- significant index no department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division aug o t ep rasta this letter constitutes notice that conditional approval has been granted for your request for a 10-year extension for amortizing the plan’s unfunded liabilities described in sec_412 of the internal_revenue_code code and sec_302 of the employee_retirement_income_security_act_of_1974 erisa the extension is granted for the amortization period for amortizing unfunded liabilities of the plan for the plan_year beginning date the extensions of the amortization periods of the unfunded liabilities of the plan have been granted in accordance with sec_412 of the code and sec_304 of erisa sec_412 of the code and sec_304 of erisa authorize the secretary to extend the period of time required to amortize any unfunded_liability described in sec_412 of the code and sec_302b of erisa of a plan for a period of time not in excess of years if the secretary determines that such extension would carry out the purposes of erisa and would provide adequate protection for participants under the plan and their beneficiaries and if the secretary determines that the failure to permit such extension would result in a a substantial risk to the voluntary continuation of the plan or b a substantial curtailment of pension benefit levels or employee compensation and be adverse to the interests of plan participants in the aggregate sec_101 of reorganization plan no of 1979_1_cb_480 transferred the authority for issuing rulings under sec_304 of erisa from the secretary of labor to the secretary_of_the_treasury accordingly the amortization periods for the unfunded liabilities of the plan are extended as described above under sec_412 of the code and sec_304 of erisa the plan is a multiemployer_plan the plan was x funded on a market_value basis as of date subsequent to an investment return of negative during the in response to this deterioration plan_year the plan was y funded as of date in the funded status of the plan the employer_contribution rate was increased effective date and additional effective date the trustees of the plan have resolved that employer_contribution rates shall be increased in accordance with the following schedule in addition effective date increase date date date date date date date date date however despite these increases the plan absent an additional increase in employer_contribution rates is projected to have funding deficiencies beginning with the plan_year beginning date this is the case even though the funded status of the plan ie the ratio of the market_value of assets to the unit credit actuarial accrued liability is projected to gradually increase without any increases in employer_contribution rates beyond those listed above the trustees of the plan have represented that an additional increase in employer_contribution rates is unattainable if however the requested amortization period extension was to be granted projections of the funding_standard_account would show no future funding deficiencies accordingly failure to permit the extensions would result in a substantial risk to the voluntary continuation of the plan and would be adverse to the participants in the aggregate however because the prospects for recovery are uncertain and because of the funded_percentage of the plan we are granting the extension subject_to the conditions listed below anotional credit balance is maintained such that the credit balance is at least as large as the accumulation at the plan’s valuation rate of the amortized at the plan’s valuation rate over a period of years differences between the amortization payments of the extended bases amortized at the sec_6621 rate and the amortization payments of such bases had such bases been extended and amortized at the plan’s valuation rate the plan’s funded ratio calculated by dividing the plan's market_value of assets by its actuarial accrued liability computed using the unit credit method and the plan assumptions as of date is a b no less than for each valuation_date from date through date inclusive foreach valuation_date subsequent to date no less than greater than the floor funded ratio as of the previous valuation_date for example because the floor funded ratio as of date i sec_59 the funded ratio must be at least as of date and as of date and for each plan_year that the extension remains in effect starting with the plan_year beginning date a copy of the actuarial valuation report for each plan_year will be provided by march of the second following calendar_year to the address listed below internal_revenue_service you accepted these conditions in a letter dated date if any one of these conditions is not satisfied the approval to extend the amortization periods for amortizing the unfunded liabilities would be retroactively null and void however the service will consider modifications of these conditions especially in the event that unforeseen circumstances beyond the control of the plan may cause the actual experience of the plan to fail the funded ratio condition an example of such an unforeseen circumstance would be market fluctuations which affect the value of the plan’s assets of course any request for a modification is considered another ruling_request and would be subject_to an additional user_fee your attention is called to sec_412 of the code and sec_304 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_plan whether qualified or unqualified maintained by the trustees for 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_304 of erisa similarly the establishment of a new profit sharing plan or any other retirement_plan whether qualified or unqualified maintained by the trustees for 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_304 of erisa we have sent a copy of this letter to the manager ep classification in and to your authorized representative pursuant to a power_of_attorney on file in this office to the manager ep compliance unit in - if you require further assistance in this matter please contact - sincerely yours james e holland jr manager employee_plans technical


internal_revenue_service number release date index number ------------------------------ --------------------- ----------------------------------- department of the treasury washington dc person to contact ------------------- id no ------------- telephone number --------------------- refer reply to cc psi b04 plr-120231-06 date date re ----------------------------------------------------- re ----------------------------------------------------- legend husband ------------------------------------------------------------------- trust b ---------------------------------------------------------------------- wife trust a - - - - ------------------------- ------------------ ----------------------------------------------------- ----------------------------------------------------- - - - - - ---------------------- ------------------------- --------------- --------------- ------------------------------------------------------- date date years years x ----------------------------------------------------------------------------- y cpa cpa ------------------------ -------------------------------------------------------- ------------------------------------------------------------------------ - - - ---------------------------------------------------------------------- - - ------------------------------- ------------- law firm state dear ------------- this is in response to a letter dated date submitted by your authorized representative requesting rulings under sec_2642 of the internal revenue plr-120231-06 code and sec_301 of the procedure and administration regulations with respect to transfers to two trusts husband and wife reside in state on date husband established an irrevocable_trust trust a for the primary benefit of his children and descendants on date husband established an irrevocable_trust trust b also for the primary benefit of his children and descendants date and date are prior to date transfers to trusts a and b in years prior to were not subject_to the provisions of chapter see sec_26_2601-1 of the generation-skipping_transfer_tax regulations husband transferred x to trust a in year sec_1 and cash to trust a in year and y to trust a in years husband transferred x to trust b in years and years and years and are after date and accordingly are subject_to the provisions of chapter husband and wife engaged cpa as their principal tax advisor for the years and relied upon cpa to advise them on tax planning issues including gift and generation-skipping_transfer_tax issues cpa prepared form sec_709 united_states gift and generation-skipping_transfer_tax return for husband and wife for the years and years transfers to trusts a and b husband and wife elected to split_gifts under sec_2513 on the form sec_709 for those years cpa inadvertently failed to allocate any of husband’s and wife’s gst_exemption to trusts a and b on the form sec_709 for those years cpa did not prepare form sec_709 for years because husband and wife did not request cpa to do so husband and wife did not make such a request because they had been advised by law firm engaged by them to prepare other tax returns that the transfers to trust a during those years were subject_to the annual exclusion rule_of sec_2503 because no form sec_709 were filed for the years no allocations of husband’s and wife’s gst exemptions were made to trust a further husband and wife did not elect to split the gifts made to trust a during those years husband and wife retained cpa in year as their principal tax preparer and advisor based upon the prior advice of law firm husband and wife did not provide information to cpa regarding the years transfers to trust a however upon a review of husband’s and wife’s form sec_709 for a later year cpa discovered that husband and wife did not allocate his or her gst_exemption to the transfers to trusts a and b for years and cpa advised husband and wife to submit a private_letter_ruling request seeking relief to do so plr-120231-06 husband requests i an extension of time to allocate his gst_exemption to trust a for year sec_1 and years and to trust b in years and and ii that such allocations are to be based on the value of the property transferred to trusts a and b on the date of the transfers sec_2601 imposes a tax on every generation-skipping_transfer a generation- skipping transfer is defined under sec_2611 as a taxable_distribution a taxable_termination and a direct_skip sec_2631 as in effect for the tax years at issue provided that for purposes of determining the gst tax every individual shall be allowed a gst_exemption of dollar_figure adjusted for inflation under sec_2631 which may be allocated by such individual or his executor to any property with respect to which such individual is the transferor sec_2631 provides that any allocation under sec_2631 once made shall be irrevocable sec_2652 and sec_26_2652-1 of the generation-skipping_transfer_tax regulations provide that if under sec_2513 one-half of a gift is treated as made by an individual and one-half is treated as made by the spouse of the individual then for purposes of the gst tax each spouse is treated as the transferor of one-half of the entire value of the property transferred by the donor spouse regardless of the interest the electing spouse is actually deemed to have transferred under sec_2513 sec_2632 provides that any allocation by an individual of his or her gst_exemption under sec_2631 may be made at any time on or before the date prescribed for filing the estate_tax_return for such individual’s estate determined with regard to extensions regardless of whether such a return is required to be filed sec_26_2632-1 provides that an allocation of gst_exemption to property transferred during the transferor’s lifetime other than in a direct_skip is made on form_709 sec_2642 provides that except as provided in sec_2642 if the allocation of the gst_exemption to any transfers of property is made on a gift_tax_return filed on or before the date prescribed by sec_6075 for such transfer the value of such property for purposes of sec_2642 shall be its value as finally determined for purposes of chapter within the meaning of sec_2001 and such allocation shall be effective on the date of such transfer plr-120231-06 sec_2642 provides that the secretary shall by regulation prescribe such circumstances and procedures under which extensions of time will be granted to make an allocation of gst_exemption described in sec_2642 or sec_2642 provides that in determining whether to grant relief under this paragraph the secretary shall take into account all relevant circumstances including evidence of intent contained in the trust instrument or instrument of transfer and such other factors as the secretary deems relevant for purposes of determining whether to grant relief under this paragraph the time for making the allocation or election shall be treated as if not expressly prescribed by statute see notice_2001_50 2001_2_cb_189 sec_301_9100-1 provides that the commissioner has discretion to grant a reasonable extension of time under the rules set forth in sec_301_9100-2 and sec_301_9100-3 to make a regulatory election or a statutory election but no more than months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301_9100-3 provides the standards used to determine whether to grant an extension of time to make an election whose date is prescribed by a regulation and not expressly provided by statute under sec_301_9100-1 a regulatory election includes an election whose due_date is prescribed by a notice published in the internal_revenue_bulletin in accordance with sec_2642 and notice_2001_50 taxpayers may seek an extension of time to make an allocation described in sec_2642 under the provisions of sec_301_9100-3 requests for relief under sec_301_9100-3 will be granted when the taxpayer provides the evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 provides that a taxpayer is deemed to have acted reasonably and in good_faith if the taxpayer reasonably relied on a qualified_tax professional including a tax professional employed by the taxpayer and the tax professional failed to make or advise the taxpayer to make the election based on the facts submitted and the representations made we conclude that the requirements of sec_301_9100-3 have been satisfied husband and wife elected to split_gifts under sec_2513 for the years and transfers to trusts a and b under sec_26_2652-1 wife is treated for gst purposes as the transferor of one-half of the entire value of the property transferred by husband regardless of the interest wife plr-120231-06 is actually deemed to have transferred under sec_2513 for gst purposes husband and wife are each treated as the transferor of one-half of the value of the entire property transferred to trusts a and b in years and the same rule will apply if husband and wife elect to split_gifts on the original form sec_709 for years therefore husband is granted an extension of time of days from the date of this letter to allocate his gst_exemption to trust a for year sec_1 and years and to trust b in years and the allocations will be effective as of the date of the transfers and the value of the transferred property to trusts a and b as of the date of the original transfers to the trusts will be used in determining the amount of husband’s gst_exemption to be allocated to trusts a and b trusts a and b’s inclusion_ratio will be determined under sec_2642 and b husband should make the allocations on supplemental form sec_709 for years and and on original form sec_709 for years each form should be filed with the cincinnati service_center at the following address internal_revenue_service cincinnati service_center - stop cincinnati oh a copy of this letter should be attached to the form 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 tax consequences of the transaction under the cited provisions or under any other provisions of the code except as specifically ruled herein we express or imply no opinion on the federal this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent sincerely william o’shea associate chief_counsel passthroughs and special industries enclosures copy for sec_6110 purposes copy of this letter


internal_revenue_service department of the treasury number release date index number washington dc person to contact telephone number refer reply to cc psi b03-plr-152661-01 date date legend x a b state d1 dear this letter responds to your letter dated date submitted on behalf of x requesting a ruling under sec_1362 of the internal_revenue_code facts x was incorporated under state law on d1 and x's shareholders a and b decided to elect s_corporation status for x a and b relied on a tax advisor to file x's form_2553 election by a small_business_corporation with an effective date of d1 the form_2553 however was not filed timely x requests a ruling that it will be recognized as an s_corporation effective for taxable_year beginning d1 under sec_1362 law and analysis sec_1362 provides that a small_business_corporation may elect to be an s_corporation sec_1362 provides the rule on when an s election will be effective if an s election is made within the first two and one-half months of a corporation's taxable_year then the corporation will be treated as an s_corporation for the year in which the election is made if an s election is made after the first two and one-half months of a corporation's taxable_year then the corporation will not be treated as an s_corporation plr-152661-01 until the taxable_year after the year in which the s election is made sec_1362 provides that if an election under sec_1362 is made for any taxable_year after the date prescribed by sec_1362 for making the election or no sec_1362 election is made for any taxable_year and the secretary determines that there was reasonable_cause for the failure to timely make the election then the secretary may treat the election as timely made for such taxable_year conclusion based on the facts submitted and representations made we conclude that x has established reasonable_cause for its failing to make a timely election and that x is eligible for relief under sec_1362 accordingly if x makes an election to be an s_corporation by filing with the appropriate service_center a completed form_2553 containing an effective date of d1 for the election within days following the date of this letter then such election will be treated as timely made a copy of this letter should be attached to the form_2553 filed with the service_center a copy is enclosed for that purpose except as expressly provided herein we express or imply no opinion concerning the federal tax consequences of any aspect of any transaction or item discussed or referenced in this letter specifically we express or imply no opinion concerning whether x is an s_corporation for federal tax purposes pursuant to a power_of_attorney on file with this office we are sending a copy of this letter to the taxpayer 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 sincerely christine ellison chief branch office of associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes cc


t c memo united_states tax_court james c miller jr petitioner v commissioner of internal revenue respondent docket no filed date james c miller jr pro_se scott lyons for respondent memorandum findings_of_fact and opinion lauber judge for petitioner’s and tax years the internal_revenue_service irs determined deficiencies in federal_income_tax and additions to tax under sec_6651 and and a in the following amounts year deficiency dollar_figure big_number big_number sec_6651 dollar_figure big_number big_number additions to tax sec_6651 dollar_figure to be determined to be determined sec_6654 dollar_figure the issues for decision are whether petitioner received but failed to report nonemployee compensation we hold that he did whether petitioner is entitled to deduct alleged expenses reported on schedules c profit or loss from business we hold that he is not whether petitioner is liable for additions to tax pursuant to sec_6651 for failing to timely file federal_income_tax returns we hold that he is whether petitioner is liable for additions to tax pursuant to sec_6651 for failing to timely pay federal_income_tax we hold that he is whether petitioner is liable for additions to tax pursuant to sec_6654 for failure to pay estimated federal_income_tax we hold that he is and whether petitioner engaged in behavior warranting the imposition of a unless otherwise indicated all section references are to the internal_revenue_code code in effect for the years in issue and all rule references are to the tax_court rules_of_practice and procedure rules all monetary amounts are rounded to the nearest dollar penalty pursuant to sec_6673 we hold that he did but will refrain from imposing a penalty 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 his petition petitioner resided in georgia petitioner was self-employed and engaged in various jobs as a handyman and maintenance worker petitioner’s primary trade was roofing but he also per- formed sheet rock repairs minor plumbing and painting for various businesses during the tax years at issue petitioner admitted that he performed such tasks for georgia farm bureau mutual insurance co georgia farm bureau which hired him to repair storm damage to properties it insured he admitted that he also performed such tasks for belk co which hired him to do maintenance and repairs on real_estate it owned petitioner failed to file a form_1040 u s individual_income_tax_return for or the irs received information returns forms 1099-misc miscellaneous income reporting that petitioner during these years received payments from the following payors in the following amounts payor georgia farm bureau belk co crystal products co regions bank wells fargo bank total dollar_figure big_number big_number -0- -0- big_number dollar_figure big_number -0- -0- -0- big_number dollar_figure big_number -0- big_number big_number using this information the irs prepared substitutes for returns sfrs for and that met the requirements of sec_6020 these returns included as income the nonemployee compensation listed above and allowed a standard_deduction for a single filer and one exemption on date respondent issued petitioner a notice_of_deficiency for and based on the sfrs and a separate notice_of_deficiency for and petitioner filed a timely petition in this court from the notice and alleged errors for those years but he did not petition from the notice thus the years at issue are limited to on date petitioner sought to put the tax years into issue by moving to amend his petition for this motion failed to comply in several respects with this court’s rules petitioner was given days to file a properly signed motion and lodge an amended petition but he did neither in any event even if a proper motion for leave to amend were before us we would deny it petitioner’s motion for leave to amend his petition could not have continued on date this case was calendared for trial in columbia south carolina concurrently with the notice of trial the court mailed petitioner its standing_pretrial_order which requires the parties among other things to stipulate facts to the maximum extent possible petitioner was advised that if failure to stipulate is due to lack of cooperation by either party the court may order sanctions against the uncooperative party during the discovery phase respon- dent served petitioner with requests for admissions asking him to admit that he received specified amounts of income from specified payors as set forth above to each such request petitioner responded that he can neither admit nor deny receiving the amounts in question having received no cooperation from petitioner respondent served sub- poenas duces tecum on the entities that had reported paying nonemployee compen- sation to him during on date petitioner filed a motion to quash these trial subpoenas four entities receiving subpoenas subsequently provided relevant documents to respondent on date petitioner filed a motion in limine to preclude respondent from introducing at trial any documen- continued provided the court with jurisdiction over hi sec_2010 or sec_2011 tax_year because it was filed more than days after the irs mailed the notice_of_deficiency for see 66_tc_105 tary evidence produced pursuant to the subpoenas on date the court denied both motions because the evidence was relevant and because peti- tioner had refused to cooperate in preparing the case for trial and refused to pro- vide meaningful answers to respondent’s request for admissions both motions were frivolous and appear to have been interposed for purposes of delay petitioner refused to stipulate that he received any specific amounts of money from the five payors listed above he contends that he incurred various expenses related to his schedule c handyman business but he failed to produce any business records or other documentary_evidence to establish the nature of these expenses or substantiate the amounts thereof opinion i burden_of_proof the commissioner’s determinations in a notice_of_deficiency are generally presumed correct and the taxpayer bears the burden of proving those determina- tions erroneous rule a 290_us_111 for the presumption to adhere in cases involving receipt of unreported income the de- ficiency determination must be supported by some evidentiary foundation linking the taxpayer to the alleged income-producing activity see 994_f2d_1542 11th cir aff’g tcmemo_1991_636 the taxpayer bears the burden of proving his entitlement to deductions allowed by the code and of substantiating the amounts of claimed deductions 503_us_79 sec_1_6001-1 income_tax regs petitioner does not contend and the evidence does not establish that the burden_of_proof shifts to respondent under sec_7491 as to any issue of fact respon- dent bears the burden of production but petitioner bears the burden_of_proof with respect to the additions to tax under sec_6651 and sec_6654 see sec_7491 ii gross_income sec_61 defines gross_income as all income from whatever source derived and includes compensation_for services whether furnished by the taxpayer as an employee a self-employed_person or an independent_contractor a taxpayer must maintain books_and_records establishing the amount of his or her gross_income see sec_6001 if a taxpayer fails to maintain the required books_and_records the commissioner may determine the taxpayer’s income by any method that clearly reflects income see sec_446 92_tc_661 the commissioner has great latitude in reconstructing a taxpayer’s income and the reconstruction need only be reasonable in light of all surrounding facts and circumstances petzoldt t c pincite the commission- er may reconstruct a taxpayer’s income using third-party information returns see 117_f3d_785 5th cir ketler v commissioner tcmemo_1999_68 respondent determined petitioner’s gross_income using forms 1099-misc supplied by five payors respondent introduced transcripts of petitioner’s account confirming that the irs had received these forms 1099-misc respondent also introduced into evidence certified third-party records establishing the payments to petitioner these documents satisfy respondent’s burden to produce some evidentiary foundation linking petitioner with the alleged income-producing activity and it was thus petitioner’s burden to prove these determinations erro- neous petitioner put on no evidence apart from his own testimony and he did not meet his burden of proving he had not received the unreported income the georgia farm bureau records included a form_w-9 request for taxpayer_identification_number and certification that petitioner completed at its request a list of payments made to petitioner and copies of checks made out to petitioner the belk co records included copies of forms 1099-misc issued to petitioner and a list of payments made to him the crystal products co records included a copy of the form 1099-misc issued to petitioner and a copy of the check issued to him sec_6201 provides that the irs in certain circumstances cannot rely solely on information returns to establish unreported income but shall have the burden of producing reasonable and probative information in addition thereto this provision applies only were the taxpayer asserts a reasonable dispute with respect to any item_of_income reported on an information_return and only if the taxpayer has fully cooperated with the secretary petitioner has not asserted a continued after initially disputing that he had received any of the income in question petitioner conceded that he had done substantial work during the tax years at issue for georgia farm bureau and belk co with respect to crystal products co respondent submitted a form 1099-misc reporting payment to petitioner of dollar_figure in together with canceled checks payable to petitioner for indirect labor costs petitioner’s only response was that he did not remember that job with respect to regions bank respondent submitted a form 1099-misc reporting payment to petitioner of dollar_figure in nonemployee compensation during petitioner revealed familiarity with the local business activities of regions bank but said he had no recollection of receiving this money with respect to wells fargo bank respondent submitted a form misc reporting payment to petitioner of dollar_figure in nonemployee compensation during petitioner testified that he had a mortgage with wachovia bank which was acquired by wells fargo and he speculated that the form 1099-misc might somehow have been connected with his mortgage but the irs transcript of continued reasonable dispute concerning the accuracy of any information_return and has utterly failed to cooperate with the irs in any event respondent supplied third- party business records to corroborate the information shown on most of the forms 1099-misc his account separately shows mortgage interest_paid to wachovia bank in and the form 1099-misc was furnished by a separate_entity wells fargo bank na and it distinctly reports a payment to petitioner of nonemployee compensation petitioner’s testimony at trial was vague inconsistent and unconvincing he produced no evidence that casts doubt on the accuracy of the information set forth in the forms 1099-misc and in the payors’ business records we according- ly conclude that the amounts set forth in the notice_of_deficiency are properly in- cludable in petitioner’s gross_income for see eg lamb v commissioner tcmemo_2013_155 iii schedule c deductions a taxpayer may deduct all the ordinary and necessary expenses paid or in- curred during the taxable_year in carrying on any trade_or_business but he must maintain sufficient records to substantiate such expenses sec_162 sec_6001 sec_1_6001-1 income_tax regs if a taxpayer establishes that deductible expenses were incurred but fails to establish the precise amounts we may estimate allowable amounts in appropriate circumstances 39_f2d_540 2d cir however there must be evidence in the record that provides a rational basis for such an estimate 85_tc_731 petitioner provided the court with no documentary_evidence in the form of invoices receipts bank records or credit card statements to support his claimed deductions his testimony concerning his purported records was inconsistent at first he said he was too busy to keep records he later asserted that his records were lost during a household move incident to a marital breakup he provided no evidence to establish the categories of business_expenses that he incurred or the relative volume of expenses within any category having presented the court with no evidence of his actual expenses peti- tioner asserted that he should be allowed deductions on the basis of a flat percentage of his gross_income under the cohan_rule according to petitioner you can claim a percentage of business_expenses and profit for a business_enterprise even if you have no records to substantiate your business_expenses for example a plumbing subcontractor could claim as expenses of the form 1099s that the irs received from the contractors to support his claimed deductions petitioner sought to move into evidence over respondent’s objection a document purporting to show average costs of roofers nationwide this document was not admitted into evidence because petitioner failed to exchange it with respondent before trial as required by the standing_pretrial_order see rule sec_104 sec_123 sec_131 77_f3d_637 2d cir in any event we are not obligated to make an estimate under the cohan_rule in these circumstances petitioner produced no evidence to establish the cate- gories or volume of his expenses the terms of his contracts with the businesses for which he worked or the percentage of his work that actually involved roofing he refused to cooperate with the commissioner to prepare this case for trial he made no meaningful effort to substantiate the expenses underlying the claimed deductions and he produced no documentary_evidence from which the court could extrapolate a reasonable estimate of his business_expenses see stephens v commissioner __ fed appx __ no slip op pincite 11th cir date refusing to apply the cohan_rule where the taxpayer provided no receipts of his claimed expenses and only general testimony about them aff’g tcmemo_2013_47 877_f2d_624 7th cir refusing to apply the cohan_rule where the taxpayer failed to present evidence to support the claimed deductions aff’g tcmemo_1987_295 688_f2d_1376 11th cir aff’g in part remanding in part tcmemo_1981_123 because petitioner did not meet his burden of substantiation we sustain respondent’s disallowance of his claimed deductions iv additions to tax a failure_to_file sec_6651 provides for an addition_to_tax of of the tax required to be shown on a return for each month or fraction thereof for which there is a fail- ure to file the return not to exceed in toto a taxpayer who files his return late is liable for this addition_to_tax unless he shows that his failure was due to reasonable_cause and not due to willful neglect sec_6651 469_us_241 respondent produced irs transcripts of petitioner’s account showing that he did not file a return for or and petitioner stipulated that he failed to file returns his only excuse was his assertion that no income_tax return was necessitated to be filed however his nonemployee compensation during the years at issue far exceeded the minimum amount of gross_income requiring a return to be filed see sec_6012 we accordingly sustain respondent’s imposition of the addition_to_tax under sec_6651 b failure to pay sec_6651 provides for an addition_to_tax when a taxpayer fails to pay the tax shown on a return timely unless the taxpayer proves that the failure was due to reasonable_cause and not due to willful neglect an sfr prepared by the irs pursuant to sec_6020 is treated as the return filed by the taxpayer for purposes of sec_6651 see sec_6651 for each month or fraction thereof for which a failure to pay continues sec_6651 adds of the tax required to be shown on such return up to a maximum addition of petitioner stipulated that the sfrs prepared by the irs for and met the requirements of sec_6020 those returns indicate deficiencies and balances due of dollar_figure dollar_figure and dollar_figure respectively petitioner pre- sented no evidence suggesting that his failure to pay was due to reasonable_cause see 116_tc_438 we accordingly sustain the sec_6651 additions to tax c failure to pay estimated_tax sec_6654 imposes an addition_to_tax on an individual who underpays his estimated_tax the addition_to_tax is calculated with reference to four required in- stallment payments of the taxpayer’s estimated_tax liability sec_6654 and d each required_installment is equal to of the required_annual_payment sec d the required_annual_payment is equal to the lesser_of of the tax shown on the individual’s return for that year or if no return is filed of his tax for such year or if the individual filed a valid_return for the immediately preceding_taxable_year of the tax shown on that return see sec_6654 b and c a taxpayer has an obligation to pay estimated_tax only if he has a required_annual_payment 127_tc_200 aff’d 521_f3d_1289 10th cir respondent’s burden of production under sec_7491 requires him to produce for each year for which the addition is asserted evidence that the tax- payer had a required_annual_payment under sec_6654 to do so respon- dent must establish the tax shown on the taxpayer’s return for the preceding year or demonstrate that the taxpayer filed no such return see wheeler t c pincite schlussel v commissioner tcmemo_2013_185 respondent met his burden of production because petitioner stipulated that he did not file a return for or petitioner’s required_annual_payment thus equaled of the tax due for each year see sec_6654 d b petitioner stipulated that he paid no estimated_tax for any year we accordingly sustain the sec_6654 additions to tax v frivolous position penalty sec_6673 authorizes this court to impose a penalty not in excess of dollar_figure whenever it appears that the taxpayer has instituted or maintained proceedings primarily for delay the taxpayer’s position is frivolous or ground- less or the taxpayer unreasonably failed to pursue available administrative remedies although petitioner did not advance classic tax-protester arguments he engaged in various tactics including action and inaction designed to delay these proceedings and waste the resources of the internal_revenue_service and the court although a sec_6673 sanction would be justified we will refrain from imposing a penalty now because this appears to be petitioner’s first appear- ance in this court we warn petitioner that we will be less generous if there is a next time to reflect the foregoing an appropriate order and decision will be entered


internal_revenue_service number release date index nos cc dom it a b9 plr-105056-00 in re dear this is in reference to a form_1128 application to adopt change or retain a tax_year submitted on behalf of the above-named partnership requesting permission to adopt an tax_year effective the partnership has requested that the form_1128 be considered timely filed under the authority contained in sec_301_9100-3 of the procedure and administration regulations the partnership’s form_1128 to adopt an accounting_period was due on or before the information furnished indicates that the application was filed late because of an error or misunderstanding however the form was filed within days of the due_date sec_1_706-1 of the income_tax regulations provides where a newly formed partnership is required to secure prior approval from the commissioner for the adoption of a taxable_year the partnership shall file an application on form_1128 with the commissioner on or before the last day of the month following the close of the taxable_year to be adopted sec_301_9100-3 provides that requests for extensions of time for regulatory elections that do not meet the requirements of sec_301_9100-2 automatic extensions such as the instant case must be made under the rules of sec_301_9100-3 requests for relief subject_to sec_301_9100-3 will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good_faith and that the granting of relief will not prejudice the interests of the government based on the facts and information submitted and the representations made it is held that the partnership has acted reasonably and in good_faith and that the granting of relief will not prejudice the interests of the government accordingly the requirements of the regulations for the granting of relief have been satisfied in this case and partnership's late filed form_1128 requesting permission to adopt an tax_year effective is considered timely filed pursuant to appendix a of revproc_2000_1 2000_1_irb_6 an additional user_fee is required in order to process the form_1128 the user_fee will be requested in a separate correspondence we will begin processing the partnership’s application after the user_fee is received the ruling contained in this letter is based upon facts and representations submitted by the partnership 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 part of an examination process this ruling addresses the granting of sec_301_9100-3 relief only no opinion is expressed regarding the tax treatment of the instant transaction under the provisions of any other sections of the code or regulations that may be applicable thereto or regarding the tax treatment of any conditions existing at the time of or effects resulting from the instant transaction specifically no opinion is expressed as to whether the partnership is permitted under the code and applicable regulations to adopt the tax_year requested in the subject form_1128 in accordance with the provisions of a power_of_attorney currently on file we are sending the original of this ruling letter to the partnership’s authorized representative and a copy to the partnership this ruling is directed only to the partnership that requested it sec_6110 of the internal_revenue_code provides that it may not be used or cited as precedent sincerely yours assistant chief_counsel income_tax and accounting by william a jackson acting deputy assistant chief_counsel enclosures copy of this letter copy for sec_6110 purposes


internal_revenue_service number release date index number --------------------------- ----------------------------- ----------------------------- -------------------------- ------------------------------------- ------------ ------------ department of the treasury washington dc third party communication none date of communication not applicable_person to contact ----------------------- id no ------------ telephone number -------------------- refer reply to cc intl b02 plr-115132-09 date date legend taxpayer qsub1 qsub2 qsub3 qsub4 qsub5 qsub6 fc1 fc2 fc3 fc4 fc5 fc6 fc7 fc8 fc9 fc10 fc11 fc12 ----------------------------- ---------------------- -------------------------------------- ----------------------- -------------------------------- ----------------------- ----------------------------- ---------------------- ----------------------------- ----------------------- ------------------------ ----------------------- --------------------------- ----------------------- --------------------------------------------- -------------------------------------------- ------------------------------------------- ------------------- ---------------------- -------------------- ------------------------------------------ ----------------------------- --------------------------------------------------------- ----------------------------- ----------------------------------- ---------------------------------- plr-115132-09 fc13 fc14 fc15 fp state v ----------------- ---------------------------- ------------------- ---------------------------- ----------------- country w country x country y country z -------------------------- ---------------- --------- --------------------- b c d e date1 date2 year1 year2 year3 year4 ------ ------ ------- ------- ------------------ ------------------- ------- ------- ------- ------- service provider1 service provider2 accounting firm --------------------------------------------- ----------------------------------------------------- ---------------------------------------- dear ------------------- this is in response to a letter dated date submitted by your authorized representative that requested the consent of the commissioner of the internal_revenue_service commissioner for taxpayer to make a retroactive qualified_electing_fund qef election under sec_1295 of the internal_revenue_code code and sec_1_1295-3 with respect to taxpayer’s investment in fc9 the ruling contained in this letter is based upon information and representations submitted on behalf of taxpayer by its authorized representatives and accompanied by a penalties of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of this request_for_ruling such plr-115132-09 material is subject_to verification on examination the information submitted in the request is substantially as set forth below facts taxpayer is a corporation organized under the laws of state v that is a subchapter_s_corporation within the meaning of code sec_1361 taxpayer owns directly and indirectly six corporations that are each a qualified_subchapter_s_subsidiary within the meaning of code sec_1361 and that are disregarded as separate from taxpayer for u s tax purposes specifically taxpayer wholly owns qsub1 which in turn wholly owns qsub2 qsub2 wholly owns each of qsub3 and qsub4 in turn qsub3 wholly owns qsub5 and qsub4 wholly owns qsub6 during year1 through qsub5 taxpayer acquired a b percent interest in fp a partnership formed under the laws of country w also during year1 fp and other investors including taxpayer through qsub6 formed fc1 a company formed under the laws of country x taxpayer’s total ownership_interest in fc1 taking into account its interest through both fp and qsub6 was approximately c percent fc1 owned d percent of fc2 a company formed under the laws of country x fc2 wholly owned fc3 a company formed under the laws of country x which in turn wholly owned fc4 a company formed under the laws of country y on date1 fc3 fully liquidated into fc2 subsequently fc2 was the sole owner of fc4 fc4 directly and indirectly wholly owned the following subsidiaries i fc5 a company formed under the laws of country y ii fc6 a company formed under the laws of country y iii fc7 a company formed under the laws of country y iv fc8 a company formed under the laws of country y v fc9 a company formed under the laws of country y vi fc10 a company formed under the laws of country y vii fc11 a company formed under the laws of country y viii fc12 a company formed under the laws of country z ix fc13 a company formed under the laws of country y x fc14 a company formed under the laws of country y and xi fc15 a company formed under the laws of country y collectively subsidiaries each of the subsidiaries owned real_property which it leased to unrelated persons and upon which it collected rental income the majority of leases entered into by the subsidiaries were so-called triple-net leases whereby the lessee generally was responsible for the maintenance and operation of the property no subsidiary held any assets other than real_property nor earned any income other than rental income in year1 fc2’s ownership of fc4 was diluted by e percent as part of an initial_public_offering on date2 fp and qsub6 sold the remaining portion of their interests in fc4 and indirectly the subsidiaries to an unrelated party plr-115132-09 in accordance with its partnership_agreement fp was required to provide sufficient detail to its u s investors to enable such investors to prepare their u s tax returns including any information required with respect to a foreign_corporation that was a passive_foreign_investment_company within the meaning of code sec_1297 pfic to do this fp retained service provider1 to provide tax and administrative services including the preparation of u s tax-related documents service provider1 was known to be a leader in providing such services to the private equity industry following the takeover of service provider1 by service provider2 in year2 fp retained service provider2 as a tax and administrative service provider fp retained service provider2 on the basis that service provider2 employed experienced tax specialists who were qualified_tax professionals such qualified_tax professionals were responsible for preparing and distributing information regarding the u s tax consequences of an investment in fp and indirectly in fc1 fc2 fc3 fc4 and the subsidiaries collectively fcs service provider2 prepared k-1 equivalents for fp’s investors for the year1 and year2 tax years during the time that service provider2 prepared fp’s k-1 equivalents service provider2 had access to both income statement and balance_sheet information relating to the fcs however service provider2 failed to identify fc9 as a pfic and failed to advise fp or consequently taxpayer of the pfic status of fc9 and the possibility of making a qef election with respect to fc9 it was not until year4 when fp retained accounting firm to prepare its k-1 equivalents and provide relevant u s tax information to its u s investors with respect to its year3 tax_year that it was discovered that fc9 was a pfic taxpayer has submitted an affidavit under penalties of perjury describing the events that led to the failure to make the qef election with respect to fc9 by the election due_date including the role of service provider2 taxpayer represents that service provider2 prepared and distributed fp’s k-1 equivalents which contained the u s tax consequences of an investment in fp and indirectly fc9 taxpayer also submitted an affidavit from an advisor to fp that was responsible for engaging service provider2 corroborating the representations made by taxpayer taxpayer represents that the pfic status of fc9 has not been raised by the irs on audit for any of the taxable years ruling requested taxpayer requests the consent of the commissioner to make a retroactive qef election with respect to fc9 for year1 under sec_1_1295-3 law plr-115132-09 code sec_1295 provides that a pfic will be treated as a qef with respect to a taxpayer if an election by the taxpayer under code sec_1295 applies to such pfic for the taxable_year and the pfic complies with such requirements as the secretary may prescribe for purposes of determining the ordinary_earnings and net capital_gains of such company under code sec_1295 a qef election may be made for any taxable_year at any time on or before the due_date determined with regard to extensions for filing the return for such taxable_year to the extent provided in regulations such an election may be made after such due_date if the taxpayer failed to make an election by the due_date because the taxpayer reasonably believed the company was not a pfic under sec_1_1295-3 a shareholder may request the consent of the commissioner to make a retroactive qef election for a taxable_year if the shareholder reasonably relied on a qualified_tax professional within the meaning of sec_1_1295-3 granting consent will not prejudice the interests of the united state sec_3 government as provided in sec_1_1295-3 the request is made before a representative of the internal_revenue_service raises upon audit the pfic status of the corporation for any taxable_year of the shareholder and the shareholder satisfies the procedural requirements of sec_1 f the procedural requirements include filing a request for consent to make a retroactive election with and submitting a user_fee to the office of the associate chief_counsel international sec_1_1295-3 additionally affidavits signed under penalties of perjury must be submitted that describe the events that led to the failure to make a qef election by the election due_date the discovery of such failure the engagement and responsibilities of the qualified_tax professional and the extent to which the shareholder relied on such professional sec_1_1295-3 and iii conclusion based on the information submitted and representations made with taxpayer’s ruling_request we conclude that taxpayer has satisfied sec_1_1295-3 accordingly consent is granted to taxpayer to make a retroactive qef election with respect to fc9 for year1 provided that taxpayer complies with the rules under treas plr-115132-09 reg sec_1_1295-3 regarding the time and manner for making the retroactive qef election except as specifically set forth above no opinion is expressed or implied concerning the u s tax consequences of the facts described above under any other provision of the code this private_letter_ruling is directed only to the taxpayer who requested it code sec_6110 provides that it may not be used or cited as precedent a copy of this letter_ruling must be attached to any federal_income_tax return to which it is relevant alternatively taxpayers filing their returns electronically may satisfy this requirement by attaching a statement to their return that provides the date and control number of the letter_ruling in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representatives sincerely jeffery g mitchell special counsel international


tax_exempt_and_government_entities_division number release date uil a b b department of the treasury internal_revenue_service te_ge eo examination fulton street room brooklyn ny date date c taxpayer_identification_number d person to contact e identification_number f contact telephone number g last date for filing a pleading with the tax_court the claims_court or the united_states district_court for the district of columbia h legend a name of the organization b address of the organization c date of this letter d taxpayer_identification_number e name of reviewer f identification_number of the reviewer g contact telephone number h last date for filing in the courts effective date of revocation j address of taxpayer_advocate k telephone number of taxpayer_advocate this is a final adverse determination that you do not qualify for exemption from income_tax under sec_501 of the internal_revenue_code as an organization described in code sec_501 this determination is effective beginning on i dear our adverse determination was made for the following reason s you have failed to established that you are organized and operated exclusively for exempt purposes as required by sec_501 of the internal_revenue_code you have not filed annual returns stating specifically the items of your gross_income receipts and disbursements nor have you responded to requests for this information you have not established that you are observing the conditions required for continuation of exempt status contributions to your organization are no longer deductible under sec_170 of the internal_revenue_code you are required to file federal_income_tax returns on form_1120 these returns should be filed with the appropriate service_center for all years beginning i processing of income_tax returns and assessment of any taxes due will not be delayed should a petition for declaratory_judgment be filed under sec_7428 of the internal_revenue_code if you decide to contest this determination in court you must file a pleading seeking a declaratory_judgment in the united_states tax_court the united_states court of federal claims or the united_states district_court for the district of columbia before the day after the date this final_determination was mailed to you please contact the clerk of the appropriate court for rules regarding filing pleadings for declaratory judgments and refer to the enclosed publication you may write to these courts at the following addresses united_states tax_court second street nw washington d c united_states court of federal claims madison place nw washington d c united_states district_court for the district of columbia constitution avenue nw washington d c you have the right to contact the office_of_the_taxpayer_advocate taxpayer_advocate assistance is not a substitute for established irs procedures such as the formal appeals process the taxpayer_advocate cannot reverse a legally correct_tax determination or extend the time fixed by law that you have to file a petition in a united_states court the taxpayer_advocate can however see that a tax matter that may not have been resolved through normal channels gets prompt and proper handling you may call too-free and ask for taxpayer_advocate assistance if you prefer you may contact your local taxpayer_advocate at internal_revenue_service j j j j telephone number k we will notify the appropriate state officials of this action as required by sec_6104 of the internal_revenue_code if you have any questions please contact the person whose name and telephone number are shown in the heading of this letter sincerely yours marsha a ramirez director eo examinations enclosure form 886-a attachment to revocation letter publication form_8 a name of taxpayer schedule no or exhibit year period ended explanation of items department of the treasury - internal_revenue_service a b-b attachment to revocation letter legend name of the organization a b - b year period ended c d e f date delinquent form_990 filed year year2 year you filed delinquent forms for the years d and e with no on c financial information you have not filed a form_990 for the f year since information returns you filed regarding your employees indicate you paid wages in the amounts of in the years d sufficient to require you to file forms provide information we are unable to determine if you had gross_receipts in excess of the gross wage income paid for the years d f e and f respectively your gross_receipts appear to be because of your failure to e and and dollar_figure dollar_figure your articles of incorporation contain no information concerning the exempt functions your organization intended to perform and your purpose cannot be determined by your subsequent conduct since you have failed to file complete forms and you have failed to provide material information to the service you have not established that your organization operates primarily for a public interest as required for a sec_501 organization because of your failure to respond to our requests for information we are unable to determine whether you have operated primarily for exempt purposes during the years d any subsequent years f and e d based on the above your organization’s sec_501 exempt status is revoked effective january your exempt status is being revoked because you have failed to demonstrate that you are operating exclusively for a recognized exempt_purpose under sec_501 your exempt status is also being revoked because you have failed to meet the requirements of sec_6033 and the regulations thereunder that all sec_501 organizations additional information as may be required by the internal_revenue_service for the purpose of determining its exempt status organization has not established that it requirements your organization has not established that it the conditions required for the continuation of its exempt status rev file forms and furnish such is exempt from the filing c b is observing your rul see form 886-arev department of the treasury - internal_revenue_service page -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 psi b02 plr-106678-14 date date x --------------------------------------------------- -------------------------------- legend country date ---------- ------------------------ dear ----------------- this is in response to a letter dated date and subsequent correspondence submitted on behalf of x by x’s authorized representative requesting that the service grant x an extension of time under sec_301_9100-1 of the procedure and administration regulations to elect to treat x as a partnership for federal tax purposes x was formed on date under the laws of country x is a foreign_entity eligible to be treated as a partnership for u s income_tax purposes however x failed to timely file form_8832 entity classification election electing to treat x as a partnership for federal tax purposes effective date sec_301_7701-3 provides in part 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 an eligible_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 guidance on the classification of a foreign eligible_entity for federal tax purposes unless the entity elects otherwise a foreign plr-106678-14 eligible_entity is treated as an association if all members have limited_liability a foreign eligible_entity is treated as a partnership if it has two or more members and at least one member does not have limited_liability a foreign eligible_entity with more than one owner may elect to be treated as a partnership pursuant to the rules under sec_301_7701-3 sec_301_7701-3 provides than an entity classification election must be filed on form_8832 and can be effective up to days prior to the election filing_date or more than months after the election filing_date sec_301_9100-1 provides that the commissioner may grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301_9100-1 defines the term regulatory election as including an election whose due_date is prescribed by a regulation published in the federal_register sec_301_9100-1 through provide the standards by which the commissioner will determine whether to grant an extension of time to make an election sec_301_9100-2 provides the rules governing automatic extensions of time for making certain elections sec_301_9100-3 describes the conditions under which the commissioner will grant requests for relief that do not meet the requirements of sec_301_9100-2 requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good_faith and granting relief will not prejudice the interests of the government based solely on the facts submitted and representations made we conclude that the requirements of sec_301_9100-3 have been satisfied accordingly x is granted an extension of days from the date of this letter to file form_8832 with the appropriate service_center to elect to be classified as a partnership effective date a copy of this letter should be attached to the form_8832 this ruling is contingent on x filing all required federal_income_tax and information returns including amended returns consistent with the requested relief being effective on date x’s filing obligations may include those required under sec_6038 and the regulations thereunder a copy of this letter should be attached to any late or amended returns except as expressly provided herein we express or imply no opinion concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter sec_6110 of the internal_revenue_code provides that it may not be used or cited as precedent the ruling contained in this letter is based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed plr-106678-14 by an appropriate party while this office has not verified any of the material submitted in support of the ruling_request it is subject_to verification on examination in accordance with the power_of_attorney on file with this office a copy of this letter will be sent to x’s authorized representative sincerely associate chief_counsel passthroughs special industries by _______________________________ bradford poston senior counsel branch office of the associate chief_counsel passthroughs special industries


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-112600-07 date date legend taxpayer parent state plant location commission a commission b method order order settlement agreement a b c d e f g h i k l m n o p ------------------------------------------ ----------------------- ------------------------- ----------------------- ------------- --------------------------------------------------------- ------------------------ -------------------------------------------------- ----------------------------------------------------- ---------------------------------------------------------- ----------------------------------------------- ---------------------------------------------- ----------------- ------------------------- --------------------------- -------------------------- ----------------- ---- ------------- ------- ---------------------- ------------------- ------- ------- ---------------------- -------------------------- ----------------------- ------------------ -------------------------------------- -------------------------------------------------- -------------------------------------------------------------------- ------------------ ----- ----------------- ----------------- ------------------ plr-112600-07 q r s t u v w x dear --------------------- this letter responds to your request dated date for a schedule of ruling amounts pursuant to sec_468a of the internal_revenue_code and the temporary income_tax regulations thereunder taxpayer was previously granted schedules of ruling amounts on a and b and most recently on c information was submitted pursuant to ' 468a-3t e taxpayer represents the facts and information relating to its request for a schedule of ruling amounts as follows taxpayer a state utility company is the owner of u percent of plant plant located near location was declared commercially operable in d and initially had an expected service life of e years plant was shut down in f plant was included in taxpayer’s rate base from d through g and decommissioning costs were collected in rates for the latter portion of this period in g commission ordered plant removed from rate base effective h on j taxpayer announced its decision to permanently shut down and decommission plant plant was temporarily placed in a safestor condition until decommissioning begins substantial decommissioning activities are expected to begin in j and are schedule to be completed in k the method of decommissioning plant is the method the cost of which is based on a site-specific decommissioning study following a corporate_reorganization in l taxpayer is now owned by parent with whom it files a consolidated_return on a calendar_year basis using the accrual_method of accounting commission a and commission b establish the rates for electric energy sold by taxpayer plr-112600-07 taxpayer ceased collecting decommissioning costs from its customer in h since that date the projected cost of decommissioning the plant has increased and is expected to exceed the amount set_aside for that purpose accordingly taxpayer sought permission to include in cost of service an increase in the cost of decommissioning plant on m commission a issued order effective m which included an increased cost of service amount on n commission a issued order modifying order to permit additional_amounts to be contributed to the qualified nuclear decommissioning fund maintained by taxpayer with respect to plant however in o commission a adopted a settlement agreement executed on p which determined that v of these collections should be retained by the taxpayer for costs of maintaining the plant in a safe storage condition consequently taxpayer submits that its cost of service amount for j is w ie x less y in determining the decommissioning costs for taxpayer’s interest in the plant commission a used an estimated base cost of p this base cost escalated annually based on a weighted average escalation factor resulting in a future decommissioning cost of q the funding_period extends r pursuant to the taxpayer’s previous election under the special transition rule_of sec_1_468a-8 the qualifying percentage is the taxpayer represents that the ruling_request submitted for approval complies with the existing regulations and the requirements of sec_468a before amendments made by the energy policy act of energy act taxpayer is complying with the law in effect before those amendments prior_law because state has not yet conformed to the amendments made by the energy act current law if the taxpayer sought to contribute to the fund in based on the higher schedule of ruling amounts permitted under current law the taxpayer would risk disqualifying the fund under state tax law for this reason the schedules of ruling amounts are sought by taxpayer under the limitations and restrictions imposed under prior_law sec_468a as amended by the energy act publaw_109_58 119_stat_954 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 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 plr-112600-07 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 energy 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 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 plr-112600-07 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 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 plr-112600-07 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 sec_1_468a-9t b provides that the internal_revenue_service will issue schedules of ruling amounts based on the regulations in effect prior to date if a taxpayer so requests and if the internal_revenue_service finds the request to be consistent with the principles and purposes of sec_468a we have examined the representations and information submitted by the taxpayer in relation to the requirements set forth in ' 468a and the regulations plr-112600-07 thereunder based solely upon these representations of the facts we reach the following conclusions the taxpayer has demonstrated that its request to apply to regulations in effect prior to date is reasonable and consistent with the principles and purposes of sec_468a the taxpayer has a qualifying interest in the plant and is therefore an eligible_taxpayer under sec_1_468a-1t b and -1 b prior_law of the regulations commission a has permitted the amount of decommissioning costs to be included in the taxpayer’s cost of service for ratemaking purposes as required by sec_1_468a-3 of the regulations prior_law the taxpayer has calculated the total decommissioning costs under sec_1_468a-3t d and -3 d prior_law of the regulations the taxpayer has determined that r percent is the qualifying percentage as calculated under sec_1_468a-8 prior_law of the regulations based on the above determinations we conclude that the taxpayer’s proposed schedule of ruling amounts with regard to commission a in light of the state tax law satisfy the requirements of sec_468a of the code for taxable_year ------- tax_year commission a ------- approved schedule of ruling amounts if any of the events described in ' 468a-3t f occur in future years the dollar_figure--------------- year ------- amount taxpayer must request a review and revision of the schedule of ruling amounts generally the taxpayer is required to file such a request on or before the deemed payment deadline date for the first taxable_year in which the rates reflecting such action became effective when no such event occurs the taxpayer must file a request for a revised schedule of ruling amounts on or before the deemed payment deadline of the tenth taxable_year following the close of the tax_year in which the most recent schedule of ruling amounts was received plr-112600-07 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 we are sending a copy of this letter_ruling to the industry 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 s peter c friedman senior technician reviewer branch passthroughs special industries


internal_revenue_service number release date index number -------------------------------- ------------- ------------------------- ----------------------------------------- -------------------------------- department of the treasury washington dc person to contact ------------------------------- -------- ------------- ----------------------------------------------------- telephone number --------------------- refer reply to cc psi - plr-127856-04 date june ----------------------- -------------------------------- legend x ------------------------- --------------------------------------------------- a ----------------------------------- ----------------- d1 dear -------------------------------- requesting a ruling under sec_1362 of the internal_revenue_code the information submitted states that x was incorporated on d1 a x’s president represents that x’s shareholders intended that x elect to be an s_corporation effective d1 however no form_2553 election by a small_business_corporation was timely filed for x 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 sec_1362 provides that if -- a an election under sec_1362 is made for this letter responds to your letter dated date submitted on behalf of x except as specifically set forth above no opinion is expressed concerning the this ruling is directed only to the taxpayer who requested it sec_6110 has established reasonable_cause for failing to make a timely election to be an s_corporation effective d1 accordingly provided that x makes an election to be an s_corporation by filing a completed form_2553 effective d1 along with a copy of this letter with the appropriate service_center within days from the date of this letter then such election will be treated as timely made for d1 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 provides that it may not be used or cited as precedent enclosures carolyn hinchman gray senior counsel branch associate chief_counsel passthroughs and special industries copy of this letter copy for sec_6110 purposes sincerely yours


internal_revenue_service number release date index number ------------------------ ------------------------------------ -------------------- -------------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact -------------------------- id no ------------- telephone number --------------------- refer reply to cc psi b01 plr-126791-13 date date legend x ------------------------------------ ----------------------------------------------------------- a ------------------------ ------------------------------------------------------------ state date year ---------------- ------------------- ------- dear ------------------ this letter responds to a letter dated date and subsequent correspondence submitted on behalf of x by its authorized representative requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations to file an election under sec_754 of the internal_revenue_code facts based on the materials submitted on behalf of x we understand the relevant facts to be as follows x was formed as a limited_liability_company under the laws of state x is treated as a partnership for federal tax purposes a a member of x died on date x inadvertently failed to timely make an election under sec_754 for the year of a’s death plr-126791-13 x represents that it has acted reasonably and in good_faith that granting relief will not prejudice the interests of the government and that it is not using hindsight in making the election x further represents that it has filed returns for year and all subsequent years consistent with the election law and analysis sec_754 provides that if a partnership files an election in accordance with regulations prescribed by the secretary the basis of partnership property shall be adjusted in the case of a transfer of a partnership_interest in the manner provided in sec_743 such an election shall apply with respect to all distributions of property by the partnership and to all transfers of interest in the partnership during the taxable_year with respect to which the election was filed and all subsequent tax years sec_1_754-1 of the income_tax regulations provides that an election under sec_754 to adjust the basis of partnership property under sec_734 and sec_743 with respect to a distribution_of_property to a partner or a transfer of an interest in a partnership shall be made in a written_statement filed with the partnership return for the taxable_year during which the distribution or transfer occurs for the election to be valid the return must be filed not later than the time prescribed by sec_1 e including extensions thereof for filing the return for that taxable_year under sec_301_9100-1 the commissioner may grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the code except subtitles e g h and i sec_301_9100-1 defines the term regulatory election as including an election whose deadline is prescribed by a regulation published in the federal_register 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 plr-126791-13 based solely upon the information submitted and the representations made we conclude that the requirements of sec_301_9100-1 and sec_301_9100-3 have been satisfied as a result x is granted an extension of time of days following the date of this letter to make an election under sec_754 effective for its year taxable_year and thereafter the election should be made in a written_statement filed with the appropriate service_center a copy of this letter should be attached to the sec_754 election a copy is enclosed for that purpose except as expressly set forth above no opinion is expressed or implied concerning the federal tax consequences of the facts discussed above under any other provision of the code specifically we express no opinion as to whether or not x is a partnership for federal tax purposes this ruling is directed only to the taxpayers 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 sincerely laura c fields laura c fields senior technician reviewer branch office of the associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes cc


id office uilc cca_2010060914124047 -------------- number release date from ---------------------- sent wednesday june pm to -------------------- cc -------------------------------------------------------------- subject fw fplp levies v paper levies - ----------------- ------- -- in response to your question about use of fplp v a paper levy we agree that the service is authorized to continue to receive payments under sec_301_6343-1 even after the csed because we timely levied on a fixed and determinable stream of payments we do take the position that we are not limited to the cap for a fplp levy under sec_6331 merely because the type of payment is a type which could be leviable under sec_6331 rather we can use a paper levy to collect the entire existing obligation to make a series of payments we argued this position in 658_fsupp2d_139 d d c the court agreed that the cap on continuous levies under sec_6331 did not apply to a levy on a taxpayer's social_security retirement benefits because the obligation to pay these benefits existed when the levies attached under sec_6331 thus the levy was not a continuous_levy subject_to the limitation the court distinguished continuing levies under sec_6331 which like sec_6331 continuous wage levies attach to new rights as they arise the court noted that sec_6331 expanded the rights to collect from property previously exempt from levy but did not limit the irs' existing rights to attach levies sec_6331 has permissive language giving discretion but not requiring its use even where the type of property might be eligible for fplp levy in this case as in hines the levy reached a fixed obligation to make payments as such levy under sec_6331 was proper without the limitation fyi--someone in our office is currently reviewing the dollar_figure irm provision cited below to ensure it is correct -------------------------------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------- we are continuing to look into this issue but wanted to get back to you on your primary question in the meanwhile i apologize for the delays