internal_revenue_service department of the treasury number release date index number washington dc person to contact telephone number refer reply to cc psi 1-plr- date date x y date date this letter responds to a letter dated date written on behalf of x requesting a ruling that x be granted an extension of time in which to elect to treat its first tier subsidiary y as a qualified_subchapter_s_subsidiary qsub facts according to the information submitted x was formed on date on date the shareholders of y a corporation contributed of their stock in y to x x elected to be treated as an s_corporation effective date x intended to have y treated as a qsub effective date however x inadvertently failed to timely file a qsub election for y law and analysis sec_1361 of the internal_revenue_code defines the term qualified_subchapter_s_subsidiary as a domestic_corporation which is not an ineligible_corporation as defined in sec_1361 if an s_corporation holds percent of the stock of the corporation and that s_corporation elects to treat the subsidiary as a qsub the election is made by filing form_8869 qualified_subchapter_s_subsidiary election under sec_301_9100-1 of the procedure and administration regulations 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 if the taxpayer demonstrates to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that granting the relief will not prejudice the interests of the government sec_301_9100-1 defines the term regulatory plr-130877-01 election as including 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_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make an election section provides automatic extensions of time for making certain elections but does not apply to qsub 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 conclusions based solely on the facts submitted and the representations made the requirements of sec_301_9100-1 and sec_301_9100-3 have been satisfied as a result x is granted an extension of time of sixty days from the date of this letter to make an election to treat its wholly owned subsidiary y as a qsub effective date x should submit the properly completed form_8869 to the relevant service_center a copy of this letter should be attached to the form_8869 filed with the service_center except as specifically set forth above no opinion is expressed or implied concerning the federal tax consequences of the facts described above under any other provision of the code specifically no opinion is expressed concerning whether x is a valid s_corporation or whether its subsidiary y is a valid qsub this ruling is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent pursuant to the power_of_attorney on file with this office a copy of this letter is being sent to the taxpayer s paul f kugler sincerely yours associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes


apr fel he t o0-0 o lo alo wl hee ec se se rc ec fo a a ca 3a sec_2s fs fe ie 2s fe fee ee eco 2h 2s oe oft 2k oe ok oe 2k ok ok ee a fe a ake ok oe oe fe ae ae feof legend taxpayer a he os ae fe fe f sec_2s 2c 2s oe ie 2k ok taxpayer b 2y6 ye 2s ae 3c ae oe ae fe 2k 2k oo 2k ok taxpayer c oe fe he oe 9k ae ok ok ok taxpayer d fe 2k 2k ak 2k ok ok ok taxpayer e 2c oe oe i ok ok ok trust t bfe fe 2c 2s a oe ak 2k ake ee ak 2k a oe ae ira x dye fe sec_2 fe he ae ae fe oe oe fe ae ee 2s eo oe oe ae ae ake ake die fe 2f sec_2 as fe sec_2s ake fe fe 2fs aft fe 2fe of ne ie fe af sec_2fe of fe fe ofc ofc of afe afc afc ok die sec_29g 2fe oie oe ah sec_2s 2h fe fe of of fe fe of fe 24g fe ofc ae fe 2fe company m sec_24s sec_246 sec_2 sec_2fe f sec_2k state n ok oh ok of oe ok ok dear m8 x - this is in response to the request for letter rulings under the internal_revenue_code submitted on your behalf by your authorized representative as supplemented by correspondence dated the request for letter rulings is based on the following facts and representations taxpayer a whose date of birth was died on rrr he eeke ook before her required_beginning_date at age as of her date of death taxpayer a was the owner of ira x maintained with company m page on taxpayer a signed and adopted trust t for the benefit of her four children taxpayer b taxpayer c taxpayer d and taxpayer e taxpayer b’s date of birth was taxpayer b is older than taxpayers c d and or e taxpayer c is the trustee of trust t taxpayers b c d and e have continuously been the beneficiaries of trust t from the death of taxpayer a through the current date and each is alive and currently over years of age there are no other beneficiaries under trust t the provisions of trust t as amended provide in relevant part that trust t became irrevocable upon the death of taxpayer a and that trust t is intended to be the beneficiary of an individual_retirement_arrangement ira maintained by taxpayer a the terms of trust t further provide that upon any beneficiary’s attaining age the trustee may divide the trust estate into equal shares and distribute his or her share to the beneficiary finally the terms of trust t provide that its trustee shall withdraw and distribute to each beneficiary such beneficiary’s share of the minimum distribution required to be distributed annually from the ira based on the age of the oldest beneficiary these minimum required distributions have been received by trust t each year since and have been redistributed to such trust’s beneficiaries on taxpayer a signed a beneficiary designation with respect to his ira x pursuant to which ira x was to be distributed to the trustee of trust t at the death of taxpayer a your authorized representative has asserted that trust t is valid under the laws of state n he has also asserted that company m was provided with a copy of trust t and of the related beneficiary designations prior to the death of taxpayer a the trustee of trust t intends to subdivide ira x into four sub-iras by means of a series of trustee-to-trustee transfers each posthumously created ira is to be titled in the name of taxpayer a deceased for the benefit of each distinct beneficiary and minimum required distributions for each sub-ira will be determined on the basis of the age of the oldest beneficiary each sub-ira will then be held individually by a separate one of the four beneficiaries outside of trust t based on the above facts and representations you through your authorized representative request the following rulings that trust t is a see-through trust as that concept exists under the final regulations promulgated under sec_401 of the code that ira x may be subdivided into four sub-iras such that each sub-ira will be created and held individually by a separate beneficiary of trust t in page the name of taxpayer a deceased for the benefit of such beneficiary and with minimum required distributions under sec_401 of the code for each sub-ira being determined on the basis of the age of the oldest beneficiary taxpayer b with respect to your ruling requests code sec_408 of the code provides that under regulations prescribed by the secretary rules similar to the rules of sec_401 and the incidental death_benefit requirements of sec_401 shall apply to the distribution of the entire_interest of an individual for whose benefit the ira trust is maintained code sec_401 provides in general that a_trust will not be considered qualified unless the plan provides that the entire_interest of each employee- ii will be distributed to such employee not later than the required_beginning_date or will be distributed beginning not later than the required_beginning_date over the life of such employee or over the lives of such employee and a designated_beneficiary or over a period not extending beyond the life expectancy of such employee or the life expectancy of such employee and a designated_beneficiary code sec_401 provides in general that if a plan participant ira holder dies before the distribution of his interest has begun in accordance with subparagraph a ii prior to his required_beginning_date then his entire_interest must be distributed within years of his death code sec_401gii provides in general that if any portion of the interest of a deceased plan participant ira holder is payable to or for the benefit of a designated_beneficiary such portion will be distributed beginning not later than year after the date of the deceased’s death or a later date as prescribed by the secretary under regulations in accordance with regulations over the life of the designated_beneficiary or a period not extending beyond the life expectancy of the beneficiary sec_401 of the code provides in relevant part that the term required_beginning_date means april of the calendar_year following the calendar_year in which the employee ira holder attains age with respect to your ruling requests final income_tax regulations under code sec_401 and sec_408 were published in the federal_register pincite federal_register date and in the internal_revenue_bulletin pincite page lr b date the preamble to the final regulations in relevant part provide that the regulations apply for determining required minimum distributions for calendar years beginning after date for determining required distributions for calendar_year taxpayers may rely on the proposed_regulations the proposed_regulations or the final regulations sec_1_401_a_9_-3 of the final regulations q a-3 a provides in general that with respect to the life expectancy exception to the 5-year rule described in code sec_401 iii distributions are required to begin to a nonspouse beneficiary on or before the end of the calendar_year immediately following the calendar_year in which the employee died sec_1_401_a_9_-5 of the final regulations q a-5 b provides in general that if an employee dies before his required_beginning_date in order to satisfy the requirements of code sec_401 or iv the applicable distribution period for calendar years after the calendar_year containing the employee’s date of death is determined in accordance with paragraph c of this a-5 sec_1_401_a_9_-5 of the final regulations q a-5 c provides in general that with respect to a nonspouse beneficiary the applicable distribution period measured by the beneficiary’s remaining life expectancy is determined using the beneficiary’s age as of the beneficiary’s birthday in the calendar_year immediately following the calendar_year of the employee’s death in subsequent calendar years the applicable distribution period is reduced by one for each calendar_year that has elapsed after the calendar_year immediately following the calendar_year of the employee’s death sec_1_401_a_9_-4 of the final regulations q a-4 provides in relevant part that in order to be a designated_beneficiary an individual must be a beneficiary as of the date of the employee’s or ira holder’s death generally an employee’s designated_beneficiary will be determined based on the beneficiaries designated as of the date of death who remain beneficiaries as of september of the calendar_year following the calendar_year of death sec_1_401_a_9_-4 of the final regulations q a-3 provides that only individuals may be designated beneficiaries for purposes of sec_401 a person who is not an individual such as the employee's estate may not be a designated_beneficiary however q a-5 of sec_1_401_a_9_-4 provides that beneficiaries of a_trust with respect to the trust's interest in an employee's benefit may be treated as designated beneficiaries if the following requirements are met the trust is valid under state law or would be but for the fact that there is no corpus the trust is irrevocable or the trust contains language to the effect it becomes irrevocable upon the death of the employee the beneficiaries of the trust who are beneficiaries with respect to the trust's interest in the page employee's benefit are identifiable within the meaning of this section from the trust instrument the documentation described in a-6 of this section has been provided to the plan_administrator sec_1_401_a_9_-4 of the final regulations q a-6 b provides generally with respect to required minimum distributions after the death of the employee that documentation described therein must be provided by the trustee of the trust_beneficiary to the plan_administrator by october of the calendar_year following the calendar_year in which the employee died sec_1_401_a_9_-8 of the final regulations q a-2 a provides the separate_account rules with respect to defined contribution plans sec_1_401_a_9_-4 of the final regulations q a-5 c provides in relevant part that the separate_account rules under a-2 of sec_1_401_a_9_-8 are not available to beneficiaries of a_trust with respect to the trust’s interest in the employee’s benefit as noted above if distributions are made to a_trust even if the trust is a see- through trust within the meaning of q a-5 of sec_1_401_a_9_-4 of the final regulations the separate_account rules of a-2 of sec_1_401_a_9_-8 of the final regulations are not available to the beneficiaries of the trust thus in general each beneficiary of a_trust must receive minimum required distributions over the life expectancy of the eldest beneficiary with respect to your first ruling_request trust t is valid under the laws of state n trust t became irrevocable as of the date of death of taxpayer a the beneficiaries of trust t are identifiable from the language of trust t at the relevant times and the relevant documentation was timely provided to the custodians of ira x with respect to your second ruling_request although neither the code nor the regulations promulgated under code sec_401 preclude the posthumous division of ira x into four sub-iras or the distribution of such iras from a_trust to the trust’s beneficiaries the regulations do preclude separate_account treatment for code sec_401 purposes where amounts pass through a_trust in this case amounts pass through a_trust thus even though ira x will be divided into four sub-iras the life expectancy of the eldest beneficiary of all of the sub-iras taxpayer b is the life expectancy to be used to determine the code sec_401 minimum_required_distribution from each of the resulting sub-iras thus based on the specific facts and representations surrounding this ruling_request we conclude as follows page that trust t is a see-through trust as that concept exists under the final regulations promulgated under sec_401 of the code that ira x may be subdivided into four sub-iras such that each sub-ira will be created and held individually by a separate beneficiary of trust t in the name of taxpayer a deceased for the benefit of such beneficiary and with minimum required distributions under sec_401 of the code for each sub- ira being determined on the basis of the age of the oldest beneficiary taxpayer b this ruling letter is based on the assumption that ira x and all sub-iras have met are meeting or will meet the requirements of code sec_408 at all times relevant thereto it also assumes that trust t and the distribution of sub-iras thereunder are valid under the laws of state n as represented pursuant to a power_of_attorney on file with this office a copy of this letter_ruling is being sent to your authorized representative this letter is directed only to the taxpayer that requested it and is based solely on the representations made with respect thereto sec_6110 of the code provides that it may not be used or cited as precedent sincerely yours ile alan pipkin manager employee_plans technical group tax_exempt_and_government_entities_division


t c memo united_states tax_court oliver w and harriet s williams petitioners v commissioner of internal revenue respondent docket no 3000-06l filed date oliver w williams pro_se gerard mackey for respondent memorandum findings_of_fact and opinion haines judge petitioners filed a petition with this court in response to a notice_of_determination concerning collection action s under sec_6320 and or notice_of_determination for and years at issue pursuant to sec_6330 petitioners seek review of respondent’s determination the issues for decision are whether petitioners have a right to a judicial review of respondent’s notice_of_determination sustaining a federal_tax_lien which covers the same tax_year as a previous federal_tax_lien in which petitioners failed to request an administrative hearing but concerns a different type of unpaid tax for that year and whether petitioners are entitled to any relief from respondent’s determination that collection may proceed a background findings_of_fact some of the facts have been stipulated and are so found the stipulation of facts and exhibits are incorporated herein by this reference petitioners resided in ossining new york when they filed this petition petitioners are oliver w williams an attorney and his wife harriet s williams a psychologist petitioners failed to pay federal_income_tax liabilities shown on their returns for the years at issue b petitioners’ installment_agreement in date petitioners and respondent entered into an installment_agreement in which petitioners agreed to pay their unless otherwise indicated all section references are to the internal_revenue_code as amended amounts are rounded to the nearest dollar income_tax_liability respondent’s certificate_of_official_record for record indicated petitioners were credited with making monthly payments of dollar_figure from date through date a dollar_figure payment on date monthly payments of dollar_figure from date through date and a dollar_figure payment on date pursuant to the installment_agreement petitioners did not fulfill the terms of the installment_agreement and an income_tax_liability for remains unpaid c notice_of_federal_tax_lien filing of date on date petitioners filed with their income_tax return form_5329 additional taxes attributable to iras other qualified_retirement_plans annuities modified endowment contracts and msas petitioners failed to pay the 10-percent additional tax on the early distribution as required under sec_72 on date respondent assessed the percent additional tax_liability including penalties and interest for on date respondent filed a notice_of_federal_tax_lien with respect to the 10-percent additional tax_liability and on date mailed petitioners a notice of federal tax the record also indicated that on date an overpayment credit of dollar_figure from was applied to petitioners’ tax_liability respondent did not explain why the 10-percent additional tax was assessed separately from the rest of the tax_shown_on_the_return lien filing and notice of your right to a hearing under sec_6320 first notice_of_federal_tax_lien the first notice_of_federal_tax_lien indicated the type of tax was form_5329 and the balance owing was dollar_figure the u s postal service returned the first notice_of_federal_tax_lien to respondent unclaimed petitioners did not submit to respondent a request for an administrative hearing with respect to the first notice_of_federal_tax_lien respondent’s certificate_of_official_record for record indicated that on date an overpayment credit of dollar_figure from petitioners’ tax_year was applied to the balance owing in ie the 10-percent additional tax_liability the balance owing as indicated on the first notice_of_federal_tax_lien was not reduced to reflect the dollar_figure overpayment credit d offer-in-compromise on date respondent received from petitioners a form_656 offer-in-compromise offering dollar_figure to compromise their outstanding tax_liabilities for the years at issue with a form 433-a collection information statement for wage earners and self-employed individuals petitioners failed to provide respondent produced two certificates of official record for one record pertains to the form_5329 10-percent additional tax_liability and the other record pertains to petitioners’ underpayment of individual income_tax for other than the 10-percent additional tax for purposes of this case the term record refers to the form_5329 10-percent additional tax_liability documentation verifying the monthly expenses claimed on form a pursuant to petitioners’ requests respondent on several occasions extended the time to submit the substantiating documentation on date respondent notified petitioners that if they failed to provide the requested documentation by date the offer-in-compromise would be rejected petitioners failed to provide the documentation by date and respondent returned petitioners’ offer-in- compromise for failure to provide verification of claimed expenses e notice_of_federal_tax_lien filing of date petitioners failed to pay their income_tax liabilities for the years at issue after respondent gave notice and demanded payment on date respondent filed a notice_of_federal_tax_lien with respect to the years at issue and on date mailed petitioners a notice_of_federal_tax_lien filing and notice of your right to a hearing under sec_6320 second notice_of_federal_tax_lien the second notice_of_federal_tax_lien indicated the type of tax owing was form_1040 u s individual_income_tax_return and listed unpaid balances of dollar_figure dollar_figure dollar_figure dollar_figure dollar_figure dollar_figure dollar_figure and dollar_figure for the form_656 was returned on date though the second notice in point of time it was the first notice as to all years except and respectively f administrative hearing on date petitioners submitted form request for a collection_due_process_hearing in which they claimed the second notice_of_federal_tax_lien should not have been filed because of representations made by respondent’s revenue_officer that a lien would not be filed while they were negotiating an offer-in-compromise on date petitioners mailed a letter to respondent in which they asserted that the tax_liability indicated in the second notice_of_federal_tax_lien failed to reflect the dollar_figure overpayment credit from on date respondent’s appeals_office mailed petitioners a letter acknowledging receipt of petitioners’ request for an administrative hearing on date a face-to-face conference was held between settlement officer thomas knauss and oliver w williams petitioner during the hearing petitioner asserted that the offer-in-compromise should not have been returned because he provided all requested documentation the second notice of the unpaid balance for as indicated on the second notice_of_federal_tax_lien did not include the balance owing in the first notice_of_federal_tax_lien the dollar_figure overpayment credit was applied to the form_5329 10-percent additional tax_liability reflected in the first notice_of_federal_tax_lien federal_tax_lien was prematurely filed because petitioners were negotiating an offer-in-compromise and the second notice_of_federal_tax_lien did not reflect that the overpayment credit of dollar_figure was applied to reduce the balance owing in response mr knauss informed petitioner that he could not reinstate a returned offer-in-compromise an offer-in- compromise does not prohibit the filing of a notice_of_federal_tax_lien and the amount shown on a notice_of_federal_tax_lien is not reduced when a taxpayer makes a subsequent payment at the hearing petitioner proposed an offer-in-compromise or an installment_agreement as a collection alternative mr knauss and petitioner agreed that petitioners would provide a completed form 433-a to mr knauss by date so that mr knauss could determine which collection alternative would suit petitioners’ financial situation on date petitioners faxed a letter to mr knauss requesting an extension until date to provide the completed form 433-a petitioners failed to provide the form 433-a by date or anytime thereafter on date respondent’s appeals_office issued petitioners a notice_of_determination sustaining the filing of the second notice_of_federal_tax_lien and finding the taxpayers have been given multiple opportunities to resolve these liabilities via less intrusive means but have failed to do so in a timely manner the filing of the nftl is the only means of securing the government’s interest in the taxpayers’ property and potentially collecting the unpaid liability in response to the notice_of_determination petitioners timely filed their petition with this court on date i notices of federal_tax_lien opinion the record indicates there were two separate notices of federal_tax_lien filed with respect to income_tax liabilities in the first notice_of_federal_tax_lien was filed with respect to the form_5329 10-percent additional tax_liability and the second notice_of_federal_tax_lien was filed with respect to the income_tax_liability for other than the 10-percent additional tax the second notice_of_federal_tax_lien did not include the form_5329 10-percent additional income_tax_liability petitioners concede this court lacks jurisdiction over the unpaid 10-percent additional tax_liability because they did not timely submit a request for an administrative hearing with respect to the first notice_of_federal_tax_lien see sec_6320 123_tc_1 affd 412_f2d_819 7th cir petitioners timely submitted a request for an administrative hearing with respect to the second notice_of_federal_tax_lien see sec_6320 although the first and second notices of federal_tax_lien include a income_tax_liability they cover different types of unpaid taxes see sec_6320 sec_301_6320-1 proced admin regs therefore this court has jurisdiction to review respondent’s notice_of_determination with respect to unpaid tax and the other years at issue in the second notice_of_federal_tax_lien ii standard of review where the validity of the underlying tax_liability is properly at issue the court will review the matter de novo 114_tc_604 114_tc_176 the underlying tax_liability is properly at issue if the taxpayer did not receive a statutory_notice_of_deficiency or otherwise have an opportunity to dispute the tax_liability sec_6330 see 118_tc_572 where the validity of the underlying tax_liability is not properly at issue the court will review the commissioner’s determination for abuse_of_discretion sego v commissioner supra pincite goza v commissioner supra pincite the abuse_of_discretion standard requires the court to decide whether the commissioner’s determination was arbitrary capricious or without sound basis in fact or law woodral v commissioner the term underlying tax_liability under sec_6330 includes amounts self-assessed under sec_6201 together with penalties and interest sec_6201 122_tc_1 sec_301_6201-1 proced admin regs t c keller v commissioner tcmemo_2006_166 fowler v commissioner tcmemo_2004_163 iii payments petitioners contend the tax_liabilities listed in the second notice_of_federal_tax_lien did not reflect the installment_agreement payments and the overpayment creditdollar_figure because the validity of the underlying tax_liabilities is properly at issue the court reviews respondent’s determinations de novo see 116_tc_60 the record indicated petitioners were credited with making payments of dollar_figure and payments of dollar_figure pursuant to their installment_agreement the record reflected all payments received by respondent for petitioners’ income_tax_liability the balance that remained is consistent with the amounts respondent is attempting to collect as stated in the second notice_of_federal_tax_lien for therefore the court finds that the second notice_of_federal_tax_lien properly reflected the installment_agreement payments iv withdrawal of notice_of_federal_tax_lien petitioners also contend that respondent abused his discretion in sustaining the second notice_of_federal_tax_lien the record indicated that the overpayment credit of dollar_figure was applied to the form_5329 10-percent additional tax_liability recorded in the first notice_of_federal_tax_lien because they were negotiating an offer-in-compromise when the lien was filed the federal government obtains a lien against all property and rights to property whether real or personal of any person liable for federal taxes upon demand for payment and failure to pay sec_6321 122_tc_287 the lien arises automatically on the date of assessment and continues until the tax_liability is satisfied or the statute_of_limitations bars enforcement sec_6322 iannone v commissioner supra pincite the notice_of_federal_tax_lien is filed with the appropriate state office or other government office in order to validate the lien against any purchaser holder of a security_interest mechanic’s_lienor or judgment lien creditor see sec_6323 lindsay v commissioner tcmemo_2001_285 affd 56_fedappx_800 9th cir the notice_of_federal_tax_lien was not filed prematurely petitioners self-assessed income_tax liabilities for the years at issue petitioners were given notice_and_demand for payment for each year at issue the second notice_of_federal_tax_lien was filed on may and mailed to petitioners on date filing of the federal_tax_lien took place after assessment and notice_and_demand for payment and at each step petitioners were properly notified the record also indicated that petitioners’ offer-in-compromise was returned before the second notice_of_federal_tax_lien was issued consequently petitioners were not negotiating an offer at the time the lien was filed the commissioner may withdraw a federal_tax_lien pursuant to sec_6323 but respondent’s failure to do so in this case is not an abuse_of_discretion see crisan v commissioner tcmemo_2007_67 ramirez v commissioner tcmemo_2005_179 stein v commissioner tcmemo_2004_124 for the foregoing reasons this court finds respondent did not abuse his discretion in sustaining the filing of the second notice_of_federal_tax_lien and respondent may proceed with collections in reaching these holdings the court has considered all arguments made and to the extent not mentioned concludes that they are moot irrelevant or without merit to reflect the foregoing decision will be entered for respondent


internal_revenue_service number release date index no department of the treasury washington d c person to contact telephone number refer reply to cc psi -- plr-111456-03 date date legend taxpayer state city project university b date dear this letter responds to your letter dated date and subsequent correspondence submitted on behalf of taxpayer requesting a private_letter_ruling under sec_42 of the internal_revenue_code taxpayer represents the following facts facts taxpayer is a state limited_partnership formed in date to acquire rehabilitate and operate b units of affordable housing located in city known as the project all of the residential units in the project must be rented to individuals who meet the income limitation applicable under sec_42 for purposes of the sec_42 low-income_housing_credit plr-111456-03 at the time of the letter_ruling request one of the project’s tenants tenant was pursuing a law degree at university on a full-time basis tenant i sec_50 years old and is single has no children and is not a dependent on another person’s federal_income_tax return within the meaning of sec_152 tenant does not fall under any of the student exceptions provided under sec_42 ruling requested taxpayer requests a ruling that tenant’s unit will be treated as a low-income_unit under sec_42 law and analysis sec_38 provides for a general_business_credit against tax that includes the amount of the current_year_business_credit sec_38 provides that the amount of the current_year_business_credit includes the low-income_housing_credit determined under sec_42 sec_42 provides that for purposes of sec_38 the amount of the low- income housing_credit determined under sec_42 for any taxable_year in a 10-year credit_period shall be an amount equal to the applicable_percentage of the qualified_basis of each qualified_low-income_building sec_42 a provides that the term low-income_unit means any unit in a building if the unit is rent-restricted as defined in sec_42 and the individuals occupying the unit meet the income limitation applicable under sec_42 to the project for which the building is a part sec_42 provides that a unit will not fail to be treated as a low-income_unit merely because it is occupied i by an individual who is i a student and receiving assistance under title iv of the social_security act or ii enrolled in a job training program receiving assistance under the job training partnership act or under other similar federal state or local laws or ii entirely by full-time students if the students are i single parents and their children and the parents and children are not dependents as defined in sec_152 of another individual or ii married and file a joint_return in the instant case tenant is a 50-year old single individual pursuing a law degree on a full-time basis tenant is income-qualified under sec_42 and not a dependent within the meaning of sec_152 tenant does not fall within the specific exceptions for students under sec_42 nevertheless based solely on the above facts and representations we believe tenant’s unit is a low-income_unit for purposes of sec_42 provided the unit otherwise qualifies as a low-income_unit under sec_42 plr-111456-03 no opinion is expressed or implied regarding the application of any other provision of the code or regulations specifically no opinion is expressed or implied regarding whether the project qualifies for the low-income_housing_credit under sec_42 this ruling is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent in accordance with the power_of_attorney filed with this request a copy of this letter is being sent to taxpayer and taxpayer’s first authorized representative sincerely susan j reaman susan j reaman chief branch office of associate chief_counsel passthroughs and special industries enclosure copy


department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division apr uniform issue list ke kee kee legend taxpayer a ra b irac ira d irae bank j dear nel ee el ee el ee this is in response to your letter dated date supplemented by letter dated date in which you request through your authorized representative a waiver of the 60-day rollover requirement contained in sec_408 of the internal_revenue_code code’ the following facts and representations have been submitted under penalty of perjury in support of the ruling requested taxpayer a redeemed ira b on date and was issued a check for and take the remaining taxpayer a intended to rollover dollar_figure asa distribution the check was deposited into bank j on dollar_figure at that time taxpayer a was told the funds would not be available until bes taxpayer a attempted to reach a family investment_advisor during the month of september without success during the month of october taxpayer a was away from home caring for her elderly mother also during the month of october taxpayer a deposited dollar_figure to reach a family investment_advisor upon her return home in november into ira c taxpayer a continued to attempt on monday of dollar_figure since she received the redemption from ira b deposits on friday day rollover rule into ira d and irae at that time it had been exactly days if taxpayer a had made these they would have qualified under the taxpayer a made two separate deposits each based on the facts and representations you request that the service waive the 60-day rollover requirement with respect to the distribution of dollar_figure from ira b because the failure to waive such requirement would be against equity or good conscience sec_408 of the code provides that except as otherwise provided in sec_408 of the code any amount_paid or distributed out of an ira should be included in gross_income by the payee or distributee as the case may be in the manner provided under sec_72 of the code sec_408 of the code defines and provides the rules applicable to ira_rollovers sec_408 of the code provides that sec_408 of the code does not apply to any amount_paid or distributed out of an ira to the individual for whose benefit the ra is maintained if i ii the entire amount received including money and any other_property is paid into an ira for the benefit of such individual not later than the day after the day on which the individual receives the payment or distribution or the entire amount received including money and any other_property is paid into an eligible_retirement_plan other than an ira for the benefit of such individual not later than the day after the date on which the payment or distribution is received except that the maximum amount which may be paid into such plan may not exceed the portion of the amount received which is includible in gross_income determined without regard to sec_408 of the code sec_408 of the code provides that sec_408 of the code does not apply to any amount described in sec_408 of the code received by an individual from an ira if at any time during the 1-year period ending on the day of such receipt such individual received any other amount described in sec_408 of the code from an ira which was not includible in gross_income because of the application of sec_408 of the code sec_408 of the code provides a similar 60-day rollover period for partial rollovers sec_408 of the code provides that the secretary may waive the day requirement under sec_408 and sec_408 of the code where the failure to waive such requirement would be against equity or good conscience including casualty disaster or other events beyond the reasonable control of the individual subject_to such requirement only distributions that occurred after date are eligible for the waiver under sec_408 of the code revproc_2003_16 2003_4_irb_359 date provides that in determining whether to grant a waiver of the 60-day rollover requirement pursuant to sec_408 the service will consider all relevant facts and circumstances including errors committed by a financial_institution inability to complete a rollover due to death disability hospitalization incarceration restrictions imposed by a foreign_country or postal error the use of the amount distributed for example in the case of payment by check whether the check was cashed and the time elapsed since the distribution occurred the information presented by taxpayer a demonstrates a clear intent to roll over the distribution she received from ira b during date this is demonstrated by taxpayer a’s deposit of dollar_figure into ira c and her unsuccessful attempts to contact a family investment_advisor also taxpayer a missed the deadline for rollover by only days of which of those days constituted a weekend ofthedollar_figure therefore pursuant to sec_408 of the code the service hereby waives the 60-day rollover requirement with respect fo the remaining dollar_figure in november of rollover_contribution of dollar_figure provided all other requirements of sec_408 of the code except the 60-day requirement were met with respect to such contributions these amounts will be considered rollover_contributions within the meaning of sec_408 of the code taxpayer a established ira d and ira e each with a distribution from rab the service notes that _ at this time taxpayer a has extended the filing_date of her federal_income_tax return by filing form_4868 in order to effectuate this ruling taxpayer a must file a federal_income_tax return form_1040 consistent therewith kee this ruling does not authorize the rotlover of amounts that are required to be distributed by sec_401 of the code made applicable to iras under sec_408 of the code no opinion is expressed as to the tax treatment of the transaction described herein under the provisions of any other section of either the code or regulations which may be applicable thereto this letter is directed only to the taxpayer who requested it sec_61 k of the code provides that it may not be used or cited as precedent if you wish to inquire about this ruling please contact at please address all correspondence to se t ep ra t3 sincerely yours neces vile frances v sloan manager employee_plans technical group enclosures deleted copy of this letter notice of intention to disclose notice cc wk ee k kek eee


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 b06 plr-161370-04 date april re request for extension of time to make the election not to deduct the additional first year depreciation parent --------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- taxpayer a date1 date2 lmsb official dear -------------------- --------------------------------------------------------------- ------- -------------------------- --------------------------- ---------------------------------------------------------------- this letter responds to a letter dated date and supplemental correspondence submitted by parent on behalf of taxpayer requesting an extension of time pursuant to sec_301_9100-3 of the procedure and administration regulations to make the election not to deduct the additional first year depreciation under sec_168 of the internal_revenue_code for certain qualified_property placed_in_service in the taxable_year ended date1 the a taxable_year facts parent represents that the facts are as follows taxpayer is a member_of_an_affiliated_group of corporations that is headed by parent and that files consolidated federal_income_tax returns parent timely filed its consolidated federal_income_tax return for the taxable_year ended date1 sometime on or before date2 the extended due_date for this income_tax return was date2 on this return taxpayer did not deduct the 30-percent additional first year depreciation for all qualified_property and the 50-percent additional first year depreciation for all 50-percent bonus_depreciation property placed_in_service during the a taxable_year however plr-161370-04 parent and taxpayer inadvertently failed to attach the election out statement to the return ruling requested accordingly taxpayer requests an extension of time pursuant to sec_301_9100-3 of the procedure and administration regulations to make the election not to deduct the additional first year depreciation under sec_168 for all property placed_in_service during the a taxable_year that qualifies for the additional first year depreciation law and analysis deduction for the taxable_year in which qualified_property is placed_in_service by a taxpayer sec_168 provides a 50-percent additional first year depreciation deduction for the taxable_year in which 50-percent bonus_depreciation property is placed_in_service by a taxpayer sec_168 provides a 30-percent additional first year depreciation sec_168 provides that a taxpayer may elect not to deduct the percent additional first year depreciation for any class of property placed_in_service during the taxable_year the term class of property is defined in sec_1_168_k_-1t e of the temporary income_tax regulations as meaning in general each class of property described in sec_168 for example 5-year_property sec_168 provides that a taxpayer may elect to deduct 30-percent instead of 50-percent additional first year depreciation for any class of property that is 50-percent bonus_depreciation property placed_in_service during the taxable_year if this election is made sec_1_168_k_-1t e ii a provides that the allowable additional first year depreciation deduction is determined as though the class of property is qualified_property under sec_168 sec_1_168_k_-1t e ii b further provides that a taxpayer may elect not to deduct both 30-percent and 50-percent additional first year depreciation for any class of property that is 50-percent bonus_depreciation property placed_in_service during the taxable_year sec_1_168_k_-1t e i provides that the election not to deduct additional first year depreciation must be made by the due_date including extensions of the federal tax_return for the taxable_year in which the property is placed_in_service by the taxpayer sec_1_168_k_-1t e ii provides that the election not to deduct additional first year depreciation must be made in the manner prescribed on form_4562 depreciation and amortization and its instructions the instructions to form_4562 for the a taxable_year provided that the election not to deduct the additional first year depreciation is made by attaching a statement to the taxpayer’s timely filed tax_return indicating that the taxpayer is electing not to deduct the additional first year depreciation plr-161370-04 and the class of property for which the taxpayer is making the election sec_1_168_k_-1t e ii further provides that the election is made separately by each person owning qualified_property or 50-percent bonus_depreciation property for example for each member of a consolidated_group by the common parent of the group by the partnership or by the s_corporation under sec_301_9100-1 the commissioner has discretion to grant a reasonable extension of time under the rules set forth in and to make a regulatory election 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_9100-3 provides that requests for relief under ' 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 the grant of relief will not prejudice the interests of the government conclusions based solely on the facts and representations submitted we conclude that the requirements of and have been satisfied accordingly parent and taxpayer are granted calendar days from the date of this letter to make the election not to deduct the additional first year depreciation under sec_168 for all property placed_in_service by taxpayer during the a taxable_year that qualifies for the additional first year depreciation this election must be made by parent filing an amended consolidated federal tax_return for that taxable_year with a statement indicating that taxpayer is electing not to deduct the additional first year depreciation for all property placed_in_service during the taxable_year ended date1 except as specifically set forth above we express no opinion concerning the federal_income_tax consequences of the facts described above under any other provisions of the code specifically no opinion is expressed or implied on whether any item of depreciable_property placed_in_service in the taxable_year ended date1 is eligible for the additional first year depreciation deduction in accordance with the power_of_attorney we are sending copies of this letter to taxpayers authorized representatives we are also sending a copy of this letter to the lmsb official plr-161370-04 this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent sincerely heather c maloy heather c maloy associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes


t c summary opinion united_states tax_court cristina a osorio petitioner v commissioner of internal revenue respondent docket no 25924-07s filed date cristina a osorio pro_se christine k lane for respondent dean special_trial_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 this opinion shall not be treated as precedent for any other case unless otherwise indicated subsequent section references are to the internal_revenue_code in effect for the year in issue and all rule references are to the tax_court rules_of_practice and procedure for respondent determined a dollar_figure deficiency in petitioner’s federal_income_tax the issue remaining for decision1 is whether petitioner is entitled to itemized_deductions in excess of the standard_deduction background some of the facts have been stipulated and are so found the stipulation of facts and the exhibits received into evidence are incorporated herein by reference when the petition was filed petitioner resided in florida during petitioner worked for southern wine and spirits as a sales consultant her customer accounts were in the greater miami area she drove her own vehicles to service her customer accounts which were on an established route that she had to stick to to get orders she was not reimbursed by her employer for her expenditures instead she claimed dollar_figure in unreimbursed employee_expenses on her schedule a itemized_deductions before application of the sec_67 2-percent floor on her form_2106 employee business_expenses she reported her expenses as follows 1petitioner presented neither evidence nor argument that she is entitled to her claimed dollar_figure deduction for tax preparation fees petitioner is therefore deemed to have conceded the issue see 61_tc_311 mikalonis v commissioner tcmemo_2000_281 description vehicle expense parking fees tolls and transportation travel_expenses unspecified business_expenses meals and entertainment total amount dollar_figure -0- big_number -0- big_number petitioner’s dollar_figure deduction for vehicle expense was based upon big_number business miles at standard mileage rates of and cents per mile for two vehicles for vehicle sec_1 and she reported business miles of big_number and big_number and other miles of and big_number for a total of big_number and big_number miles respectively she did not claim a deduction on her form_2106 for the actual transportation_expenses of her vehicles i burden_of_proof discussion the commissioner’s determinations in a notice_of_deficiency are presumed correct and the taxpayer bears the burden to prove that the determinations are in error see rule a 290_us_111 but the burden_of_proof on factual issues that affect the taxpayer’s tax_liability may be shifted to the commissioner where the taxpayer introduces credible_evidence with respect to the issue and the taxpayer has satisfied certain conditions see sec_7491 petitioner has not alleged that sec_7491 applies and she has neither complied with the substantiation requirements nor maintained all required records see sec_7491 and b accordingly the burden_of_proof remains on her ii unreimbursed employee_expenses sec_162 authorizes a deduction for all the ordinary and necessary expenses paid_or_incurred during the taxable_year in carrying on any trade_or_business but as a general_rule deductions are allowed only to the extent that they are substantiated sec_274 no deductions are allowed for gifts listed_property or traveling entertainment amusement or recreation unless substantiated taxpayers must keep records sufficient to establish the amount of the items required to be shown on their federal_income_tax returns if the taxpayer establishes that he has incurred a deductible expense yet is unable to substantiate the exact amount the court may estimate a deductible amount in some circumstances 39_f2d_540 2d cir but the court cannot estimate a taxpayer’s expenses with respect to the items enumerated in sec_274 50_tc_823 affd per curiam 412_f2d_201 2d cir rodriguez v commissioner tcmemo_2009_22 the strict substantiation requirements of sec_274 preclude the court and taxpayers from approximating their expenses 2the term listed_property is defined to include passenger automobiles and cell phones sec_280f v sec_274 and the regulations thereunder require taxpayers to substantiate their deductions by adequate_records or sufficient evidence to corroborate the taxpayer’s own testimony as to the amount of the expenditure or use the time of the expenditure or use the place of the expenditure or use the business_purpose of the expenditure or use and the business relationship to the taxpayer of the persons entertained or receiving the gift see sec_1_274-5t and b temporary income_tax regs fed reg date as to the rules of substantiation the temporary_regulation provides that taxpayers must maintain and produce such substantiation as will constitute proof of each expenditure or use sec_1_274-5t temporary income_tax regs fed reg date written evidence has considerably more probative value than oral evidence and the probative value of written evidence is greater the closer in time it is to the expenditure or use id although a contemporaneous log is not required a record made at or near the time of the expenditure or use that is supported by sufficient documentary_evidence has a higher degree of credibility than a subsequently prepared statement id the corroborative evidence required to support a statement not made at or near the time of the expenditure or use must have a high degree of probative value to elevate the statement and evidence to the level of credibility reflected by a record made at or near the time of the expenditure or use supported by sufficient documentary_evidence id to satisfy the adequate_records requirement of sec_274 the taxpayer shall maintain an account book diary log statement of expense trip sheets or similar record and documentary_evidence that in combination are sufficient to establish each element of expenditure or use sec_1 5t c i temporary income_tax regs fed reg date the adequate record must be prepared or maintained in such manner that each recording of an element or use is made at or near the time of the expenditure or use sec_1 5t c ii temporary income_tax regs fed reg date ‘ m ade at or near the time of the expenditure or use’ means that the elements of an expenditure or use are recorded at a time when in relation to the use or making of an expenditure the taxpayer has full present knowledge of each element of the expenditure or use’ sec_1_274-5t temporary income_tax regs fed reg date the level of detail required in an adequate record to substantiate the taxpayer’s business use may vary depending on the facts and circumstances sec_1_274-5t temporary income_tax regs fed reg date for example a taxpayer’s use of a vehicle for both business and personal purposes and whose only business use of the vehicle is to make deliveries to customers on an established route may satisfy the adequate record requirement by recording the total number of miles driven during the taxable_year the length of the delivery route once and the date of each trip at or near the time of the trips or establishing the date of each trip with a receipt record of delivery or other documentary_evidence id to substantiate petitioner’s claimed deduction for unreimbursed employee_expenses she submitted copies of her bank statements for the period date through date a calendar that sets forth the customer’s name the purpose of the trip and the various miles petitioner drove a pm route list an on premise marketing report and her testimony a petitioner’s deduction for vehicle expense sec_1 deduction based on the standard mileage rate petitioner testified that the mileage figures were approximations of her mileage accrued between each account between an account and her employer’s office between an account and her home or between her home and her employer’s office on occasions she also testified that she had recorded bits and 3for the sake of completeness petitioner admitted that she is not entitled to deductions in for amounts expended during the period dec through see also sec_1_461-1 and income_tax regs pieces of it in but she had to go back and put some stuff in there at the current_year and refill some stuff in based on my account list and she testified that she used her vehicles for personal purposes very locally like locally petitioner’s testimony established that her mileage figures were mere estimates of her business use and that she did not accurately record her business mileage at or near the time of her business use see sec_1_274-5t c temporary income_tax regs fed reg date the court therefore finds that petitioner is not entitled to her deduction for mileage see sanford v commissioner t c pincite rodriguez v commissioner tcmemo_2009_22 see also sec_4although sec_1_274-5t temporary income_tax regs fed reg date provides that the length of an established delivery route may be recorded once if the recording takes place at or near the time of the trip the court does not accord much weight to petitioner’s calendar she admitted that she did not accurately record the information at or near the time of the trip and that she supplemented the information based on information from the current_year putting aside sec_1_274-5t temporary income_tax regs supra the court also does not accord much weight to petitioner’s calendar because she admitted that she merely copied the information from one week to the next eg the descriptions for each monday and the other days are the same throughout 5the court notes that any mileage accrued or actual expenses petitioner paid in commuting between her residence and either her employer’s office or a customer account are nondeductible personal expenses see sec_162 sec_262 413_us_838 sec_1_162-2 sec_1_262-1 income_tax regs 274-5t c temporary income_tax regs supra the substantiation requirements are designed to encourage taxpayers to maintain records and documentary_evidence deduction based on actual expenses although petitioner did not claim a deduction on her form_2106 for the actual costs of her transportation_expenses she now asserts entitlement to a deduction for gas of dollar_figure car payments of dollar_figure insurance of dollar_figure and repairs of dollar_figure as a general_rule however taxpayers are prohibited from claiming deductions for automobile expenses using both the actual cost method and the standard mileage rate see tesar v commissioner tcmemo_1997_207 revproc_2004_64 sec_5 2004_2_cb_898 taxpayers generally may deduct an amount based on the standard mileage rate or actual costs in addition because the court has concluded that petitioner’s evidence was not sufficient to substantiate her claimed deduction based on the standard mileage rate it also does not sufficiently substantiate her claimed deduction based on the actual costs of her transportation_expenses petitioner therefore is not entitled to her claimed deduction based on the actual costs of her transportation_expenses see sanford v commissioner supra pincite rodriguez v commissioner supra deduction for parking fees tolls and transportation_expenses petitioner claimed a dollar_figure deduction on her form_2106 for parking fees tolls and transportation_expenses deductions for these expenses may generally be deducted as a separate item see revproc_2004_64 sec_5 c b pincite petitioner however has substantiated expenditures_for parking fees of only dollar_figure the court therefore finds that petitioner is entitled to only a dollar_figure deduction for parking fees subject_to sec_67 relating to the 2-percent floor on miscellaneous_itemized_deductions see cohan v commissioner f 2d pincite estimates of a taxpayer’s deductions bear heavily against the taxpayer whose inexactitude is of his or her own making b petitioner’s deduction for unspecified business expenses6 meals and entertainment_expenses although petitioner did not claim a deduction on her form_2106 for meals and entertainment_expenses she now asserts entitlement to a dollar_figure deduction for meals and entertainment_expenses on several pages of petitioner’s bank statements she 6petitioner testified that she did not know what her claimed deduction of dollar_figure for unspecified business_expenses consisted of except as otherwise noted herein the court sustains respondent’s disallowance of petitioner’s deduction for unspecified business_expenses handwrote food w customer meals w customer or meals for charges for several dates at various restaurants petitioner’s evidence however fails to prove the business relationship to petitioner of the persons entertained see sec_1_274-5t temporary income_tax regs fed reg date requiring the record to show the name title or other designation of the persons entertained sufficient to establish the business relationship to the taxpayer in addition it does not indicate the business reason for the entertainment the nature of the business benefit derived or expected to be derived an account of the entertainment or the nature of any business_discussion or activity see sec_1 5t b iv c ii b temporary income_tax regs fed reg date because petitioner did not testify about this issue or provide any other corroborating evidence the court finds that her handwritten notations are not adequate to substantiate the business_purpose of her meals and entertainment_expenses see sec_1_274-5t temporary income_tax regs supra see also fed r evid c 294_f2d_328 4th cir affg 34_tc_845 87_tc_74 accordingly petitioner is not entitled to a dollar_figure deduction for meals and entertainment_expenses see sanford v commissioner supra pincite rodriguez v commissioner supra see also fed r evid c travel_expenses although petitioner did not claim a deduction on her form_2106 for travel_expenses she now asserts entitlement to a dollar_figure deduction for travel_expenses on petitioner’s bank statement for the period march through date she handwrote travel for work next to a charge for ioa admissions in orlando florida on date sec_1_274-5t and c ii b temporary income_tax regs fed reg date provides that the taxpayer must record the business reason for the travel or the nature of the business benefit derived or expected to be derived on account of the travel unless the business_purpose is evident from the surrounding facts and circumstances for example in the case of a salesman calling on customers on an established sales route a written explanation of the business_purpose of such travel ordinarily will not be required sec_1_274-5t temporary income_tax regs supra petitioner’s evidence shows that her customer accounts were within the greater miami area the business_purpose of petitioner’s travel to orlando florida is therefore not evident from the facts and circumstances because petitioner did not testify about this issue or provide any other corroborating evidence the court finds that her handwritten notation is not adequate to substantiate the business_purpose of her travel see sec_1_274-5t temporary income_tax regs supra see also fed r evid c urban redev corp v commissioner supra pincite tokarski v commissioner supra pincite accordingly petitioner is not entitled to a dollar_figure deduction for travel_expenses see sanford v commissioner t c pincite rodriguez v commissioner tcmemo_2009_22 gift_expenses although petitioner did not claim a deduction on her schedule a for gift_expenses she now asserts entitlement to a dollar_figure deduction for gift_expenses on several pages of petitioner’s bank statements she handwrote gift_for customer for charges for several dates at various merchants petitioner’s evidence however does not describe the gifts see sec_1_274-5t temporary income_tax regs fed reg date it does not substantiate the business reason for the gifts or the nature of the business benefit derived or expected to be derived on account of the gifts see sec_1_274-5t temporary income_tax regs fed reg date and it does not substantiate the business relationship to petitioner of the gift recipients see sec_1_274-5t c temporary income_tax regs fed reg date the taxpayer must record the occupation or other information relating to the gift recipient including name title or other designation sufficient to establish the business relationship in addition without a receipt or other corroborative evidence to substantiate petitioner’s claim that she purchased gifts for her customers the court does not accept her self-serving statement that her purchases were made for those purposes see urban redev corp v commissioner supra pincite tokarski v commissioner supra pincite sec_1_274-5t temporary income_tax regs supra see also fed r evid c accordingly petitioner is not entitled to a dollar_figure deduction for gift_expenses see sanford v commissioner supra pincite rodriguez v commissioner supra cell phone expenses although petitioner did not claim a deduction on her form_2106 for cell phone expenses she now asserts entitlement to a dollar_figure deduction for cell phone expenses on several pages of petitioner’s bank statements she handwrote verizon phone bill verizon phone verizon pymt etc for charges for several dates by check which do not include the payee’s name or checkcard verizon wireless petitioner also testified that she used her cell phone mostly for work and rarely used it for personal purposes petitioner’s evidence however does not substantiate the amount of her business use or her total use see sec_1 5t b i b temporary income_tax regs fed reg date and it does not substantiate the business_purpose of each business use see sec_1_274-5t temporary income_tax regs fed reg date in addition without a receipt or other corroborative evidence to substantiate petitioner’s claim of payments to verizon for her cell phone use by check the court does not accept her self- serving statement that the checks were issued for that purpose see urban redev corp v commissioner f 2d pincite tokarski v commissioner t c pincite sec_1_274-5t temporary income_tax regs supra see also fed r evid c accordingly petitioner is not entitled to a dollar_figure deduction for cell phone expenses see sanford v commissioner supra pincite rodriguez v commissioner supra see also fed r evid c supplies expenses although petitioner did not claim a deduction on her schedule a for supplies expenses she now asserts entitlement to a dollar_figure deduction for supplies expenses petitioner’s handwritten notations on her bank statements indicate that her supplies consist of dollar_figure for folders pens paper etc purchased at cvs and dollar_figure for work-supplies purchased at gulf liquors petitioner however did not provide any receipts or testimony to substantiate her deduction for supplies without other corroborative evidence the court does not accept her self- serving statement that the items were purchased for work purposes see urban redev corp v commissioner f 2d pincite tokarski v commissioner t c pincite see also fed r evid c accordingly petitioner is not entitled to a dollar_figure deduction for supplies expenses clothing shoes and dry cleaning expenses although petitioner did not claim a deduction on her schedule a for clothing shoes and dry cleaning expenses she now asserts entitlement to a dollar_figure deduction for clothing shoes and dry cleaning expenses on several pages of her bank statements she handwrote clothes for work clothing for work and dry cleaning clothing is a deductible expense only if it is required for the taxpayer’s employment is unsuitable for general or personal wear and is not so worn see 74_tc_1266 30_tc_757 if the cost of acquiring clothing is deductible then the cost of maintaining the clothing is also deductible 23_tc_218 affd 230_f2d_79 7th cir petitioner testified that she was sometimes required to wear logo’d shirts that her employer_provided but her clothing expenses did not include amounts for logo’d shirts rather her clothing expenses included amounts for clothing that she purchased for professional-looking apparel and shoes according to petitioner she did not necessarily wear the purchased clothing outside of work but i guess the purchased clothing could have been worn outside of work she also testified that her dry cleaning expenses were for the purchased clothing that i wore to work and also for the logo’d shirts petitioner’s purchased clothing and shoes consist of items that are suitable for general or personal wear and she has failed to prove otherwise the court therefore finds that the amounts were expended for personal purposes and as such are not deductible see sec_262 which generally precludes deductions for personal living or family_expenses similarly the portion of the dry cleaning expenses for petitioner’s purchased clothing was also expended for personal purposes and as such is not deductible see id fisher v commissioner supra the court will however allow petitioner a deduction for the dry cleaning of her logo’d shirts of dollar_figure subject_to sec_67 relating to the 2-percent floor on miscellaneous_itemized_deductions see cohan v commissioner f 2d pincite grooming expenses although petitioner did not claim a deduction on her schedule a for upkeep grooming expenses she now asserts entitlement to a dollar_figure deduction for grooming expenses petitioner’s grooming expenses relate to amounts she expended on her nails and hair petitioner claims that she is entitled to deduct these amounts because she believes they are work related since she had to have a certain look grooming however is an inherently_personal expense and amounts expended for grooming are not deductible regardless of whether an employer requires a certain look hynes v 7this amount is based on one-half of the following substantiated expenditures date description amount total sy8 carriage clea sy8 carriage clea sy8 carriage clea sy8 carriage clea carriage cleaners dry-clean usa dollar_figure dollar_figure dollar_figure dollar_figure dollar_figure dollar_figure dollar_figure 1the court suspects that the amounts petitioner claims that she paid for dry cleaning expenses at marks café were not paid for those purposes because petitioner has not proven that the amounts were paid for dry cleaning the court will not allow deductions for those amounts see 39_f2d_540 2d cir commissioner supra pincite accordingly petitioner is not entitled to a dollar_figure deduction for grooming expenses iii itemized_deductions the court has allowed petitioner a miscellaneous itemized_deduction for unreimbursed employee_expenses of dollar_figure see supra pp and note the dollar_figure amount however does not exceed the 2-percent floor of sec_67 thus petitioner is not entitled to the claimed deduction taking into account the court’s determinations and petitioner’s concession see supra note her remaining itemized_deductions are state sales_taxes of dollar_figure and charitable_contributions of dollar_figure the total of dollar_figure is less than the dollar_figure standard_deduction for see revproc_2004_71 sec_3_10 2004_2_cb_970 the court assumes that petitioner would want the greater amount and therefore sustains respondent’s use of the standard_deduction see sec_63 george v commissioner tcmemo_2006_121 taxpayers may either elect the standard_deduction or elect to itemize deductions other arguments made by the parties and not discussed herein were considered and rejected as irrelevant without merit and or moot 8petitioners’ adjusted_gross_income for is dollar_figure to exceed the 2-percent floor of sec_67 petitioner’s miscellaneous_itemized_deductions must exceed dollar_figure to reflect the foregoing decision will be entered under rule


t c summary opinion united_states tax_court charlene diane navarre petitioner v commissioner of internal revenue respondent docket no 30177-07s filed date charlene diane navarre pro_se bryan e sladek for respondent paris judge this case was heard pursuant to the provisions of section of the internal_revenue_code in effect at the time the petition was filed pursuant to sec_7463 the decision to be entered is not reviewable by any other court and this opinion shall not be treated as precedent for any other case 1section references are to the internal_revenue_code_of_1986 as amended on date respondent mailed to petitioner a notice_of_determination concerning collection action s under sec_6320 and or notice_of_determination for a tax_liability of petitioner for in response to that notice and pursuant to sec_6320 and sec_6330 petitioner timely petitioned this court for review of respondent’s determination sustaining a notice_of_federal_tax_lien nftl the issue for decision is whether the appeals_office abused its discretion in upholding respondent’s filing of a nftl background on date respondent recorded a notice_of_federal_tax_lien and levy for income_tax due from petitioner for tax_year petitioner timely requested a collection_due_process cdp hearing under sec_6330 with respondent’s appeals_office as a result of the hearing the appeals_office determined that the recording of the notice_of_federal_tax_lien was appropriate and that the lien should not be withdrawn it was also determined that collection of the tax_liability due by levy was no longer necessary because a collection alternative reporting the account as currently not collectible had been reached no offer-in-compromise was agreed to or offered by 2petitioner’s residence will be affected if the filing of the nftl is sustained petitioner during the cdp hearing the appeals office’s conclusions were memorialized in the notice_of_determination on date petitioner then residing in the state of michigan filed a petition with this court requesting that the federal_tax_lien not be sustained on date a trial was held in detroit michigan to determine whether the appeals_office abused its discretion by determining that the notice_of_federal_tax_lien should be sustained petitioner testified that she had equity in her residence but contests sustaining the federal_tax_lien because the lien makes her feel as if she does not own her house anymore tr pincite discussion under sec_6321 if a person liable for a tax fails to pay it after demand the unpaid amount including any interest and civil penalties becomes a lien in favor of the united_states upon all property and rights to property whether real or personal belonging to such person the lien arises when the tax is assessed sec_6322 sec_6323 explains that the internal_revenue_service irs may file a notice_of_federal_tax_lien to protect its lien against subsequent creditors and purchasers of the taxpayer’s property 3at trial the court tried several times unsuccessfully to evoke from petitioner an argument or legal basis why the tax_lien should not be sustained this was the most cogent response the court received a taxpayer may appeal the filing of a notice of tax_lien to the irs under sec_6320 by requesting an administrative hearing to review the notice_of_federal_tax_lien the taxpayer is additionally afforded the opportunity for judicial review of a determination sustaining the notice_of_federal_tax_lien in the u s tax_court pursuant to sec_6330 petitioner has chosen to seek judicial review of respondent’s determination petitioner concedes her underlying tax_liability thus the court reviews the determination to see whether there has been an abuse_of_discretion by respondent’s appeals_office in the determination see 117_tc_183 citing 117_tc_117 the court has described the standard by which respondent’s determinations in cdp cases are reviewed as an abuse_of_discretion meaning arbitrary capricious clearly unlawful or without sound basis in fact or law 122_tc_32 rev’d on other grounds 439_f3d_1009 9th cir see also 112_tc_19 utilizing this standard this court does not find that respondent’s appeals_office abused its discretion respondent simply used the available methods under the internal_revenue_code for protecting the united states’ claims against subsequent creditors conclusion based on the record the court holds that the appeals_office did not abuse its discretion in determining that respondent’s filing of a nftl with respect to petitioner’s residence was an appropriate collection action finally in reaching the conclusions described herein the court has considered all arguments made and to the extent not mentioned above finds them to be moot irrelevant or without merit to reflect the foregoing decision will be entered for respondent


internal_revenue_service number release date index number -------------------------------- ----------------------------------------- -------------------------------------- ----------------------- department of the treasury washington dc person to contact ---------------- id no ------------- telephone number --------------------- refer reply to cc psi b02 - plr-110052-06 date date x -------------------------------------------------- ----------------------------------------------------------- reit -------------------------------------------------- ---------------------------------------------- taxpayer ----------------------------- ----------------------- ------------ ------------ ---------------------- -------------------------- state state date date dear ---------------- taxpayer requesting a ruling under sec_301_9100-1 and sec_301_9100-3 of the procedure and administration regulations that taxpayer be granted an extension of time to elect to be treated as an association_taxable_as_a_corporation for federal tax purposes under sec_301_7701-3 facts this letter responds to a letter dated date written on behalf of according to the information submitted x a state limited_liability_company is the sole owner of reit a state real_estate_investment_trust reit is the direct owner of taxpayer a state limited_liability_company taxpayer was originally a tax exempt_corporation but was converted on date to a limited_liability_company x relied on its tax professional to analyze the tax ramifications of the date plr-110052-06 conversion and to advise it of all necessary elections an election to treat taxpayer as an association_taxable_as_a_corporation was required to be filed by date prior to the due_date of entity classification election x s was not advised nor did it know that it should make an election to treat taxpayer as an association_taxable_as_a_corporation it was not until after the election due_date that x was advised that it should have made the election with respect to taxpayer upon learning that the election should have been filed taxpayer filed the instant private_letter_ruling request seeking relief to make a late entity election law and analysis sec_301_7701-3 provides in part that a business_entity that is not classified as a corporation under sec_301_7701-2 or an eligible_entity can elect its classification for federal tax purposes as provided in this section an eligible_entity with one member may be classified as either an association and thus a corporation under sec_301_7701-2 or as a disregarded_entity sec_301_7701-3 provides in part that an eligible_entity may elect to be classified other than as provided under sec_301_7701-3 by filing form_8832 entity classification election with the service_center designated on the form sec_301_7701-3 provides in part that an election made under sec_301_7701-3 will be effective on the date specified by the entity on form_8832 or on the date filed if no such date is specified on the election form the effective date specified on form_8832 can not be more than days prior to the date on which the election is filed and can not be more than months after the date on which the election 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 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 an automatic_extension 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 plr-110052-06 conclusions based solely on the facts submitted and the representations made we conclude that taxpayer has satisfied the requirements of sec_301_9100-3 as a result taxpayer is granted an extension of time of sixty days from the date of this letter to file a properly executed form_8832 electing to be treated as an association_taxable_as_a_corporation with the appropriate service_center effective date that purpose a copy of this letter should be attached to the election a copy is enclosed for except as specifically set forth above no opinion is expressed or implied concerning the federal tax consequences of the facts described above under any other provision of the code this ruling is directed only to the taxpayer who requested it sec_6110 of the internal_revenue_code provides that it may not be used or cited as precedent pursuant to the power_of_attorney on file with this office a copy of this letter is being sent to taxpayer’s authorized representative sincerely enclosures copy of this letter copy for sec_6110 purposes heather c maloy associate chief_counsel passthroughs and special industries


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 b09 plr-140579-05 date may legend husband ------------------------------------------------------------------------------------------------- ------------------------- ------------------------- ------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------- ----------------------- ------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------- ----------------------- ------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------- ----------------------- ------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------- ----------------------- ------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------- ----------------------- ----------------------- wife trust trust trust trust trust trust plr-140579-05 trust ------------------------------------------------------------------------------------------------- ----------------------- ------- ------- year year dear -------------------- this is in response to your letter dated date and prior husband and wife each filed a form_709 united_states gift and generation- the facts and representations submitted are summarized as follows husband correspondence requesting an extension of time under sec_2642 of the internal_revenue_code and sec_301_9100-3 of the procedure and administration regulations to allocate husband’s and wife’s generation-skipping_transfer gst exemptions to transfers to trust trust trust trust trust trust and trust created trust trust trust and trust in year each trust is for the primary benefit of one of husband’s children and has gst potential in year husband also created trust trust and trust each for the benefit of one of his grandchildren during year husband transferred non-publicly traded stock to trust trust trust trust trust trust and trust skipping transfer_tax return for year and elected to split_gifts under sec_2513 husband’s gift_tax_return allocated gst_exemption to the transfers to trust trust and trust but based on the valuations listed on the return the allocations were in excess of his share of those transfers no gst_exemption was allocated on husband’s gift_tax_return to the transfers to trust trust trust and trust in addition no gst_exemption was allocated on wife’s gift_tax_return trust and trust in year husband filed a gift_tax_return for year husband’s gift_tax_return included an election to split_gifts with wife but no allocation of gst_exemption wife did not file a gift_tax_return for year professional to properly prepare their gift_tax returns the qualified_tax professional inadvertently failed to prepare wife’s year gift_tax_return and to properly allocate each taxpayer’s gst_exemption to the year and year transfers to trust trust trust trust trust trust and trust of their respective gst_exemption to the year and year transfers to the seven trusts in addition husband has requested a ruling that the gst_exemption allocated husband and wife have each requested extensions of time to make allocations husband and wife each made additional transfers of stock to trust trust in both year and year husband and wife relied upon a qualified_tax sec_2513 provides that paragraph shall apply only if both spouses sec_2513 provides that a gift made by one spouse to any person other sec_2601 imposes a tax on every generation-skipping_transfer a generation- plr-140579-05 on his year gift_tax_return is void to the extent that the allocation exceeds the amount necessary to obtain a zero inclusion_ratio law and analysis than the other spouse shall for the purposes of chapter be considered as made one-half by him and one-half by his spouse but only if at the time of the gift each spouse is a citizen or resident_of_the_united_states have signified under the regulations provided for in sec_2513 their consent to the application of sec_2513 in the case of all such gifts made during the calendar_year by either while married to the other skipping transfer is defined under sec_2611 as a taxable_distribution a taxable_termination and a direct_skip sec_2631 in effect at the time of the transfer provided that for purposes of determining the inclusion_ratio every individual shall be allowed a gst_exemption of dollar_figure that may be allocated by such individual or his executor to any property with respect to which such individual is the transferor exemption under sec_2631 may be made at any time on or before the date prescribed for filing the estate_tax_return for such individual’s estate determined with regard to extensions regardless of whether such a return is required to be filed provides that an allocation of gst_exemption to a_trust is void to the extent the amount allocated exceeds the amount necessary to obtain an inclusion_ratio of zero with respect to the trust sec_2642 provides that except as provided in sec_2642 if the allocation of the gst_exemption to any transfers of property is made on a gift_tax_return filed on or before the date prescribed by sec_6075 for such transfer or is deemed to be made under sec_2632 or c the value of such property for purposes of sec_2642 shall be its value as finally determined for purposes of chapter within the meaning of sec_2001 or in the case of an allocation deemed to have been made at the close of an estate_tax_inclusion_period on and after the close of such estate_tax_inclusion_period prescribe such circumstances and procedures under which extensions of time will be sec_2632 provides that any allocation by an individual of his or her gst sec_2642 provides generally that the secretary shall by regulation sec_26 b of the generation-skipping_transfer_tax regulations notice_2001_50 2001_2_cb_189 provides that under sec_2642 the time sec_2642 provides that in determining whether to grant relief under plr-140579-05 granted to make an allocation of gst_exemption described in sec_2642 or and an election under sec_2632 or c such regulations shall include procedures for requesting comparable relief with respect to transfers made before the date of the enactment of sec_2642 this paragraph the secretary shall take into account all relevant circumstances including evidence of intent contained in the trust instrument or instrument of transfer and such other factors as the secretary deems relevant for purposes of determining whether to grant relief under this paragraph the time for making the allocation or election shall be treated as if not expressly prescribed by statute for allocating the gst_exemption to lifetime transfers and transfers at death the time for electing out of the automatic allocation rules and the time for electing to treat any trust as a gst_trust are to be treated as if not expressly prescribed by statute the notice further provides that taxpayers may seek an extension of time to make an allocation described in sec_2642 or b or an election described in sec_2632 or c under the provisions of sec_301_9100-3 sec_301_9100-1 provides that the commissioner has discretion to grant a reasonable extension of time under the rules set forth in sec_301_9100-2 and sec_301_9100-3 to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except in subtitles e g h and i for regulatory elections that do not meet the requirements of sec_301_9100-2 must be made under the rules of sec_301_9100-3 date is prescribed by a notice published in the internal_revenue_bulletin in accordance with sec_2642 and notice_2001_50 taxpayers may seek an extension of time to make an election described in sec_2642 or b or an election described in sec_2632 or c under the provisions of sec_301_9100-3 provides the evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government reasonably and in good_faith if the taxpayer reasonably relied on a qualified_tax sec_301_9100-3 provides that in general requests for extensions of time sec_301_9100-3 provides that a taxpayer is deemed to have acted under sec_301_9100-1 a regulatory election includes an election whose due requests for relief under sec_301_9100-3 will be granted when the taxpayer in addition wife is granted an extension of time of days from the date of this plr-140579-05 professional including a tax professional employed by the taxpayer and the tax professional failed to make or to advise the taxpayer to make the election conclusion based on the facts submitted and the representations made we conclude that the requirements of sec_301_9100-3 have been satisfied therefore husband is granted an extension of time of days from the date of this letter to allocate gst_exemption to the year and year transfers to trust trust trust and trust husband should file a supplemental form_709 for each year and should include a notice of allocation properly allocating the taxpayer’s gst_exemption to the transfers to the trusts in accordance with sec_26 b any allocation of gst_exemption made on husband’s gift_tax_return to trust trust or trust is void to the extent that the allocation exceeds the amount necessary to obtain a zero inclusion_ratio letter to allocate gst_exemption to trust trust trust trust trust trust and trust for the transfers in year and year wife should file a form_709 for year and a supplemental form_709 for year each form_709 should include a notice of allocation properly allocating her gst_exemption to the transfers to the trusts the allocations made by husband and wife will be effective as of the date of the transfers and the gift_tax value of the transfers to the trusts will be used in determining the amount of gst_exemption to be allocated each trust’s inclusion_ratio will be determined under sec_2642 and sec_2642 a copy of this letter should be attached to the supplemental form and filed with the internal_revenue_service center cincinnati ohio a copy is included for this purpose concerning the federal tax consequences of any aspect of any transaction or item discussed or referenced in this letter we are specifically not ruling on the gift_tax value of the stock transferred to the trusts 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 being sent to the taxpayer’s representative pursuant to the power_of_attorney on file with this office a copy of this letter is except as expressly provided herein no opinion is expressed or implied the rulings contained in this letter are based upon information and plr-140579-05 provides that it may not be used or cited as precedent this ruling is directed only to the taxpayer requesting it sec_6110 sincerely heather c maloy heather c maloy associate chief_counsel passthroughs and special industries copy of this letter for sec_6110 purposes copy of this letter enclosures cc