-8t of temporary income_tax regulations you also provided additional information by letter dated date taxpayer was previously granted schedules of ruling amounts most recently on date information was submitted pursuant to sec_1_468a-3t e by letter dated date taxpayer withdrew the request for a revised schedule of ruling amounts taxpayer represents the facts and information as follows plr-117445-06 the taxpayer a subsidiary of the parent is included in a consolidated_return filed by the parent the taxpayer is the operator and owner of ----- percent interest of the plant the plant is situated at the location the plant s amended operating license is scheduled to expire on -------------------- the estimated base cost for decommissioning the plant is based on an independent study and the proposed method of decommissioning the plant is the method the taxpayer is subject_to the jurisdiction of commission a -------- and commission b ------ in the order commission a decreased the decommissioning costs collected for the plant to dollar_figure-- effective ----------------------because of the impact of the extended operating license on continued earnings on the assets of the fund and the associated nonqualified_fund commission a determined that based upon the estimates used in the proceeding the amounts presently held in the fund and the associated nonqualified_fund are anticipated to grow to adequately satisfy the liability for decommissioning the plant at this time the taxpayer does not seek ruling amounts with respect to commission b’s jurisdiction based upon the assumptions adopted by commission a in the order it is estimated that the fund assets will earn an after-tax rate of return of -- percent the total cost of decommissioning the plant is estimated to be dollar_figure------------------in ------- dollars this base cost of decommissioning the plant is escalated at a -----percent yearly rate resulting in a total future cost to the taxpayer of decommissioning the plant of dollar_figure--------------------in ------- dollars under ratemaking assumptions used during the first proceeding before commission a the plant would no longer be included in rate base in ------- in the prior schedule of ruling amounts issued under sec_468a of the code as in effect prior to the estimated_useful_life of the plant is ---- years -------------- and the estimated period for which the fund is to be in effect is ---- years -------------- thus the percentage of the total estimated costs qualifying for deduction in the schedule of ruling amounts under prior_law was --------percent sec_468a as amended by the energy tax incentives act of the act publaw_109_58 119_stat_594 allows an electing taxpayer to deduct payments made to a nuclear decommissioning reserve fund sec_468a limits the amount that may be paid into the nuclear decommissioning fund in any year to the ruling_amount applicable to that year prior to the changes made by the act the deduction was limited to the lesser_of the amount included in the utility’s cost of service for ratemaking purposes or the ruling_amount plr-117445-06 generally as a result only regulated utilities could take advantage of sec_468a the act amendment of sec_468a eliminated the cost-of-service limitation accordingly decommissioning costs of an unregulated nuclear power plant may now be funded by deductible contributions to a qualified nuclear decommissioning fund sec_468a provides that no deduction shall be allowed for any payment to the nuclear decommissioning fund unless the taxpayer requests and receives from the secretary a schedule of ruling amounts the ruling_amount for any_tax year is defined under ' 468a d as the amount which the secretary determines to be necessary to fund the total nuclear decommissioning cost of that nuclear power plant over the estimated_useful_life of the plant this term is further defined to include the amount necessary to prevent excessive funding of nuclear decommissioning costs or funding of these costs at a rate more rapid than level_funding taking into account such discount rates as the secretary deems appropriate prior to the changes made by the act deductible contributions were limited to the amount necessary for an electing taxpayer to fund the plant’s post-1983 nuclear decommissioning costs determined as if decommissioning costs accrued ratably over the estimated_useful_life of the plant provided that the taxpayer elected to establish a fund in prior_law also did not allow a taxpayer electing to establish a fund later than to contribute to that fund any amount in excess of that amount necessary to fund the ratable portion of the plant’s nuclear decommissioning costs beginning in the year the fund is established sec_468a now allows a taxpayer to contribute to a nuclear decommissioning fund the entire cost of decommissioning the plant including both the pre-1984 amount that was denied under the law prior to the act as well as any amount attributable to any year after in which a taxpayer had not established a fund under sec_468a sec_468a provides that the deduction for the contribution of the previously-excluded amount is allowed ratably over the remaining useful_life of the nuclear plant sec_468a provides that a taxpayer shall be deemed to have made a payment to the nuclear decommissioning fund on the last day of a taxable_year if the payment is made on account of such taxable_year and is made within months after the close of the tax_year this section applies to payments made pursuant to either a schedule of ruling amounts or a schedule of deduction amounts sec_1_468a-1t a provides that an eligible_taxpayer may elect to deduct nuclear decommissioning costs under sec_468a of the code an eligible_taxpayer as defined under ' 468a-1t b of the regulations is a taxpayer that has a plr-117445-06 qualifying interest in any portion of a nuclear power plant a qualifying interest is among other things a direct ownership_interest sec_1_468a-2t b provides that the maximum amount of cash payments made or deemed made to a nuclear decommissioning fund during any_tax year shall not exceed the ruling_amount applicable to the nuclear decommissioning fund for such taxable_year the limitation on the amount of cash payments for purposes of sec_1 468a- 2t b does not apply to any special transfer permitted under sec_1_468a-8t sec_1_468a-3t a provides that in general a schedule of ruling amounts for a nuclear decommissioning fund is a ruling specifying annual payments that over the tax years remaining in the funding_period as of the date the schedule first applies will result in a projected balance of the nuclear decommissioning fund as of the last day of the funding_period equal to and in no event more than the amount of decommissioning costs allocable to the fund sec_1_468a-3t a provides that to the extent consistent with the principles and provisions of this section each schedule of ruling amounts shall be based on reasonable assumptions concerning the after-tax rate of return to be earned by the amounts collected for decommissioning the total estimated cost of decommissioning the nuclear plant and the frequency of contributions to a nuclear decommissioning fund for a taxable_year under ' 468a-3t a the internal_revenue_service shall provide a schedule of ruling amounts identical to the schedule proposed by the taxpayer but no such schedule shall be provided by the service unless the taxpayer's proposed schedule is consistent with the principles and provisions of that section sec_1_468a-3t a provides that the taxpayer bears the burden of demonstrating that the proposed schedule of ruling amounts is consistent with the principles of the regulations and that it is based on reasonable assumptions that section also provides additional guidance regarding how the service will determine whether a proposed schedule of ruling amounts is based on reasonable assumptions for example if a public_utility commission established or approved the currently applicable rates for the furnishing or sale by the taxpayer of electricity from the plant the taxpayer can generally satisfy this burden_of_proof by demonstrating that the schedule of ruling amounts is calculated using the assumptions used by the public_utility commission in its most recent order in addition a taxpayer that owns an interest in a deregulated nuclear plant may submit assumptions used by a public_utility commission that formerly had regulatory jurisdiction over the plant as support for the assumptions used in calculating the taxpayer’s proposed schedule of ruling amounts with the understanding that the assumptions used by the public_utility commission may be given less weight if they are out of date or were developed in a proceeding for a different taxpayer the use of other industry standards such as the assumptions underlying the taxpayer's most recent financial assurance filing with the nrc are described by the plr-117445-06 temporary regulations as an alternative means of demonstrating that the taxpayer has calculated its proposed schedule of ruling amounts on a reasonable basis sec_1_468a-3t a further provides that consistency with financial_accounting statements is not sufficient in the absence of other supporting evidence to meet the taxpayer’s burden_of_proof sec_1_468a-3t b provides that in general the ruling_amount for any_tax year in the funding_period shall not be less than the ruling_amount for any earlier tax_year under ' 468a-3t c the funding_period begins on the first day of the first tax_year for which a deductible payment is made to the nuclear decommissioning fund and ends on the last day of the taxable_year that includes the last day of the estimated_useful_life of the nuclear power plant to which the fund relates sec_1_468a-3t c provides rules for determining the estimated_useful_life of a nuclear plant for purposes of sec_468a in general under sec_1_468a-3t c i a if the plant was included in rate base for ratemaking purposes for a period prior to date the date used in the first such ratemaking proceeding as the estimated date on which the nuclear plant will no longer be included in the taxpayer’s rate base is the end of the estimated_useful_life of the nuclear plant sec_1_468a-3t c i b provides that if the nuclear plant is not described in sec_1_468a-3t c i a the last day of the estimated_useful_life of the nuclear plant is determined as of the date the plant is placed_in_service under sec_1_468a-3t c i c any reasonable method may be used in determining the estimated_useful_life of a nuclear power plant that is not described in sec_1_468a-3t c i a sec_1_468a-3t d provides that the amount of decommissioning costs allocable to a nuclear decommissioning fund is the taxpayer's share of the total estimated cost of decommissioning the nuclear power plant sec_1_468a-3t d provides that a taxpayer's share of the total estimated cost of decommissioning a nuclear power plant equals the total estimated cost of decommissioning such plant multiplied by the taxpayer's qualifying interest in the plant sec_1_468a-3t e enumerates the information required to be contained in a request for a schedule of ruling amounts filed by a taxpayer in order to receive a ruling_amount for any taxable_year sec_1_468a-3t f provides that any taxpayer that has previously obtained a schedule of ruling amounts can request a revised schedule of ruling amounts such a request must be made in accordance with the rules of ' 468a-3t e the internal_revenue_service shall not provide a revised schedule of ruling amounts applicable to a taxable_year in response to a request for a schedule of ruling amounts that is filed after the deemed payment deadline date for such taxable_year plr-117445-06 sec_1_468a-3t f v provides in part that if a taxpayer is required to request a revised schedule of ruling amounts and each ruling in the revised schedule would equal zero the taxpayer may instead of requesting a revised schedule begin treating the ruling amounts under its most recent schedule as equal to zero dollars sec_1_468a-8t a provides that under the provisions of sec_468a as described above a taxpayer may make a special transfer of cash or property to the nuclear decommissioning fund this special transfer is not subject_to the sec_468a limitation the amount of the special transfer is the present_value of the pre-2005 nonqualifying percentage of the estimated future costs of decommissioning the nuclear plant that was disallowed under sec_468a prior to the act sec_1_468a-8t a defines the pre-2005 nonqualifying percentage as equal to percent reduced by the sum of the qualifying percentage used in determining the taxpayer’s last schedule of ruling amounts for the fund under sec_468a as it existed prior to the act and the percentage transferred in any previous special transfer sec_1_468a-8t a provides that the taxpayer is not required to transfer the entire amount eligible for the special transfer in one year but must take any prior special transfers into account in calculating the pre-2005 qualifying percentage further pursuant to sec_1_468a-8t c a taxpayer making a special transfer in more than one year must request a new schedule of deduction amounts in connection with each special transfer sec_1_468a-8t b provides that the deduction for the special transfer is allowed ratably over the remaining useful_life of the nuclear plant under sec_1 468a- 8t b iii the deduction for property contributed in a special transfer is limited to the lesser_of the fair_market_value of the property or the taxpayer’s basis in the property under sec_1_468a-8t b the taxpayer recognizes no gain_or_loss on the special transfer of property the taxpayer’s basis in the fund is not increased by reason of the special transfer of property and the fund’s basis in the property transferred in the special transfer is the same as the transferee’s basis in that property immediately prior to the special transfer sec_1_468a-8t c provides that taxpayer may not make a special transfer to a qualified nuclear decommissioning fund unless the taxpayer requests from the irs a schedule of deduction amounts in connection with such transfer a request for a schedule of deduction amounts may be made in connection with a request for a schedule of ruling amounts but in such case the calculations for both the schedule of ruling amounts and the schedule of deduction amounts must be separately_stated as stated above prior to the changes made by the act deductible contributions were limited to the lesser_of the amount necessary to fund the plant’s post-1983 plr-117445-06 nuclear decommissioning costs or the amount necessary to fund the plant’s decommissioning costs for that portion of the plant’s estimated_useful_life for which a fund had been established under that prior_law taxpayer was allowed to contribute --- --------percent of the amounts necessary to fully decommission its share of the plant sec_468a allows a taxpayer to contribute to the nuclear decommissioning fund the pre-1984 amount that was denied under the law prior to the act thus taxpayer is able to contribute the additional --------percent of the amounts necessary to decommission its ownership share of the plant taxpayer’s share of the total future decommissioning costs is dollar_figure-------------------- ------- dollars and the present_value of that amount is dollar_figure----------------- ------- dollars the -------- percent of dollar_figure------------------is dollar_figure---------- ----------------- ------- dollars we have examined the representations and information submitted by the taxpayer in relation to the requirements set forth in ' 468a and the regulations thereunder based solely upon these representations of the facts we conclude that the taxpayer may make a special transfer of dollar_figure----------------in ------- and may ratably deduct the amount contributed from taxable_year ------- to ------- as set forth below schedule of deduction amounts year deduction amount ------------------each year dollar_figure--------------- the special transfer amount stated above is the maximum amount permitted to be transferred to the fund under sec_468a if taxpayer transfers a lesser amount to the fund the taxpayer may deduct that lesser amount ratably over the period of years described above further in the event that taxpayer transfers a lesser amount in ------ in order to make an additional special transfer in a later year including a special transfer of the difference between the special transfer amount stated above and the lesser amount transferred in ------- taxpayer must request a new schedule of deduction amounts and in that request must take the ------- transfer into account and recalculate the pre-2005 qualifying percentage in such request we note that if the taxpayer elects to make a special transfer of property for all or a portion of this special transfer the amount of the transfer is the lesser_of the fair_market_value of the property transferred or the basis of the property in the hands of the taxpayer immediately prior to the transfer in either event the deduction of the taxpayer with respect to the property is limited to the taxpayer’s basis in the property since the actions of commission a in reducing decommissioning collections to dollar_figure- --- results in a revised schedule of ruling amounts equal to dollar_figure-- in each year the plr-117445-06 taxpayer may pursuant to sec_1_468a-3t f v treat the ruling amounts in its most recent schedule as equal to ------ dollars effective in ------- and subsequent years except as specifically determined above no opinion is expressed or implied concerning the federal_income_tax consequences of the transaction described above this ruling is directed only to the taxpayer who requested it sec_6110 of the code provides it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to the taxpayer’s representative we are also sending a copy of this letter_ruling to the director pursuant to ' 468a-7t a a copy of this letter must be attached with the required election statement to the taxpayer's federal_income_tax return for each tax_year in which the taxpayer claims a deduction for payments made to the fund sincerely peter c friedman senior technician reviewer branch passthroughs special industries


department of the treasury internal_revenue_service washington d c y hxexeurr ano government entities division jul uniform issue list se t pra t2 legend taxpayer a asisiinidceekivictes tk ira xx maki riaa financial_institution a ka aakrererekkkkhe a kres amount a hurwaakewe date t t maarkkrerenae aaa date date hhhrakeaekaeakk in eekkkak ikk dear hekkkeremrek this is in response to your request dated date in which you request a waiver of the 60-day rollover requirement contained in sec_408 d of the internal_revenue_code the code’ the following facts and representations have been submitted under penalty of perjury in support of the ruling requested taxpayer a age represents that he received a distribution from ira x totaling amount a taxpayer a asserts that his failure to accomplish a rollover within the 60-day period prescribed by sec_408 was due to a mistake made by financial_institution a taxpayer a further represents that amount a has not been used for any other purpose page - on date taxpayer a received a distribution from ira x on date a date within the 60-day rollover period taxpayer a met with a representative from financial_institution a to open an ira account the representative erroneously completed the paperwork opening a non-ira account instead of an ira account financial_institution a has admitted its error in a letter dated date based on the facts and representations you request a ruling that the internal_revenue_service waive the day rollover requirement contained in sec_408 of the code with respect to the distribution of amount a sec_408 of the code provides that except as otherwise provided in sec_408 any amount_paid or distributed out of an ira shail be included in gross_income by the payee or distributee as the case may be in the manner provided under sec_72 of the code sec_408 of the code defines and provides the rules applicable to ra rollovers sec_408 of the code provides that sec_408 of the code does not apply to any amount_paid or distributed out of an ira to the individual for whose benefit the ira is maintained if i the entire amount received including money and any other_property is paid into an ira for the benefit of such individual not later than the day after the day on which the individual receives the payment or distribution or ii the entire amount received including money and any other_property is paid into an eligible_retirement_plan other than an ira for the benefit of such individual not later than the day after the date on which the payment or distribution is received except that the maximum amount which may be paid into such plan may not exceed the portion of the amount received which is includible in gross_income determined without regard to sec_408 sec_408 of the code provides that sec_408 does not apply to any amount described in sec_408i received by an individual from an ira if at any time during the 1-year period ending on the day of such receipt such individual received any other amount described in sec_408 from an ira which was not includible in gross_income because of the application of sec_408 sec_408 of the code provides a similar 60-day rollover period for partial rollovers sec_408 of the code provides that the secretary may waive the day requirement under sec_408 and sec_408 of the code where the failure to waive such requirement would be against equity or good conscience including page cagtalty disaster or other events beyond the reasonable control of the individual subject_to such requirement only distributions that occurred after date are eligible for the waiver under sec_408 of the code revproc_2003_16 r b date provides that in determining whether to grant a waiver of the 60-day rollover requirement pursuant to sec_408 the service will consider all relevant facts and circumstances including errors committed by a financial_institution inability to complete a rollover due to death disability hospitalization incarceration restrictions imposed by a foreign_country or postal error the use of the amount distributed for example in the case of payment by check whether the check was cashed and the time elapsed since the distribution occurred the information presented and documentation submitted by taxpayer a is consistent with his assertion that his failure to accomplish a timely rollover was caused by an error committed by a representative of financial_institution a therefore pursuant to sec_408 of the code the service hereby waives the 60-day rollover requirement with respect to the distribution of amount a from ira x taxpayer a letter to contribute amount a into a rollover ira provided all other requirements of sec_408 of the code except the 60-day requirement are met with respect to such contribution amount a will be considered a rollover_contribution within the meaning of sec_408 of the code is granted a period of days from the issuance of this ruling no opinion is expressed as to the tax treatment of the transaction described herein under the provisions of any other section of either the code or regulations which may be applicable thereto this letter is directed only to the taxpayer who requested it sec_61 k of the code provides that it may not be used or cited as precedent if you wish to inquire about this ruling please contact please address all correspondence to se t ep ra t2 at weak _ keke sincerely yours ymz vogl soth cittlejohn manager denzell employee_plans technical group enclosures deleted copy of ruling letter notice of intention to disclose