t c summary opinion united_states tax_court mary elizabeth cumings petitioner v commissioner of internal revenue respondent docket no 11623-05s filed date mary elizabeth cumings pro_se michael w lloyd for respondent marvel judge this case was heard pursuant to the provisions of sec_7463 of the internal_revenue_code in effect when the petition was filed pursuant to sec_7463 the decision to be entered is not reviewable by any other court and 1all subsequent section references are to the internal_revenue_code unless otherwise indicated this opinion shall not be treated as precedent for any other case this case arises from a request for relief under sec_6015 with respect to petitioner’ sec_2002 taxable_year respondent determined petitioner was not entitled to any relief from joint_and_several_liability under sec_6015 petitioner timely filed a petition seeking review of respondent’s determination the issue for decision is whether respondent’s denial of relief under sec_6015 was an abuse_of_discretion background some of the facts have been stipulated we incorporate the stipulated facts into our findings by this reference petitioner resided in loveland colorado when her petition in this case was filed 2respondent filed a motion to dismiss this case for lack of jurisdiction in which he contended that the tax_court did not have jurisdiction to review respondent’s denial of relief under sec_6015 in nondeficiency cases however in response to an order to show cause dated date respondent concedes that the tax relief and health care act of publaw_109_432 div c sec_408 c 120_stat_3061 amended sec_6015 to confer jurisdiction on the court over stand-alone requests for equitable relief under sec_6015 effective for tax_liabilities arising or remaining unpaid on or after date and requests that his motion to dismiss for lack of jurisdiction be denied an appropriate order denying the motion will be issued in accordance with respondent’s request during petitioner was married to robert parker mr parker in date petitioner and mr parker separated and in they divorced mr parker was the sole_proprietor of two businesses bob’s drywall and parker custom homes during petitioner was a laborer and a bookkeeper for mr parker’s drywall business during their marriage petitioner and mr parker maintained a joint checking account from which they both paid household bills among other things petitioner made deposits into the account wrote checks for household business and personal purposes reviewed the monthly bank statements and reconciled the checkbook petitioner also opened the household mail after petitioner and mr parker separated in date petitioner’s access to the joint checking account apparently was restricted petitioner and mr parker timely filed a joint federal_income_tax return for their return reflected an unpaid income_tax_liability of dollar_figure the tax_liability resulted from an underpayment of self-employment_tax arising from mr parker’s sole proprietorships 3the original tax_return filed with the internal_revenue_service irs did not contain the signature page petitioner and mr parker subsequently filed a document confirming that they had signed the return petitioner and mr parker’ sec_2002 joint_return was prepared by a tax_return_preparer petitioner compiled the necessary paperwork and gave it to the preparer petitioner faxed the completed tax_return to mr parker for his signature and mailing petitioner reviewed the return and was aware that there was a reported unpaid tax_liability petitioner and mr parker did not discuss payment of the tax_liability at the time they filed their return on date less than month after petitioner and mr parker filed their return petitioner filed form_8857 request for innocent spouse relief and form questionnaire for requesting spouse petitioner requested equitable relief under sec_6015 on or about date tax examiner m wilce ms wilce evaluated petitioner’s request for relief under sec_6015 among other things ms wilce determined that petitioner had filed a joint_return with mr parker had filed a timely claim for relief under sec_6015 had not yet paid the outstanding tax_liability for the year in issue did not prepare a fraudulent return did not receive a fraudulent transfer of assets and did not receive disqualified assets however ms wilce also determined that petitioner had received a portion of the income from which the liability arose and that petitioner was ineligible for relief to the extent of the partial attribution ms wilce did not determine at that time what portion of the underpayment was attributable to petitioner but she did conclude that petitioner was not entitled to relief under sec_6015 on or about date petitioner appealed ms wilce’s denial of relief on or about date appeals officer leslie hackmeister ms hackmeister reviewed petitioner’s appeal in the case memorandum she prepared reflecting her review ms hackmeister stated among other things that the underpayment is attributable to mr parker’s self-employment_income on date respondent issued a notice_of_determination denying petitioner’s request for relief under sec_6015 on date a petition contesting respondent’s determination was filed with this court discussion in general spouses who file a joint federal_income_tax return are jointly and severally liable for the full amount of the tax_liability shown or required to be shown on the return sec_6013 114_tc_276 however a spouse may seek relief from joint_and_several_liability under sec_6015 if certain requirements are met in this case petitioner seeks equitable relief under sec_6015 sec_6015 provides sec_6015 equitable relief --under procedures prescribed by the secretary if-- taking into account all the facts and circumstances it is inequitable to hold the individual liable for any unpaid tax or any deficiency or any portion of either and relief is not available to such individual under subsection b or c the secretary may relieve such individual of such liability this court is a court of limited jurisdiction and it may exercise its jurisdiction only to the extent authorized by congress sec_7442 114_tc_171 85_tc_527 on date congress amended sec_6015 to provide that this court has jurisdiction over stand-alone sec_6015 cases tax relief and health care act of publaw_109_432 div c sec_408 c 120_stat_3061 respondent 4because petitioner seeks relief from an underpayment_of_tax rather than understatements of tax relief under subsecs b and c of sec_6015 is not available to her sec_6015 and c see also 120_tc_137 sec_408 of the tax relief and health care act of publaw_109_432 div c 120_stat_3062 provides that the amendments made by sec_408 shall apply with respect to liability for taxes arising or remaining unpaid on or after date sec_6015 now provides sec_6015 petition for review by tax_court -- in general --in the case of an individual against whom a deficiency has been asserted and who elects to have subsection b or c apply or in the continued concedes that we have jurisdiction over this case under sec_6015 as amended the commissioner uses guidelines prescribed in revproc_2003_61 2003_2_cb_296 to determine whether a taxpayer qualifies for relief from joint_and_several_liability under sec_6015 we review the commissioner’s determination using an abuse_of_discretion standard see 120_tc_137 butler v commissioner supra pincite under this standard of review we defer to the commissioner’s determination unless it is arbitrary capricious or without sound basis in fact 118_tc_106 affd 353_f3d_1181 10th cir the taxpayer requesting sec_6015 relief bears the burden_of_proof see rule a jonson v commissioner supra pincite continued case of an individual who requests equitable relief under subsection f -- a in general -- the individual may petition the tax_court and the tax_court shall have jurisdiction to determine the appropriate relief available to the individual under this section emphasis added 7rev proc 2003_2_cb_296 supersedes revproc_2000_15 2000_1_cb_447 effective for requests for relief filed on or after date and for requests for relief pending on date for which no preliminary determination_letter has been issued as of that date revproc_2003_61 secs and c b pincite a revproc_2003_61 sec dollar_figure before the commissioner will consider a taxpayer’s request for relief under sec_6015 the taxpayer must satisfy the following seven threshold conditions listed in revproc_2003_ sec_4 c b pincite the requesting spouse filed a joint_return for the taxable_year for which he or she seeks relief relief is not available to the requesting spouse under sec_6015 or c the requesting spouse applies for relief no later than two years after the date of the service’s first collection activity no assets were transferred between the spouses as part of a fraudulent scheme by the spouses the nonrequesting spouse did not transfer disqualified assets to the requesting spouse the requesting spouse did not file or fail to file the return with fraudulent intent the income_tax_liability from which the requesting spouse seeks relief is attributable to an item of the individual with whom the requesting spouse filed the joint_return the nonrequesting spouse review of the administrative record particularly ms wilce’s workpaper and ms hackmeister’s case memorandum confirms that petitioner satisfies each of these conditions petitioner and mr parker filed a joint federal_income_tax return for relief is not available to petitioner under sec_6015 or c because relief under those subsections is available only with respect to underreported liabilities petitioner and mr parker did not underreport their tax_liability on their return petitioner requested relief promptly after the return was filed ms wilce concluded that there was no fraudulent transfer of assets or transfer of disqualified assets to petitioner and there is no evidence in the record supporting a different conclusion neither ms wilce nor ms hackmeister claim that petitioner and mr parker filed their return with a fraudulent intent and there is no evidence in the record supporting such an intent finally ms hackmeister determined that the income_tax_liability in question arose from mr parker’s sole_proprietorship income and the administrative record overwhelmingly supports her conclusion we conclude that petitioner has satisfied the conditions in revproc_2003_61 sec_4 b revproc_2003_61 sec dollar_figure in general revproc_2003_61 sec_4 c b pincite provides that equitable relief will ordinarily be granted as to unpaid liabilities if in addition to the seven threshold conditions each of the following elements is satisfied a on the date of the request for relief the requesting spouse is no longer married to or is legally_separated from the nonrequesting spouse or has not been a member of the same household as the nonrequesting spouse at any time during the 12-month_period ending on the date of the request for relief b on the date the requesting spouse signed the joint_return the requesting spouse had no knowledge or reason to know that the nonrequesting spouse would not pay the income_tax_liability the requesting spouse must establish that it was reasonable for the requesting spouse to believe that the nonrequesting spouse would pay the reported income_tax_liability c the requesting spouse will suffer economic hardship if the service does not grant relief petitioner and mr parker were separated at the time petitioner filed her request for relief the parties dispute only whether petitioner had knowledge or reason to know that mr parker would not pay the reported tax_liability and whether petitioner would suffer economic hardship if relief were not granted knowledge or reason to know this element is satisfied if the requesting spouse did not know or have reason to know when she signed the return that the taxes would not be paid revproc_2003_61 sec_4 b accordingly petitioner must establish that it was reasonable for her to believe that mr parker would pay the reported liability petitioner was aware of the reported tax_liability when she signed the return petitioner also admitted that at the time she signed the return she did not know whether mr parker would pay the outstanding balance and that no funds were available at that time to pay the liability petitioner was aware that mr parker intended to file a petition in bankruptcy while we are sympathetic to petitioner’s situation with her former husband we cannot find that respondent abused his discretion in determining that petitioner had reason to know at the time she signed the return that the tax_liability would not be paid petitioner has not established that it was reasonable for her to believe mr parker would pay the liability we conclude therefore that respondent did not abuse his discretion in determining that petitioner did not satisfy the knowledge or reason to know element of revproc_2003_61 sec_4 and thus does not qualify for equitable relief under that section of the revenue_procedure c revproc_2003_61 sec dollar_figure where the requesting spouse fails to qualify for relief under revproc_2003_61 sec_4 the commissioner may nonetheless grant relief under revproc_2003_61 sec_4 c b pincite revproc_2003_61 sec_4 provides that where the seven threshold conditions have been satisfied and the requesting spouse does not qualify for relief under revproc_2003_61 sec_4 equitable relief may be granted under sec_6015 if taking into account all facts and circumstances it is inequitable to hold the requesting spouse liable revproc_2003_61 sec_4 contains a list of factors that the commissioner will take into account in determining on the facts and circumstances whether to grant full or partial equitable relief under sec_6015 as revproc_2003_61 sec_4 makes clear no single factor is determinative in any particular case all factors are to be considered and weighed appropriately and the listing of factors is not intended to be exclusive revproc_2003_61 sec_4 a c b pincite lists the following factors that the commissioner will weigh in determining whether to grant equitable relief i marital status whether the requesting spouse is separated or divorced from the nonrequesting spouse ii economic hardship whether the requesting spouse would suffer economic hardship within the meaning of sec_4 c of this revenue_procedure if the service does not grant relief from the income_tax_liability iii knowledge or reason to know a underpayment cases whether the requesting spouse did not know and had no reason to know that the nonrequesting spouse would not pay the income_tax_liability iv nonrequesting spouse’s legal_obligation whether the nonrequesting spouse has a legal_obligation to pay the outstanding income_tax_liability pursuant to a divorce decree or agreement v significant benefit whether the requesting spouse received significant benefit beyond normal support from the unpaid income_tax_liability vi compliance with income_tax laws whether the requesting spouse has made a good_faith effort to comply with income_tax laws in the taxable years following the taxable_year or years to which the request for relief relates revproc_2003_61 sec_4 b c b pincite lists the following two positive factors that the commissioner will weigh in favor of granting equitable relief i abuse whether the nonrequesting spouse abused the requesting spouse ii mental or physical health whether the requesting spouse was in poor mental or physical health on the date the requesting spouse signed the return or at the time the requesting spouse requested relief we consider the factors below marital status petitioner and mr parker separated in date and divorced in both ms wilce and ms hackmeister admitted that this factor weighs in favor of granting relief economic hardship revproc_2003_61 sec_4 c requires respondent to apply the rules in sec_301_6343-1 proced admin regs in making the determination of whether a requesting spouse will suffer economic hardship sec_301_6343-1 proced admin regs provides that economic hardship is present if satisfaction of the tax_liability in whole or in part will render a taxpayer unable to pay her reasonable basic living_expenses sec_301_6343-1 proced admin regs lists factors that will be considered in determining a reasonable continued in date petitioner submitted a form to respondent petitioner reported on the form monthly income of dollar_figure and monthly expenses of dollar_figure petitioner’s stated monthly expenses included housing food and utility expenses of dollar_figure transportation_expenses of dollar_figure and other expenses of dollar_figure the administrative record establishes that petitioner was the sole owner of the marital residence and jointly owned a mobile home with mr parker that petitioner had significant credit card debt and that the mortgage company holding the mortgage on the marital residence had begun foreclosure proceedings against the marital residence at the time petitioner filed her request for relief the administrative record also establishes that although petitioner was working two jobs in she could not pay her reasonable basic living_expenses without going further into debt ms wilce determined that petitioner would not suffer economic hardship because the internal_revenue_service irs continued amount for basic living_expenses these factors include the taxpayer’s age employment status and history ability to earn number of dependents extraordinary circumstances and any other factor that the taxpayer claims bears on economic hardship and brings to the attention of the director 9petitioner’s form is inconsistent with irs documents that show petitioner reported only a total of dollar_figure in wage income and dollar_figure as schedule c profit or loss from business income in computer records showed that petitioner had received a form misc miscellaneous income reporting dollar_figure of income during however the social_security_number on the form 1099-misc did not match petitioner’s social_security_number petitioner learned of ms wilce’s determination incorrectly attributing the income from the form 1099-misc to petitioner on date petitioner faxed to ms hackmeister an affidavit from ryan scallon the issuer of the form 1099-misc stating that the form was issued to c c contracting and not to petitioner or mr parker ms hackmeister erroneously concluded that the social_security_number referenced in the fax matched petitioner’s social_security_number and that the income had not been reported on the return we conclude that petitioner has established that she will suffer economic hardship if she is not granted equitable relief this factor weighs in favor of granting relief knowledge or reason to know for the reasons stated in our analysis of this factor under revproc_2003_61 sec_4 we conclude petitioner has failed to establish that she did not have reason to know when the return was filed that the tax_liability shown as due would not be paid this factor weighs against granting relief nonrequesting spouse’s legal_obligation petitioner and mr parker’s divorce decree was not included in the record and petitioner did not testify to the contents of it regarding the unpaid tax_liability therefore we cannot determine which spouse had the legal_obligation under the decree to pay the outstanding tax_liability this factor is neutral significant benefit both ms wilce and ms hackmeister admitted that petitioner did not significantly benefit from the unpaid liability and the record does not reflect otherwise this factor weighs in favor of granting relief compliance with income_tax laws respondent does not appear to contend that this factor applies and he did not otherwise argue at trial that petitioner did not make a good_faith effort to comply with her federal_income_tax obligations in the years subsequent to moreover both ms wilce and ms hackmeister noted that petitioner met this requirement therefore this factor weighs in favor of granting relief abuse mental or physical health neither of these positive factors applies in this case petitioner was not abused by mr parker and there is no evidence in the administrative record that she suffered poor mental or physical health liability attribution under revproc_2000_15 sec_4 f and a 2000_1_cb_447 the irs considered whether the outstanding liability was attributable to the requesting spouse or the nonrequesting spouse when determining whether equitable relief was appropriate although revproc_2003_61 sec_4 does not list liability attribution as one of the factors for consideration we note that the list in revproc_2003_61 sec_4 is not exclusive the entire outstanding liability is attributable to self- employment_taxes arising from mr parker’s self-employment_income from two sole proprietorships none of the self-employment_income or self-employment taxes arising therefrom is attributable to petitioner this factor weighs in favor of granting relief d conclusion at trial petitioner’s testimony was consistent with her assertions in the form_8857 her responses to information requests from respondent and the statements outlined in the revenue agent’s workpapers respondent has not challenged petitioner’s truthfulness on these matters although we find that petitioner had reason to know that the tax_liability would not likely be paid in light of mr parker’s intent to file a petition in bankruptcy we nevertheless conclude that respondent abused his discretion in determining that petitioner was not entitled to relief under sec_6015 because all of the other factors either weigh in favor of granting relief to petitioner or are neutral to reflect the foregoing an appropriate order and decision will be entered for petitioner


internal_revenue_service number release date index number 860d department of the treasury washington dc -------------------------------------- -------------------------------------------- ---------------------------- ------------------------------------------------------------ ------------------------------ ------------------------------------- person to contact ------------------ id no ---------------- telephone number -------------------- refer reply to cc fip - plr-145147-08 date march in re --------------------------------------------------- ---------------------------- legend fund -------------------------------------------------- ---------------------------------------------------------------------------- depositor trustee seller seller servicer preparer ------------------ --------------------------------------- ----------------------------------------- ------------------------- ---------------------------------------------------- -------------- accountant ---------------------- date ----------------------- plr-145147-08 dear -------------- this is in reply to a letter dated date requesting on behalf of fund an extension of time under sec_301_9100-1 of the procedure and administration regulations to file an income_tax return in order to make an election under sec_860d of the internal_revenue_code to be treated as regulated mortgage investment conduit remic facts fund was established on or about date by agreement between depositor seller seller servicer and trustee fund was established to facilitate the securitization of remic regular interests created upon the conveyance of certain mortgage loans to depositor from seller and seller pursuant to a_trust agreement fund issued five classes of certificates designated as regular interests and one class of certificates designated as a residual_interest the trust agreement states the intention of fund to make two remic elections creating one master remic and one subsidiary remic a former assistant treasurer with trustee filed form ss-4 application_for employer_identification_number and form_8811 information_return for real_estate mortgage investment conduits remics and issuers of collateralized debt obligations based on a preliminary version of the trust agreement that version provided only for one remic the master remic that version did not provide for a second remic the subsidiary remic trustee engaged preparer to prepare remic tax returns and elections trustee sent preparer only the preliminary trust agreement which reflected only the master remic trustee did not indicate that the trust agreement that was sent was only a preliminary agreement consequently preparer prepared only a single form_1066 for master remic for the taxable_year preparer engaged accountant to review and sign the remic tax returns for fund accountant reviewed and signed form_1066 for master remic for trustee filed form_1066 and made a remic election for master remic for no form_1066 was filed and no remic election was made for subsidiary remic for trustee had obtained the final version of the trust agreement which reflected the creation of subsidiary remic before it filed form_1066 for master remic for plr-145147-08 however trustee did not detect the change that provided for the formation of subsidiary remic trustee filed form_1066 for master remic for but no form_1066 was filed for subsidiary remic for during an internal audit in late trustee discovered that no returns had been filed for subsidiary remic for and trustee began discussions with preparer and accountant about actions that could be taken to correct the oversight accountant began the process of requesting supporting information and preparing a request for a private_letter_ruling for relief under sec_301 of the regulations fund has submitted the affidavit of trustee’s former assistant treasurer in support of this requested ruling fund makes the following representations the request for relief was filed by fund before the failure to make the regulatory election was discovered by the service granting the relief will not result in fund having a lower tax_liability in the aggregate for all years to which the regulatory election applies than fund would have had if the election had been timely made taking into account the time_value_of_money fund does not seek to alter a return position for which an accuracy-related_penalty has been or could have been imposed under sec_6662 of the code at the time fund requested relief and the new position requires or permits a regulatory election for which relief is requested being fully informed of the required regulatory election and related tax consequences fund did not choose to not file the election law and analysis sec_860d of the code provides that an entity otherwise meeting the requirements of a remic under sec_860d may elect to be treated as a remic for its first taxable_year by making an election on its return for that year sec_1_860d-1 of the regulations provides that a qualified_entity elects remic status by timely filing a form_1066 u s real_estate_mortgage_investment_conduit income_tax return by the 15th day of the fourth month following the close of the first tax_year of its existence this regulation also provides a reference to sec_301_9100-1 for rules regarding extensions of time for making elections plr-145147-08 sec_1_860f-4 of the regulations provides that the due_date and any extensions for filing a remic’s annual tax_return are determined as if the remic were a partnership therefore pursuant to sec_1 e a remic’s annual return must be filed on or before the 15th day of the fourth month following the close of the taxable_year unless an extension is granted sec_301_9100-1 of the regulations provides that the commissioner has discretion to grant a reasonable extension of time to make a regulatory election defined in sec_301_9100-1 as an election whose deadline is prescribed by regulations or by a revenue_ruling a revenue_procedure a notice or an announcement published in the internal_revenue_bulletin or a statutory election but no more than months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301_9100-3 through c i of the regulations sets forth rules that the internal_revenue_service generally will use to determine whether under the facts and circumstances of each situation the commissioner will grant an extension of time for regulatory elections that do not meet the requirements of sec_301_9100-2 sec_301_9100-3 provides that subject_to paragraphs b i through iii of sec_301_9100-3 when a taxpayer applies for relief under this section before the failure to make the regulatory election is discovered by the service the taxpayer will be deemed to have acted reasonably and in good_faith and sec_301_9100-3 provides that the interests of the government are prejudiced if granting relief would result in the taxpayer having a lower tax_liability in the aggregate for all years to which the regulatory election applies than the taxpayer would have had if the election had been timely made taking into account the time_value_of_money conclusion based upon the facts and representations submitted we conclude that fund has shown good cause for granting a reasonable extension of time to elect to be treated as a remic under sec_860d accordingly fund is granted days from the date of the issuance of this letter to file a return for its initial taxable_year ended december making an election to be treated as a remic this ruling is limited to the timeliness of the filing of fund’s income_tax returns for purposes of the election under sec_860d of the code this ruling’s application is limited to the facts representations code sections and regulations cited herein no opinion is expressed with regard to whether fund otherwise qualifies as a remic under subchapter_m of the code plr-145147-08 no opinion is expressed with regard to whether the tax_liability of fund is not lower in the aggregate for all years to which the election applies than such tax_liability would have been if the election had been timely made taking into account the time_value_of_money upon audit of the federal_income_tax returns involved the director’s office will determine such tax_liability for the years involved if the director’s office determines that such tax_liability is lower that office will determine the federal_income_tax effect except as specifically provided otherwise no opinion is expressed on the federal_income_tax consequences of the transaction described above this ruling is directed only to the taxpayer that requested it sec_6110 of the code provides that it may not be used or cited as precedent in accordance with the terms of a power_of_attorney on file in this office this original letter is being sent to you and a copy of this letter is being sent to your authorized representative sincerely yours thomas p preston thomas m preston senior counsel branch office of associate chief_counsel financial institutions products


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 b03 plr-112174-14 date date ---------------------------------- x ------------------------------------------------- y ------------------------------------------------- state date date --------------- ------------------------ ------------------- ----------------------------- dear -------------------- this responds to a letter dated date submitted on behalf of x requesting that the service grant x an extension of time under sec_301_9100-1 of the procedure and administration regulations to elect to treat y as a qualified_subchapter_s_subsidiary qsub for federal tax purposes the information submitted states that y was formed under the laws of state on date x an s_corporation had intended to elect to treat y as a qsub effective as of date however x failed to timely file form_8869 qualified_subchapter_s_subsidiary election to treat y as a qsub effective as of date x represents that x y and x’s shareholders have filed tax returns for all of the relevant tax years that are consistent with the income_taxation of y as a qsub from date sec_1362 generally provides that a small_business_corporation may elect to be an s_corporation sec_1361 defines a qsub as a domestic_corporation which is not an ineligible_corporation if percent of the stock of the corporation is owned by the s_corporation and the s_corporation elects to treat the corporation as a qualified_subchapter_s_subsidiary plr-112174-14 sec_1_1361-3 of the income_tax regulations prescribes the time and manner for making an election to be classified a qualified_subchapter_s_subsidiary sec_1_1361-3 provides that an election to treat an eligible subsidiary as a qualified_subchapter_s_subsidiary may be effective up to two months and days prior to the date the election is filed or not more than months after the election is filed the proper form for making the election is form_8869 qualified_subchapter_s_subsidiary 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 months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301_9100-1 defines the term regulatory election as an election whose due_date is prescribed by a regulation published in the federal_register or a revenue_ruling revenue_procedure notice or announcement published in the internal_revenue_bulletin sec_301_9100-2 provides the rules governing automatic extensions of time for making certain elections sec_301_9100-3 provides the standards the commissioner will use to determine whether to grant an extension of time for regulatory elections that do not meet the requirements of sec_301_9100-2 under sec_301 a request for relief will be granted when the taxpayer provides evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government based solely upon the information submitted and the representations made we conclude that the requirements of sec_301 have been satisfied accordingly x is granted an extension of time of days from the date of this letter to file form_8869 with the appropriate service_center to elect to treat y as a qsub effective date a copy of this letter should be attached to the form_8869 for y a copy is enclosed for that purpose except for the specific rulings above we express or imply no opinion concerning the federal_income_tax consequences of the facts of this case under any other provision of the code specifically we express no opinion regarding whether x qualifies as a small_business_corporation under sec_1361 or whether y otherwise meets the definition of a qsub under sec_1361 this ruling is directed only to the taxpayer requesting it sec_6110 of the code provides that it may not be used or cited as precedent plr-112174-14 in accordance with a power_of_attorney on file with this office a copy of this letter is being sent to x’s authorized representative sincerely associate chief_counsel passthroughs and special industries by _______________ bradford r poston senior counsel branch office of associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes cc


third party communication date of communication month dd yyyy cca_2014021114333301 id uilc number release date from sent tuesday date pm to cc bcc subject re aar question - refund statute the period for issuing refunds will expire years after the tmp aar or longer if he signs a form_9247 it does not appear that an extension on form_9248 to ------------would do anything other than extend the year period by one day if the tmp signed a form 872-p before the normal section a period this would extend the refund period to the agreed date plus months sec_6227 any partner level aar would extend the refund statute for that partner for years from the date of the partner-level aar


tax_exempt_and_government_entities_division department of the treasury internal_revenue_service te_ge eo examination commerce dallas texas date date number release date legend org organization name xx date address address org address employer_identification_number person to contact id number contact numbers voice fax certified mail - return receipt requested dear this is a final adverse determination_letter as to your exempt status under sec_501 of the internal_revenue_code your exemption from federal_income_tax under sec_501 of the code is hereby revoked effective october 20xx our adverse determination was made for the following reasons internal_revenue_code sec_6001 requires organizations exempt from tax to keep such records and render such statements as are required by such rules and regulations as the secretary may prescribe sec_1_6033-2 h requires organizations exempt from tax to submit such additional information as may be required by the internal_revenue_service for the purpose of inquiring into the organization's exempt status you failed to keep the required records and you did not file annual information returns you failed to meet the requirements of sec_501 and sec_1 c -1 d in that you failed to establish that you were operated exclusively for an exempt_purpose contributions to your organization are no longer deductible under sec_170 of the internal_revenue_code you are required to file federal_income_tax returns on form_1120 those returns should be filed with the appropriate service_center processing of income_tax returns and assessment of any taxes due will not be delayed should a petition for declaratory_judgment be filed under sec_7428 of the internal_revenue_code if you decide to contest this determination in court you must initiate a suit of declaratory_judgment in the united_states tax_court the united_states claims_court or the district_court of the united_states for the district of columbia before the day after the date this determination was mailed to you contact the clerk of the appropriate court for rules for initiating suits for declaratory_judgment you may write to the tax_court at the following address you also have the right to contact the office_of_the_taxpayer_advocate you can call and ask for taxpayer_advocate assistance or you can contact the taxpayer_advocate office located nearest you by calling or by writing to taxpayer_advocate assistance cannot be used as a substitute for established irs procedures formal appeals processes etc the taxpayer_advocate is not able to reverse legal or technically correct_tax determinations or extend the time fixed by law that you have to file a petition in the united_states tax_court the taxpayer_advocate can however see that a tax matter that may not have been resolved through normal channels gets prompt and proper handling we will notify the appropriate state officials of this action as required by sec_6104 of the internal_revenue_code if you have any questions in regards to this matter please contact the person whose name and telephone number are shown in the heading of this letter thank you for your cooperation nanette m downing director eo examinations sincerely yours internal_revenue_service department of the treasury michigan avenue 10th floor detroit mi 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 exempt status under sec_501 of the internal_revenue_code code is necessary if you accept our findings take no further action we will issue a final revocation letter if you do not agree with our proposed revocation you must submit to us a written request for appeals_office consideration within days from the date of this letter to protest our decision your protest should include a statement of the facts the applicable law and arguments in support of your position an appeals officer will review your case the appeals_office is independent of the director eo examinations the appeals_office resolves most disputes informally and promptly the enclosed publication the examination process and publication exempt_organizations appeal procedures for unagreed issues explain how to appeal an internal_revenue_service irs decision publication also includes information on your rights as a taxpayer and the irs collection process you may also request that we refer this matter for technical_advice as explained in publication if we issue a determination_letter to you based on technical_advice no further administrative appeal is available to you within the irs regarding the issue that was the subject of the technical_advice letter rev catalog number 34809f if we do not hear from you within days from the date of this letter we will process your case based on the recommendations shown in the report of examination if you do not protest this proposed determination within days from the date of this letter the irs will consider it to be a failure to exhaust your available administrative remedies sec_7428 of the code provides in part a declaratory_judgment or decree under this section shall not be issued in any proceeding unless the tax_court the claims_court or the district_court of the united_states for the district of columbia determines that the organization involved has exhausted its administrative remedies within the internal_revenue_service we will then issue a final revocation letter we will also notify the appropriate state officials of the revocation in accordance with sec_6104 of the code you have the right to contact the office_of_the_taxpayer_advocate taxpayer_advocate assistance is not a substitute for established irs procedures such as the formal appeals process the taxpayer_advocate cannot reverse a legally correct_tax determination or extend the time fixed by law that you have to file a petition in a united_states court the taxpayer_advocate can however see that a tax matter that may not have been resolved through normal channels gets prompt and proper handling you may call toll-free and ask for taxpayer_advocate assistance if you prefer you may contact your local taxpayer_advocate at if you have any questions please call the contact person at the telephone number shown in the heading of this letter 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 sunita lough director eo examinations enclosures publication publication report of examination letter rev catalog number 34809f form_886 a department of the treasury - internal_revenue_service explanation of items name of taxpayer org ein ein schedule no or exhibit year period ended september 20xx september 20xx september 20xx legend org organization name xx date state state issue whether the exempt_organization referenced above qualifies for exemption under sec_501 of the internal_revenue_code facts org incorporated hereafter referred to as org was organized as a non-profit corporation under the laws of the state of state by filing articles of incorporation with the state on january 19xx the purpose of the organization as stated in its articles is to assist in locating missing children and other such activities allowable for a non-profit corporation in connection with the foregoing the organization’s activities were to be funded through donations and grant monies received from the general_public org was granted tax exemption as an organization described in sec_501 and sec_170 by the internal_revenue_service in october of 19xx the organization was selected for examination based on information obtained from the state of state indicating that this organization was regularly conducting gaming activities but not filing a form_990 or other related returns as may be required during course of examination it was concluded that org failed to meet its filing_requirements for both forms and 990-t for tax years ending september 20xx 20xx and 20xx asa result org was requested to file all required returns and supporting documentation for the tax years referenced above however the organization it failed to properly comply with this request during the timeframe provided see attached in response the internal_revenue_service issued a notice_and_demand letter dated march 20xx requesting org file its forms for the tax periods in question and also advising of the potential for revocation of exempt status and imposition of penalties see attached however the organization also failed to comply with the requirements set forth in this letter law lr c sec_6001 provides that every person liable for any_tax imposed by the code or for the collection thereof shall keep adequate_records as the secretary_of_the_treasury or_his_delegate may from time to time prescribe lr c sec_6033 provides except as provided in sec_6033 every organization exempt from tax under sec_501 shall file an annual return stating specifically the items of form 886-a cev department of the treasury - internal_revenue_service page -1- be form_886 a name of taxpayer explanation of items department of the treasury - internal_revenue_service schedule no or exhibit org ein ein year period ended september 20xx september 20xx september 20kx gross_income receipts and disbursements and such other information for the purposes of carrying out the internal revenue laws as the secretary may by forms or regulations prescribe and keep such records render under oath such statements make such other returns and comply with such rules and regulations as the secretary may from time to time prescribe sec_1_6001-1 in conjunction with lr c sec_1_6001-1 provides that every organization exempt from tax under sec_501 of the code and subject_to the tax imposed by sec_511 on its unrelated_business_income must keep such permanent books or accounts or records including inventories as are sufficient to establish the amount of gross_income deduction credits or other matters required to be shown by such person in any return of such tax such organization shall also keep such books_and_records as are required to substantiate the information required by sec_6033 sec_1_6001-1 states that the books_or_records required by this section shall be kept at all times available for inspection by authorized internal revenue officers or employees and shall be retained as long as the contents thereof may be material in the administration of any internal revenue law sec_1_6033-1 provides that every organization which has established its right to exemption from tax whether or not it is required to file an annual return of information shall submit such additional information as may be required by the district_director for the purpose of enabling him to inquire further into its exempt status and to administer the provisions of subchapter_f sec_501 and the following chapter of the code and sec_6033 rev_rul 1959_1_cb_627 concerns an exempt_organization that was requested to produce a financial statement and statement of its operations for a certain year however its records were so incomplete that the organization was unable to furnish such statements the service held that the failure or inability to file the required information_return or otherwise to comply with the provisions of sec_6033 of the code and the regulations which implement it may result in the termination of the exempt status of an organization previously held exempt on the grounds that the organization has not established that it is observing the conditions required for the continuation of exempt status taxpayer’s position the organization failed to submit an official protest or respond in any manner to the service’s proposed revocation of its exempt status within the required day timeframe government’s position in accordance with the above cited provisions of the code and regulations under sec_6001 and sec_6033 organizations recognized as exempt from federal_income_tax must meet certain form 886-a cev department of the treasury - internal_revenue_service page -2- form_886 a name of taxpayer explanation of items department of the treasury - internal_revenue_service schedule no or exhibit org ein ein year period ended september 20xx september 20xx september 20xx reporting requirements these requirements relate to the filing of a complete and accurate annual information and other required federal tax forms and the retention of records sufficient to determine whether such entity is operated for the purposes for which it was granted tax-exempt status and to determine its liability for any unrelated_business_income_tax conclusion it is the irs's position that the organization failed to meet the reporting requirements under sec_6001 and sec_6033 to be recognized as exempt from federal_income_tax under sec_501 of the internal_revenue_code accordingly the organization's exempt status is revoked effective october 20xx the organization is required to file form_1120 u s_corporation income_tax return as required by sec_6501 for the taxable_period ending september 20xx and for each year thereafter form 886-a rev department of the treasury - internal_revenue_service page -3-


t c no united_states tax_court anonymous petitioner v commissioner of internal revenue respondent docket no filed date p is a foreign national a member of p’s family was kidnapped several years ago and held for ransom p filed a motion to seal the record because p fears that p or other family members might be targeted for another kidnapping if information about p’s identity or financial circumstances were publicly disclosed held the significant risk of physical harm to p and p’s family outweighs the public interest in access to court proceedings under these circumstances p’s motion to seal the record shall be granted and p is permitted to proceed anonymously sealed for petitioner sealed for respondent opinion kroupa judge this matter is before the court on petitioner’s motion to seal court records petitioner requests us to seal the record in this case and permit petitioner to proceed anonymously petitioner has demonstrated a significant risk of physical harm to petitioner and petitioner’s family members if the record were to remain open we conclude that it is appropriate to seal the record and permit petitioner to proceed anonymously unless otherwise indicated all section references are to the internal_revenue_code and all rule references are to the tax_court rules_of_practice and procedure background petitioner is a foreign national at the time petitioner filed the petition petitioner resided outside the united_states a member of petitioner’s family was kidnapped and held for ransom several years ago kidnappings are a rampant problem in the country where petitioner and most of petitioner’s family reside petitioner fears that petitioner or other members of petitioner’s family might also be kidnapped and their lives placed in jeopardy if petitioner’s identity or petitioner’s financial circumstances were made public in this case petitioner filed the motion to seal court records at the same time petitioner filed the petition discussion we shall begin by describing the general presumption of openness that attaches to judicial proceedings generally official records of all courts shall be open and available to the public for inspection and copying 435_us_589 in re coordinated pretrial proceedings 101_frd_34 c d cal hearings and the evidentiary record of proceedings before this court shall be open to the public sec_7458 sec_7461 common_law statutory law and the u s constitution all support this important principle nixon v warner commcns inc supra 85_tc_914 in re coordinated pretrial proceedings in petroleum prods antitrust litig supra the right to inspect and copy judicial records however is not absolute nixon v warner commcns inc supra pincite courts have supervisory power over their own records and files and access to records has been denied where the court files might become a vehicle for improper purposes id sealing the record this court has broad discretionary power to control and seal if necessary records and files in our possession willie nelson music co v commissioner supra we may in our discretion seal the record or portions of the record if justice so requires and the party seeking such relief demonstrates good cause sec_7461 rule a at t co v grady 594_f2d_594 7th cir willie nelson music co v commissioner supra pincite tavano v commissioner tcmemo_1991_237 affd 986_f2d_1389 11th cir to determine whether sealing the record is appropriate we must weigh the presumption however gauged in favor of public access to judicial records against the interests advanced by the parties nixon v warner commcns inc supra pincite at t co v grady supra pincite willie nelson music co v commissioner supra pincite taxpayers seeking to seal court records must come forward with appropriate testimony and factual data to show good cause 92_tc_180 willie nelson music co v commissioner supra pincite citing 686_f2d_276 5th cir 410_f2d_553 ndollar_figure 5th cir tavano v commissioner supra taxpayers may not rely on conclusory or unsupported statements to establish claims of harm that would result from disclosure willie nelson music co v commissioner supra pincite in re coordinated pretrial proceedings in petroleum prods antitrust litig supra pincite good cause has been demonstrated and records sealed where patents trade secrets or confidential information are involved or where an individual’s business reputation will be hurt see 656_f2d_1101 5th cir striking an individual’s name from factual resumes on due process grounds as resumes were prepared in criminal proceeding where the individual was not indicted 616_f2d_458 10th cir sealing portions of record involving documents alleged to be subject_to attorney-client_privilege or work product doctrine 575_f2d_870 c c p a sealing record involving patent application proceeding so that the information would remain a trade secret in the event of an adverse decision 100_frd_21 d d c sealing parties’ tax returns to protect confidentiality and privacy interests merely asserting annoyance embarrassment or harm to a person’s personal reputation however is generally insufficient to demonstrate good cause and overcome the strong common_law presumption in favor of access to court records willie nelson music co v commissioner supra pincite record not sealed where nationally known entertainer sought to avoid public scrutiny or news coverage of case tavano v commissioner supra record not sealed where taxpayer had civil suit pending against employer and did not want employer to learn facts of case petitioner submitted affidavits together with supporting documentation that demonstrate the severe degree of harm petitioner and petitioner’s family members would risk if we did not seal the record these affidavits and documentation show that a member of petitioner’s family was kidnapped several years ago and that kidnapping is rampant in the country where petitioner and most of petitioner’s family reside petitioner fears that publicizing petitioner’s identity and financial circumstances will increase the risk that either petitioner or a member of petitioner’s family will be the target of another kidnapping and that petitioner’s life or the lives of petitioner’s family will be placed in jeopardy we find these facts compelling petitioner has demonstrated through these affidavits that physical harm has actually been inflicted against a member of petitioner’s family and there is a risk that the same type of physical harm may be inflicted upon petitioner or another member of petitioner’s family we must evaluate this risk of physical harm against the public interest in access to judicial records see nixon v warner commcns inc supra pincite 214_f3d_1058 9th cir at t co v grady supra pincite willie nelson music co v commissioner supra pincite after careful consideration of the facts of this case we find that the balance favors petitioner the risk of extreme physical harm to petitioner and petitioner’s family outweighs the countervailing public interest favoring open judicial proceedings permission to proceed anonymously petitioner also requests permission to proceed anonymously there is no provision in our rules that permits a taxpayer to proceed anonymously the rules generally require taxpayers’ 1written determinations of the commissioner such as rulings determination letters technical_advice memoranda or chief_counsel_advice and background file documents are generally made public with certain deletions of names addresses and other continued names to be included on pleadings and other papers filed with the court see rule sec_32 requiring a party’s name to be set forth on pleadings a requiring all papers filed to contain the full name and surname of each petitioner a requiring a case be brought by and in the name of a person against whom the commissioner determined the deficiency in the case of a deficiency_notice when there is no applicable rule we may prescribe the procedure giving particular weight to the federal rules of civil procedure to the extent adaptable to the matter at hand rule a where our rules are silent we have looked to the federal rules of civil procedure and cases in other federal courts interpreting the federal rules of civil procedure for guidance see willie nelson music co v commissioner t c pincite looking to decisions interpreting rule c of the federal rules of civil procedure for guidance in interpreting rule a 71_tc_577 several u s courts of appeals have permitted litigation to proceed anonymously see eg does i thru xxiii v advanced textile corp supra pincite 6_f3d_233 4th cir 653_f2d_180 5th cir the supreme court and the u s court_of_appeals for the district of columbia circuit have occasionally permitted continued identifying information sec_6110 c a person may act to restrain disclosure of these materials however under the procedures set forth in sec_6110 anonymous litigation to proceed 228_frd_8 d d c citing 410_us_113 and 938_f2d_1370 d c cir the decision whether to allow parties to proceed anonymously is in the discretion of the trial_court james v jacobson supra pincite a party may generally proceed anonymously when the trial_court reasonably determines that the need for anonymity outweighs the prejudice to the opposing party and the general presumption that the parties’ identities are public information see does i thru xxiii v advanced textile corp supra pincite some factors to be considered in deciding whether a party may proceed anonymously include whether the party challenges governmental activity whether the party is required to disclose information of the utmost intimacy and whether the party is compelled to admit his or her intention to engage in illegal conduct doe v stegall supra pincite petitioner has a unique need for anonymity in this case petitioner fears that physical harm may come to petitioner or petitioner’s family and their lives placed in jeopardy if petitioner’s identity or financial circumstances were made public in this case we weigh this risk of physical harm against the risk of prejudice to respondent and the public interest in knowing the parties’ identities see does i thru xxiii v advanced textile corp supra pincite we hold that petitioner may preserve anonymity in the special circumstances of this proceeding because petitioner’s need for anonymity outweighs prejudice to the opposing party and the public interest in knowing the identities of parties to judicial proceedings there is little risk of prejudice to respondent here petitioner wants only to keep the information from public view petitioner is willing to provide sealed copies of documents to respondent further the risk of severe physical harm to petitioner and petitioner’s family outweighs the general_public interest in knowing the parties’ identities accordingly we conclude that the balance is in petitioner’s favor and petitioner may therefore proceed anonymously prior public disclosure of information respondent objects to sealing the record here because some of the information has already been disclosed in a different judicial forum and the records of that forum have not yet been sealed respondent argues that we therefore cannot maintain or protect petitioner’s privacy due to the previous disclosure we disagree the public availability of some facts in another forum should not bar protection against the risk of future harm caused by disclosure in this court see does i thru xxiii v advanced textile corp supra pincite ndollar_figure past acts of bravery in the face of danger is poor rationale for denying the courageous individual protection against future harm estate of yaeger v commissioner t c pincite the prior disclosure of some information does not preclude our decision to seal the record in this court and permit petitioner to proceed anonymously conclusion after a careful review of the facts and circumstances of this case we find that the demonstrated risk of severe physical harm to petitioner and petitioner’s family outweighs the public interest in access to judicial records and to the identity of the parties there is little prejudice to respondent in permitting petitioner to proceed anonymously accordingly we shall grant petitioner’s motion to seal the entire record and permit petitioner to proceed anonymously we do not address whether or to what extent any later opinions in this case will be sealed to reflect the foregoing an appropriate order will be issued


internal_revenue_service number release date index number ----------------------- ------------------- ------------------------------------------------------------ ---------- ----------------------------------- -------------------------- in re -------------------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact ---------------------- id no -------------- telephone number --------------------- refer reply to cc intl b01 plr-142074-07 date december us funds ------------------------------------------------------------------------ -------------------------------------------------------------- ------------------------------------------------------------ ------------------------------------------------------- ----------------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------- ----------------------------------------------- -------------------------------------------------------- ------------------------------------------------------------ ------------------------------------------------------------------ -------------------------------------------------------- ----------------------------------------------------------------------- ---------------------------------------------------------- a b c offering memorandum trust ---------------------------------------------- --------------------------------------------------------- ----------------------------------------------- ------------------------------------------------------------------------- plr-142074-07 agreement ----------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- -------------------------------- ----------------- ---------------------------------------------- ---------------------------------- ----------------------------- --------------------------------------- --------------------------------- --------------------------------- ---------------------- ---------------------- ------------------------------ ---------------------------------- ---------------------------------------- -------------------------------- ------------------------------------ ------------------------------ province r canadian funds dear ------------ this is in response to a letter from your authorized representative dated --------------------- ------- requesting rulings that interest and dividends_paid to certain canadian investors will be exempt from u s withholding_tax under article xxi of the u s -canada income_tax treaty the treaty additional information was received in a letter dated -------------- ------------ the information submitted is substantially as set forth below the rulings contained in this letter are predicated upon information and representations submitted by the taxpayers and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for a ruling it is subject_to verification on examination a a domestic entity is a registered investment_company under the investment_company act of us funds are each a series of a each us fund has elected to be treated as a regulated_investment_company under sec_851 b is a domestic_corporation that serves as the investment manager of the us funds --------------------------------------------- plr-142074-07 c an affiliate of b is a company incorporated under the laws of province r c is in the process of forming the canadian funds each canadian fund will be a unit trust established under the laws of province r a represents that as a canadian resident each canadian fund will potentially be liable for canadian income_tax as well as certain other taxes in particular a canadian trust may be liable for income_tax under part i of the canadian income_tax act the canadian act which sets out the primary income_tax provisions applicable to canadian taxpayers a also represents that part i of the canadian act provides a special tax regime for canadian trusts including sub sec_104 which provides that in computing its income for purposes of part i of the canadian act a_trust is permitted to deduct any amount including realized taxable capital_gains that is paid or payable in the year to beneficiaries of the trust a represents that the trust agreement will require the trustee to make payable to unitholders in each year an amount sufficient to ensure that each canadian fund will not have any income subject_to regular part i tax and that each canadian fund will make payable all earnings to its unitholders each year in accordance with the trust agreement unless the unitholder requests payment in cash the amount payable to the unitholder will be reinvested in the respective canadian fund a represents that the canadian funds will not carry on a trade_or_business in the united_states and will not earn income from a related_person within the meaning of article xxi of the treaty the offering memorandum for certain of the canadian funds provides that the investors are limited to trusts governed by a registered pension_plan rpp that is exempt pursuant to paragraph o of the canadian act and certain canadian master trusts whose beneficiaries are limited to rpps and which are exempt from income_taxation in canada pursuant to paragraph l o of the canadian act master trusts it is proposed that units of the canadian funds will also be purchased and held by one or more of the following types of entities a_trust governed by a registered retirement savings_plan rrsp that is tax exempt pursuant to sub sec_146 and paragraph r of the canadian act a_trust governed by a registered retirement income fund rrif that is tax exempt pursuant to sub sec_146 and and paragraph x of the canadian act a_trust governed by a deferred profit sharing plan dpsp that is tax exempt pursuant to sub sec_147 and paragraph s of the canadian act a_trust governed by an employees profit sharing plan epsp that is tax exempt pursuant to sub sec_144 and paragraph p of the canadian act a_trust governed by a registered supplementary unemployment benefit plan subplan that is tax exempt pursuant to paragraph q of the canadian act a vacation pay trust vacation pay trust that is tax exempt plr-142074-07 pursuant to paragraph y of the canadian act a master_trust whose beneficiaries are dpsps rpps or both and a tax exempt pension investment corporation tepi that meets all of the conditions of and is tax-exempt pursuant to subparagraph l o iii of the canadian act sec_894 provides that the provisions of the code shall be applied to any taxpayer with due regard to any treaty obligation of the united_states which applies to such taxpayer article iv residence paragraph of the treaty provides for the purposes of this convention the term resident of a contracting state means any person who under the laws of that state is liable to tax therein by reason of his domicile residence place of management place of incorporation or any other criterion of a similar nature but in the case of an estate_or_trust only to the extent that income derived by such estate_or_trust is liable to tax in that state either in its hands or in the hands of its beneficiaries article xxi exempt_organizations paragraph provides subject_to the provisions of paragraph income referred to in articles x dividends and xi interest derived by a a_trust company organization or other arrangement that is a resident of a contracting state generally exempt from income_taxation in a taxable_year in that state and operated exclusively to administer or provide pension retirement or employee_benefits or b a_trust company organization or other arrangement that is a resident of a contracting state generally exempt from income_taxation in a taxable_year in that state and operated exclusively to earn income for the benefit of an organization referred to in subparagraph a shall be exempt from income_taxation in that taxable_year in the other contracting state article xxi paragraph provides the provisions of paragraph sec_1 and shall not apply with respect to the income of a_trust company organization or other arrangement from carrying_on_a_trade_or_business or from a related_person other than a person referred to in paragraph or plr-142074-07 prior to amendment by article of the third protocol to the treaty which generally entered into force on date paragraph b of article xxi read as follows a_trust company or other organization which is resident in a contracting state not taxed in a taxable_year in that state and constituted and operated exclusively to earn income for the benefit of an organization referred to in subparagraph a emphasis added the technical explanation to article of the third protocol states in part that the other changes all in paragraph are intended to improve and clarify the language in subparagraph b the phrase not taxed in a taxable_year was changed to generally exempt from income_taxation in a taxable_year to ensure uniformity throughout the convention this change was not intended to disqualify a_trust or other arrangement that qualifies for the exemption under the wording of the present convention article xxix a limitation_on_benefits paragraph provides for purposes of the application of this convention by the united_states a a qualifying person shall be entitled to all of the benefits of this convention and b except as provided in paragraph and a person that is not a qualifying person shall not be entitled to any benefits of the convention article xxix a paragraph provides in part for the purposes of this article a qualifying person is a resident of canada that is h an organization described in paragraph of article xxi exempt_organizations and established for the purposes of providing benefits primarily to individuals who are qualifying persons persons who were qualifying persons within the five preceding years or residents or citizens of the united_states based solely on the information submitted and on the representations made by the taxpayers and provided that the entities deriving the dividends and interest are residents of canada within the meaning of article iv of the treaty and qualifying persons within the meaning of article xxix a of the treaty we conclude that plr-142074-07 an rpp is a_trust company organization or other arrangement described in article xxi a of the treaty consequently dividends and interest derived by an rpp will be exempt from u s income_tax pursuant to article xxi a of the treaty an rrsp is a_trust company organization or other arrangement described in article xxi a of the treaty consequently dividends and interest derived by an rrsp will be exempt from u s income_tax pursuant to article xxi a of the treaty an rrif is a_trust company organization or other arrangement described in article xxi a of the treaty consequently dividends and interest derived by an rrif will be exempt from u s income_tax pursuant to article xxi a of the treaty a dpsp is a_trust company organization or other arrangement described in article xxi a of the treaty consequently dividends and interest derived by a dpsp will be exempt from u s income_tax pursuant to article xxi a of the treaty an epsp is a_trust company organization or other arrangement described in article xxi a of the treaty consequently dividends and interest derived by an epsp will be exempt from u s income_tax pursuant to article xxi a of the treaty a subplan is a_trust company organization or other arrangement described in article xxi a of the treaty consequently dividends and interest derived by a subplan will be exempt from u s income_tax pursuant to article xxi a of the treaty a vacation pay trust is a_trust company organization or other arrangement described in article xxi a of the treaty consequently dividends and interest derived by a vacation pay trust will be exempt from u s income_tax pursuant to article xxi a of the treaty a master_trust whose investors are limited to rpps and dpsps is a_trust company organization or other arrangement described in article xxi b of the treaty consequently dividends and interest derived by such a master_trust will be exempt from u s income_tax pursuant to article xxi b of the treaty a tepi whose investors are limited to rpps is a_trust company organization or other arrangement described in article xxi b of the plr-142074-07 treaty consequently dividends and interest derived by a tepi will be exempt from u s income_tax pursuant to article xxi b of the treaty provided that the unitholders of the canadian funds consist at all times exclusively of trusts companies organizations or other arrangements described in ruling sec_1 through a canadian fund will be a_trust company organization or other arrangement described in article xxi b of the treaty consequently dividends and interest derived by a canadian fund will be exempt from u s income_tax pursuant to article xxi b of the treaty the above rulings are not applicable to any dividend or interest_income derived from carrying_on_a_trade_or_business in the united_states or from a corporation that is a related_person under article xxi of the treaty they also are not applicable to any distribution designated as a capital_gain dividend 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 a copy of this letter must be attached to any income_tax return to which it is relevant in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent enclosure copy for sec_6110 purposes ------------------------ m grace fleeman senior technical reviewer cc intl br sincerely


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 fip b04 plr-124472-16 date january legend taxpayer ----------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------- ------------------------------------ company ------------------------------ state year manager date ---------------- ------- ----------------------- -------------------- dear ------------------ this letter is in response to taxpayer’s request pursuant to sec_301_9100-3 of the procedure and administration regulations requesting an extension of time to make the election under sec_831 of the internal_revenue_code the code facts taxpayer is a member of company which is organized as a series_llc in accordance with the laws of state taxpayer maintains a calendar-year accrual basis of accounting for both book and tax purposes the premiums written each year by taxpayer do not exceed dollar_figure million taxpayer represents that it qualified as an insurance_company under sec_831 in year even though it had not initially received its license from state in year plr-124472-16 taxpayer obtained its insurance license on date the license was retroactive to year taxpayer failed to make an election pursuant to sec_831 with its initial federal tax_return for year taxpayer represents that it relied upon manager to inform it of the proper timing of making an election under sec_831 and that manager failed to do so taxpayer further represents that manager also failed to instruct taxpayer to file for an extension of time in which to file its year federal tax_return and that if taxpayer had done so it could have made a timely sec_831 election when it ultimately filed its year federal tax_return taxpayer discovered this error after hiring tax professionals who informed them of the filing_requirements that were necessary to make an election under sec_831 taxpayer requested relief under sec_301_9100-3 before the failure to make the regulatory election was discovered by the internal_revenue_service law and analysis sec_831 provides that taxes computed as provided in sec_11 are imposed for each taxable_year on the taxable_income of every insurance_company other than a life_insurance_company sec_831 provides that for purposes of sec_831 the term_insurance company has the meaning given to such term by sec_816 under sec_816 the term_insurance company means any company more than half the business of which during the taxable_year is the issuing of insurance or annuity_contracts or the reinsuring of risks underwritten by insurance_companies sec_831 allows certain small companies to elect to be subject_to tax on their taxable_investment_income only the election applies to the taxable_year for which the company made it and as long as the company continues to qualify for all subsequent taxable years unless revoked with the consent of the secretary the time and manner to make the election under sec_831 is prescribed by sec_301_9100-8 accordingly the election under sec_831 is a regulatory election sec_301_9100-1 pursuant to sec_301_9100-8 the election is to be made by the due_date taking into account any extensions of time to file obtained by the taxpayer of the tax_return for the first taxable_year for which the election is to be effective by attaching a statement to the tax_return containing the information specified in sec_301_9100-8 under sec_301_9100-1 the commissioner may grant a reasonable extension of time under the rules set forth in sec_301_9100-2 and sec_301_9100-3 to make a regulatory election an extension of time to make an election is not a determination that the taxpayer is otherwise eligible to make the election sec_301_9100-1 requests or extensions of time for regulatory elections that do not meet the requirements of sec_301_9100-2 automatic_extension must be made pursuant to sec_301_9100-3 under sec_301_9100-3 relief will be granted only when the taxpayer plr-124472-16 provides the evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that the grant of relief will not prejudice the interests of the government under sec_301_9100-3 a taxpayer is deemed to have acted reasonably and in good_faith if it i requests relief under this section before the failure to make the regulatory election is discovered by the internal_revenue_service ii failed to make the election because of intervening events beyond the taxpayer’s control iii failed to make the election because after exercising reasonable diligence taking into account the taxpayer’s experience and complexity of the return or issue the taxpayer was unaware of the necessity for the election iv reasonably relied on the written advice of the internal_revenue_service or v reasonably relied on a qualified_tax professional including a tax professional employed by the taxpayer and the tax professional failed to make or advise the taxpayer to make the election under sec_301_9100-3 a taxpayer is deemed not to have acted reasonably and in good_faith if the taxpayer i seeks to alter a return position for which an accuracy-related_penalty has been or could be imposed under sec_6662 at the time the taxpayer requests relief and the new position requires or permits a regulatory election for which relief is requested ii was informed in all material respects of the required election and related tax consequences but chose not to file the election or iii uses hindsight in requesting relief the commissioner will grant a reasonable extension of time to make a regulatory election only when the interests of the government will not be prejudiced by the granting of relief sec_301_9100-3 the interests of the government are prejudiced if granting relief would result in a taxpayer having a lower tax_liability in the aggregate for all taxable years affected by the election than the taxpayer would have had if the election had been timely made taking into account the time_value_of_money similarly if the tax consequences of more than one taxpayer are affected by the election the government’s interests are prejudiced if extending the time for making the election may result in the affected taxpayers in the aggregate having a lower tax_liability than if the election had been timely made sec_301_9100-3 based solely on the facts submitted and the representations made we conclude that taxpayer satisfies the requirements of sec_301_9100-1 and sec_301_9100-3 and that taxpayer qualifies for an extension of time to make the election under section plr-124472-16 b a ii taxpayer requested relief under these provisions before the failure to make the regulatory election was discovered by the service based on taxpayer’s representations taxpayer is deemed to have acted in good_faith the interests of the government are not prejudiced because the election affects the tax_liability of only taxpayer and taxpayer will not have a lower tax_liability in the aggregate for all taxable years affected by the election than taxpayer would have had if the election had been timely made taking into account the time_value_of_money ruling under sec_301_9100-3 taxpayer is granted an extension of time until days following the date of this letter to make the election provided by sec_831 effective for year the election should be made in a written_statement filed with the appropriate service_center a copy of this letter should be attached to the sec_831 election caveats the rulings contained in this letter are based upon information and representations submitted by taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party this office has not verified any of the material submitted in support of the request for rulings and it is subject_to verification on examination except as provided above no opinion is expressed or implied concerning the federal_income_tax consequences of any other aspect of taxpayer specifically no ruling is made as to whether taxpayer qualifies as an insurance_company under sec_831 and granting the extension under sec_301_9100-1 should not be construed as a determination that taxpayer is eligible to make the election provided by sec_831 also no ruling is granted with respect to taxpayer’s entity classification for federal_income_tax purposes this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent in accordance with a power_of_attorney on file in this office a copy of this letter is being sent to your authorized representative sincerely james a polfer senior technician reviewer branch financial institutions products


internal_revenue_service number release date index number ---------------------------------- ----------------------------------- ------------------------------ ------------ ---------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact ---------------------- id no ------------- telephone number -------------------- refer reply to cc psi b01 plr-165850-04 date date ------------------------------------ ----------------------- legend x ------------------------------------------------- y ------------------------------------------------- country d1 d2 dear ----------------------------- ------------------ --------- ----------------------- this is in response to a letter dated date requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations to file an election to treat y as an entity disregarded as separate from its owner for federal tax purposes under sec_301_7701-3 facts according to the information submitted and representations made within the request x is the ultimate parent of an affiliated_group_of_corporations among this affiliated_group is y which is an entity that was formed under the laws of country on d1 due to inadvertence a form_8832 entity classification election to treat y as an entity disregarded as separate from its owner effective d2 was not filed law and analysis sec_301_7701-3 provides guidance on the classification of a foreign plr-165850-04 eligible_entity for federal tax purposes generally unless the entity makes an election to be treated otherwise a foreign eligible_entity is treated as an association_taxable_as_a_corporation if all members have limited_liability if a foreign eligible_entity has only one owner it may elect to be treated as a disregarded_entity pursuant to the rules in sec_301_7701-3 if a foreign eligible_entity has more than one owner it may elect to be treated as a partnership pursuant to the rules in sec_301_7701-3 sec_301_7701-3 further provides that an entity classification election must be filed on form_8832 entity classification election and can be effective up to days prior to the date the form is filed or up to months after the date on which the form is filed under sec_301_9100-1 the commissioner may grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the code except subtitles e g h and i sec_301_9100-1 defines the term regulatory election as including an election 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 requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 conclusion based solely upon the information submitted we conclude that the requirements of sec_301_9100-1 and sec_301_9100-3 have been satisfied as a result an extension of days from the date of this letter is granted to elect to treat y as disregarded as an entity separate from its owner for federal tax purposes effective d2 the entity classification election should be made by filing form_8832 with the appropriate service_center a copy of this letter should be attached to the form_8832 a copy is enclosed for that purpose concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter except as expressly provided herein no opinion is expressed or implied plr-165850-04 this ruling is directed only to the taxpayer s 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 your authorized representative enclosures copy of this letter copy for sec_6110 purposes cc sincerely heather c maloy heather c maloy associate chief_counsel passthroughs and special industries


internal_revenue_service department of the treasury number release date index number washington dc person to contact telephone number refer reply to cc corp 4-plr-167584-02 date date corp corp sub sub country country country date date a b c d e plr-167584-02 f g h i j cla sec_1 cla sec_2 cla sec_3 cla sec_4 dear this letter responds to the date request for rulings on certain federal_income_tax consequences of a proposed transaction additional information was submitted on january february and date the information submitted with regard to this ruling_request is summarized below summary of facts corp is a country corporation that is not engaged in a u s trade_or_business corp is a country corporation that is not engaged in a u s trade_or_business corp and corp are the shareholders of sub corp owns a percent of sub and corp owns b percent of sub sub is the principal holding_company for sub operations in country corp owns all of sub 2's cla sec_1 shares old cla sec_1 shares the c dollar_figured par_value old cla sec_1 shares are voting common shares holding e percent of the vote of sub corp owns all of sub 2's cla sec_2 shares old cla sec_2 shares the f dollar_figured par_value old cla sec_2 shares are voting common shares holding g percent of the vote of sub sub owns all of sub 2's cla sec_3 and cla sec_4 shares which are voting common shares that each carry h percent of the vote of sub proposed transaction for what have been represented to be valid business reasons the following transactions have been proposed i corp and corp will amend sub 2’s certificate of incorporation to decrease the voting power of the old cla sec_1 shares from e percent to i percent new cla sec_1 plr-167584-02 shares to increase the voting power of the old cla sec_2 shares from g percent to j percent new cla sec_2 shares and to permit the contribution described below the recapitalization and ii corp and corp will contribute all of their new cla sec_1 shares and new cla sec_2 shares respectively to sub in exchange for shares in sub the contribution representations corp and corp have made the following representations concerning the recapitalization a the fair_market_value of the new cla sec_1 shares and new cla sec_2 shares held by corp and corp respectively immediately following the recapitalization will be equal to the fair_market_value of the old cla sec_1 shares and old cla sec_2 shares held by corp and corp respectively immediately before the recapitalization b sub corp and corp will each pay their own expenses if any incurred in connection with the recapitalization c sub has no plan or intention to redeem or otherwise reacquire any of the stock to be issued in the recapitalization d at the time of the recapitalization sub will not have outstanding any stock_options warrants convertible securities or any other right that is convertible into any class of stock_or_securities of sub e sub is not under the jurisdiction of a court in a title_11_or_similar_case within the meaning of sec_368 of the internal_revenue_code f none of the outstanding sub stock is sec_306 stock corp and corp have made the following additional representations g for valid business purposes corp will contribute all of its new cla sec_1 shares to sub and corp will contribute all of its new cla sec_2 shares to sub in each case for sub stock in a share for share exchange h the contribution will qualify as a transfer within the meaning of sec_351 i sub is a united_states_real_property_holding_corporation within the meaning of sec_897 and the new cla sec_1 shares and new cla sec_2 shares are united_states real_property interests within the meaning of sec_897 plr-167584-02 j sub is a qualified_resident of country as defined in sec_884 and the regulations thereunder k corp and corp will comply with the filing_requirements of sec_1 5t d iii of the temporary regulations as modified by notice_89_57 1989_1_cb_698 l corp and corp have no intention of disposing of any shares of sub received in the contribution for a period of three years from the date of receipt of such sub shares m neither corp nor corp will obtain greater tax benefits under either the country country income_tax treaty or the country country income_tax treaty as a result of this transaction law and analysis corp and corp have represented that sub is a united_states_real_property_holding_corporation and that each of their interests in sub constitutes a united_states_real_property_interest usrpi pursuant to temp sec_1_897-6t a nonrecognition_provision shall apply to a transfer by a foreign_person of a usrpi only to the extent it is exchanged for another usrpi which would be subject_to u s tax on its disposition a recapitalization under sec_368 is a nonrecognition_provision as defined in temp sec_1_897-6t further corp and corp have represented that corp 1’s transfer of the new cla sec_1 stock and corp 2’s transfer of the new cla sec_2 shares to sub are transfers of property under sec_351 and are transfers to which sec_897 applies accordingly to obtain nonrecognition treatment for the transfers corp and corp must meet the requirements set forth in temp sec_1_897-6t after corp 1’s and corp 2’s transfers to sub a foreign_corporation sub will hold an interest that will be subject_to taxation under temp sec_1_897-5t corp and corp have represented that sub is a qualified_resident as defined in sec_884 and any regulations thereunder of a foreign_country in which it is incorporated finally corp and corp have represented that the filing_requirements of temp sec_1 5t d iii as modified by notice_89_57 will be complied with and that corp 1’s and corp 2’s interests in sub before and after the proposed transfer will be identical rulings based solely on the information submitted and the representations set forth above we rule as follows on the recapitalization the amendment to sub 2’s certificate of incorporation will be treated as a deemed exchange by corp and corp of old cla sec_1 shares and old cla sec_2 shares respectively for new cla sec_1 shares and new cla sec_2 shares the deemed exchange will qualify as a recapitalization and therefore a reorganization within the meaning of plr-167584-02 sec_368 sub will be a_party_to_a_reorganization within the meaning of sec_368 no gain_or_loss will be recognized by sub upon the deemed receipt of old cla sec_1 shares and old cla sec_2 shares for new cla sec_1 shares and new cla sec_2 shares as described above sec_1032 corp and corp will not recognize gain_or_loss upon the deemed exchange of old cla sec_1 shares and old cla sec_2 shares for new cla sec_1 shares and new cla sec_2 shares as described above sec_354 the basis of the new cla sec_1 shares and new cla sec_2 shares to be received by corp and corp as described above will be same as the basis of the old cla sec_1 shares and old cla sec_2 shares surrendered in exchange therefor sec_358 the holding_period of the new cla sec_1 shares and new cla sec_2 shares to be received by corp and corp in each instance will include the period during which the old cla sec_1 shares and old cla sec_2 shares surrendered in exchange therefor provided the old cla sec_1 shares and old cla sec_2 shares surrendered were held as a capital_asset on the date of the exchange sec_1223 based solely on the information submitted and the representations made and provided that the exchange by corp and corp in each instance of new cla sec_1 shares and new cla sec_2 shares for sub stock as described above qualifies as an exchange under sec_351 and the filing_requirements of temp sec_1_897-5t as modified by notice_89_57 are met we also rule as follows corp and corp will not recognize gain with respect to the recapitalization under sec_897 temp sec_1_897-6t corp and corp will not recognize gain on the exchange of new cla sec_1 and new cla sec_2 shares for sub shares under sec_897 temp sec_1_897-6t and caveats the rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter in addition see sec_1445 and the regulations thereunder for the withholding responsibilities of corp and corp plr-167584-02 procedural statements this ruling is directed only to the taxpayers requesting it sec_6110 provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative a copy of this letter must be attached to any income_tax return to which it is relevant sincerely ____________________________ lewis k brickates acting chief branch office of associate chief_counsel corporate