t c memo united_states tax_court creditron financial_corporation petitioner v commissioner of internal revenue respondent docket no filed date a d covatto an officer for petitioner kelly r morrison-lee for respondent memorandum opinion chiechi judge this case is before us on respondent’s motion to dismiss for lack of jurisdiction as supplemented for convenience we shall refer to petitioner filed an opposition to respondent’s motion to dismiss for lack of jurisdiction petitioner’s opposition and a response to respondent’s motion to dismiss for lack of jurisdiction as supplemented respondent’s motion to dismiss for lack of jurisdiction as supplemented as respondent’s motion we shall grant respondent’s motion background the record establishes and or the parties do not dispute the following petitioner’s principal_place_of_business was in erie pennsylvania at the time it filed the petition in this case petitioner filed form_941 employer’s quarterly federal tax_return form for the quarter ended date date quarter petitioner did not pay all of the federal taxes that it reported in that return peti- tioner’s unpaid form_941 taxes for the date quarter respondent timely assessed petitioner’s unpaid form_941 taxes for the date quarter as well as an addition_to_tax under sec_6651 and interest as provided by law for that quarter we shall refer to any such unpaid assessed amounts with respect to the date quarter as well as interest as provided by law accrued thereafter as petitioner’s unpaid liability for the date quarter all section references are to the internal_revenue_code in effect at all relevant times on january and respectively respondent issued to petitioner a notice_of_intent_to_levy and notice of your right to a hearing notice_of_intent_to_levy with respect to petitioner’s unpaid liability for the date quarter notice_of_intent_to_levy with respect to the date quarter and a notice_of_federal_tax_lien filing and your right to a hearing under sec_6320 notice of tax_lien with respect to that liability notice of tax_lien with respect to the date quarter in the notice_of_intent_to_levy with respect to the date quarter respondent indicated that if petitioner wanted to request what respondent referred to as a collection_due_process_hearing with respondent’s appeals_office appeals_office regarding that notice it had to do so within days after the date of that notice ie by date the 30th day after date the date on which respondent issued the notice_of_intent_to_levy with respect to the date quarter in the notice of tax the commissioner of internal revenue commissioner has prescribed respective form letters to serve as a notice_of_intent_to_levy and notice of your right to a hearing and a notice_of_federal_tax_lien filing and your right to a hearing under sec_6320 the prescribed form letters for those respective notices are letter and letter each of those prescribed form letters indicates that the commissioner is attaching to each such letter inter alia form request for a collection_due_process or equivalent_hearing form we shall refer to an appeals_office hearing under sec_6320 and sec_6330 as an appeals_office hearing lien with respect to the date quarter respondent indicated that if petitioner wanted to request an appeals_office hearing regarding that notice it had to do so by date petitioner timely submitted to respondent form regarding the notice_of_intent_to_levy with respect to the date quarter and regarding the notice of tax_lien with respect to the date quarter on date the appeals_office issued to petitioner a notice_of_determination concerning collection action s under sec_6320 and or notice_of_determination with respect to petitioner’s unpaid liability for the date quarter notice_of_determination with respect to the date quarter as discussed below petitioner did not file a petition with respect to that notice until date as discussed in more detail below on date petitioner submitted to respondent form_9423 collection appeal request form with respect to inter alia petitioner’s unpaid liability for the date quarter peti- tioner’s date form as also discussed in more detail below on july petitioner’s form that petitioner submitted to respondent regarding the notice_of_intent_to_levy with respect to the date quarter and regarding the notice of tax_lien with respect to the date quarter is not part of the record in this case petitioner submitted to respondent another form_9423 with respect to inter alia that liability petitioner’s date form petitioner filed form_941 for the quarter ended date decem- ber quarter petitioner did not pay all of the federal taxes that it reported in that return petitioner’s unpaid form_941 taxes for the date quarter respondent timely assessed petitioner’s unpaid form_941 taxes for the date quarter as well as an addition_to_tax under sec_6651 and interest as provided by law for that quarter we shall refer to any such unpaid assessed amounts with respect to the date quarter as well as interest as provided by law accrued thereafter as petitioner’s unpaid liability for the date quarter on april and date respectively respondent issued to petitioner a notice_of_intent_to_levy with respect to petitioner’s unpaid liability for the date quarter notice_of_intent_to_levy with respect to the date quarter and a notice of tax_lien with respect to that liability notice of tax_lien with respect to the date quarter in the notice_of_intent_to_levy with respect to the date quarter respondent indicated that if petitioner wanted to request an appeals_office hearing regarding that notice it had to do so within days after the date of that notice ie by date the 30th day after date the date on which respondent issued the notice_of_intent_to_levy with respect to the date quarter in the notice of tax_lien with respect to the date quarter respondent indicated that if petitioner wanted to request an appeals_office hearing regarding that notice it had to do so by date petitioner did not timely submit to respondent form or any other document in which it requested an appeals_office hearing regarding the notice_of_intent_to_levy with respect to the date quarter and the notice of tax_lien with respect to the date quarter instead petitioner waited until june or on which to submit to respondent form regarding those notices petitioner’s date form because petitioner did not timely submit form or any other document in which it requested an appeals_office hearing regarding the notice_of_intent_to_levy with respect to the date quarter and the notice of tax_lien with respect to the date quarter respondent granted petitioner a so-called equivalent_hearing and petitioner’s date form is not part of the record in this case respondent’s transcript of account for the quarter ended date shows that petitioner submitted to respondent a collection_due_process equivalent_hearing request on june and not an appeals_office hearing regarding petitioner’s unpaid liability for the date quarter on date the appeals_office issued to petitioner a decision letter concerning equivalent_hearing under sec_6320 and or of the internal_revenue_code decision letter with respect to petitioner’s unpaid liability for the date quarter that decision letter stated in pertinent part your due process hearing request was not filed within the time pre- scribed under sec_6320 and or however you received a hearing equivalent to a due process hearing except that there is no right to dispute a decision by the appeals_office in court under sec_6320 and or as discussed in more detail below on date petitioner submitted to respondent petitioner’s date form_9423 with respect to inter alia peti- tioner’s unpaid liability for the date quarter as also discussed in more detail below on date petitioner submitted to respondent peti- tioner’s date form_9423 with respect to inter alia that liability petitioner filed form_941 for the quarter ended date date quarter petitioner did not pay all of the federal taxes that it reported in that return petitioner’s unpaid form_941 taxes for the date quarter respondent timely assessed petitioner’s unpaid form_941 taxes for the date quarter as well as an addition_to_tax under sec_6651 and interest as provided by law for that quarter we shall refer to any such unpaid assessed amounts with respect to the date quarter as well as interest as provided by law accrued thereafter as petitioner’s unpaid liability for the date quarter on august and respectively respondent issued to petitioner a notice_of_intent_to_levy with respect to petitioner’s unpaid liability for the date quarter notice_of_intent_to_levy with respect to the date quarter and a notice of tax_lien with respect to that liability notice of tax_lien with respect to the date quarter in the notice_of_intent_to_levy with respect to the date quarter respondent indicated that if petitioner wanted to request an appeals_office hearing regarding that notice it had to do so within days after the date of that notice ie by date the 30th day after date the date on which respondent issued the notice_of_intent_to_levy with respect to the date quarter in the notice of tax_lien with respect to the date quarter respondent indicated that if petitioner wanted to request an appeals_office hearing regarding that notice it had to do so by date petitioner filed form_941 for the quarter ended date sep- tember quarter petitioner did not pay all of the federal taxes that it reported in that return petitioner’s unpaid form_941 taxes for the date quarter respondent timely assessed petitioner’s unpaid form_941 taxes for the date quarter as well as interest as provided by law for that quarter we shall refer to any such unpaid assessed amounts with respect to the date quarter as well as interest as provided by law accrued thereafter as petitioner’s unpaid liability for the date quarter on april and date respectively respondent issued to petitioner a notice of tax_lien with respect to petitioner’s unpaid liability for the septem- ber quarter notice of tax_lien with respect to the date quarter and a notice_of_intent_to_levy with respect to inter alia that liability in the notice of tax_lien with respect to the date quarter respondent indicated that if petitioner wanted to request an appeals_office hearing regarding that notice it had to do so by date in the notice_of_intent_to_levy with respect to the date quarter and petitioner’s taxable_year respondent indicated that if petitioner wanted to request an appeals_office hearing as discussed below the notice_of_intent_to_levy that respondent issued to petitioner with respect to petitioner’s unpaid liability for the date quarter also pertained to certain assessed amounts for petitioner’s taxable_year we shall refer to that notice as the notice_of_intent_to_levy with respect to the date quarter and petitioner’s taxable_year regarding that notice it had to do so within days after the date of that notice ie by date the 30th day after date the date on which respondent issued the notice_of_intent_to_levy with respect to the date quarter and petitioner’s taxable_year petitioner filed form_941 for the quarter ended date decem- ber quarter petitioner did not pay all of the federal taxes that it reported in that return petitioner’s unpaid form_941 taxes for the date quarter respondent timely assessed petitioner’s unpaid form_941 taxes for the date quarter as well as interest as provided by law for that quarter we shall refer to any such unpaid assessed amounts with respect to the date quarter as well as interest as provided by law accrued thereafter as petitioner’s unpaid liability for the date quarter on date respondent issued to petitioner a notice of tax_lien with respect to petitioner’s unpaid liability for the date quarter notice of tax_lien with respect to the date quarter in the notice of tax_lien with respect to the date quarter respondent indicated that if on date after petitioner filed the petition commencing this case respondent issued to it a notice_of_intent_to_levy with respect to petitioner’s unpaid liability for the date quarter petitioner wanted to request an appeals_office hearing regarding that notice it had to do so by date petitioner filed form_940 employer’s annual federal unemployment futa_tax return form for its taxable_year petitioner did not pay all of the federal tax that it reported in that return petitioner’s unpaid form_940 tax for its taxable_year respondent timely assessed petitioner’s unpaid form_940 tax for its taxable_year as well as an addition_to_tax under sec_6651 and interest as provided by law for that year we shall refer to any such unpaid assessed amounts with respect to petitioner’s taxable_year as well as interest as provided by law accrued thereafter as petitioner’s unpaid liability for its taxable_year on may and respectively respondent issued to petitioner the notice_of_intent_to_levy with respect to the date quarter and petitioner’s taxable_year that pertained to inter alia petitioner’s unpaid liability for its taxable_year and a notice of tax_lien with respect to that liability notice of tax_lien with respect to petitioner’s taxable_year as discussed above in the notice_of_intent_to_levy with respect to the september see supra note quarter and petitioner’s taxable_year respondent indicated that if petitioner wanted to request an appeals_office hearing regarding that notice it had to do so within days after the date of that notice ie by date the 30th day after date the date on which respondent issued the notice_of_intent_to_levy with respect to the date quarter and petitioner’s taxable_year in the notice of tax_lien with respect to petitioner’s taxable_year respondent indicated that if petitioner wanted to request an appeals_office hearing regarding that notice it had to do so by date petitioner did not submit to respondent form or any other document in which it requested an appeals_office hearing with respect to petitioner’s unpaid liability for the date quarter petitioner’s unpaid liability for the date quarter petitioner’s unpaid liability for the date quarter and petitioner’s unpaid liability for its taxable_year instead petitioner submitted petitioner’s date form_9423 the instructions for form_9423 state in pertinent part you may appeal a notice_of_federal_tax_lien levy seizure or denial or termination of an installment_agreement under these procedures how to appeal if you disagree with one of these action sec_1 if you disagree with the decision of the revenue_officer and wish to appeal you must first request a conference with a collection manager if you do not resolve your disagreement with the collection manager you may request appeals consideration by completing form_9423 collection appeal request on the form_9423 check the collection action s you disagree with and explain why you disagree you must also explain your solution to resolve your tax problem the collection of- fice must receive your request for an appeal within days of your conference with the col- lection manager or we will resume collec- tion action decision on the appeal once the appeals officer makes a decision on your case that deci- sion is binding on both you and the irs this means that both you and the irs are required to accept the decision and live up to its terms petitioner provided the responses indicated to the following questions in petitioner’s date form type of tax tax form tax periods being appealed payroll forms all applicable tax periods including but not limited to and tax due uncertain please check the collection action s you’re appealing federal_tax_lien denial of installment_agreement levy or notice_of_levy termination of installment_agreement seizure please explain why you disagree with the collection action s you checked above and explain how you would resolve your tax problem taxpayer hereby appeals the irs decisions to deny a taxpayer-proposed installment_agreement classify taxpayer’s installment_agreement request as an attempt to delay collection no written classification has been received as yet but is anticipated based on a recent telephone conversa- tion with the irs file liens and levies against taxpayer for any and all applicable tax years execute and or enforce liens and levies against taxpayer for any and all applicable tax years require the filing of a federal_tax_lien to support any accepted installment_agreement deny taxpayer any and all rights mandated under a request for an installment_agreement move forward with collection activities while knowing that such collection activities will generate substantially less funds than foregoing such collection activities that is the irs is better off if it allows the sale of the taxpayer and or all of its assets to a private buyer rather than the irs’s proposed collec- tion activities liens and levies overall collection totals will decrease substantially due to massive lay-offs and the impact on the local economy and tax_base this decrease will likely cause a domino effect to decrease total collected taxes on a state-wide basis taxpayer respectfully asks that the taxpayer be granted sufficient time to consummate the proposed sale without the imposition of additional liens and levies nor the execution or enforcement of existing liens and levies although the attached letter of intent to purchase creditron indicates a closing date within days taxpayer would ask for up to four months to allow for any unpredictable issues and to minimize the administrative burden of seeking appeals again to grant more time if required in the alternative or in addition the taxpayer requests that the install- ment agreement request dated date be granted until the sale is executed and closed reproduced literally in petitioner’s date form_9423 petitioner did not request or in any way suggest that it wanted an appeals_office hearing on date the appeals_office sent to petitioner a letter appeals_office date letter with respect to the tax period s ended in that letter the appeals_office indicated that it had considered your protest regarding the proposed enforcement actions by the collection function a review of the case file revealed that compliance adhered to all applicable legal and procedural require- ments in conjunction with your collection case in the appeals_office date letter the appeals_office reminded petitioner that t he issuance of the levy is to collect the outstanding balance due accounts that you have not voluntarily paid in petitioner’s date form_9423 petitioner had requested the appeals_office to delay for up to four months respondent’s proceeding with any collection actions relating to petitioner’s respective employment_tax liabilities for the quarters ended september and date and march septem- ber and date and its unemployment tax_liability for its taxable_year in the appeals_office date letter the appeals_office in- formed petitioner that it would delay respondent’s proceeding with any such actions for days only that letter stated in pertinent part since you are so close to closing on a sale of the business which will provide the funds to full pay the above tax periods appeals will direct the compliance division not to enforce the levies until days from the date of this letter appeals partially sustains the compliance division based on a review of all the facts before us the action is appropriate but appeals is affording you another days to full pay the above tax_liabilities the day time frame sic begins on the date of this letter on date a revenue_officer with respondent’s collection function revenue_officer sent to petitioner a letter that letter stated in pertinent part i’ve called twice and left voice mails each time i trust you’ve re- ceived them to confirm creditron financial_corporation must file the form_941 employers quarterly tax_return for the calendar_quarter ended date with me along with full payment of any amount not previously deposited failure to comply with this requirement will result in notices of levy being issued to the taxpayer’s bank and customers on date petitioner submitted to respondent petitioner’s date form_9423 petitioner provided the responses indicated to the following questions in that form type of tax tax form tax periods being appealed tax due employment and all relevant periods aprox sic dollar_figure 5mil please check the collection action s you’re appealing federal_tax_lien denial of installment_agreement levy or notice_of_levy termination of installment_agreement seizure please explain why you disagree with the collection action s you checked above and explain how you would resolve your tax problem l evy or notice_of_levy will produce less income to the irs than an outright sale of taxpayer taxpayer can provide assurances that a sale will be closed within days however these assur- ances must satisfy the irs not just the taxpayer so sic any document that the irs would deem sufficient to establish the certainty of the sale will help taxpayer and the irs in this regard although the sale was to occur by now the delay has been with taxpayer’s auditors the auditors were extremely late in prepar- ing reviewed financial statements that are required for the buyer’s due diligence now that these statements are ready taxpayer only needs another days to close the sale there is close to five million dollars at stake to the irs should the sale fail if the levies are issued the sale fails please consider extending the time for sale for another days in petitioner’s date form_9423 petitioner did not request or in any way suggest that it wanted an appeals_office hearing on date the appeals_office sent to petitioner a memorandum entitled appeals case memorandum collection appeal program denial of installment_agreement proposed levy action proposed seizure action that memorandum stated in pertinent part type of tax periods assessed balance balance big_number big_number big_number big_number big_number big_number dollar_figure summary and recommendation the taxpayer requested a hearing in regard to a denial of an install- ment agreement proposed levy and proposed seizure action under the collection appeal program cap the taxpayer is being represented by edgar darden referred to as power_of_attorney poa the denial of the installment_agreement was based on requirements as provided in the internal_revenue_manual dollar_figure indicating that all tax returns for which the taxpayer is required to file must be filed prior to installment_agreement approval the taxpayer must be in compliance with all current deposits after being told to do so the taxpayer was not in compliance with filing_requirements when the installment_agreement was denied and the taxpayer is not making current deposits as required the denial of the installment_agreement was also based on the tax- payer requesting the agreement to delay collection irm d the levy action and seizure action was proposed based on the tax- payer incurring additional liability because they were not making timely and sufficient deposits collection’s decision to deny the taxpayer’s request for an installment_agreement the proposed levy action and the proposed seizure is sustained in appeals background the liabilities for the tax periods indicated above are due to the taxpayer not making timely and sufficient federal tax deposits the accounts were assigned to collection timely contact was made with the taxpayer by the revenue_officer the collection manager concurred with the revenue officer’s decision to deny the installment_agreement proposed levy action and proposed seizure the appeals settlement officer received the taxpayer’s cap request on date discussion and analysis the taxpayer’s position the taxpayer proposed an installment_agreement to collection for dollar_figure per week until such time the company is sold the taxpayer is requesting months to consummate the pro- posed sale without the imposition of additional levies or liens compliance’s position collection denied the installment_agreement because it was determined it was submitted to delay collection the taxpayer had not filed the form_941 for the tax period ending date and therefore was not in compliance with filing_requirements as required by the irm the taxpayer has now filed the tax_return for the tax period ending date with a balance due of dollar_figure the taxpayer has a long history of non-compliance and has incurred additional liability since the installment_agreement request was made the taxpayer is not making current deposits after being advised to do so appeals’ decision on date the cap hearing was held via telephone with the appeals settlement officer so and the poa the taxpayer was not in attendance appeals determination is that compliance followed all legal and local procedures and guidelines and that the decision to deny the install- ment agreement proposal of the levy and the proposed seizure actions are appropriate the case was reviewed by appeals for appropriateness based on law regulations policy and procedures considering all the facts and circumstances presented determination appeals finds that all legal and local procedures and guidelines were followed and were appropriate the above actions denial of installment_agreement proposed levy action and proposed seizure are all sustained in appeals on date petitioner filed a petition commencing this case in the petition petitioner alleged that the petition is a petition for redetermination of a deficiency and a petition for lien or levy action petitioner also alleged in the petition that it disagrees with the determination contained in the notice issued by the internal_revenue_service for the year s or period s and as set forth in such notice dated july the petition stated in pertinent part taxpayer requests that all collection actions cease to allow taxpayer to close a sale the company completely satisfing sic taxpayer’s outstanding irs debt taxpayer needs until sep- tember to close the transaction tax- payer feels that the irs threatened levy action is an abuse_of_discretion given taxpayer’s docu- mented hardship if levies are issued taxpayer will not make payroll and over employees will be out of work allowing the sale of the company to close creates a win-win situation for the irs and the taxpayer there is also a question of the exact amount of the tax_liability given the confusing penalty and interest calculations discussion it is respondent’s position that we do not have jurisdiction over the quarters ended september and date march september and date and petitioner’s taxable_year in support of that posi- tion respondent represents that with respect to none of those tax periods did respondent issue to petitioner a notice_of_deficiency issue to petitioner a notice_of_determination under sec_6330 except for the notice of determi- nation with respect to the date quarter or make any other determination that would confer jurisdiction on us if a petition were timely filed with respect to any such determination in the petition petitioner alleged that it disagrees with the determination contained in the notice issued by the internal_revenue_service for the year s or period s and as set forth in such notice dated july the only document in the record dated date is a letter to petitioner from one of respondent’s revenue officers regarding petitioner’s failure_to_file form_941 for the quarter ended date we conclude that that letter was not and did not purport to be a determination under sec_6330 in response to respondent’s representation in respondent’s motion that after a diligent search respondent concluded that respondent did not issue to petitioner a notice_of_deficiency with respect to any of the tax periods at issue petitioner asserts in pertinent part in petitioner’s opposition although respondent argues that no statutory notices of deficiency have been sent timely evidence of deficiency notices are in respon- dents sic records and it is important that the dates on the deficiency notices be verified before a decision is made on the motion to dis- miss petitioner requests additional time to produce the date of the notices or alternatively to have respondent produce evidence of the notice dates if that would save time petitioner appears to be contending that respondent issued to it notices of deficiency with respect to the respective tax periods at issue we reject peti- tioner’s contention petitioner’s unpaid liability for each of the quarters ended september and date and march september and decem- ber consists of the unpaid amount of federal taxes that petitioner showed in its form_941 for each such quarter as well as any addition_to_tax under sec_6651 and interest as provided by law for each such quarter none of those liabilities arose from a deficiency that respondent determined in a notice_of_deficiency petitioner’s unpaid liability for its taxable_year consists of the unpaid amount of federal tax that petitioner showed in its form_940 for that year as well as any addition_to_tax under sec_6651 and interest as provided by law for that year that liability did not arise from a deficiency that respondent determined in a notice_of_deficiency in response to respondent’s representation in respondent’s motion that after a diligent search respondent concluded that except for the notice_of_determination with respect to the date quarter respondent did not issue to petitioner a notice_of_determination under sec_6330 with respect to any of the tax periods at issue petitioner asserts in pertinent part in petitioner’s opposition that on or about date petitioner made a request that respondent accept an installment_agreement regarding the and tax periods this installment_agreement would allow petitioner to con- clude a pending sale of its business operations and real_estate the sale would completely satisfy any outstanding liability for the above and any other outstanding periods respondent stated to petitioner that the request would be rejected and instead classified as an attempt to delay collection this determination by respondent is within the statutory period emphasis added petitioner does not otherwise explain the determination by respondent issued to petitioner within the statutory period to which it is referring in peti- tioner’s opposition in any event our jurisdiction under sec_6330 does not depend upon whether the appeals_office issued a determination under that section within a certain period our jurisdiction under sec_6330 depends upon the issuance of a valid notice_of_determination under that section and a timely filed petition 117_tc_159 we turn now to each of the tax periods at issue in order to determine whether we have jurisdiction over each of those periods with respect to the date quarter respondent concedes and we conclude that on date respondent issued to petitioner a notice_of_determination under sec_6330 petitioner however did not file the petition until date we conclude that we do not have jurisdiction over the date quarter see sec_6330 with respect to the date quarter petitioner did not timely submit to respondent form or any other document in which it requested an appeals_office hearing regarding the notice of tax_lien with respect to the decem- ber quarter and the notice_of_intent_to_levy with respect to the date quarter because petitioner did not timely request an appeals_office there is no mandated period of time within which the appeals_office must issue a notice_of_determination under sec_6330 sec_301_6330-1 q a-e9 proced admin regs on april and date respectively respondent issued to petitioner the notice_of_intent_to_levy with respect to the date quarter and the notice of tax_lien with respect to the date quarter petitioner did continued hearing with respect to those notices it was not entitled to such a hearing see sec_6320 sec_6330 sec_301_6320-1 q a-c7 c q a-c7 proced admin regs respondent granted petitioner an equivalent_hearing regarding petitioner’s unpaid liability for the date quarter see sec_301_6320-1 sec_301_6330-1 proced admin regs on date the appeals_office issued to petitioner a decision letter with respect to that liability see sec_301_6320-1 sec_301_6330-1 proced admin regs we conclude that that letter was not and did not purport to be a determination under sec_6330 see eg 116_tc_263 we further conclude that we do not have jurisdiction over the date quarter with respect to the quarters ended march september and date and petitioner’s taxable_year although petitioner knew that form was the form prescribed for requesting an appeals_office hearing continued not submit form with respect to those notices until june or see supra note the notice_of_intent_to_levy and the notice of tax_lien that respondent issued to petitioner with respect to each of the tax periods at issue indicated that respondent was attaching to each such letter inter alia form see supra note moreover petitioner had submitted that form to respondent with respect to each of the quarters ended september and date petitioner did not submit to respondent that form or any other document in which it requested such a hearing regarding those tax periods instead on june and date petitioner submitted to respondent forms in which it requested a hearing with the appeals_office under respondent’s collection_appeals_program cap appeals_office hearing the collection_appeals_program provides an administrative appeal for certain collection actions and the rejection and termination of installment agreements irm pt - date the irm points out the distinction between a cap appeals_office hearing and an appeals_office hearing see eg irm pt date and indicates that t he taxpayer has the right to go to court on appeals’ determinations under cdp but not under cap see irm pt dollar_figure on date petitioner submitted to respondent form_9423 with respect to inter alia the quarters ended march and september and decem- ber and its taxable_year on date petitioner submitted to respondent another form_9423 with respect to inter alia those tax periods internal_revenue_manual irm pt date indicated that form_9423 was the form to be used to request a cap appeals_office hearing consistent with irm pt date the instructions for form_9423 informed the taxpayer that o nce the appeals officer makes a decision on your case that decision is binding on both you and the irs this means that both you and the irs are required to accept the decision and live up to its terms in response to petitioner’s date form_9423 and petitioner’s date form_9423 the appeals_office sent to petitioner a letter dated date and a memorandum dated date that was entitled appeals case memorandum collection appeal program denial of installment_agreement proposed levy action proposed seizure action we conclude that that letter and that memorandum were not and did not purport to be determinations under sec_6330 we further conclude that we do not have jurisdiction over the quarters ended march september and date and petitioner’s taxable_year we have considered all of petitioner’s contentions arguments and requests that are not discussed herein and we find them to be without merit irrelevant and or moot on the record before us we shall grant respondent’s motion to reflect the foregoing an order granting respondent’s motion as supplemented and dismissing this case for lack of jurisdiction will be entered


department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division date jan - contact person no third party contact sin 02-big_number 00-big_number identification_number telephone number to bi legend a- b- cc employer_identification_number dear sir or madam this is in response to your ruling_request concerning a proposed transaction and its effects on the exempt status and unrelated_business_income_tax liability of b and c under sec_511 through of the internal_revenue_code ais an organization described in sec_501 of the code a's purpose is to provide funds for the construction equipment and operation of a free clinic and hospital for rippled maimed-or-diseased-children vos a created b to promote the health of the community by operating a charitable hospital specializing in pediatric services b is an organization described in sec_501 of the code and in sec_509 and sec_170 support to b the election and removal of b's directors and the dissolution of b a must approve all amendments to the b's articles of incorporation and bylaws b's sole member is a a provides ongoing c is an organization described in sec_501 which was created by b c's sole member c's sole purpose is to own operate and maintain the property transferred to it as described below and to tender the net profits of the property to b b's medical campus consists of connected physical structures providing charitable medical services through a broad range of pediatric treatment facilities and related administrative services b erected two office towers adjacent to its campus on land it owns the towers are attached by an overhead walkway to b's campus and are used primarily by b for the treatment of patients and administrative services however b has leased fifteen percent of the total space to physicians that only practice pediatric medicine to carry on their private medical practices these physicians regularly but are not required to refer their patients to b for treatment and aiso have staff privileges at b office towers to physicians not practicing in the field of pediatric medicine for example b leases space to a tenant specializing in pediatric cardiology a sub-specialty that might not be available to b absent the proximity of the office towers the physicians are available for emergency and other medical services offered by b regularly attend b's staff meetings and attend or provide medical education programs neither a nor b have any ownership_interest in the physician practices b as a matter of policy will not lease space in the physicians are charged a fixed rental subject_to adjustments such as inflation the physicians do not receive any personal_property under the leases and personal services included within the lease are limited to elevator services security utilities replacement of light bulbs janitorial services and building maintenance all such services are usual and customary in the leasing of real_property in the area b has erected a multi-story parking facility the facility is unattended and is open to the patients visitors and family members of patients of b without charge b does not control ingress or egress over the parking facility because it has no toll or ticket gate b has agreed to provide a limited number of parking spaces to the physicians who lease space in the office towers and their patients the leases to the physicians do not contain a provision setting forth a fee for providing parking spaces however with one exception no spaces are required to be reserved and the leases do not separately charge for the spaces with regard to the one exception b agreed to reserve one space for the medical director of the tenant specializing in pediatric cardiology to have easy access to the physician offices and b's campus at all times it has come to b's attention that leasing a portion of the office towers to private physicians may cause the entirety of both office towers to be subject_to local property taxes to minimize the potential impact of the property_tax b proposes to convert the office towers into _ condominiums in and to contribute the units leased to physicians to c free of any mortgage and in conjunction with that assign b's rights and duties as landlord to c under the lease arrangements b will agree with c to continue to provide parking spaces to the physicians and patients without charge to c under the lease arrangements b will agree to continue performing the services relating to elevators security utilities replacement of light bulbs janitorial and building maintenance as when it was landlord b will also perform management functions such as preparing and mailing monthly rental invoices without charge to c after b completes the process of converting the leases into condominiums b will contribute the physician units a total of three to c b will initially retain the remaining units for use in its operations as well as a share of the common areas however b may contribute the remaining units to c for leasing to the physicians as the need may arise rights and responsibilities as between the tenants and c will be the same as now exists between the tenants and b with the added benefit that only the leased units are subject_to local property_tax consequently b should be able to achieve substantial savings by transferring the in any event the ie property to c c does not anticipate providing any direct services to manage maintain or operate the condominium units transferred to it these services which include the collection of rents and the payment of expenses will be provided by b without charge to c start_up costs attributable to organizing c as well as amounts as may be needed from time to time by c in excess of its net_income will be contributed by b the following rulings are requested the change in property ownership of the office towers from fee simple to condominium will not be considered an unrelated_trade_or_business that would generate unrelated_business_taxable_income under sec_511 through and will not affect b's exempt status under sec_501 the transfer of the condominium units and related leases by b to c unrelated_business_taxable_income as described in sec_511 through to either b or c will not generate neither the exempt status of either b or c will be affected by the transfer of the condominium units or physician leases and the subsequent operations to be carried on by b and c as a result thereof the rental income received by c from the physicians' leases will not constitute unrelated_business_taxable_income under sec_511 through the rental income received by b from c from the physician leases after the payment of costs and expenses will not constitute unrelated_business_taxable_income under sec_511 through the receipt of income to b from c net of costs and expenses will not affect b's exempt status under sec_501 of the code the providing of parking facilities by b to the physicians and their patients and b's providing of management maintenance and operational services to c will not affect b's status as an organization described in sec_501 and will not constitute unrelated_business_taxable_income under sec_511 through of the code the providing of start_up costs as well as amounts needed to meet c's costs and expenses in excess of income will not constitute ubit to c and not affect b's status as an organization described in sec_501 sec_501 of the code provides for the exemption from federal_income_tax of corporations organized for the exclusive purpose of holding title to property collecting income therefrom and turning over the entire amount thereof less expenses to an organization which itself is exempt from federal_income_tax under sec_501 sec_1_501_c_2_-1 of the income_tax regulations provides that a corporation described in sec_501 of the code cannot accumulate income and retain its exemption but must turn over the entire amount of such income less expenses to an organization which is itself exempt from tax under sec_501 sec_501 of the code provides in part for the exemption from federal_income_tax of organizations that are organized and operated exclusively for religious charitable scientific or educational_purposes provided no part of their net_earnings inures to the benefit of any private_shareholder_or_individual sec_511 of the code imposes a tax on the unrelated_business_taxable_income of organizations exempt from federal_income_tax under sec_501 sec_512 of the code defines the term unrelated_business_taxable_income as gross_income derived by an organization from any unrelated_trade_or_business regularly carried on by it less the deductions directly attributable to such business activity sec_512 provides that rents_from_real_property and incidental related personal_property are not treated as unrelated_business_income unless the real_property is debt-financed under sec_514 sec_514 defines debt-financed_property as any property that is held to produce income and with respect to which there is an acquisition_indebtedness at any time during the taxable_year debt financed property does not include any property substantially related to the exercise or performance by such organization if its exempt purposes sec_513 of the code defines the term unrelated_trade_or_business as any trade_or_business the conduct of which is not substantially related aside from the need of the organization for income or funds or the use it makes of the profits derived to the exercise or performance by an organization of the purpose or function constituting the basis for its ee bromphon o cocccccsneeenenuntee wasneaseesspeiqes mens wy we ees sec_1_513-1 of the regulations defines unrelated_business_taxable_income to mean gross_income from any unrelated_trade_or_business regularly carried on sec_1 b states that the phrase trade_or_business includes activities carried on for the production_of_income and which possess the characteristics of a trade_or_business within the meaning of sec_162 of the code finally sec_1_513-1 explains that regularly carried on has reference to the frequency and continuity of the conduct of an activity and the manner in which the activity is pursued sec_1_513-1 of the regulations provides that a trade_or_business is related to exempt purposes only where the conduct of the business activity has a causal relationship to the achievement of an exempt_purpose and is substantially related for purposes of sec_513 only if the causal relationship is a substantial one thus for the conduct_of_a_trade_or_business from which a particular amount of gross_income is derived to be substantially related to purposes for which exemption is granted the production or distribution of the goods or the performance of the services from which the gross_income is derived must contribute importantly to the accomplishment of those purposes sec_514 of the code provides for the taxation under sec_512 of the code of income from debt-financed_property sec_514 of the code however provides that the definition of debt-financed_property does not include any property substantially_all the use of which is substantially related to the exercise or performance by such organization of its charitable purposes constituting the basis for its exemption under sec_501 revrul_69_269 1969_1_cb_160 provides that the operation of a parking lot for patients and visitors only by a sec_501 hospital does not constitute unrelated_trade_or_business under sec_513 of the code revrul_69_463 1969_2_cb_131 provides that income derived by a hospital from leasing office space in an adjacent office building to a medical group was substantially related to the hospital's exempt_purpose revrul_69_545 1969_2_cb_117 sets forth standards under which a nonprofit_hospital may qualify for recognition of exemption under sec_501 of the code this revenue_ruling gave consideration to two separate hospitals only one of which was determined to qualify for exempt status under sec_501 by weighing all the relevant facts and circumstances the revenue_ruling analyzed whether both the control and use of the hospitals were for the benefit of the public or for the benefit of private interests the hospital that qualified for exemption was found to be organized and operated to further the charitable purpose of promoting health by satisfying a community benefit standard that included among other factors a board_of directors that broadly represented the interests of the community the hospital that did not qualify for recognition of exemption was found to be operating for the private benefit of those who controlled it rather than for the benefit of the public revrul_78_41 1978_1_cb_148 concludes that a_trust created by a hospital to accumulate and hold funds to pay malpractice claims against the hospital qualified for exemption under sec_501 of the code as an integral part of the hospital the hospital provided the funds for the trust and the banker-trustee was required to make payments to claimants at the direction of the hospital the organization conducted an activity that the hospital could perform itself b currently operates a hospital and is described in sec_509 and sec_170 and wants to restructure its real_estate holdings in its office towers to minimize the impact of local property_tax liability by converting its office towers to condominium ownership from fee simple after the conversion of the office towers c will hold title to all condominium units leased to physicians and b will own all units relating to the operation of the hospital furthermore b will continue to operate a hospital that will further sec_501 purposes the current leasing of office space to physicians will not generate any unrelated_business_income under revrul_69_463 the change in form in ownership of the space that the physicians lease will have no impact on whether unrelated_business_income is generated by b or c under sec_511 through since the space will still be leased to the physicians in the same manner as described in rev_rul -6- the change in property ownership of the office towers and the subsequent transfer of the physician-leased condominiums to c will not adversely either entity's exempt status furthermore the change in property ownership of the office towers is a one-time event and does not possess the characteristics of a trade_or_business regularly carried on the transfer of assets and or funds to c will be one time transfers and therefore will not possess the characteristics of a trade_or_business regularly carried on furthermore any gain on the transfers would not be subject_to unrelated_business_income_tax due to sec_512 of the code following the proposed reorganization the sharing of services and facilities wnether or not a fee is charged and transfers of cash and assets among the exempt_organizations will be substantially related to the exercise or performance of the exempt purposes of b and will therefore not constitute unrelated_trade_or_business activities subject_to tax because the transfers will further the charitable purposes of b the provision of parking spaces to the physicians leasing space from c and their patients will not generate unrelated_business_income as described in revrul_69_269 therefore the exempt status of b and c will not be jeopardized because the transferred assets will be used to further exempt purposes the rents c will receive from ownership of the condominiums will be income from a substantially retated activity under sec_513 of the code c's rental of the condominium space adjacent to its affiliated hospital b is similar to the nontaxable medical office building rental in revrul_69_463 in which the rentals of the adjacent medical office building contribute importantly to the furtherance of the exempt_activities of the lessor hospital c's ownership of the condominium units will further b's exempt purposes because the rentals furthered b’s exempt purposes when b owned the property and will still further its exempt purposes when the property is owned by b's controlled affiliate c sews porth lorain foe nno rna samaria etrbed bb ne ape see ce oat won based on the following we rule as follows b's conversion of the office towers to condominiums is not an unrelated_trade_or_business and will not subject b to tax under sec_511 through of the code the transfer of the condominium units and the related leases by b to c is not an unrelated_trade_or_business that will generate unrelated_business_income under sec_511 through b's exempt status as an organization described in sec_501 and c's exempt status under sec_501 are not jeopardized by the transfer of the condominium units and physician leases and subsequent operations to be carried on by b and c as a result of the transfer the rental income received by c from the leases will not constitute unrelated_business_taxable_income as described in sec_511 through of the code oe the rental income received by b from c from the leases after payment of costs and expenses will not constitute unrelated_business_taxable_income as described in sec_511 through b's receipt of income net of costs and expenses will not affect its exempt status under sec_501 of the code the providing of parking facilities by b to c and their patients and b's providing of management maintenance and operational services to c will not affect b's exempt status under sec_501 and will not generate unrelated_business_taxable_income under sec_511 through of the code the providing of start_up costs by b to c as well as amounts needed by c from time to time to meet its costs and expenses in excess of income will not constitute unrelated_business_taxable_income to c as described in sec_511 through and will not affect b's exempt status as an organization described in sec_501 of the code we have not been asked and we express no opinion on whether the provision of a parking space for the medical director of one of the tenants will generate unrelated_business_income under sec_511 through of the code except as specifically ruled upon above no opinion is expressed concerning the federal_income_tax consequences of the transactions described above under any other provision of the code this ruling is directed only to the organization that requested it sec_6110 of the code provides that it may not be used or cited as precedent if you have’any questions about this ruling please contact the person whose name and telephone number are shown in the heading of this letter sincerely signed marvin friedlander marvin friedlander manager eo technical group


department of the treasury internal_revenue_service washington p n sec_91 tax_exempt_and_government_entities_division date mar uniform issue list legend m n pp y o x dear sir or madam contact person identification_number telephone number - we have considered your ruling_request dated date in which you requested approval of a proposed set-aside of m's income under the suitability test of sec_4942 of the internal_revenue_code the code and sec_53_4942_a_-3 of the foundation and similar excise_taxes regulations the regulations and a determination that the amount set_aside may be treated as a qualifying_distribution in the year in which it is set_aside but not in the year in which actually paid m is recognized as exempt from federal_income_tax as a charitable_organization under sec_501 of the code and is classified as a private_foundation within the meaning of sec_509 m wishes to set_aside a grant totaling dollar_figure xto n nis exempt from federal_income_tax under sec_501 of the code and is classified as a publicly_supported_organization under sec_170 no additions to the set-aside are planned the purpose of the grant is to restore and renovate an historic site known as p which is now owned by n n has proposed to renovate and restore p the restoration project and to turn it into a museum and visitor's center the cost of the restoration project is estimated at dollar_figure x m's grant is subject_to an agreement with n the agreement under the agreement m will make a grant of dollar_figure restoration grant m will disburse the funds to n ina lump sum within business days after the satisfaction of the conditions set forth in paragraph sec_2 and b of the agreement upon receipt of the funds from m n shall deposit the funds in a separate interest bearing account the x to n to partially fund the costs of the restoration project the do project account as the conditions set forth in paragraph sec_2 and d are satisfied n may make disbursements from the project account solely to pay reimbursable costs of the restoration project m's obligation to make the gift to n is subject_to the following conditions precedent detailed in paragraph of the agreement a on or before contributions for the restoration project in an amount not less than dollar_figure x and ii shall have provided m with evidence satisfactory to m in its sole discretion that such contributions have been received i n shall have received eligible matching b on or before approved in writing the drawings plans and specifications for the restoration project collectively the plans and ii m shall be satisfied in its sole discretion that n has sufficient funding to complete the restoration project as embodied in the plans _ i n shall have submitted to m and m shall have c prior to the disbursement of any portion of the restoration grant from the project account for the purchase of any materials or the performance of any work for the restoration project n shall have submitted to-m and m shall have approved in writing the contractor vendor or other supplier and the finally awarded contract for the labor or materials for which such disbursement is to be made d at the time the restoration grant is to be initially paid to n and at the time of disbursement of any portion of the restoration grant from the project account n shall not be in default in the performance of any of its obligations under the agreement and shall be an organization described in sec_501 and sec_509 or of the code should any of the conditions not be satisfied and should m be unwilling to waive the same then m's obligation to make the restoration grant may be terminated m states that the set-aside was made as of date and that the amounts set_aside must and will actually be paid for the restoration project within a period of time that ends not more than months after the date of the set-aside the agreement requires that payments of the restoration grant be made on or before months from the date of the set-aside which is less than m states that the restoration grant as part of a matching-grant program is intended to stimulate grants to n from the community at large preservation and architectural features of p m believes it is crucial that it retain a degree of control_over the architectural plans and construction process by making the disbursement of the funds dependent upon approval of drawings plans and specifications of the restoration project m believes it can best meet the goal of preserving p in addition because of m's concern with the sec_4942 of the code imposes on the undistributed_income_of_a_private_foundation for any taxable_year which has not been distributed before the first day of the second taxable -3- year following such taxable_year a tax equal to percent of the amount of such income remaining undistributed at the beginning of such second taxable_year sec_4942 of the code provides that for purposes of sec_4942 the term undistributed_income means with respect to any private_foundation for any taxable_year as of any time the amount by which the distributable_amount for each taxable_year exceeds the qualifying distributions made before such time out of such distributabie amount sec_4942 of the code defines the term qualifying_distribution in general as any amount_paid to accomplish one or more purposes described in sec_170 or to acquire an asset used directly in carrying out one or more purposes described in sec_170b sec_4942 of the code provides that an amount of income that is set_aside for a specific project which comes within one or more purposes described in sec_170 of the code may be treated as a qualifying_distribution if the amount meets the set-aside_requirements of sec_4942 sec_4942 of the code provides in pertinent part that an amount set_aside for a specific project may be treated as a qualifying_distribution if at the time of the set-aside the private_foundation establishes to the satisfaction of the secretary that the amount set_aside will be paid for the specific project within five years and that the suitability test for a set-aside under sec_4942 is met sec_4942 of the code provides a suitability test under which the private_foundation at the time of the set-aside must establish to the satisfaction of the secretary that the specific project is one that can better be accomplished by the set-aside of income rather than by the immediate payment of funds sec_53_4942_a_-3 of the regulations provides that an amount set_aside for a specific project that is for one or more of the purposes described in sec_170 or b of the code may be treated as a qualifying_distribution in the year in which set_aside but not in the year in which actually paid if the requirements of sec_4942 of the code are met the foundation establishes to the satisfaction of the commissioner that the amount set_aside will be paid for the specific project within months after it has been set_aside and the set-aside otherwise meets the suitability test of sec_53_4942_a_-3 of the regulations sec_53_4942_a_-3 of the regulations provides that the suitability test is satisfied if the private_foundation establishes to the satisfaction of the commissioner that the specific project for which the amount is set_aside is one that can be better accomplished by a set-aside than by the immediate payment of funds specific projects that can be better accomplished by the use of a set-aside include but are not limited to projects in which relatively long-term grants or expenditures must be made in order to assure the continuity of particular charitable projects or program-related investments as defined in sec_4944 or where grants are made as part of a matching-grant program such projects include for example a plan to erect a building to house the direct charitable educational or other similar exempt activity of the private foundation even though the exact location and architectural plans have not been finalized revrul_77_7 1977_1_cb_354 holds that the term specific project includes a building project to be undertaken by a public charity unrelated to the foundation making the set_aside sec_53_4942_a_-3 of the regulations provides that if an amount is set_aside under the suitability test of sec_4942 of the code and sec_53_4942_a_-3 of the regulations the private_foundation must apply for the commissioner's approval of the set- aside before the end of the taxable_year in which the amount is set_aside m has timely sought approval of its set-aside of income in advance of the time when the amounts of income are to be set_aside as required by sec_4942 of the code and sec_53_4942_a_-3 of the regulations m's set-aside of dollar_figure x as a matching-grant will be for specific projects within the charitable purposes of sec_170 of the code as required by sec_4942 of the code and sec_53_4942_a_-3 of the regulations m represents that the amount set_aside for the restoration project will be paid out within months from the time it is set_aside as required by sec_4942 of the code and sec_53_4942_a_-3 of the regulations m's specific project ie the restoration grant is better accomplished by this set-aside of income rather than by immediate payment because it involves a grant made as part of a matching grant program as described in sec_53 a - b of the regulations thus m's restoration grant to n meets the requirements for a set- aside of income under the suitability test of sec_4942 of the code and sec_53_4942_a_-3 of the regulations accordingly we rule that up to dollar_figure grant to n will be treated as a qualifying_distribution under sec_4942 of the code and sec_53_4942_a_-3 of the regulations in the tax_year when such amount is set_aside x of m's income to be set_aside for the restoration sec_53_4942_a_-3 of the regulations provides that any set-aside approved by the internal_revenue_service must be evidenced by the entry of a dollar amount in on the books_and_records of a private_foundation as a pledge or obligation to be paid at a future date or dates further any amount which is set_aside must be taken into account in determining the private_foundation's_minimum_investment_return under sec_53_4942_a_-2 of the regulations and any income attributable to a set-aside must be taken into account in computing adjusted_net_income under sec_53_4942_a_-2 of the regulations because this ruling letter could help to resolve any questions please keep it in m's permanent records and include a copy with m's annual return form_990-pf this ruling letter is directed only to m sec_6110 of the code provides that it may not be used or cited as precedent ol d4 if you have any questions about this ruling please contact the person whose name and telephone number are shown in the heading of this letter sincerely signed terrell m berkovsky terrell m berkovsky manager exempt_organizations technical group ais


release number release date internal_revenue_service te_ge technical_advice_memorandum date january taxpayer's name taxpayer's address taxpayer's identification_number year s involved conference held uniform issue list legend state claimants program u t i o t n e w e b t n u o f whether the commissioner tax_exempt_and_government_entities_division should exercise discretion to grant the taxpayer relief under sec_7805 of the internal_revenue_code i r c to limit the retroactive effect of revocation of its exempt status under sec_501 facts application_for recognition of exemption taxpayer applied for tax-exempt status describing its activities on the form_1023 as lessening the burdens of government by providing financing to accelerate program fund claim payments to claimants additionally taxpayer stated that it would operate its financing program in conjunction with program funds in several states including state the attachment to the form_1023 provides the following narrative description taxpayer is modeled on state's award winning agency m program the agency program state terminated the agency program and authorized taxpayer to begin providing services formerly provided by the program on date1 taxpayer will expand the program developed by agency to other states through an arrangement with a state governmental bond issuer and various banks taxpayer is able to provide low cost financing to claimants the form_1023 also disclosed a related_party transaction servicing agreement and compensation agreements with llc the servicing agreement noted that llc was contracted to provide operational and management services to taxpayer in the same manner as it had with agency taxpayer disclosed in its form_1023 that it would compensate llc for its services and would reimburse llc for all marketing costs furthermore the form_1023 disclosed the relationship of b its founder and the sole owner of llc and disclosed the related_party transaction with llc on its form_1023 taxpayer provided no additional information or details in the form_1023 regarding its relationship with state or any other state in which it would be operating based on these representations the service issued a favorable determination_letter to taxpayer examination and appeal of recommendation the examination concluded that during the years under exam taxpayer did not qualify for tax- exempt status under sec_501 the examination recommended revocation of taxpayer's tax- exempt status based the following issues its operations do not further one or more exempt purposes it operates for the substantial non-exempt purpose of providing a commercial financing service its net_earnings inured to the benefit of b its founder and board member through llc and it operates for the more than incidental private benefit of b through lle e furthermore the examination concluded that revocation should be retroactive to the first day of the taxable_year under examination date2 because taxpayer made material misstatements on its form_1023 with respect to its operations examinations did concede that the taxpayer disclosed its business relationship with llc and b on its form_1023 specifically the examination stated that taxpayer's form_1023 wrongly implied that state granted taxpayer the exclusive right to acquire claims from claimants and left that issue as the only remaining basis for the recommendation to revoke retroactively taxpayer appealed the proposed revocation the office of appeals sustained the revocation section dollar_figure of revproc_2014_5 2014_1_irb_172 states that all requests for sec_7805 relief are mandatory tams with respect to all exempt_organizations delegation_order formerly do-96 rev delegates authority to the commissioner tax exempt and government entities tege to prescribe the extent to which any ruling relating to the internal revenue laws shall be applied without retroactive effect taxpayer requests that the commissioner tege exercise discretion and grant relief to limit the retroactive effect of revocation under sec_7805 to the date that a final adverse determination_letter is issued or date3 the date of the notice of proposed revocation law sec_7805 provides that the secretary may prescribe the extent if any to which any ruling including any judicial decision or any administrative determination other than by regulation relating to the internal revenue laws shall be applied without retroactive effect sec_1_501_a_-1 states that an organization that has been determined by the commissioner to be exempt under sec_501 may rely upon such determination so long as there are no substantial changes in the organization's character purposes or methods of operation and subject_to the commissioner's inherent power_to_revoke rulings because of a change in the law or regulations or for other good cause sec_301 b -1 grants to the commissioner authority to prescribe the extent to which any ruling issued by his authorization shall be applied without retroactive effect revproc_2014_5 r b states in dollar_figure that all requests for relief under sec_7805 must be made through a request for technical_advice tam section dollar_figure further provides that when during the course of an examination by eo examinations or consideration by the appeals area director a taxpayer is informed of a proposed revocation a request to limit the retroactive application of the revocation must itself be made in the form of a request for a tam and should discuss the items listed in section dollar_figure as they relate to the taxpayer's situation section of revproc_2014_5 lists the criteria necessary for granting sec_7805 relief as well as the effect of such relief section dollar_figure states in part that a tam that revokes a determination_letter is not applied retroactively if there has been no misstatement or omission of material facts the facts at the time of the transaction are not materially different from the facts on which the determination_letter was based there has been no change in the applicable law and the taxpayer directly involved in the determination_letter acted in good_faith in relying on the determination_letter and the retroactive revocation would be to the taxpayer's detriment revproc_2014_9 2014_2_irb_281 sets forth procedures for issuing determination letters from eo determinations and rulings on applications for recognition of exempt status by eo technical on the exempt status of organizations under sec_501 these procedures also apply to revocation or modification of determination letters or rulings section dollar_figure of revproc_2014_9 states in part that the revocation or modification of a determination_letter or ruling recognizing exemption may be retroactive if the organization omitted or misstated a material fact or operated in a manner materially different from that originally represented in certain cases an organization may seek relief from retroactive revocation or modification of a determination or ruling under sec_7805 using the procedures set forth in revproc_2014_4 which further refers to revproc_2014_5 and sec_12 of revproc_2014_9 states that in the case where a determination_letter or ruling is issued in error or is no longer in accord with the service's position and sec_7805 relief is granted see sections and of rev_proc ordinarily the revocation or modification will be effective not earlier than the date when the service modifies or revokes the original determination_letter or ruling delegation_order delegates authority to the commissioner tax exempt and government entities to prescribe the extent to which any ruling relating to the internal revenue laws shall be applied without retroactive effect in 238_f2d_589 3d cir the court_of_appeals for the third circuit determined that the commissioner abused his discretion by retroactively revoking the foundation’s exempt status under sec_501 upon examination the commissioner retroactively revoked the foundation’s exempt status to the date it acquired clover spinning mills an enterprise that manufactured cotton yarn and cloth the foundation disclosed this acquisition on its information_return for the year accordingly the court concluded that the foundation committed no fraud and made no misstatement therefore the court saw no grounds for sustaining retroactive revocation analysis in the present instance taxpayer did not omit or misstate any material facts in its application operate in a manner materially different from the facts set forth in its application or engage in any prohibited_transactions 238_f2d_589 3d cir taxpayer disclosed its operations and activities in full including its relationship with llc and b in its form_1023 nothing in taxpayer's form_1023 implied that state granted it the exclusive right to acquire claims from claimants taxpayer provided no additional information or details in the form_1023 regarding its relationship with state or any other state in which it would be operating no other relationship was disclosed or implied in the information provided in the form_1023 furthermore taxpayer operates in exactly the same manner as described in its form_1023 taxpayer acted in good_faith in relying on its determination_letter conclusion the commissioner te_ge has exercised discretion to grant relief under sec_7805 to limit the retroactive effect of revocation of exempt status under sec_501 revocation is effective as of date3 the date of the notice of the proposed revocation


internal_revenue_service number release date index no department of the treasury washington dc person to contact telephone number refer reply to plr-125442-00 cc intl b1 date date a date b date c country d dear this is in response to your letter dated date requesting a ruling under sec_877 of the internal_revenue_code_of_1986 code that a’s loss of u s citizenship will not have for one of its principal purposes the avoidance of u s taxes under subtitle a or subtitle b of the code the ruling contained in this letter is based upon information and representations submitted by the taxpayer and accompanied by penalty of perjury statements 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 the information submitted for consideration is substantially as set forth below a is a u s citizen by virtue of his birth in the united_states on date c he has been residing in country d since early childhood he plans to relinquish his u s citizenship on date b he has filed an application to become a citizen of country d the country in which his spouse and parents were born sec_877 generally provides that a citizen who loses u s citizenship or a u s long-term_resident who ceases to be taxed as a lawful permanent resident individuals who expatriate within the 10-year period immediately preceding the close of the taxable_year will be taxed under sec_877 and the special rules of sec_877 for such taxable_year unless such loss did not have for one of its principal purposes the avoidance of u s taxes sec_2107 and sec_2501 provide special estate and gift_tax regimes respectively for individuals who expatriate with a principal purpose to avoid u s taxes plr-125442-00 page a former citizen or former long term-resident will be treated as having expatriated with a principal purpose to avoid u s taxes for purposes of sec_877 sec_2107 and sec_2501 if the individual’s average income_tax_liability or the individual’s net_worth on the date of expatriation exceed certain thresholds see sec_877 sec_2107 and sec_2501 a former u s citizen or former long term-resident whose net_worth or average tax_liability exceeds these thresholds however will not be presumed to have a principal purpose of tax_avoidance if that former citizen is described within certain statutory categories and submits a request for a ruling within one year of the date of loss of u s citizenship for the secretary’s determination as to whether such loss had for one of its principal purposes the avoidance of u s taxes see sec_877 sec_2107 and sec_2501 notice_98_34 requires that certain information be submitted with a request for a ruling that an individual’s expatriation did not have for one of its principal purposes the avoidance of u s taxes a submitted all the information required by notice_98_34 including any additional information requested by the service after review of the submission a’s net_worth is expected to exceed the sec_877 amount on date b a is eligible to request a ruling because he is becoming a citizen of the country in which his parents and spouse were born sec_877 based solely on the information submitted and the representations made a has made a complete and good_faith submission in accordance with sec_877 however because the information submitted does not clearly establish either the existence or lack of a principal purpose to avoid taxes under subtitle a or b of the code no opinion is expressed as to whether a's expatriation had for one of its principal purposes the avoidance of such taxes while this ruling rebuts the presumption of tax_avoidance under sec_877 it is not conclusive as to whether a subsequently may be found to have a principal purpose of tax_avoidance under sec_877 sec_2107 and sec_2501 based on all the facts and circumstances see sec_877 this ruling will be effective only if a expatriates on or after date b except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter in addition no opinion is expressed as to a's u s tax_liability for taxable periods prior to his loss of permanent residence status or for taxable periods after his loss of permanent residence status under sections of the code other than sec_877 sec_2107 and sec_2501 a copy of this letter must be attached to a's u s income_tax return for the year in which a obtained the ruling whether or not a is otherwise required to file a return this ruling is directed only to the taxpayer requesting it sec_6110 of plr-125442-00 page the code provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to a and the second representative listed on line of the power attorney form sincerely yours w edward williams senior technical reviewer branch office of the associate chief_counsel international cc


-_- significant index no department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division ein company silver this letter constitutes notice that a waiver of the minimum_funding_standard for the above-named plan for the plan_year ending has been granted subject_to the following conditions collateral acceptable to the pbgc will be provided to the plan for the full amount of the waiver by the later of a days from the date of the ruling letter or b the earlier of i the date the pbgc notifies the service in writing that this condition has not been met or ii days from the date of the ruling letter the company provide to the pbgc a copy of all ruling requests it makes under sec_412 of the code the company makes the required quarterly due october contributions to the plan that are for the plan_year ending and january in a timely manner and the company makes contributions to the plan in amounts sufficient to meet the minimum_funding requirements for the plan for the plan_year ending ee te without applying for a waiver of the minimum_funding_standard your authorized representative agreed to these conditions in a fax dated date if any one of these conditions is not satisfied the waiver is retroactively null and void this conditional waiver has been granted in accordance with sec_412 of the internal_revenue_code code and sec_303 of the employee_retirement_income_security_act_of_1974 erisa the amount for which this conditional waiver has been granted is the contribution that would otherwise be required to reduce the balance in the funding_standard_account to zero as of december the plan is a defined_benefit_plan maintained by the company for the benefit of all eligible employees of the company and silver no other members of the company’s controlled_group contribute to the plan effective june plan ceased the plan is a floor-offset arrangement with its benefits offset by those provided by a separate qualified defined_contribution_plan esop benefit accruals to the the company is a publicly held company the company is a global manufacturer and distributor of a diversified line of kitchenware flatware cooking implements within the last several years the company has gone through a number of changes that have redirected its focus from manufacturing to sourcing this includes the closure and impending closure of all the company-operated manufacturing facilities worldwide the company is the parent of a large number of subsidiaries which are all members of the controlled_group the company’s tableware business is presently focused in three market segments foodservice consumer and international the through distributors to operations worldwide including segment sells directly or - directly to a broad base of including the international segment sells to a variety of the consumer segment sells _ while the company is a worldwide leader in and financially strong-until-recently a number of factors have contributed-to the company’s current business hardship declining sales poor plant cost performance debt burdens from acquisitions and a greatly increased pension funding obligation caused by a decline in company stock and the general decline in the equity markets ' and has been profitable over the last four fiscal years sales have progressively dropped from dollar_figure to dollar_figure while expenses have steadily increased from dollar_figure to dollar_figure this has resulted in a decline in operating revenues from dollar_figure to dollar_figure big_number and a drop in net_income from dollar_figure to dollar_figure big_number these financial results are being driven by the direct and indirect impact of the terrorist attacks of date primarily the conversion by airlines from the general economic decline from late through a continued shift to casual lifestyles increased foreign competition and dual sourcing by customers furthermore the company's liquidity problems have led to inventory imbalances which in turn led to poor service levels loss of customer confidence and further loss of sales to as a result of the sales declines and the falling prices of competitive imported products the company's domestic manufacturing operations have become increasingly noncompetitive by closing these manufacturing facilities a major cause of the company’s financial distress will be eliminated moreover the company’s current business restructuring from manufacturing to sourcing is designed adjust its cost structure to match current lower sales levels and reestablish profitability the decline in the company’s stock value has decreased the value of the benefits provided by the esop which is invested in company stock this has increased underfunding in the plan by dollar_figure million decreases in equity investments in the plan itself have caused an additional increase in underfunding of dollar_figure million the company’s hardship appears to be temporary the company’s current business restructuring is focused on returning the company to profitability the problems are well-defined and the company is highly confident that the restructuring will be successful many key initiatives are either completed or well underway the restructuring plan does not rely significantly on new business ventures new markets or new products furthermore additional assets are available for sale to help the company fund business operations and new senior management has been continue the restructuring because the prospects for the company’s recovery appear ss olid the waiver of the minimum_funding_standard for the plan for the plan_year ending pf has been granted subject_to the conditions listed-above hired to your attention is called to sec_412 of the code and sec_304 of erisa which describe the consequences that would result in the event the plan is amended to increase benefits change the rate in the accrual_of_benefits or to change the rate of vesting while any portion of the waived_funding_deficiency remains unamortized please note that any amendment to a profit sharing plan or any other retirement plans covering employees covered by this plan maintained by the company to increase the - liabilities of those plans would be considered an amendment for purposes of sec_412 of the code and sec_304 of erisa similarly the establishment of a new profit sharing plan or any other retirement_plan by the company covering employees covered by this plan would be considered an amendment for purposes of sec_412 of the code and sec_304 of erisa 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 by others as precedent when filing form_5500 for the plan_year ending po the date of this letter should be entered on schedule b actuarial information for this reason we suggest that you furnish a copy of this letter to the enrolled_actuary who is responsible for the completion of the schedule b we have sent a copy of this letter to the manager ep classification in _ to the manager ep compliance unit in _ and to your authorized representative pursuant to a power_of_attorney on file in this office if you require further assistance in this matter please contact sincerely yours carol d gold manager employee_plans