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 b02 - plr-161493-03 date date ------------------ -------------------------- x -------------------------------------------- a_trust -------------------------------------------- d1 dear --------------- ------------------------- --------------------------------------------- this letter responds to a letter dated date and subsequent correspondence submitted on behalf of x by its authorized representative requesting relief under ' f of the internal_revenue_code the information submitted states that x was formed d1 effective d1 x elected to be an s_corporation on d1 trust was the sole shareholder of x however trust was an ineligible shareholder and therefore x’s election to be an s_corporation was invalid a the president of x represents that trust was qualified to be an electing_small_business_trust esbt effective d1 however the trustee of trust inadvertently failed to make an esbt election effective d1 a represents that x filed form_1120s u s income_tax return for an s_corporation for all the years involved in this request a represents that the circumstances resulting in x s invalid election to be an s_corporation were inadvertent a represents also that x and its shareholder did not intend to engage in tax_avoidance or retroactive tax planning x and its shareholder agree to make such adjustments consistent with the treatment of x as an s_corporation as may be required by the secretary with respect to such period plr-161493-03 sec_1362 provides that except as provided in ' g a small_business_corporation may elect in accordance with the provisions of ' to be an s_corporation sec_1361 provides that the term as corporation means with respect to any taxable_year a small_business_corporation for which an election under ' a is in effect for such year sec_1361 provides that a asmall business corporation cannot have as a shareholder a person other than an estate a_trust described in ' c or an organization described in ' c who is not an individual sec_1361 provides that an aelecting small_business trust may be a shareholder in an s_corporation sec_1361 provides that the term aelecting small_business trust means any trust if i such trust does not have as a beneficiary any person other than i an individual ii an estate or iii an organization described in paragraph of ' c ii no interest in such trust was acquired by purchase and iii an election under ' e applies to such trust sec_1361 provides that the term electing_small_business_trust shall not include i any qualified_subchapter_s_trust as defined in sec_1361 if an election under ' d applies to any corporation the stock of which is held by such trust ii any trust exempt from tax under subtitle a and iii any charitable_remainder_annuity_trust or charitable_remainder_unitrust as defined in ' d sec_1361 provides that an election under ' e shall be made by the trustee any such election shall apply to the taxable_year of the trust for which made and all subsequent taxable years of such trust unless revoked with the consent of the secretary in notice_97_12 1997_1_cb_385 the service provided guidance regarding esbt elections in particular the notice provided that the trustee of an esbt must file the esbt election within the time requirements prescribed in regulation sec_1 j iii for filing qsst elections generally within the 16-day-and-2-month period beginning on the day that the stock is transferred to the trust sec_1362 in relevant part provides that if an election under sec_1362 by any corporation a was not effective for the taxable_year for which made determined without regard to sec_1362 by reason of a failure to meet the requirements of sec_1361 or to obtain shareholder consents or b was terminated under paragraph or of sec_1362 the secretary determines plr-161493-03 that the circumstances resulting in such ineffectiveness or termination was inadvertent no later than a reasonable period of time after discovery of the event resulting in such ineffectiveness or termination steps were taken a so that the corporation is a small_business_corporation or b to acquire the required shareholder consents and the corporation and each person who was a shareholder of the corporation at any time during the period specified pursuant to sec_1362 agrees to make any adjustments consistent with the treatment of the corporation as an s_corporation as may be required by the secretary with respect to the period then notwithstanding the circumstances resulting in the ineffectiveness or termination the corporation shall be treated as continuing to be an s_corporation during the period specified by the secretary based solely on the information submitted and the representations made we conclude that x's s_corporation_election was an inadvertent invalid election within the meaning of sec_1362 pursuant to the provisions of f x will be treated as an s_corporation effective d1 and thereafter provided that x's election to be an s_corporation was not otherwise invalid and not terminated under sec_1362 trust will be treated as the shareholder of x effective d1 trust will be treated as an esbt under sec_1361 effective d1 x's shareholder must include its pro_rata share of the separately and nonseparately computed items of x as provided in sec_1366 make any adjustments to stock basis as provided in sec_1367 and take into account any distributions made by x to its shareholder as provided in if x or x's shareholder fail to treat x as described above this ruling will be null and void these rulings are conditioned on x within days of the date of this letter filing a new form_2553 with the appropriate service_center with an effective date of d1 an esbt election for trust pursuant to the procedures set forth in notice_97_12 must be filed effective d1 with the appropriate service_center within days of the date of this letter a copy of this letter should be attached to the new form_2553 and the esbt election concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter including whether x was otherwise eligible to be an s_corporation and whether trust was a valid esbt except as expressly provided herein no opinion is expressed or implied this ruling is directed only to the taxpayer requesting it sec_6110 of the internal_revenue_code provides that it may not be used or cited as precedent plr-161493-03 in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to x’s authorized representatives sincerely carolyn hinchman gray senior counsel branch office of associate chief_counsel passthroughs special industries enclosures copy of this letter copy for ' 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 tege eoeg teb presp-144847-06 date date dear -------------- pursuant to sec_54 of the internal_revenue_code the code and notice_2005_98 2005_52_irb_1211 and after review of your application submitted on date including supplements thereto we have determined that the project described in appendix a attached hereto is qualified for purposes of sec_54 and will be owned by one or more qualified borrowers we allocate authority to ---------------------- ------------------------------ the issuer a qualified issuer under sec_54 to issue up to dollar_figure- --------------- of clean renewable energy bonds crebs bonds issued pursuant to this allocation must be designated by the issuer as bonds for purposes of sec_54 for the project described in appendix a up to the amount allocated for each project described in appendix a bonds so designated must be issued on or before date please be aware that in order for bonds to be crebs the applicable_requirements of the code including without limitation sec_54 notice_2005_98 and notice_2006_7 2006_10_irb_559 must be met please note that creb proceeds may be used to reimburse capital expenditures paid_by qualified borrowers for qualified projects only if the provisions of sec_54 are met if you have any questions with respect to this allocation please contact --------------------- ------------------------------------------------------------------------------------------------------------------- - -------- or --------------------------- of the office of division counsel associate chief_counsel tax-exempt and government entities on -------------------- not a toll-free call except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter for purposes of the renewable_electricity_production_credit under sec_45 of the code no inference may be drawn from this allocation that any project listed in appendix presp-144847-06 a is a qualified_facility or that electricity to be produced at such project s is electricity from a qualified_energy resource at a qualified_facility within the meaning of sec_45 this determination is directed only to the applicant named above sec_6110 of the code provides that it may not be used or cited as precedent a copy of this letter must be attached to any form 8038-g information_return for tax- exempt governmental obligations filed for bonds issued pursuant to this allocation the allocation contained in this letter is based upon information and representations submitted by the applicant for the creb allocation and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the application_for an allocation it is subject_to verification on examination sincerely assistant chief_counsel exempt_organizations employment_tax government entities tax exempt government entities by timothy l jones senior counsel tax-exempt_bonds branch presp-144847-06 borrower name appendix a project type project location -------------------------------- wind facility -------------------- -------------------------------- -------------- amount allocated dollar_figure-------------


department of the treasury internal_revenue_service washington d c date number info release date cc tege eoeg et1 - genin-164429-02 uilc memorandum for director internal_revenue_service center cincinnati oh attn technical unit from subject office of division counsel associate chief_counsel tax exempt and government entities cc tege eoeg et1 - genin-164429-02 railroad retirement act tax status in accordance with the coordination procedure established between the service and the railroad retirement board rrb the rrb has provided us with its opinion that the following business ceased to be an employer under the railroad retirement act and the railroad unemployment insurance act effective date we have reviewed the opinion of the rrb and based upon the information submitted to the rrb we also conclude that ceased to be an employer under the railroad_retirement_tax_act effective date please take the appropriate action regarding this business will e mcleod cc


t c summary opinion united_states tax_court ricky c hutchinson and tammy l mcnichol petitioners v commissioner of internal revenue respondent docket no 11690-02s filed date stephen t walzak for petitioners alexandra e nicholaides for respondent couvillion special_trial_judge this case was heard pursuant to sec_7463 of the internal_revenue_code in effect at the time the petition was filed the decision to be entered is not reviewable by any other court and this opinion should not be cited as authority internal_revenue_code in effect for the year at issue unless otherwise indicated section references are to the respondent determined a deficiency of dollar_figure in petitioners’ federal_income_tax for the sole issue for decision is whether tammy l mcnichol petitioner released to her former spouse john f mcnichol mr mcnichol under sec_152 for the year the dependency_exemption deductions for petitioner and mr mcnichol’s two children some of the facts were stipulated and those facts with the accompanying exhibits are so found and are made part hereof at the time the petition was filed petitioners were legal residents of gladwin michigan petitioner and mr mcnichol were formerly married to each other and were divorced in date two daughters were born of that marriage in and petitioner thereafter married ricky c hutchinson they filed a joint federal_income_tax return for mr mcnichol petitioner’s former spouse also remarried on their joint federal_income_tax return for petitioners claimed the two daughters as dependents likewise mr mcnichol and his spouse claimed the two daughters as dependents in the notice_of_deficiency respondent disallowed the two dependency_exemption deductions claimed by petitioners for her two daughters the basis for the disallowance is the record is unclear whether respondent also disallowed the continued respondent’s determination that petitioner released to her former spouse the dependency_exemption deductions for the two daughters by virtue of petitioner’s execution of form_8332 release of claim to exemption for child of divorced or separated parents wherein petitioner released to her former spouse the dependency_exemptions for the two children for the year and all future years petitioner agrees that she released the dependency_exemption deductions of the two children for the tax_year but denies that she released the exemption deductions for the years subsequent to sec_151 allows a taxpayer to deduct an annual exemption_amount for each dependent as defined in sec_152 under sec_152 the term dependent means in pertinent part a son or daughter of the taxpayer over half of whose support was received from the taxpayer sec_152 in the case of a child of divorced parents sec_152 provides in pertinent part that if a child receives over half of his support from his parents who are divorced under a decree of divorce and the child is in the custody of one or both of his parents for more than one-half of the year then the child will be treated as receiving over half of his support from continued dependency_exemption deductions claimed by mr mcnichol the parent having custody for a greater portion of the calendar_year respondent agrees that petitioner met that requirement the noncustodial_parent is allowed to claim the dependency_exemption deductions if one of three statutory exceptions in sec_152 applies if an exception applies the noncustodial_parent in this case mr mcnichol is treated as providing over half of a child’s support this case focuses on sec_152 the exception that is at issue here sec_152 provides if the custodial_parent signs a written declaration that such custodial_parent will not claim such child as a dependent and the noncustodial_parent attaches such written declaration to the noncustodial parent’s return for the taxable_year the noncustodial_parent is entitled to the dependency_exemption deduction for that year the written declaration is embodied in form_8332 that form consists of two parts part i which is for the release of the dependency_exemption for the current_year and part ii applies to releases for future years both parts if applicable must be signed by the custodial_parent releasing the exemptions and each part requires the year or years in the case of part ii to which the exemption is released and the names of the dependents in this case mr mcnichol and his spouse attached to their federal_income_tax return a completed form_8332 purportedly signed by petitioner which appears to satisfy the above requirements and includes on the signature lines of both parts i and ii a signature that purports to be that of petitioner tammy l mcnichol petitioner however contends that she released the dependency_exemptions for only the year and did not release or did not intend to release the exemptions for any years subsequent to she denies having consented to part ii releasing the exemptions for all future years prior to trial petitioner and her former spouse each engaged the services of forensic experts to address whether petitioner tammy l mcnichol signed form_8332 to allow mr mcnichol to claim the dependency_exemption deductions for all future years the reports of the forensics experts were not offered at trial nor were the experts called as witnesses however the parties stipulated that both evaluations provided inconclusive results the court considers the testimony of mr mcnichol as pivotal in the decision of this case mr mcnichol had engaged the services of an income_tax_return_preparer to prepare his federal_income_tax return the return preparer who did not although not entirely clear it does not appear that respondent engaged the services of a forensic expert although counsel for respondent referred to both parties as having employed the forensic experts the court assumes that both parties meant petitioner and her former spouse mr mcnichol neither petitioner mr mcnichol nor respondent addressed the forensic evaluations at trial testify at trial advised mr mcnichol of the necessity of having a form_8332 to attach to his return to allow him the dependency_exemption deductions of the two children for that year the preparer provided mr mcnichol with a blank form_8332 which he was instructed to present to his former wife for her signature mr mcnichol presented the form to his former wife and in a rather tense atmosphere petitioner signed only part ii of the form mr mcnichol did not question his former wife as to the significance of her signature on that part of the form and he immediately delivered the signed blank form to his return preparer the return preparer expressed surprise that petitioner signed part ii but opined to mr mcnichol that since part i was not signed he would not be able to claim the dependency_exemption deductions for at that point the return preparer prepared a new form_8332 in which the preparer completed both parts i and ii and directed mr mcnichol to return and obtain petitioner’s signature for both parts i and ii mr mcnichol immediately went back to his former wife with directions that she sign both parts i and ii as required by the return preparer again in a tense atmosphere petitioner signed both parts i and ii of form_8332 in his testimony at trial mr mcnichol acknowledged that he was expecting that his former wife would release the dependency_exemptions for only year that was also the understanding of the return preparer mr mcnichol was also unfamiliar with form_8332 mrs mcnichol testified at trial and corroborated the testimony of mr mcnichol there is no indication from the record that mr mcnichol or anyone else threatened or applied pressure on petitioner to sign the form_8332 while their relations with each other were obviously strained the court is satisfied that petitioner signed the document without any threat or intimidation by her former spouse petitioner did not sign the form under duress in 121_tc_245 where the former spouse challenged the validity of the form_8332 the court noted it was mrs king’s duty to make the appropriate inquiries before she signed the form_8332 permanently releasing her claim to exemption deductions and we will not ignore the properly executed form because she now contends that she did not intend to release her claim for the years in issue respondent therefore is sustained reviewed and adopted as the report of the small_tax_case division decision will be entered for respondent


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-142256-09 date january legend x country date dear -------------- ------------------------------------------------------- ------- --------------- --------------------- -------------------------- this responds to your letter dated date submitted on behalf of x requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations to file an election to be classified as a partnership for federal tax purposes the information submitted states that x was formed in country on date x represents that as a foreign eligible_entity x was eligible to elect to be treated as a partnership for federal tax purposes effective date however x inadvertently failed to timely file a form_8832 entity classification election sec_301_7701-3 of the income_tax regulations provides that so long as a business_entity is not classified as a corporation under sec_301_7701-2 or an eligible_entity it may elect its classification for federal tax purposes sec_301_7701-3 further provides that an eligible_entity with at least two members can elect to be classified as either an association and thus a corporation under plr-142256-09 sec_301_7701-2 or as a partnership and an eligible_entity with a single owner can elect to be classified as an association or to be disregarded as an entity separate from its owner sec_301_7701-3 provides that unless the entity elects otherwise a foreign eligible_entity is a partnership if it has two or more members and at least one member does not have limited_liability except as provided in sec_301_7701-3 sec_301_7701-3 provides that an eligible_entity may elect to be classified other than as provided under sec_301_7701-3 by filing a form_8832 with the appropriate service_center under sec_301_7701-3 this election will be effective on the date specified by the entity on form_8832 or on the date filed if no such date is specified on the election form the date specified on form_8832 cannot be more than days prior to the date on which the election is filed and cannot be more than months after the date on which the election is filed sec_301_9100-1 provides that the commissioner may grant a reasonable extension of time 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 with a deadline prescribed by a regulation published in the internal_revenue_bulletin sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make an election sec_301_9100-2 provides automatic extensions of time for making certain elections sec_301_9100-3 provides extensions of time for making elections that do not meet the requirements of sec_301_9100-2 sec_301_9100-3 provides that request 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 that 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 sixty days from the date of this letter to elect to be classified as a partnership for federal tax purposes effective date the election should be made by filing form_8832 with the appropriate service_center a copy of this letter should be attached to the election except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter plr-142256-09 this ruling is directed only to the taxpayer requesting it sec_6110 of the internal_revenue_code provides that it may not be used or cited as precedent 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 curt g wilson associate chief_counsel passthroughs special industries enclosure copy of this letter copy for sec_6110 purposes


internal_revenue_service issued date number release date cc el gl br1 gl-701148-99 uilc memorandum for district_counsel north central district from alan c levine chief branch general litigation subject collection_due_process notices this responds to your request dated date asking us to review your proposed answers to a request for advice sent to you from the north central district rra collection coordinator that request sets forth various hypothetical fact patterns and questions regarding proper procedures to follow when sending a collection_due_process cdp_notice the questions are underlined with our comments on your proposed answers following we have a balance due account for income taxes of a deceased taxpayer we have accounts for income taxes of the estate there is also an estate_tax balance due account the probate_estate has been closed and the personal representative has been relieved of future responsibility we will be issuing a cdp_notice a to whom should we issue the cdp_notice for the income_tax account of the deceased taxpayer to whom should we issue the cdp_notice for the estate_tax accounts of the probate_estate to whom should we issue the cdp_notice for unpaid income taxes of the estate the same procedures that are followed when sending a statutory_notice_of_deficiency will be followed when sending a cdp_notice for liabilities of a deceased taxpayer the first question is addressed by nrc question the answer is as follows if it is known that the taxpayer is deceased the service should exercise reasonable diligence to determine if a fiduciary was appointed a fiduciary is required to give notice of fiduciary to the internal_revenue_service service form_56 notice concerning fiduciary relationship may be used to notify the service of a fiduciary relationship do not assume that the surviving_spouse is the gl-701148-99 executor executrix for the deceased spouse if the service has been notified as to the existence of a fiduciary relationship the l notice final notice notice_of_intent_to_levy and notice of your right to a hearing should be sent as follows john doe decd richard doe executor richard doe’s address if the service has not been notified as to the existence of a fiduciary relationship the l should be sent as follows john doe decd john doe’s last_known_address in the hypothetical given if there was a personal representative then he would be treated as the fiduciary for estate_tax accounts and unpaid income taxes of the probate_estate the cdp_notice should be sent to the personal representative even though he has been relieved of further responsibility because this liability accrued while he was responsible for the estate and the administration thereof b letter notification of potential third party contact rra section will also be issued in this matter to whom should this letter be sent for the deceased taxpayer’s income taxes for estate_taxes regarding income taxes of the estate c will contact with the former personal representative be a section third party contact with respect to the liability of the deceased the probate_estate the estate_taxes nrc question answers these two questions it provides for decedent cases whoever would normally receive the statutory_notice_of_deficiency is the person considered to be the taxpayer that person should also be given the letter ‘third party notice ’ contacts with anyone who would not normally be authorized to receive a statutory notice on the account would be considered third-party_contacts and should be documented a when we have a limited_liability_company llc with delinquent tax accounts to whom do we send the cdp_notice just the llc entity each individual who has an interest in the llc we defer to your interpretation that under minnesota law members of an llc are not personally liable for the tax incurred by the llc and therefore the cdp_notice should only be sent to the llc entity for further guidance please see the gl-701148-99 discussion on partnerships in part of this memorandum b if we send the cdp_notice to each individual to what address do we send the cdp_notice the address of the llc the home address of the individual please see response 2a a when we have a partnership with delinquent tax accounts to whom do we send the cdp_notice sec_6320 - sec_6320 requires the service to notify the person described in sec_6321 within five days of the filing of a notice of lien of his right to challenge the filing of the lien at a cdp hearing temp sec_301_6320-1t a a-a-1 provides under sec_6320 notification of the filing of a nftl on or after date is only required to be given to the person described in sec_6321 who is named on the nftl that is filed accordingly if the nftl lists only the partnership then only the partnership receives a cdp_notice however if the nftl lists partners in addition to the partnership then each individual partner named on the nftl and the partnership must receive a cdp_notice for example if the nftl lists abc partnership and a b and c individually then a cdp_notice must be sent to abc partnership and to a b and c individually sec_6330 - sec_6330 provides that no levy may be made on any property or right to property of any person unless the secretary has notified such person in writing to their right to a hearing we interpret person under sec_6330 as the partnership with the delinquent tax account therefore when the service intends to levy on property because of a partnership_liability the partnership should receive the cdp_notice b to what address do we send the cdp_notice sec_6320 relating to the filing of a nftl requires that when a notice is mailed it is to be by certified or registered mail to the person’s last_known_address sec_6330 relating to a levy adds the additional requirement that the mailing must be by return receipt requested if the notice is required to be sent to a partner it should be sent to the partner’s last_known_address if a notice is required to be sent to the partnership it should be sent to the partnership’s last_known_address a when we have a limited_partnership with delinquent accounts to whom do we send the cdp_notice please see answer under sec_6320 either a general or limited_partner should receive a cdp_notice when listed on the nftl the partnership receives a gl-701148-99 cdp_notice under sec_6330 the revenue_officer prepares a cdp_notice and a letter in preparation for a meeting with the taxpayer and the taxpayer’s representative poa only the poa shows up for the meeting the revenue_officer gives the poa both letters a is the giving of these letters the same as giving the letters to the taxpayer no an original or copy of the notices must be provided to the taxpayer even if the taxpayer is represented by a power_of_attorney poa taxpayers may authorize a representative to act on their behalf by executing a form_2848 power_of_attorney and declaration of representative form_2848 line provides that o riginal notices and other written communication will be sent to you the taxpayer and a copy to the first representative listed on line the poa unless you check one or more of the boxes below the boxes below line give the taxpayer the option of a having the poa receive the original and the taxpayer a copy of such notices or communication b having a second poa receive a copy of such notices and communications or c not having any notices or communication sent to the poa there is no choice for the taxpayer to have notices or communications sent only to the poa accordingly the original advance notice required under sec_7602 letter and the cdp_notice must be sent to the taxpayer or to the poa with a copy sent to the taxpayer b does the revenue_officer still need to mail a copy of each letter to the taxpayer does the cdp letter need to be mailed certified in this case form_2848 does not eliminate the requirement that the taxpayer be sent either the original or a copy of any notices or written communications if on form_2848 the taxpayer authorizes the poa to receive the original notice then the copy of the cdp_notice sent to the taxpayer does not need to be mailed certified or registered mail return receipt requested if the poa is not authorized to receive the original notice then the cdp_notice must be served on the taxpayer either in person left at the dwelling or usual place of business_of_the_taxpayer or by certified or registered mail return receipt requested there is no requirement under sec_7602 that the advance notice be provided by certified mail c which idrs transaction codes should we use in this case tc action code ac - the return receipt was signed so the notice was delivered ac - delivery was refused ac - the notice was returned undelivered the return receipt requested mailing requirement only applies to cdp notices under sec_6330 gl-701148-99 we agree that this question should be coordinated with the national_resource_center d can the revenue_officer immediately proceed with a third party investigation under rra section if the advance notice letter is sent to the taxpayer then the revenue_officer should wait ten days before making any third party contacts however the taxpayer’s poa may authorize the revenue_officer to make certain third party contacts form_2848 first gives a representative the power to do all things a taxpayer could do and only then excepts from that general grant of authority certain acts not relevant here the form provides that the representatives are authorized to perform any and all acts that i we can perform with respect to the tax matters described on line for example the authority to sign any agreements consents or other documents this language is sufficient to allow a taxpayer’s representative to authorize a sec_7602 contact if a third party contact has been authorized by the taxpayer or the taxpayer’s poa then the advance notice and recordkeeping requirements of sec_7602 do not apply with respect to the particular contact that has been authorized for example if the revenue_officer meets with the taxpayer’s poa and the poa authorizes the revenue_officer to contact a specific third party the revenue_officer may make this contact without providing advance notice to the taxpayer or keeping a record of this contact however in order to avoid any subsequent disputes as to whether the contact was authorized there should be written documentation that the contact was authorized the better practice would be for the revenue_officer to obtain written authorization from the taxpayer or the poa either by having the taxpayer or the poa sign the form third party contact authorization form or by some other means how do we handle our idrs transaction code tc and action code when someone other than the taxpayer signs for the letter we agree that this question should be coordinated with the national_resource_center while preparing the cdp letter letter the revenue_officer discovers that the catalog number the number on the bottom of the notice which gives the number of the notice for the macro letter on her computer is wrong she has sent out a number of these notices to taxpayers already a does she need to reissue the notices she has previously sent b would your answer change if there is a misspelling of a word c if a sentence is missing from the notice d if the employees name and id number are missing gl-701148-99 this office issued a memorandum dated date that addressed the legal requirements of a notice of a hearing under sec_6330 in that memorandum we concluded that courts will presumably rule on the sufficiency of a notice under sec_6330 as they have under sec_6331 courts have ruled that there is not any magic language that qualifies notice given by the service as fulfilling the requirements of sec_6331 rather the notice must explain to the taxpayer the nature of the act that will occur ie the levy and what the taxpayer can do to prevent such action from occurring see watts v united_states ustc big_number d wyo the court ruled that sec_6331 was satisfied where the notice explains the nature of the notice and the appropriate measures to obtain relief from the levy person v united_states ustc big_number d haw the court found that the irs followed proper procedures and that the requirements of sec_6331 were fulfilled when the irs sent the taxpayer a letter stating this is your final notice before we proceed with enforcement action and levy on your property or right to property in accordance with sec_6331 of the internal_revenue_code bay v united_states 995_f2d_230 9th cir in discussing whether the united_states complied with the procedures of sec_6303 and sec_6331 the court ruled that the form of the notices was irrelevant as long as it provided the taxpayer with the information required under the statute courts also note that the notice does not need to be signed by an irs official and can be computer generated see watts in re 192_br_760 d nev the court ruled that where plaintiffs received a fourth delinquency_notice encaptioned notice_of_intent_to_levy even though it was computer generated with no signature of an irs employee it qualified as notice under sec_6331 there are no cases that discuss the specific language that is required to fulfill the notice requirements of sec_6331 however it is clear that strict compliance with the statute is necessary for example each year’s assessment where enforcement action is going to occur must be listed on the notice_of_intent_to_levy where a specific year is not listed and property is levied upon to recover for a year’s assessment that was not listed on the notice the levy is in violation of sec_6331 see 782_fsupp_164 d me where the united_states could prove that notices were provided for all the tax years in question except the court ruled that a notice of intention to levy is required for each tax_year and whether the notice was sent for was a matter that could not be disposed of in summary_judgment 970_f2d_750 10th cir the content rather than the form of the notice will determine whether the service has complied with sec_6330 this provision was enacted so that taxpayers have adequate notice of collection activity and a meaningful hearing before the irs deprives them of their property s rep no the notice must clearly inform the taxpayer of his right to a hearing the process of securing a hearing and explain the consequences that will occur if a hearing is not requested gl-701148-99 namely levying on property therefore if an inaccurate catalog number is the only error with the letter and the letter provides the information that is provided on a correctly identified letter a substitute letter does not need to be sent a misspelling of a word does not indicate that they need to be resent however if a sentence is missing from the notice and it is a sentence that addresses or explains a statutory right then a corrected notice should be sent specifically rra provides that any correspondence that the taxpayer receives from the service must contain an employee’s name and a unique identifying number therefore if this information is missing from the cdp_notice a substitute notice should be sent temp sec_301_6330-1t a-a10 temp sec_301_6320-1t a- a12 can the revenue_officer working a case type or print in the district director’s name on the letter and letter and send the letters do we need to reissue cdp letters that we have sent without any signature typed name or printed name in the signature space we agree that this question should be coordinated with the national_resource_center in the past when we talked to a taxpayer and advised the taxpayer that we were going to file a notice_of_federal_tax_lien nftl we filed the nftl however if we had not advised the taxpayer we would send a final notice letter to the taxpayer and wait days to file the nftl with the coming of the collection_due_process procedures both sec_6320 and sec_6330 we are more cautious about filing the nftl even if we have talked with the taxpayer and advised the taxpayer of the nftl filing must we send the cdp letter first and wait days before filing the nftl or can we still file the nftl immediately after advising taxpayer that the nftl will be filed the notice does not create a day waiting_period for lien filing rather a nftl can be filed after giving the taxpayer warning and a chance to satisfy his tax_liability policy statement p-5-47 provides that a notice of lien shall not be filed except in jeopardy_assessment cases until reasonable efforts have been made to contact the taxpayer in person by telephone or by a notice sent by mail delivered in person or left at the taxpayer’s last_known_address to afford him her the opportunity to make payment after filing a nftl the taxpayer must be notified of the filing of the nftl not more than five business days after the date of such filing when we have sent one cdp letter and days have passed our warning of enforcement is no longer considered timely if it is then appropriate to take enforcement action we must issue letter warning of enforcement should this letter be sent by certified mail how long should we wait after mailing this letter before we can take enforcement action gl-701148-99 we agree that this question should be coordinated with the national_resource_center


department of the treasury internal_revenue_service commerce mc dal dallas tx 501-dollar_figure tax_exempt_and_government_entities_division release number release date legend org - organization name xx - date date date address - address taxpayer_identification_number form tax_year s ended person to contact id number contact numbers phone fax certified mail - return receipt requested dear in a determination_letter dated march 19xx you were held to be exempt from federal_income_tax under sec_501 of the internal_revenue_code the code based on recent information received we have determined you have not operated in accordance with the provisions of sec_501 of the code accordingly your exemption from federal_income_tax is revoked effective january 20xx this is a final letter with regard to your exempt status we previously provided you a report of examination explaining why we believe revocation of your exempt status was necessary at that time we informed you of your right to contact the taxpayer_advocate as well as your appeal rights on february 20xx you signed form 6018-a consent to proposed action agreeing to the revocation of your exempt status under sec_501 of the code you are required to file federal_income_tax returns for the tax period s shown above if you have not yet filed these returns please file them with the ogden service_center within days from the date of this letter unless a request for an extension of time is granted file returns for later tax years with the appropriate service_center indicated in the instructions for those returns you have the right to contact the office_of_the_taxpayer_advocate taxpayer_advocate assistance is not a sudsittute for established irs procedures such as the formal appeals process the taxpayer_advocate cannot reverse a legally correct_tax determination or extend the time fixed by law that you have to file a petition in a united_states court the taxpayer_advocate can however see that a tax matter that may not have been resolved through normal channels gets prompt and proper handling you may call toll-free and ask for taxpayer_advocate assistance if you prefer you may contact your local taxpayer_advocate at vint if you have any questions please contact the person whose name and telephone number are shown at the beginning of this letter thank you for your cooperation sincerely nanette m downing director eo examinations internal_revenue_service tax_exempt_and_government_entities_division exempt_organizations examination sec_801 tom martin dr room birmingiiam al department of the treasury date date org address taxpayer_identification_number form tax_year s ended person to contact id number contact numbers telephone fax certified mail - return receipt requested dear we have enclosed a copy of our report of examination explaining why we believe revocation of your organization's exempt status is necessary if you do not agree with our position you may appeal your case the enclosed publication the examination process explains how to appeal an internal_revenue_service irs decision publication also includes information on your rights as a taxpayer and the irs collection process if you request a conference we will forward your written_statement of protest to the appeals_office and they will contact you for your convenience an envelope is enclosed if you and appeals do not agree on some or all of the issues after your appeals_conference or if you do not request an appeals_conference you may file suit in united_states tax_court the united_states court of federal claims or united_states district_court after satisfying procedural and jurisdictional requirements as described in publication you may also request that we refer this matter for technical_advice as explained in publication exempt_organization appeal procedures for unagreed issues f a determination_letter is issued to you based on technical_advice no further administrative appeal is available to you within the irs on the issue that was the subject of the technical_advice if you accept our findings please sign and return the enclosed form_6018 consent to proposed adverse action we will then send you a final letter revoking your exempt status we do not hear from you within days from the date of this letter we will process your case on the basis of the recommendations shown in the report of examination and this letter will become final shown avove file these returns with the ogden service_center within days from the date of in that event you will be required to file federal_income_tax returns for the tax period s if letter rev catalog number 34801v this letter unless a request for an extension of time is granted file returns for later tax years with the appropriate service_center indicated in the instructions for those returns you have the right to contact the office_of_the_taxpayer_advocate taxpayer_advocate assistarice is not a substitute for established irs procedures such as the formal appeals process the taxpayer_advocate cannot reverse a legally correct_tax determination or extend the time fixed by law that you have to file a petition in a united_states court the taxpayer_advocate can however see that a tax matter that may not have been resolved through normal channels gets prompt and proper handling you may call toll-free and ask for taxpayer_advocate assistance if you prefer you may contact your local taxpayer_advocate at if you have any questions please call the contact person at the telephone number shown in the heading of this letter if you write please provide a telephone number and the most convenient time to call if we need to contact you thank you for your cooperation sincerely nanette m downing director eo examinations enclosures publication publication form 6018-a report of examination envelope letter rev catalog number 34801v schedule number or exhibit form 886-a rev date name of taxpayer 20xx 20xx12 tax identification_number year period ended org ein explanations of items legend org - organization name city - city country issue ein - ein xx - date state - state country -- co-1 co-2 whether org qualifies for exemption under internal_revenue_code irc sec_501 facts the org was denied exemption as a c organization on february 19xx a letter dated june 19xx requested an appeals review of the c denial appeals issued a letter dated march 19xx granting the org exemption as a c organization sec_501 provides for exemption of two very different types of organizations with their own distinct qualification requirements they are a b social welfare organizations -- civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare and local associations of employees the membership of which is limited to the employees of a designated person s in a particular municipality and the net_earnings of which are devoted exclusively to charitable educational or recreational purposes to qualify as a local association of employees under sec_501 the organization must a b be local in character its membership must be limited to employees of a designated employer s in a particular locality and devote its net_earnings exclusively to charitable educational or recreational purposes for purposes of the local requirement sec_1_501_c_4_-1 refers to the definition of local in sec_1_501_c_12_-1 for this purpose business limited only by the borders of a state would not be local according to your articles of incorporation filed may 19xx the purpose for which this corporation is organized is to operate a center that caters to the particular recreational and social needs of the crew members of cruise ships docking at the port of state and to conduct incidental activities related thereto including but not limited to the maintenance and operation of any park with recreational facilities adjacent to facilities-of the organization this corporation shall carry on no activities which are not permitted to be carried on by an organization exempt from federal_income_tax under sec_501 of the internal_revenue_code_of_1986 or the corresponding provision of any future united_states internal revenue law in the event of dissolution the residual assets of this corporation will be turned over to one or more organization which are exempt as organizations described in sec_501 and sec_170 of the internal_revenue_code_of_1986 or corresponding sections of any prior or future internal_revenue_code or to the federal state of local_government for exclusive public purposes during the examination of your form_990 for 20xx and 20xx you were asked during the initial interview to describe the history of your organization and all of its activities you stated that the co-1 closed their operations back in the late 80s org was established to continue to offer service to seafarers working on ships calling on port of state the service consisted of low cost phone calls to families at home this later turned into internet service etc mailing service money transfer and food were also available sport form 886-a department of the treasury-internal revenue service catalog number 20810w publish no irs gov page _1 schedule number or exhibit form 886-a name of taxpayer rev january sec_4 explanations of items tax identification_number year period ended org activities were arranged and the center also had a soccer field in the earlier days that area was later taken by the port in addition org manages the buildings where the services are provided 20xx 20xx12 ein you were asked does the organization own lease or sublease any real_property if so is the property encumbered by debt you responded org owns three modular buildings which are located on city property the center pays ground lease to the port of state for use of the grounds that the buildings are on the buildings were sold in october 20xx org has no outstanding debt according to your 20xx and 20xx form_990 you received income from the following sources table deleted the application stated that the source_of_income would be net_income from telephone services food service and sundry shop it also stated the miscellaneous gifts from cruise and shipping and governmental welfare organization would also be a source_of_income however during the examination it was noted that the only source_of_income was rental income and ships per call fees your explanation of ship per calls fees is the center which was originally founded by the country government who pulled out back in the 19xxs the org was created to operate the facility going forward the two major country cruise lines that operated out of the port of state had a large number of their crew being from country therefore the two cruise lines paid dollar_figure per ship per call to the center as a way of supporting their efforts of the org co-2 pulled out several years ago and country cruise lines pulled out a year ago according to your 20xx and 20xx form_990 you listed expenses of the following table deleted the expenses listed above appear to be commercial in nature and as a c local associations of employees the membership of which is limited to the employees of a designated person s in a particular municipality and the net_earnings of which are devoted exclusively to charitable educational or recreational purposes the expenses listed above are not commensurate with that of a c organization law sec_1_501_c_4_-1 b local associations of employees local associations of employees described in sec_501 are expressly entitled to exemption under sec_501 as conditions to exemption it is required that the membership of such an association be limited to the employees of a designated person or persons in a particular municipality and that the net_earnings of the association be devoted exclusively to charitable educational or recreational purposes the word local is defined in paragraph b of sec_1_501_c_12_-1 see paragraph d and of sec_1_501_c_3_-1 with reference to the meaning of charitable and educational as used in this section b the phrase of a purely local character applies to benevolent_life_insurance_associations and not to the other organizations specified in sec_501 it also applies to any organization seeking exemption on the ground that it is an organization similar to a benevolent life_insurance association an organization of a purely local character is one whose business activities are confined to a particular community place or form 886-a catalog number 20810w page _2 publish no irs gov department of the treasury-internal revenue service schedule number or exhibit form 886-a rev date explanations of items name of taxpayer tax identification_number year period ended org 20xx 20xx12 district irrespective however of political subdivisions if the activities of an organization are limited only by the borders of a state it cannot be considered to be purely local in character ein charitable defined the term charitable is used in sec_501 in its generally accepted legal sense and is therefore not to be construed as limited by the separate enumeration in sec_501 of other tax-exempt purposes which may fall within the broad outlines of charity as developed by judicial decisions such term includes relief of the poor and distressed or of the underprivileged advancement of religion advancement of education or science erection or maintenance of public buildings monuments or works lessening of the burdens of government and promotion of social welfare by organizations designed to accomplish any of the above purposes or i to lessen neighborhood tensions ii to eliminate prejudice and discrimination iii to defend human and civil rights secured_by law or iv to combat community deterioration and juvenile delinquency the fact that an organization which is organized and operated for the relief of indigent persons may receive voluntary contributions from the persons intended to be relieved will not necessarily prevent such organization from being exempt as an organization organized and operated exclusively for charitable purposes the fact that an organization in carrying out its primary purpose advocates social or civic changes or presents opinion on controversial issues with the intention of molding public opinion or creating public sentiment to an acceptance of its views does not preclude such organization from qualifying under sec_501 so long as it is not an action_organization of any one of the types described in paragraph c of this section educational defined-- i in general the term educational as used in sec_501 relates to a the instruction or training of the individual for the purpose of improving or developing his capabilities or b the instruction of the public on subjects useful to the individual and beneficial to the community an organization may be educational even though it advocates a particular position or viewpoint so long as it presents a sufficiently full and fair exposition of the pertinent facts as to permit an individual or the public to form an independent opinion or conclusion on the other hand an organization is not educational if its principal function is the mere presentation of unsupported opinion reg f v provides that expenditures that are deductible by employers because they are for employee recreational activities include expenditures_for christmas parties picnics summer outings a swimming pool a baseball diamond bowling alleys and a golf course revproc_80_25 1980_1_cb_667 section dollar_figure states that a ruling or determination_letter recognizing exemption may not be relied upon if there is a material_change inconsistent with exemption in the character the purpose or the method of operation of the organization sec dollar_figure further states that where there is a material_change inconsistent with exemption in the character the purpose or the method of operation of an organization revocation or modification will ordinarily take effect as of the date of such material_change section dollar_figure states that a ruling or determination_letter recognizing exemption may be revoked or modified by a subsequent ruling or determination_letter addressed to the organization or by a revenue_ruling or other statement published in the internal_revenue_bulletin the revocation or modification may be retroactive if the organization omitted or misstated a material fact operated in a manner materially different from that originally represented or in the case or organizations to which section 503-of the code applies engaged in a prohibited_transaction with the purpose of diverting corpus or income of the organization from its form 886-a catalog number 20810w page publish no irs gov department of the treasury-internal revenue service schedule number or exhibit tax identification_number year period ended form 886-a rev date name of taxpayer org explanations of items ein 20xx 20xx12 exempt_purpose and such transaction involved a substantial part of the corpus or income of such organization where there is a material_change inconsistent with exemption in the character the purpose or the method of operation of an organization revocation or modification will ordinarily take effect as of the date of such material_change in cases where a ruling or determination_letter was issued in error or is no longer in accord with the holding of the service retroactivity of the revocation or modification ordinarily will be limited to a date not earlier than that on which the original ruling or determination_letter is modified or revoked revproc_2007_52 sec_12 states that where there is a material_change inconsistent with exemption in the character the purpose or the method of operation of an organization revocation or modification will ordinarily take effect as of the date of such material_change governments position an organization exempt under sec_501 civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare or local associations of employees the membership of which is limited to the employees of a designated person or persons in a particular municipality and the net_earnings of which are devoted exclusively to charitable educational or recreational purposes shall not apply to an entity unless no part of the net_earnings of such entity inures to the benefit of any private_shareholder_or_individual the org no longer qualifies for exemption as a c organization because the net_earnings are not devoted exclusively to charitable educational or recreational purposes of its members the organizations main source income is rental income and expenses are related to the upkeep of these rented facilities during the years under examination the organization did not conduct any activities for its members as illustrated in the tables above the organization appears to be operating in a commercial nature as stated above if there were a material_change inconsistent with exemption in the character the purpose or the method of operation of an organization revocation or modification will ordinarily take effect as of the date of such material_change the organization is no longer operating within the guidelines of sec_501 and therefore no longer qualify for exemption taxpayers position the org will have an opportunity to respond once this report is received conclusion the sec_501 tax exempt status of org should be revoked since the organization is no longer providing any exempt services to its members a material_change has taken place which is inconsistent with exemption in character and in purpose and therefore your c should be revoked wot form 886-a catalog number 20810w page publish no irs gov department of the treasury-internal revenue service


department of the treasury internal_revenue_service washington d c sep tax_exempt_and_government_entities_division uniform issue list through legend state a this is in response to a letter dated date as supplemented by correspondence dated date and date submitted on your behalf by your authorized representative regarding rulings under sec_72 of the internal_revenue_code the code the following facts and representations were submitted in connection with your request - normal retirement benefits under system x are based on the system x is a defined_benefit_plan that provides pension benefits to certified teachers of public schools in state a pursuant to statute b system x a plan intended to be qualified under code sec_401 is maintained by state a and its provisions are found in statute b benefits under system x are funded through both mandatory employee contributions and employer contributions participant’s age and years of credited service and payable in monthly installments retirement allowance upon the participant’s retirement participant who is eligible for a retirement allowance who has not previously received a retirement allowance including a disability retirement allowance and who meets certain age and or service requirements may elect to receive a partial lump sum distribution lump sum payment by notifying system x when applying for retirement benefits statute b provides that the monthly retirement allowance a participant would have received absent such an election will be reduced on an actuarially equivalent basis system x permitted participants to withdraw their accumulated employee contributions on termination of employment after-tax employee contributions from non-state retirement plans that may be attributable to employee contributions made prior to withdrawal feature on system x does not accept nor has it historically accepted system x also provides that a on or from state plans that did not have a based on the above facts and representations you request rulings that alump sum payment from system x is eligible for the special tax treatment under code sec_72 as modified by sec_1011a b of tamra and a lump sum payment paid before or with the first annuity_payment under system x will be treated as having been received before the annuity_starting_date and will be excluded from gross_income up to the amount of the participant’s pre-1987 after-tax employee contributions with regard to the above ruling requests code sec_72 provides that except as otherwise provided in this chapter gross_income includes any amount_received_as_an_annuity whether for a period certain or during one or more lives under an annuity endowment or life_insurance_contract code sec_72 generally applies to any amount received under an annuity_contract but which is not received as an annuity code sec_72 provides that any amount not received as an annuity and which is received on or after the annuity_starting_date shall be included in gross_income code sec_72 provides that notwithstanding any other provision of sec_72 in the case of any non-annuity amount received before the annuity_starting_date from a qualified_plan sec_72 shall apply to such amounts code sec_72 provides that a non-annuity payment which is received before the annuity_starting_date shall be included in gross_income to the extent allocable to the income_on_the_contract and shall not be included in gross_income to the extent allocable to the investment_in_the_contract code sec_72 provides that in the case of a plan which on date permitted withdrawal of any employee contributions before separation_from_service subparagraph a shall apply only to the extent that amounts received before the annuity_starting_date when increased by amounts previously received under the contract after date exceed the investment_in_the_contract as of date sec_1011a b of the technical_and_miscellaneous_revenue_act_of_1988 tamra pub_l_no 1988_3_cb_1 created the following special rule that in the case of a retirement_plan maintained by a state which on date permitted withdrawal by the employee of employee contributions other than as an annuity code sec_72 shall be applied without regard to the phrase before separation from service’ in paragraph d and by treating any amount received other than as an annuity before or with the first annuity_payment as having been received before the annuity_starting_date in this case with respect to ruling_request system x is a state plan that provided for the withdrawal of after-tax employee contributions on _ on separation_from_service system x permits an eligible_participant to elect a lump sum payment that under statute b is paid on or before commencement of payment of the participant’s monthly retirement allowance thus with regard to ruling_request a lump sum payment satisfies the requirements for the special relief afforded code sec_72 as modified by tamra thus we conclude with respect to ruling_request that a lump sum payment will be treated as being received before the annuity_starting_date and taxable only to the extent such payment exceeds the participant’s investment_in_the_contract as of date ie pre-1987 after-tax employee contributions any portion of a lump sum payment received in excess of the pre-1987 investment_in_the_contract will be taxable pursuant to the pro_rata basis recovery rule_of sec_72 no opinion is expressed as to the federal tax consequences of the transaction described above under any other provisions of the code the above rulings are based on the assumption that system x is qualified under code sec_401 and its related trust exempt from tax under sec_501 at all relevant times this ruling is directed only to the specific taxpayer that requested it code sec_6110 provides that it may not be used or cited by others as precedent a copy of this letter_ruling is being sent to your authorized representative pursuant to a power_of_attorney on file with this office should you have any questions or concerns regarding this letter please contact sincerely yours onl a atkins carlton a watkins manager employee_plans technical group enclosures notice of intention to disclose deleted copy of ruling


internal_revenue_service department of the treasury sry se by-o y qik washington dc coniact person telephone number in reference to i op e ebeo t kdo bin legend a b c dear sir or madam date dec this is the grant-making procedures described in a’s letter of date as modified by your letter of september in reply to the request for advance approval of a and b have been recognized as exempt under sec_501 c of the internal_revenue_code and are private_foundations within the meaning of sec_509 of the code a and b have merged and you you expect to continue the activities are the surviving entity for which b was recognized as exempt under sec_501 and will also carry on this proposed program be and first school public private teachers to educate to further your objective of promoting the establishment and class education systems you have proposed maintenance of you intend to invite establishing a teacher training program short selected the training seminars during the summer months of seminars will personal computers in the technology available to them via personal computers and access to the internet and to teach them how to utilize computer technology in the seminar program including providing accommodations and meals to the participants each participant will be given a laptop computer to use during the course of be permitted to retain it for use in the classroom and at home upon the completion of the seminars the laptops and accompanying software will be paid for by you the seminar and will attend focus and you intend to bear the entire cost the classroom the classroom train them to teachers on the value of use to the use of to the teachers attending your you also have proposed to establish a separate program under which select two seminars these students will students to attend a similar seminar program the laptops and to assist the teachers in the be trained to use classroom during the course of the school year in the program for teacher instruction all costs will be borne by you and each student participant will be given a laptop and permitted to retain it the summer the student the entire summer end of one the for or as at a y r e t r o f re participant will school be required to return the computer to their to you here year again receive in addition to training all bear additional to intend the training seminars each participant must commit to attend three two-day update sessions during the course of the and _ share school information costs the a participant fails to associated with these update sessions attend an update session or the the grant have been violated and grant funds have been terms of used improperly you will request that a participant be returned or transferred to another teacher within the same school take any other reasonable and appropriate steps to and make no additional grants to that recover the diverted funds individual until the individual repays the grant funds or otherwise explains also represented that you will maintain complete records regarding the grants if you otherwise determine that the laptop provided to the original diversion cause have you the of if a to you intend target representative schools over broad participants will be selected geographic and socioeconomic region based on demonstrated skills interest and commitment to utilizing personal computer technology in the school’s willingness to participate in including the update sessions any disqualified persons within the meaning of sec_4946 of the code will be eligible to participate in the program you will have a selection committee was participated consisting of in who conducted by you represented that the have in a position to derive a private benefit selection committee is either directly or indirectly if certain grantees are selected instead of others a which no member of none of your employees or the classroom and the program teachers test c you have requested advance approval of the procedures proposed to be employed by you in making grants to individuals as required by sec_4945 of the code sec_501 of the code exempts from federal_income_tax organization organized and operated exclusively for charitable or educational_purposes sec_509 of the code provides that unless specifically excepted a domestic or foreign organization described in sec_50l1 c a private_foundation and subject_to the excise_taxes of chapter is sec_4945 of the internal_revenue_code imposes an excise_tax on each taxable_expenditure made by a private_foundation section expenditure d provides means any amount_paid that or the term incurred by taxable a private re yeeqrs t e r d n a e_p or foundation as similar purposes by such individual unless such grant satisfies the requirements of sec_4945 an individual travel study grant for to a of sec_4945 section an shall not apply to d procedure and nondiscriminatory basis objective is demonstrated to the approved in advance by the secretary if to satisfaction of the secretary that the purpose of the grant is achieve a specific objective produce a report or similar product scientific or improve or enhance a literary artistic musical teaching or similar capacity skill or talent of the grantee the an individual grant awarded on pursuant it provides code that to a an objective and nondiscriminatory basis sec_53_4945-4 of the foundation and similar excise_tax regulations sets forth standards for determining whether grants to individuals awarded under sec_4945 of the code are made the standards on discussed in this section require that the potential grantees are the of selected the criteria used in selecting recipients purposes of the grant the persons should be related to a selecting recipients should not their private selection a position to derive the purpose of reasonably indirectly the grant directly criteria benefit related reason basis and the on or by to be of in of on the merit basis the information you have submitted indicates that your awards are made are the accomplishment of your exempt section reasonably related to a the selection committee will c their selections and adequate position to benefit by reason of in addition records regarding the program shall be maintained you will have procedures in place to recover your equipment and to perhaps take other measures if the terms of your grant a participant fails to live up and under criteria purposes which not be in based on accordingly the information presented above and assuming your grant-making program will be conducted as proposed with objectivity and nondiscrimination in awarding grants we have determined that your procedures comply with the requirements of of the code and that grants made according to sec_4945 taxable_expenditures within the these procedures will be meaning of sec_4945 not this ruling is conditioned on the understanding that there no material_change in the facts upon which it will be is further conditioned on the premise that no grants will be it awarded directors trustees or members of the selection committee or for a purpose that sec_170 c b organization’s inconsistent of the code described is based purposes officers creators with your the in is to re the approval of your grant-making procedures is one time approval of your system of standards and procedures for selecting section recipients thus approval will apply to succeeding g grant programs only as long as the standards and procedures under those which described in your request differ materially from conducted do requirements of the code grants they that meet are not the of of a any funds you distribute to individuals must be made on a true charitable basis in furtherance of the purposes for which you are therefore you should maintain adequate_records and organized be case histories substantiated upon request by the internal_revenue_service all grant distributions can that any or so in this letter we have not considered whether adopting this program will effect your status as an operating_foundation within the meaning of sec_4942 of the code we are informing your key district_director of this action please keep a copy of this ruling with your permanent records this ruling is directed only to you as organization that originally requested it the code provides that it may not be used or cited as precedent the successor of the of sec_6110 sincere le uasvelt cag mar garland a carter chief exempt_organizations technical branch


department of the treasury internal_revenue_service washington d c contact person identification_number telephone number employer_identification_number se t eo ra t tax exempt and sovernment entities division release number release date date date uil code legend l z university dollar_figurex date_y dear - in reply to your ruling this i sec_4941 sec_4944 and sec_4945 of the internal_revenue_code code of a transfer of assets and liabilities from you to a newly created organization request regarding the proper treatment under sec_507 sec_4940 facts you were formed by a for the purpose of providing educational opportunities for disadvantaged inner-city children you have been recognized as an organization described in sec_501 of the code and classified as a private_foundation under sec_509 in the past you have sponsored a wide range of programs including after school and summer programs mentoring tutoring school-day academic support family outreach scholarships social work and counseling services in addition you made grants that further your charitable objectives several years ago you made a dollar_figurex pledge to university for various purposes currently half of the pledge remains unpaid you now plan to focus on a narrower range of programs that provide education to disadvantaged inner-city children and support to their families consequently you plan to transfer the pledge made to university along with additional assets required to carry on other charitable objectives that do not directly further your new narrower purpose to m a new private_foundation created by a the transfer’ the transfer would consist of more than of your assets m has been recognized as an organization described in sec_501 of the code and classified as a private_foundation under sec_509 the transfer will be accompanied by an assumption_agreement that ensures m fulfills its obligations to the university and you will exercise expenditure_responsibility with regard to the transferred assets you have recently broadened your public support base through additional fundraising consequently on date y you filed advance notice of your intent to terminate your private_foundation_status by operating as a public charity for sixty months you have received a favorable advance_ruling that you will be described in sec_509 of the code at the end of that period based on the above facts you request the following rulings the transfer will not adversely affect the tax-exempt status of either you or m under sec_501 of the code the transfer will qualify as a transfer under sec_507 of the code the transfer will not operate to terminate your status under sec_507 of the code and therefore will not subject you to termination_tax under sec_507 the transfer will not adversely affect the termination of your private_foundation_status or your qualification as a public charity under sec_507 of the code the transfer will not adversely affect the advance_ruling on your public charity status the basis of any assets received in the transfer by m will be your basis in the assets for purposes of sec_4940 of the code the transfer will not constitute an act of self-dealing under sec_4941 of the code for you or your disqualified persons the transfer will not constitute an investment that jeopardizes your exempt purposes under sec_4944 of the code the transfer will not constitute a taxable_expenditure under sec_4945 of the code provided appropriate expenditure_responsibility requirements are satisfied under sec_4945 and h during the remainder of your sixty month termination period you will not be required to continue to exercise expenditure_responsibility over the assets transferred to m under sec_4945 and h of the code upon the successful completion of your sixty month termination period under sec_507 the reasonable and necessary expenses in making the transfer including those incurred in connection with this ruling will not constitute a taxable_expenditure under sec_4945 of the code law sec_501 of the code exempts from federal_income_tax corporations organized and operated exclusively for charitable educational and other exempt purposes provided that no part of its net_earnings inures to the benefit of any private_shareholder_or_individual sec_507 of the code states that the status of any organization as a private_foundation it notifies the secretary of its intent to terminate or there have been shall be terminated only if either willful repeated acts or a willful and flagrant act giving rise to liability for tax under chapter and the secretary notifies the organization that it is liable for termination_tax under sec_507 and either the organization pays the tax imposed by sec_507 or the tax is abated under sec_507 - sec_507 of the code states that the status of any organization as a private_foundation may be terminated if the private_foundation notifies the secretary of its intent to terminate its private_foundation_status by operating as a public charity and in fact operates as a public charity for its termination period sec_507 of the code provides that in the case of a transfer of assets of any private_foundation to another private_foundation pursuant to any liquidation merger redemption recapitalization or other adjustment organization or reorganization the transferee foundation shall not be treated as a newly created organization sec_4941 of the code imposes a tax on acts of self-dealing between a disqualified_person and a private_foundation sec_4944 of the code imposes a tax upon a private_foundation which invests any amount in such a manner as to jeopardize the carrying out of any of its exempt purposes sec_4945 of the code imposes an excise_tax on the taxable_expenditures made by a private_foundation sec_4945 provides in part that the term taxable_expenditure means any amount_paid or incurred as a grant to an organization other than a public charity described in sec_509 or unless the private_foundation exercises expenditure_responsibility in accordance with sec_4945 sec_4945 of the code provides that expenditure_responsibility means the private_foundation is responsible to exert all reasonable efforts and to establish adequate procedures to see that the grant is spent solely for the purpose for which it was made to obtain full and complete reports from the grantee on how the funds are spent and to make full and detailed reports with respect to such expenditures to the secretary or_his_delegate sec_1_507-1 of the income_tax regulations provides that neither a transfer of all of the assets of a private_foundation nor a significant disposition of assets as defined in sec_4 c by a private_foundation whether or not any portion of such disposition of assets is a termination of the transferor made to another private_foundation shall be deemed to result in private_foundation unless the transferor private_foundation elects to terminate pursuant to sec_507 or sec_507 of the code sec_1_507-2 of the regulations states that a private foundation's notification that it is commencing a termination under sec_507 of the code will not be treated as a notification described in sec_507 and no termination_tax will be incurred under sec_507 of the regulations state that an organization which files the notification sec_1_507-2 under sec_507 of the code may obtain an advance_ruling that it can be expected to satisfy the requirements thereof sec_1_507-2 of the regulations provides in part that in the event that an organization satisfies the requirements of sec_507 for termination of its private_foundation_status by the end of the 42-month period or during the continuous 60-month period such organization shall be treated for such entire 12-month or 60-month period in the same manner as an organization described in sec_509 or sec_1_507-3 of the regulations provides that assets transferred in a transaction described in sec_507 of the code will have the same basis and holding_period for the transferee as they did for the transferor sec_1_507-3 of the regulations provides that for purposes of sec_507 of the code the terms other adjustment organization or reorganization shall include a significant disposition of assets sec_1_507-3 of the regulations provides that the term significant disposition of assets includes any disposition by a foundation in a taxable_year to one or more other private_foundations which i sec_25 percent or more of the fair_market_value of the net assets of the distributing foundation at the beginning of the taxable_year sec_1_507-3 of the regulations provides that if a private_foundation transfers all or part of its assets to one or more other private_foundations pursuant to a transfer described in sec_507 of the code such transferor foundation will not have terminated its private_foundation_status under sec_507 sec_1_507-3 of the regulations provides that if during an organization's sixty month termination period under sec_507 of the code such organization makes a significant disposition of assets to a private_foundation the transfer will be treated as a sec_507 transfer rather than as a grant or contribution from a public charity sec_53_4945-6 of the foundation and similar excise_tax regulations provides that legal administrative and other expenses_incurred by a private_foundation in a good_faith belief that they are reasonable and consistent with ordinary care and prudence will not constitute taxable_expenditures the regulations further provide that the determination of whether an expenditure is unreasonable depends upon the facts and circumstances of a particular case sec_53_4946-1 of the regulations indicates that for purposes of sec_4941 of the code the term disqualified_person does not include any organization described in sec_501 revrul_2003_13 2003_4_irb_305 provides that a transfer from a private_foundation of all its assets to one or more organizations described in sec_509 of the code does not constitute an investment for purposes of sec_4944 analysis ruling the transfer will not adversely affect the tax-exempt status of either you or m under sec_501 of the code to be exempt under sec_501 of the code an organization must be organized and operated exclusively for exempt purposes you are organized and operated to further exempt charitable and educational_purposes the assets transferred to m will be used to further charitable and educational_purposes therefore the transfer is an activity in furtherance of your exempt purposes and will not adversely affect your exempt status the transfer will require m to fulfill your pledge to the university furtherance of m’s charitable and educational_purposes because it will help to support education therefore the transfer and its accompanying obligation will not adversely affect the tax exempt status of m fulfilling this obligation is in ruling the transfer will qualify as a transfer under sec_507 of the code sec_507 of the code applies to transfers from one private_foundation to another pursuant to any liquidation merger redemption recapitalization or other adjustment organization or reorganization sec_1_507-3 of the regulations provides that sec_507 applies to a significant disposition of assets a significant disposition of assets is defined in sec_1_507-3 as a transfer of more than percent of one private foundation’s assets to another private_foundation sec_1_507-3 provides that if during an organization's sixty month termination period under sec_507 such organization makes a significant disposition of assets to a private_foundation the transfer will be treated as a sec_507 transfer rather than as a grant or contribution from a public charity the transfer includes transferring more than percent of your assets to m mis a private_foundation you are a private_foundation within the sixty month termination period described in sec_507 of the code therefore the transfer will be treated as a transfer under sec_507 of the code and not as a grant or contribution from a public charity ruling the transfer will not operate to terminate your status under sec_507 of the code and therefore will not subject you to termination_tax under sec_507 sec_1_507-1 of the regulations states that a transfer of assets under sec_507 of the code does not constitute a termination of a transferor foundation's private_foundation_status under sec_507 as stated above the transfer will qualify as a transfer of assets under sec_507 therefore the transfer will not operate to terminate your status as a private_foundation or subject you to termination_tax under sec_507 ruling the transfer will not adversely affect the termination of your private_foundation_status or your qualification as a public charity under sec_507 of the code the determination of whether an organization qualifies as a public charity depends upon the organization's sources of support transfers of assets by the organization do not effect whether the organization meets the requirements of being a public charity instead of a private_foundation therefore the transfer will have no effect on your termination of private_foundation_status and becoming a public charity under sec_507 of the code ruling the transfer will not adversely affect the advance_ruling on your public charity status as discussed above in ruling the transfer will not adversely affect the advance_ruling on your public charity status because a transfer of assets does not affect whether an organization meets the test for being classified as a public charity as opposed to being a private_foundation ruling the basis of any assets received in the transfer by m will be your basis in the assets for purposes of sec_4940 of the code sec_1_507-3 of the regulations provides that assets transferred as described in sec_507 of the code will have the same basis in the hands of the transferee as they did in the hands of the transferor for purposes of c b the assets transferred by you to m are pursuant to a sec_507 transfer therefore m's basis in the assets will be the same as yours for the purposes of c b ruling the transfer will not constitute an act of self-dealing under sec_4941 of the code for you or your disqualified persons sec_4941 of the code imposes an excise_tax on acts of self-dealing between a private_foundation and its disqualified persons as the term is defined in sec_4946 sec_53 a of the regulations provides that for the purposes of sec_4941 disqualified persons do not include organizations described in sec_501 m is not a disqualified_person with respect to you for purposes of sec_4941 of the code because it is an organization described in sec_501 therefore the transfer will not constitute an act of self-dealing because it is not a transaction between a private_foundation and a disqualified_person ruling the transfer will not constitute an investment that jeopardizes your exempt purposes under sec_4944 of the code sec_4944 of the code imposes a tax upon a private_foundation which invests any amount in such a manner as to jeopardize the carrying out of any of its exempt purposes revrul_2003_13 states that a transfer from a private_foundation of all of its assets to one or more organizations described in sec_509 does not constitute an investment for purposes of sec_4944 you are transferring assets to m and do not retain any interest in those assets while the transfer is not a transfer of all of your assets it has the same character as the transfer described in revrul_2003_13 we conclude that sec_4944 of the code does not apply to the transfer because it is not an investment ruling the transfer will not constitute a taxable_expenditure under sec_4945 of the code provided appropriate expenditure_responsibility requirements are satisfied under sec_4945 and h during the remainder of your sixty month termination period sec_4945 of the code imposes an excise_tax on each taxable_expenditure of a private_foundation a taxable_expenditure is defined in sec_4945 as an amount_paid or incurred to among other things an organization other than an organization described in sec_509 or of sec_4940 unless the distributing foundation exercises expenditure_responsibility with respect to the amount_paid mis an organization described in sec_501 of the code however it does not meet the requirements of sec_509 or furthermore m is not an organization described under sec_4940 therefore you must exercise expenditure_responsibility over the assets transferred to m pursuant to the transfer during the remainder of your sixty month termination period in order to preclude the transfer being classified as a taxable_expenditure see sec_4945 sec_53_4945-5 of the regulations ruling you will not be required to continue to exercise expenditure_responsibility over the transfer under sec_4945 and h of the code upon the successful completion of your sixty month termination period under sec_507 sec_1_507-2 of the regulations provides that when a private_foundation satisfies the requirements for termination under sec_507 of the code any actions it took during the month termination period will be treated as those of an organization described in sec_509 or of the code organizations described in sec_509 are not required to exercise expenditure_responsibility under sec_4945 and h lf you meet the requirements for termination under sec_507 of the code and become a public charity described in sec_509 the transfer will be treated as made by an organization described in sec_509 because it was made during your month termination period therefore you will not be required to exercise responsibility over the transfer if you successfully terminate your private_foundation_status and become an organization described in sec_509 ruling the reasonable and necessary expenses in making the transfer including those incurred in connection with this ruling will not constitute taxable_expenditure under sec_4945 of the code under sec_53_4945-6 of the regulations legal administrative and other expenses_incurred by a private_foundation in a good_faith belief that they are reasonable and consistent with ordinary care and prudence will not constitute taxable_expenditures the determination whether an expenditure is unreasonable depends upon the facts and circumstances ofa particular case the expenses_incurred in making the transfer including those incurred in connection with this letter_ruling constitute legal administrative and other expenses for purposes of sec_53_4945-6 of the reg ulations therefore your payment of these fees if incurred with a good_faith belief that they are reasonable will not constitute a taxable_expenditure under sec_4945 of the code ruling sec_4 the transfer will not adversely affect the tax-exempt status of either you or m under sec_501 of the code the transfer will qualify as a transfer under sec_507 of the code the transfer will not operate to terminate your status under sec_507 of the code and therefore will not subject you to termination_tax under sec_507 the transfer will not adversely affect the termination of your private_foundation_status or your qualification as a public charity under sec_507 of the code the transfer will not adversely affect the advance_ruling on your public charity status the basis of any assets received in the transfer by m will be your basis in the assets for purposes of sec_4940 of the code the transfer will not constitute an act of self-dealing under sec_4941 of the code for you or your disqualified persons the transfer will not constitute an investment that jeopardizes your exempt purposes under sec_4944 of the code the transfer will not constitute a taxable_expenditure under sec_4945 of the code provided appropriate expenditure_responsibility requirements are satisfied under sec_4945 and h during the remainder of your sixty month termination period you will not be required to continue to exercise expenditure_responsibility over the assets transferred to m under sec_4945 and h of the code upon the successful completion of your sixty month termination period under sec_507 the reasonable and necessary expenses in making the transfer including those incurred in connection with this ruling will not constitute a taxable_expenditure under sec_4945 of the code this ruling will be made available for public inspection under sec_6110 of the code after certain deletions of identifying information are made for details see enclosed notice notice of intention to disclose a copy of this ruling with deletions that we intend to make if you disagree with our proposed available for public inspection is attached to notice deletions you should follow the instructions in notice this ruling is directed only to the organization that requested it sec_6110 of the code provides that it may not be used or cited by others as precedent this ruling is based on the facts as they were presented and on the understanding that there will be no material changes in these facts because it could help resolve questions concerning your federal_income_tax status this ruling should be kept in your permanent records if you have any questions about this ruling please contact the person whose name and telephone number are shown in the heading of this letter sincerely steven grodnitzky manager exempt_organizations technical group enclosure notice