t c memo united_states tax_court meserve drilling partners regional resources inc f k a r r energy inc tax_matters_partner petitioner v commissioner of internal revenue respondent columbia energy fund regional resources inc f k a r r energy inc tax_matters_partner petitioner v commissioner of internal revenue respondent docket nos filed date robert b martin jr for petitioner jack h klinghoffer for respondent memorandum opinion dawson judge these cases were assigned to special_trial_judge larry l nameroff pursuant to sec_7443a of the code and rule sec_180 sec_181 and sec_183 the court agrees with and all section references are to the internal_revenue_code in effect for the years in issue all rule references are to the tax_court rules_of_practice and procedure adopts the opinion of the special_trial_judge which is set forth below opinion of the special_trial_judge nameroff special_trial_judge these cases are before us on motion by petitioner to dismiss for lack of jurisdiction on the ground that the final partnership administrative adjustments fpaa are invalid petitioner herein is the tax_matters_partner tmp of two partnerships meserve drilling partners and columbia energy fund the principal_place_of_business of each partnership when the petitions for readjustment of partnership items were filed was in newport beach california these two cases were part of a group consisting of cases that were consolidated for purposes of trial briefing and opinion in osterhout v commissioner tcmemo_1993_251 affd in part revd in part without published opinion sub nom balboa energy fund v commissioner f 3d 9th cir date according to that opinion decisions were to be entered under rule in each of the two cases now before us respondent filed a computation under rule and petitioner thereafter filed a motion to dismiss together with a statement that petitioner had no objection to entry of decision pursuant to respondent's computation if the court denied the motion to dismiss on date respondent issued fpaa's in which she determined adjustments to partnership items as follows meserve drilling partners year adjustment to ordinary_income dollar_figure big_number columbia energy fund year adjustment to ordinary_income dollar_figure big_number in the motions to dismiss petitioner claims that the fpaa's are invalid because they did not make determinations as to partnership items on the dates they were issued and therefore cannot confer jurisdiction on this court according to petitioner's argument the regulations defining partnership items were adopted on date whereas the fpaa's were mailed on date thus petitioner argues that because no regulations existed when the fpaa's were mailed pursuant to sec_6231 all items are nonpartnership_items in addition petitioner argues that the regulation defining partnership items should not be used to retroactively confer jurisdiction on this court respondent asserts that the fpaa validly confers jurisdiction on the court and that jurisdiction can be conferred by the retroactive application of the regulation defining partnership items discussion the question of jurisdiction is a fundamental question that can be raised at any time by either party or by the court 85_tc_527 81_tc_879 moreover we have jurisdiction to determine whether we have jurisdiction 83_tc_626 83_tc_309 in a partnership action for readjustment of partnership items this court has jurisdiction when the commissioner has mailed a valid fpaa and the tax_matters_partner or other eligible_partner has timely filed a petition with the court seeking a readjustment of partnership items sec_6226 rule c if the fpaa is not valid we lack subject matter jurisdiction clovis i v commissioner 88_tc_980 87_tc_783 at a minimum the fpaa must give notice to the taxpayer that the commissioner has finally determined adjustments to the partnership return 91_tc_1069 clovis i v commissioner supra pincite petitioner's argument as to jurisdiction turns on sec_301_6231_a_3_-1 proced admin regs which defines partnership items the unified_audit and litigation procedures applicable to partnership items which are found in sections were enacted as part of the tax equity and fiscal responsibility act of tefra publaw_97_248 96_stat_648 and are effective for partnership taxable years commencing after date the tefra partnership provisions were enacted partly in response to the administrative problems experienced by the internal_revenue_service in auditing returns of partnerships particularly tax_shelter partnerships with numerous partners staff of joint comm on taxation general explanation of the revenue provisions of the tax equity and fiscal responsibility act of pincite j comm print as we stated in an earlier case interpreting the tefra partnership provisions by enacting the partnership and audit litigation procedures congress provided a method for uniformly adjusting items of partnership income loss deduction or credit that affect each partner congress decided that no longer would a partner's tax_liability be determined uniquely but the tax treatment of any partnership_item would be determined at the partnership level sec_6221 87_tc_783 alteration in original sec_6221 provides that the tax treatment of partnership items shall be determined at the partnership level except as otherwise provided in subchapter_c of chapter of the code sec_6231 provides that a partnership_item means any item required to be taken into account for the partnership's taxable_year under any provision of subtitle a of the code to the extent prescribed by the regulations as an item that is more appropriately determined at the partnership level than at the partner level sec_6231 defines nonpartnership_items as those items that are not partnership items the regulations defining partnership items were first proposed in the federal_register on date the proposed_regulations gave public notice of the treasury's intent to make the regulations effective with respect to partnership years beginning after date the date tefra was enacted sec_1 c proposed proced admin regs fed reg date the proposed_regulations enumerated items of income loss deduction or credit to be treated as more appropriately determined at the partnership level than at the partner level and therefore as partnership items id the regulations became final without substantial change on date fed reg date sec_301_6231_a_3_-1 proced admin regs states this section shall apply with respect to partnership taxable years beginning after date these regulations were issued pursuant to the authority of sec_7805 k and a sec_7805 provides sec_7805 retroactivity of regulations or rulings --the secretary may prescribe the extent if any to which any ruling or regulation relating to the internal revenue laws shall be applied without retroactive effect the code thus contemplates that a regulation is to operate retroactively except to the extent that the commissioner provides that it shall be applied without retroactive effect 91_tc_110 affd without published opinion 886_f2d_442 d c cir in the cases before the court the commissioner exercised her discretion by providing that the regulations defining partnership items would be effective for partnership taxable years ending after date coinciding with the effective date of tefra in general the retroactive application of an income_tax regulation has been reviewed for abuse_of_discretion 353_us_180 739_f2d_580 11th cir affg 79_tc_355 728_f2d_1249 9th cir affg 79_tc_355 however we do not find that the treasury committed an abuse_of_discretion with respect to the effective date of the regulations in question here petitioner's reliance on 96_tc_773 is misplaced in that case the commissioner issued a final s_corporation administrative adjustment fsaa to the tax_matters_person of eastern states for the taxable_year eastern states had only shareholders and contended that the fsaa procedure did not apply because the commissioner had issued sec_301_6241-1t c i temporary proced admin regs fed reg date which provided that a corporation with five or fewer shareholders was not subject_to the fsaa procedure however we noted that the temporary_regulation by its terms was applicable to a taxable_year of an s_corporation only if the due_date of the corporation's return for that year was on or after date eastern states casualty agency v commissioner supra pincite by contrast the regulations in issue here are by their terms effective for partnership taxable years ending after date we reject petitioner's argument that the regulations should not be applied here the legislative_history of tefra clearly indicates congress' intent generally to treat a partnership's items of income loss deduction and credit as partnership items for purposes of the unified_audit and litigation procedures see h conf rept pincite 1982_ 2_cb_600 further the issuance of the proposed_regulations in january of only a few months after the enactment of tefra provided guidance as to which items fell within the definition of partnership items and put the public on notice that the regulations would be applied to partnership years beginning after the date of tefra's enactment the proposed_regulations gave petitioners warning of things to come 360_f2d_260 10th cir accepting petitioner's contentions would lead to the absurd result that the tefra provisions would have little or no effect until date notwithstanding congress' clear mandate to the contrary because the regulations apply here there is no need to address the remainder of petitioner's argument accordingly the motions to dismiss for lack of jurisdiction will be denied appropriate orders will be issued denying petitioner's motions to dismiss for lack of jurisdiction and decisions will be entered in accordance with respondent's rule_155_computations


tax exempt and government entities department of the treasury internal_revenue_service washington d c jan division significant index number jesse sonos beibebk hike kke kee kek eere ree keke ree hrkekkeerkeerkeker ek rakekekekrerekereeereeke hhrkekekrriekeeekreeek eere errererer ter ralts be in re request for waiver of the minimum_funding_standard for krekekkekkkeekeee plan no eeeey ein kkk _krkkkkkek sponsor me kk kkrkkkeekkrereeekrkeek plan hrekekekrkerererererekrerererer dear kekkekkkkreeeee this letter is to inform you that your request for a waiver of the minimum_funding_standard for the above-named plan for the plan_year ending june _ is denied the sponsor is a non-profit academic institution the facts of the sponsor's situation show that it is experiencing significant permanent financial distress this is shown in the excess of current liabilities over current_assets and-a steep decline in operating cash flows while the sponsor has adjusted payroll reduced expenses and devised a comprehensive financial pian in an attempt to improve its financial situation its financial resources have diminished greatly due to declining enrollment and an overall economic downturn the sponsor states also that it has struggled in its efforts to raise unrestricted funds and its financial statements and recent issues involving its accreditation indicate that uncertainty exists about the college’s ability to continue as a going concern you were notified in a letter dated december tentatively denied a conference of right was held on january 20__ that your request had been - after considering all financial information the sponsor has supplied we have determined that its business hardship is not temporary furthermore even if the funding waiver were granted the sponsor’s financial submission illustrates that it would not be able to make periodic_payments to the plan sufficient to cover both the amortization payments on the funding waiver plus the future ongoing cost of the plan therefore because the sponsor's financial hardship does not appear to be temporary and it is unable to satisfy future minimum_funding requirements your request for a waiver of the minimum_funding_standard for the plan_year ending june is denied you should note that excise_taxes under sec_4971 of the internal_revenue_code code are currently due on the minimum_funding requirement for the plan_year ending june taxes you should file a form_5330 as soon as possible to report and pay the this ruling is directed only to the taxpayer that requested it sec_6110 of the code provides that it may not be used or cited by others as precedent we have sent a copy of this letter to the manager ep classification in baltimore maryland to the manager ep compliance unit in chicago illinois if you require further assistance in this matter please contact id - areeresy at sincerely yours lith b yu william hulteng manager employee_plans technical cc


washington dc department of the treasury internal_revenue_service number release date index number person to contact telephone number refer reply to cc psi - plr-119788-02 date date legend a b c d e f g h i j k l m n o p plr-119788-02 q r s t u v w x y z country1 country2 country3 d1 d2 d3 d4 d5 dear this letter responds to a letter dated date and subsequent correspondence submitted on behalf of b c d e f g h i j k l m n o p q r s t u v w x y and z by their authorized representatives requesting a ruling that b c d e f g h i j k l m n o p q r s t u v w x y and z each be given an extension of time to elect under sec_301_7701-3 of the procedure and plr-119788-02 administration regulations to be classified as a disregarded_entity for federal tax purposes facts the information submitted states that a is a us partnership owned by us investors b a wholly owned subsidiary of a was formed on d1 pursuant to the laws of country1 c a wholly owned subsidiary of b was formed on d2 pursuant to the laws of country2 d a wholly owned subsidiary of c was formed on d3 pursuant to the laws of country3 e a corporation formed under the laws of country3 became a wholly owned subsidiary of d as of d4 on d4 c and d purchased f g h i j k l m n o p q r s t u v w x y and z immediately after the purchase the properties owned by the subsidiaries were transferred to e e owns f and g f owns h h owns i j k l m n o and p j owns q r s t u v w x and y p owns z b represents that pursuant to sec_301_7701-3 b is a foreign eligible_entity that is not required to be classified as a corporation for federal tax purposes b has a single owner that has limited_liability as defined in sec_301_7701-3 b intended to be disregarded for federal tax purposes effective on d1 however b inadvertently failed to timely file a form_8832 entity classification election c represents that pursuant to sec_301_7701-3 c is a foreign eligible_entity that is not required to be classified as a corporation for federal tax purposes c has a single owner that has limited_liability as defined in sec_301_7701-3 c intended to be disregarded for federal tax purposes effective on d2 however c inadvertently failed to timely file a form_8832 entity classification election d represents that pursuant to sec_301_7701-3 d is a foreign eligible_entity that is not required to be classified as a corporation for federal tax purposes d has a single owner that has limited_liability as defined in sec_301_7701-3 d intended to be disregarded for federal tax purposes effective on d3 however d inadvertently failed to timely file a form_8832 entity classification election e f g h i j k l m n o p q r s t u v w x y and z represent that pursuant to sec_301_7701-3 e f g h i j k l m n o p q r s t u v w x y and z are each a foreign eligible_entity that is not required to be classified as a corporation for federal tax purposes e f g h i j k l m n o p q r s t u v w x y and z each has a single owner that has limited_liability as defined in sec_301_7701-3 e f g h i j k l m n o p q r s t u v w x y and z each intended to be disregarded for federal tax purposes effective on d5 however e f g h i j k l m n o p q r s t u v w x y and z each inadvertently failed to timely file a form_8832 entity classification election plr-119788-02 law and analysis sec_301_7701-3 provides 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 a business_entity is any entity recognized for federal tax purposes that is not properly classified as a_trust under sec_301_7701-4 or otherwise subject_to special treatment under the internal_revenue_code sec_301_7701-2 sec_301_7701-3 provides that unless a foreign eligible_entity elects otherwise the entity is a a partnership if it has two or more members and at least one member does not have limited_liability b an association if all members have limited_liability or c disregarded as an entity separate from its owners if it has a single owner that does not have limited_liability sec_301_7701-3 provides that for purposes of sec_301_7701-3 a member of a foreign eligible_entity has limited_liability if the member has no personal liability for the debts of or claims against the entity by reason of being a member sec_301_7701-3 provides that when elections under sec_301 c i for a series of tiered entities are effective on the same date the eligible entities may specify the order of elections on form_8832 sec_301_7701-3 provides that to elect to be classified other than as provided in sec_301_7701-3 an eligible_entity must file form_8832 entity classification election with the designated service_center sec_301_7701-3 provides that an election will be effective on the date specified on the form_8832 or on the date filed if no such date is specified the effective date specified on the form_8832 cannot be more than days prior to the date the election is filed under c the commissioner may grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the code except subtitles e g h and i sec_301_9100-1 defines the term regulatory election as an election whose due_date is prescribed by a regulation published in the federal_register or a revenue_ruling revenue_procedure notice or an announcement published in the internal_revenue_bulletin sec_301_9100-1 and sec_301_9100-3 provide the standards the commissioner will use to determine whether to grant an extension of time to make an election sec_301_9100-2 provides automatic extensions of time for making certain elections sec_301_9100-3 provides extensions of time for making elections that do not meet the requirements of sec_301_9100-2 plr-119788-02 sec_301_9100-3 provides that requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 provides that a taxpayer is deemed to have acted reasonably and in good_faith if the taxpayer failed to make the election because after exercising reasonable diligence taking into account the taxpayer's experience and the complexity of the return or issue the taxpayer was unaware of the necessity for the election conclusion based solely on the facts submitted and representations made we conclude that the requirements of sec_301_9100-3 have been satisfied as a result b is granted an extension of time of days from the date of this letter to file a form_8832 with the appropriate service_center and elect under sec_301_7701-3 to be classified as a disregarded_entity for federal tax purposes effective for d1 c is granted an extension of time of days from the date of this letter to file a form_8832 with the appropriate service_center and elect under sec_301_7701-3 to be classified as a disregarded_entity for federal tax purposes effective for d2 d is granted an extension of time of days from the date of this letter to file a form_8832 with the appropriate service_center and elect under sec_301_7701-3 to be classified as a disregarded_entity for federal tax purposes effective for d3 e f g h i j k l m n o p q r s t u v w x y and z each is granted an extension of time of days from the date of this letter to file a form_8832 with the appropriate service_center and elect under sec_301_7701-3 to be classified as a disregarded_entity for federal tax purposes effective for d5 additionally in accordance with sec_301_7701-3 the entities may specify that the order of the elections of e f g h i j k l m n o p q r s t u v w x y and z be deemed made in order from the bottom subsidiary to the top subsidiary on form_8832 a copy of this letter should be attached to each form_8832 a copy is included for that purpose except as specifically set forth above no opinion is expressed 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 plr-119788-02 pursuant to a power_of_attorney on file with this office a copy of this letter is being sent to x’s authorized representative sincerely heather c maloy associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes


internal_revenue_service department of the treasury number release date index number washington dc person to contact telephone number refer reply to cc psi 2-plr-112705-03 date date x a b date year dear this letter responds to a letter date submitted on behalf of x by its authorized representative requesting a ruling under sec_1362 of the internal_revenue_code the information submitted states that a and b incorporated x on date and intended that x be an s_corporation effective date a memorandum to the file indicates a and b’s intent for x to be an s_corporation x filed a form_1120s u s income_tax return for an s_corporation for its first taxable_year year however no form_2553 election by a small_business_corporation was timely filed for x sec_1362 of the code provides that if -- a an election under sec_1362 is made for any taxable_year after the date prescribed by sec_1362 for making such election for such taxable_year or no such election is made for any taxable_year and b the secretary determines that there was reasonable_cause for the failure to timely make such election the secretary may treat such an election as timely made for such taxable_year based solely on the facts and the representations submitted we conclude that x has established reasonable_cause for failing to make a timely election to be an s_corporation for x’s year taxable_year accordingly provided that x makes an election plr-112705-03 to be an s_corporation by filing a completed form_2553 with the appropriate service_center effective for its year taxable_year within days following the date of this letter then such election will be treated as timely made for x's year taxable_year a copy of this letter should be attached to the form_2553 except as specifically set forth above no opinion is expressed concerning the federal tax consequences of the facts described above under any other provision of the code including whether x was or is a small_business_corporation under sec_1361 of the code this ruling is directed only to the taxpayer requesting it sec_6110 of the code provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative sincerely yours j thomas hines chief branch associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes cc


internal_revenue_service index no number release date cc dom fi p - plr-116624-98 date legend authority state a year county date program date department v w x y year z date date plr-116624-98 dear this is in reply to a letter dated date and subsequent correspondence requesting certain rulings on behalf of authority the requested rulings concern whether authority may be treated as an integral part of state a for federal_income_tax purposes or alternatively whether authority is subject_to sec_115 of the internal_revenue_code you have also requested a ruling concerning the deductibility of contributions to authority under sec_170 facts the state a legislature in year passed legislation that allowed county to establish a public agency to meet medical needs of the indigent under this legislation the board_of supervisors for county board established a commission to deliver publicly assisted medical_care in county on date the board established by resolution and on behalf of the commission authority a public agency which the commission owns and operates as a local initiative public assistance health plan to provide managed health care to program eligible beneficiaries in county program is state a’s implementation of the federal medicaid program authority was established to provide managed health care for indigent persons in county by contracting with hospitals doctors and other health care service providers on behalf of program eligible beneficiaries the state a legislature intended for the implementation of the public agency to involve consultation and cooperative activities from various agencies of state a county and the commission and that those activities would be in furtherance of state a’s goals and efforts the activities of the commission and authority are recognized as state a action for purposes of all statutes and regulations relating to business competition authority is deemed a public agency that is a local unit of government for purposes of all grant programs and other funding and loan guarantee programs of state a on date the board established by ordinance and on behalf of the commission authority as an entity separate and distinct from the county the county has no responsibility for the financial obligations and liabilities of authority also authority is exempt from county hiring and operations requirements the governance of authority is vested in commission which consists of thirteen members appointed by the board the members of the governing body are selected as follows four members are selected by the board in its discretion the other members are plr-116624-98 selected by the board from groups specified in state a legislation as follows one member must be a representative of private hospitals that have program status one member must be a representative of private hospitals that do not have program status one member must be a representative of free and community clinics one member must be a representative of federally qualified health centers one member must be a physician representative one member must be a representative of a licensed prepaid health plan one member must be an individual who is a health care consumer one member must be a health care consumer advocate one member must be a children’s health care provider representative the members of the board_of governors and employees of authority are immune from liability as public employees members of the board_of governors of authority are required to file public statements disclosing their assets and are prohibited in participating in a decision in which the member has a financial conflict of interest the composition of the 13-member governing body of authority is subject_to alteration upon a two-thirds vote of the full membership of the governing body if the action is also concurred in by an affirmative vote of at least four members of the board the auditor-controller of county conducts a review of the fiscal condition of authority at least annually and reports the findings to the board and authority the auditor-controller also has the discretion to conduct at any time other operational or financial audits of authority and to review authority’s books_and_records authority may be terminated by the board if it no longer functions for the purpose for which it was established when authority’s existing obligations have been satisfied or when its assets have been exhausted upon termination of authority by the board county must manage any remaining assets of authority until superseded by a plan approved by department which is part of state a meetings of the board_of governors of authority and its committees are subject_to the open meeting laws for governmental agencies in state a the documents and records of authority are open to inspection as public records authority is required to file a statement as a local unit of government under state a legislation all of the powers and permitted activities of authority are limited by a strategic plan written by department department may amend the strategic plan changing authority’s power plr-116624-98 prior to the creation of authority county entered into a contract with department to operate the local initiative public assistance health plan for county after the creation of authority county department and authority entered into a novation transferring county’s contract with department to authority authority also has entered into a contract with department to operate a family program which provides managed health care to families with limited income in county the funding for authority was authorized under a state a statute which appropriated dollar_figurev of state a funds to be used by department the dollar_figurev allocated to department by state a was matched by a dollar_figurev federal grant creating a dollar_figurew pool of funds from this pool of funds department distributed dollar_figurex to county for the formation and operation of authority additionally authority receives payments under its contract with department for program under the medicaid program money is granted to states that adopt plans to provide medical assistance to indigent persons approximately one-half of the money authority receives under its contract is from state a and the balance is from a federal grant to state a for program this contract provided authority with dollar_figurey for rendering services for year under a second contract with department authority receives additional funds for providing health care to families with limited income this contract will provide authority with dollar_figurez for rendering services for the period date through date also county may lend funds to authority upon such terms as the board may establish law analysis and conclusions integral part generally if income is earned by an enterprise that is an integral part of a state or political_subdivision of a state that income is not taxable in the absence of specific statutory authorization to tax that income see revrul_87_2 1987_1_cb_18 sec_511 rev_rul 1971_1_cb_28 revrul_71_132 1971_1_cb_29 when a state or political_subdivision conducts an enterprise through a separate_entity however the income of the entity may be exempt or excluded from income under a specific provision such as sec_501 and sec_115 in 308_fsupp_761 rev'd on other grounds 400_us_4 mssic the state of maryland formed a corporation to insure the customer accounts of state chartered savings and loan plr-116624-98 associations under mssic’s charter the full faith and credit of the state was not pledged for mssic’s obligations only three of eleven directors were selected by state officials the district_court rejected mssic’s claim of intergovernmental tax immunity because the state made no financial contribution to mssic and had no present_interest in the income of mssic thus the imposition of an income_tax on mssic would not burden the state of maryland although the supreme court reversed the lower court on other grounds it agreed with the lower court’s analysis of the instrumentality and sec_115 issues in state of michigan and 40_f3d_817 6th cir rev'g 802_fsupp_120 w d mich the court held that the investment_income of the michigan education trust met was not subject_to current taxation under sec_11 the court's opinion is internally inconsistent because it concludes that met qualifies as a political_subdivision of the state of michigan id pincite that met is in a broad sense a municipal corporation id pincite and that met is in any event an integral part of the state of michigan id pincite moreover the court's reliance on the factors listed in revrul_57_128 1957_1_cb_311 to reach its conclusion is misplaced the revenue_ruling applies to entities that are separate from a state the factors in the revenue_ruling do not determine whether an enterprise is considered to be a separate_entity or an integral part of a state nevertheless in determining whether an enterprise is an integral part of a state it is necessary to consider all of the facts and circumstances including the state's degree of control_over the enterprise and the state's financial commitment to the enterprise sec_301_7701-1 et seq of the procedure and administration regulations the so-called check-the-box_regulations support the position that an entity that is separate from a state or political_subdivision may still be an integral part of that state or political_subdivision sec_301 a provides in part that an entity formed under local law is not always recognized as a separate_entity for federal tax purposes for example an organization wholly owned by a state is not recognized as a separate_entity for federal tax purposes if it is an integral part of the state sec_301_7701-2 provides plr-116624-98 for purposes of this section and sec_301_7701-3 a business_entity is any entity recognized for federal tax purposes including an entity with a single owner that may be disregarded as an entity separate from its owner under sec_301_7701-3 that is not properly classified as a_trust under sec_301_7701-4 or otherwise subject_to special treatment under the internal_revenue_code a business_entity with two or more members is classified for federal tax purposes as either a corporation or a partnership a business_entity with only one owner is classified as a corporation or is disregarded if the entity is disregarded its activities are treated in the same manner as a sole_proprietorship branch or division of the owner sec_301_7701-2 provides in part for federal tax purposes the term corporation means-- a business_entity organized under a federal or state statute or under a statute of a federally recognized indian_tribe if the statute describes or refers to the entity as incorporated or as a corporation body corporate or body politic an association as determined under sec_301_7701-3 a business_entity wholly owned by a state or any political_subdivision thereof thus the check-the-box_regulations indicate that even if authority were classified as a separate_entity from state a it nevertheless could be treated as an integral part of state a if it so qualifies in this case authority was created by enabling legislation of state a and an implementing resolution and ordinance of county the powers of authority are included in the legislation that established authority the board appoints the members of the board_of governors that controls authority the financial affairs of authority are reviewed and may be audited by the auditor-controller of county all of the activities of authority are subject_to the requirements for all governmental entities of state a with respect to its procedures and litigation county plr-116624-98 has the authority to terminate authority and department would determine the ultimate disposition of authority’s assets also the permitted activities of authority are subject_to the control of department which may expand or limit these activities through revisions of its strategic plan based on the information submitted we conclude that state a will exercise substantial control_over authority the funding for authority was authorized under state a statute which appropriated dollar_figurev of state a funds to be used by department which is part of state a the allocation to department by state a was matched by a dollar_figurev federal grant creating a dollar_figurew pool of funds from this pool of funds department distributed dollar_figurex to county for the formation and operation of authority county has no direct responsibility for the financial obligations and liabilities of authority additionally authority receives payments under its contract with department for program approximately one-half of the money authority receives under its contract is from revenues from state a and the balance is from a federal grant to state a for program this contract provided authority with dollar_figurey for rendering services for year under a second contract with department authority receives additional state a funds for providing health care to families with limited income this contract will provide authority with dollar_figurez for rendering services for the period date through date the allocation of the above-mentioned funds represents a substantial financial commitment by state a to authority accordingly based on the facts and representations submitted state a through county has demonstrated that it will exercise a substantial level of control_over authority state a through department will make a substantial financial commitment to authority therefore we conclude that authority’s income is not subject_to federal_income_tax because authority is an integral part of state a sec_115 because we have concluded that authority is an integral part of state a sec_115 is not applicable sec_170 sec_170 provides subject_to certain limitations a deduction for contributions or gifts to or for_the_use_of organizations described in sec_170 payment of which is made within the taxable_year plr-116624-98 sec_170 states that the term charitable_contribution includes a contribution or gift to or for_the_use_of a state a possession_of_the_united_states any political_subdivision of a state or any possession_of_the_united_states or the district of columbia but only if the contribution is made for exclusively public purposes see eg revrul_79_323 1979_2_cb_106 holding that amounts contributed to an industrial commission established by a state legislature for exclusively public purposes are deductible under sec_170 authority was created under state a statute to provide managed health care for indigent persons and certain limited income families in county authority is under the control and supervision of county and is funded by state a and from federal money paid to state a authority functions for an exclusively public purpose as required by sec_170 for contributions to a state to be deductible because authority is an integral part of state a contributions or gifts to or for_the_use_of authority are contributions or gifts to or for_the_use_of an entity described in sec_170 accordingly contributions or gifts to or for_the_use_of authority are to or for_the_use_of state a and are for exclusively public purposes and are therefore generally deductible under sec_170 to the extent otherwise provided under sec_170 sec_170 provides limitations on the amount that an individual can deduct for charitable_contributions in a taxable_year sec_170 provides that any charitable_contribution to a governmental_unit referred to in sec_170 is allowed to the extent that the aggregate of such contributions does not exceed percent of the taxpayer's contribution_base for the taxable_year because authority is an integral part of state a authority is a governmental_unit described in sec_170 other information this ruling is directed only to the taxpayer who requested it no opinion is expressed as to the federal tax consequences of this transaction under any provision not addressed herein in accordance with a power_of_attorney on file with this office a copy of this letter is being sent to taxpayer’s authorized representative plr-116624-98 sec_6110 provides that this ruling may not be used or cited as precedent sincerely assistant chief_counsel financial institutions products by signed by alvin j kraft alvin j kraft chief branch enclosures copy of this letter copy for sec_6110 purposes


cca_2017021715180923 id uilc number release date from -------------------- sent friday date pm to ---------------------- cc bcc subject hi ----------- sorry for the confusion but i needed to resend to you due to a glitch in our system you asked whether the ss-8 program may accept signatures other than original signatures on form ss-8 unfortunately at this point we believe that irs procedures require that form ss-8 can only be accepted with an original signature we paul and i consulted with attorneys in the associate chief_counsel procedure and administration reviewed irm irm determination_letter requests related to income_tax gift_tax estate_tax generation skipping transfer_tax employment_tax and excise_tax matters will not be accepted via fax and the memorandum for division commissioners that ----------- sent to use which includes the same language as in the preceding quoted irm provision it is our view that a request made on form ss-8 is a determination_letter request for an employment_tax matter that would fall under the prohibition described above for not accepting faxed signatures see also revproc_2017_1 sec_12 we think that the reasoning for not accepting fax signatures on form ss-8 seems more related to policy decisions rather than to legal issues that would prohibit fax signatures you may want to consider pursuing the issue higher in your chain of command to try to change the policy and obtain a business decision that would enable the irm to be amended to allow for other than original signatures on the form ss-8 if you have any questions please let us know


internal_revenue_service department of the treasury index number washington dc person to contact telephone number refer reply to cc dom p si plr-114006-99 date date number release date legend company state shareholders a this letter responds to a letter dated date requesting a ruling on behalf of company under sec_1362 of the internal_revenue_code the information submitted discloses that company was incorporated in a under the laws of state company has two shareholders shareholders it is represented that company has intended to be an s_corporation since its incorporation believing itself to be an s_corporation company has operated accordingly since a after the end of its taxable_year beginning on a however company discovered that its s election had not been timely filed company requests a ruling that its sec_1362 election will be treated as timely made for its taxable_year that begins on a sec_1362 provides that a small_business_corporation may elect to be an s_corporation sec_1362 explains when an s election will be effective generally if an s plr-114006-99 election is made within the first two and one half months of a corporation’s taxable_year then that corporation will be treated as an s_corporation for the year in which the election is made sec_1362 provides that if an s election is made after the first two and one half months of a corporation’s taxable_year then that corporation will not be treated as an s_corporation until the taxable_year following the year in which the s election is made sec_1362 provides that if no sec_1362 election is made for any taxable_year and the secretary determines that there was reasonable_cause for the failure to timely make such election then the secretary may treat such an election as timely made for such taxable_year and sec_1362 shall not apply applying the relevant law to the facts submitted and representations made we rule that company's sec_1362 election will be treated as timely made for its taxable_year that begins on a however this ruling is contingent on company filing form_2553 election by a small_business_corporation with an effective date of a with the appropriate service_center within days from the date of this ruling a copy of this letter should be attached to the form_2553 except as specifically set forth above we express no opinion concerning the federal tax consequences of the foregoing facts specifically we express no opinion on whether company otherwise qualifies as an s_corporation this ruling is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent sincerely yours william p o’shea chief branch office of the assistant chief_counsel passthroughs and special industries enclosure copy for sec_6110 purposes


t c summary opinion united_states tax_court chue y her petitioner v commissioner of internal revenue respondent docket no 8683-03s filed date chue y her pro_se thomas m newman for respondent couvillion special_trial_judge this case was heard pursuant to sec_7463 of the internal_revenue_code in effect at the time the petition was filed the decision to be entered is not reviewable by any other court and this opinion should not be cited as authority 1unless otherwise indicated all subsequent section references are to the internal_revenue_code in effect for the year in issue all rule references are to the tax_court rules_of_practice and procedure respondent determined a deficiency of dollar_figure in petitioner’s federal_income_tax for the year the issues for decision are whether petitioner is entitled to head-of-household filing_status under sec_2 dependency_exemption deductions for three children under sec_152 an earned_income_credit under sec_32 a child_and_dependent_care_credit under sec_21 and a child_tax_credit under sec_24 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 at the time the petition was filed petitioner resided in fresno california petitioner was employed as a medical assistant during the year she filed her return for as a head_of_household she reported gross_income of dollar_figure and claimed dependency_exemptions for three children an earned_income_credit of dollar_figure a child_care_credit of dollar_figure and a child_tax_credit of dollar_figure respondent issued a notice_of_deficiency determining that petitioner was not entitled to head-of-household filing_status the claimed dependency_exemption deductions the earned_income_credit the child_care_credit and the child_tax_credit because she failed to substantiate her entitlement to them deductions are a matter of legislative grace and taxpayers must maintain adequate_records to substantiate the amounts of any deductions or credits claimed sec_6001 503_us_79 sec_1_6001-1 income_tax regs taxpayers generally bear the burden of proving that the commissioner’s determination was incorrect rule a 290_us_111 sec_1 imposes a special tax_rate on individuals whose filing_status is head_of_household sec_2 defines head_of_household in relevant part as an individual taxpayer who is not married at the close of the taxable_year and maintains as her home a household that constitutes for more than one-half of the taxable_year the principal_place_of_abode of a son or daughter of the taxpayer sec_2 a taxpayer maintains a household if the taxpayer pays more than one-half of the total cost to maintain the household including such items as property taxes mortgage interest utility charges and food sec_1_2-2 income_tax regs petitioner failed to establish adequately that she maintained a household during she provided some documentation including a phone bill and rental agreement but she did not demonstrate her contribution to total household expenses thus regardless of petitioner’s marital status 2under some circumstances the burden_of_proof shifts to respondent under sec_7491 that burden does not shift to respondent in this case because petitioner failed to maintain records and comply with the requirements of substantiation as required by sec_7491 discussed infra petitioner failed to establish her entitlement to head-of-household filing_status under sec_1_2-2 income_tax regs sec_151 allows dependency_exemption deductions for each dependent as defined in sec_152 sec_152 defines a dependent as an individual over half of whose support was received from the taxpayer eligible individuals who may be claimed as dependents include a son or daughter of the taxpayer in determining whether an individual received over half of his support from the taxpayer there shall be taken into account the amount of support which the individual received from all sources including support which the individual himself supplied sec_1_152-1 income_tax regs petitioner must demonstrate through competent evidence the total amount of support from all sources available during the year in issue 56_tc_512 if petitioner fails to provide this information this court cannot conclude that the taxpayer claiming the exemption provided more than one-half of the support of the claimed dependent petitioner testified that yia her the father of her six children moved out of her residence in date that the three children she claimed as dependents lived with her during and that the other three children lived with their father mr her petitioner also testified that she had never been married to mr her based on the available evidence it is not unreasonable for the court to conclude that mr her as their father provided some support during for the children who were living with petitioner since petitioner failed to demonstrate the total support provided by mr her and herself the court cannot determine whether her contributions constituted more than half of the total support provided to the children during the court therefore holds that petitioner is not entitled to the dependency_exemption deductions for the court also agrees with respondent that petitioner is not entitled to the earned_income_credit sec_32 provides for an earned_income_credit in the case of an eligible_individual sec_32 in relevant part defines an eligible_individual as an individual who has a qualifying_child for the taxable_year a qualifying_child is one who satisfies a relationship_test a residency test an age_test and an identification requirement sec_32 in order to satisfy the residency test the qualifying_child must have the same principal_place_of_abode as the taxpayer for more than one-half of the taxable_year in which the credit is claimed sec_32 sec_32 provides however that a married individual within the meaning of sec_7703 may claim the earned_income_credit only if a joint_return is filed for the taxable_year at issue although petitioner testified that she has never been married to mr her she filed a return as married_filing_jointly with mr her for the taxable years and mr her received his form_w-2 statements and unemployment benefits at petitioner’s residence in a property transfer record recites that petitioner was a married woman the evidence leads the court to conclude that petitioner was married in despite her testimony to the contrary under sec_7703 a taxpayer who maintains as a home a household that constitutes the principal_place_of_abode for more than one-half of the year of a child for whom the taxpayer is entitled to a deduction under sec_151 is deemed to be not married if during the last months of the year at issue the other spouse did not reside with the taxpayer as previously discussed petitioner did not establish that she maintained a household or that she is entitled to the dependency_exemptions petitioner therefore does not satisfy the requirements of sec_7703 the court holds that petitioner is not entitled to the earned_income_credit because she failed to file a joint_return with mr her sec_21 generally provides allowance for a credit against the tax to any individual who maintains a household that includes as a member one or more qualifying individuals the term qualifying_individual under sec_21 includes a dependent of the taxpayer under age with respect to whom the taxpayer is entitled to a dependency_deduction under sec_151 the allowable credit under sec_21 generally is based upon employment-related_expenses that are incurred to enable the taxpayer to be gainfully_employed including expenses_incurred for the care of a qualifying_individual petitioner did not establish either that she maintained a household or that she incurred employment-related_expenses for the children and as the court holds that she is not entitled to dependency_exemption deductions for the three children it follows that she is not entitled to the sec_21 child_care_credit finally taxpayers who are allowed a dependency_exemption deduction under sec_151 may be allowed a child_tax_credit under sec_24 as stated above the court sustains respondent’s determination that petitioner was not entitled to deduct dependency_exemptions for the three children who lived with her because petitioner is not entitled to the dependency_exemption deductions she is not entitled to the child_tax_credit under sec_24 reviewed and adopted as the report of the small_tax_case division decision will be entered for respondent


internal_revenue_service number release date index number ------------------- ----------------------------------------------- ----------------------------- ------------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact -------------------------- id no -------------- telephone number ---------------------- refer reply to cc psi plr-125623-16 date date legend x y --------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------- shareholder ------------------------ trust1 trust2 beneficiary ---------------------------------------------- --------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- ------------- state -------------- d1 d2 d3 d4 ------------------ ------------------- ------------------ ------------------- dear ----------------- plr-125623-16 this letter responds to a letter dated date submitted on behalf of x by its authorized representative requesting a ruling under sec_1362 of the internal_revenue_code code facts the information submitted states that x was organized under the laws of state on d1 and elected to be an s_corporation effective d1 on d2 shareholder transferred his shares in x to trust1 an eligible shareholder on d3 shareholder died and all assets of trust1 were transferred to trust2 trust2 was eligible to be a qualified_subchapter_s_trust qsst however beneficiary of trust2 did not timely file a qsst election therefore on d3 x’s s_corporation_election terminated on d4 x’s shareholders transferred all of their stock to y an ineligible shareholder x represents that the termination event on d3 was not motivated by tax_avoidance or retroactive tax planning x further represents that x and its shareholders have filed consistently with the treatment of x as an s_corporation from d1 through d4 x and its shareholders have agreed to make any adjustments that the commissioner may require consistent with the treatment of x as an s_corporation law and analysis sec_1362 provides that except as provided in sec_1362 a small_business_corporation may elect in accordance with the provisions of sec_1362 to be an s_corporation sec_1361 provides that the term s_corporation means with respect to any taxable_year a small_business_corporation for which an election under sec_1362 is in effect for such year sec_1361 provides that the term small_business_corporation means a domestic_corporation which is not an ineligible_corporation and which does not a have more than shareholders b have as a shareholder a person other than an estate a_trust described in sec_1361 or an organization described in sec_1361 who is not an individual c have a nonresident_alien as a shareholder and d have more than one class of stock sec_1361 provides that a qsst whose beneficiary makes an election under sec_1361 will be treated as a_trust described in sec_1361 and the beneficiary of such trust shall be treated as the owner for purposes of sec_678 of that portion of the trust which consists of stock in an s_corporation with respect to which the election under sec_1361 is made sec_1361 provides that a beneficiary of a qsst or his legal_representative may elect to have sec_1361 apply sec_1361 provides that plr-125623-16 an election under sec_1361 shall be effective up to days and months before the date of the election sec_1_1361-1 of the income_tax regulations provides that the current income_beneficiary of the trust must make the election under sec_1361 by signing and filing with the service_center where the corporation files its income_tax return the applicable form or a statement including the information listed in sec_1_1361-1 sec_1362 provides that an election under sec_1362 will be terminated whenever at any time on or after the first day of the first taxable_year for which the corporation is an s_corporation such corporation ceases to be a small_business_corporation sec_1362 provides in relevant part that if an election under sec_1362 by any corporation was terminated under sec_1362 or the secretary determines that the circumstances resulting in the termination were inadvertent no later than a reasonable period of time after discovery of the circumstances resulting in the termination steps were taken a so that the corporation is a small_business_corporation and the corporation and each person who was a shareholder of the corporation at any time during the period specified pursuant to sec_1362 agrees to make such adjustments consistent with the treatment of the corporation as an s_corporation as may be required by the secretary with respect to such period then notwithstanding the circumstances resulting in the termination the corporation will be treated as an s_corporation during the period specified by the secretary sec_1_1362-4 provides in relevant part that for purposes of sec_1_1362-4 the determination of whether a termination was inadvertent is made by the commissioner the corporation has the burden of establishing that under the relevant facts and circumstances the commissioner should determine that the termination was inadvertent the fact that the terminating event was not reasonably within the control of the corporation or was not part of a plan to terminate the election or the fact that the terminating event or circumstance took place without the knowledge of the corporation notwithstanding its due diligence to safeguard itself against such an event or circumstance tends to establish that the termination was inadvertent sec_1_1362-4 provides in part that the commissioner may require any adjustments that are appropriate in general the adjustments should be consistent with the treatment of the corporation as an s_corporation during the period specified by the commissioner conclusion based solely on the facts submitted and the representations made we conclude that x’s s_corporation_election terminated on d3 we also conclude that had x’s s plr-125623-16 corporation election not terminated on d3 it would have terminated on d4 we further conclude that the circumstances resulting in the termination on d3 were inadvertent within the meaning of sec_1362 accordingly under sec_1362 x will be treated as an s_corporation from d3 until its termination on d4 provided x’s s_corporation_election was otherwise valid and has not otherwise terminated under sec_1362 this ruling is conditioned on beneficiary of trust2 filing an qsst election effective d3 with the appropriate service_center within days of the date of this letter a copy of this letter should be attached to the qsst election except as specifically ruled above we express no opinion concerning the federal tax consequences of the facts described above under any other provisions of the code specifically we express no opinion regarding x’s eligibility to be an s_corporation this ruling is directed only to the taxpayer that requested it sec_6110 provides that it may not be used or cited as precedent in accordance with a power_of_attorney on file with this office we are sending a copy of this letter to x’s authorized representative sincerely brad poston senior counsel branch office of the associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes


internal_revenue_service number release date index number --------------------------------------- -------------------------------- ------------------------------------ -------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact -------------- id no ----------------- telephone number --------------------- refer reply to cc psi b01 plr-128827-10 date january legend x a_trust trust date date date date state dear ---------------- -------------------------- ----------------------- ------------------------------- -------------------------------------------------------- ---------------------------- ------------------------------------- ------------------------------ ---------------------- ---------------------- ------------------------- ---------------- ---------- this responds to a letter dated date submitted on behalf of x by x’s authorized representative requesting relief under sec_1362 of the internal_revenue_code the code facts plr-128827-10 according to the information submitted x was incorporated on date under the laws of state effective date x elected to be taxed as an s_corporation on date a a shareholder of x died following a’s death a’s estate pursuant to the terms of a’s will transferred shares of x to trust on date trust distributed the x stock to trust the trustees of trust did not make a timely election to treat trust as an esbt causing a termination of x’s s_corporation status x represents that trust has at all times met the requirements of an esbt within the meaning of sec_1361 x further represents that its s_corporation_election termination was not motivated by tax_avoidance or retroactive tax planning x and its shareholders have agreed to make any adjustments the commissioner may require consistent with the treatment of x as an s_corporation law and analysis sec_1361 of the code provides that the term s_corporation means with respect to any taxable_year a small_business_corporation for which an election under sec_1362 is in effect for such year sec_1361 defines a small_business_corporation as a domestic_corporation which is not an ineligible_corporation and which does not a have more than shareholders b have as a shareholder a person other than an estate a_trust described in sec_1361 or an organization described in sec_1361 who is not an individual c have a nonresident_alien as a shareholder and d have more than class of stock sec_1361 c a iii provides that for purposes of sec_1361 a_trust with respect to stock transferred to it pursuant to the terms of a will may be a shareholder but only for the 2-year period beginning on the day on which such stock is transferred to it sec_1361 provides that for purposes of sec_1362 an electing_small_business_trust esbt may be an s_corporation shareholder sec_1361 provides that an esbt means any trust if i such trust does not have as a beneficiary any person other than i an individual ii an estate iii an organization described in sec_170 which holds a contingent_interest in such trust and is not a potential_current_beneficiary ii no interest in such trust was acquired by purchase and iii an election under sec_1361 applies to such trust plr-128827-10 sec_1361 provides that an election under sec_1361 shall be made by the trustee any such election shall apply to the taxable_year of the trust for which made and all subsequent taxable years of such trust unless revoked with the consent of the secretary sec_1362 provides in relevant part that if an election under sec_1362 by any corporation was not effective for the taxable_year for which made determined without regard to sec_1362 by reason of a failure to meet the requirements of sec_1361 the secretary determines that the circumstances resulting in such ineffectiveness or termination were inadvertent no later than a reasonable period of time after discovery of the circumstances resulting in such ineffectiveness or termination steps were taken so that the corporation for which the termination occurred is a small_business_corporation and the corporation for which the termination occurred and each person who was a shareholder in such corporation at any time during the period specified pursuant to sec_1362 agrees to make the adjustments consistent with the treatment of such corporation as an s_corporation as may be required by the secretary with respect to such period then notwithstanding the circumstances resulting in such ineffectiveness or termination such corporation shall be treated as an s_corporation during the period specified by the secretary conclusion based solely on the facts submitted and the representations made we conclude that x’s election to be an s_corporation terminated on date and that the termination of x’s s election was inadvertent within the meaning of sec_1362 therefore x will be treated as an s_corporation effective date and thereafter provided x’s s_corporation_election is not otherwise terminated under sec_1362 moreover trust will be treated as an esbt from date this ruling is contingent upon the filing of an election to treat trust as an esbt effective date within days of the date of this letter with the appropriate service_center a copy of this letter should be attached to the esbt election the shareholders of x must include in their income their pro_rata share of separately_stated and nonseparately computed items of x as provided in sec_1366 make any adjustments to basis as provided in sec_1367 and take into account any distributions made by x as provided in sec_1368 further to the extent necessary trust must file amended returns to treat itself as an esbt within the earlier of the expiration of the statute_of_limitations for the respective period or days of the date of this letter except as specifically ruled upon above we express or imply no opinion concerning the federal tax consequences of the facts of this case under any other provision of the code specifically we express or imply no opinion regarding x’s eligibility to be an s_corporation plr-128827-10 this ruling is directed only to the taxpayer who requested it according to sec_6110 this ruling may not be used or cited as precedent pursuant to the power_of_attorney on file with this office we are sending a copy of this letter to your authorized representative sincerely faith colson faith colson senior counsel branch office of the associate chief_counsel passthroughs special industries enclosures copy of this letter copy of this letter for sec_6110 purposes


office_of_chief_counsel internal_revenue_service memorandum number release date cc ita postf-105930-08 uilc date date to benjamin w mcclendon attorney cc lm rfp jax nas from thomas d moffitt chief cc ita subject proper timing of accrual for commission expenses originally advanced as loans to insurance agents this chief_counsel_advice responds to your request for assistance dated date this advice may not be used or cited as precedent legend taxpayer issue ------------------------- whether taxpayer may treat its commission liability as incurred upon payment and prior to the receipt of the premiums to which the commission liability relates conclusion further factual development is necessary to determine the appropriate time for treating taxpayer’s commission liability as incurred facts the taxpayer is an insurance_company that is in the business of issuing policies of insurance that are classified into different product lines the taxpayer uses a hybrid of the accrual and reserve methods_of_accounting overall and accounts for its commission liability on the accrual_method postf-105930-08 the taxpayer uses independent brokers to sell its insurance products and compensates these brokers with commissions these commissions are based on premiums charged to insured individuals the taxpayer issues certain insurance policies that are paid for through deductions to employee payroll accounts for example a given employee may sign up for a certain type of insurance that is underwritten by the taxpayer the applicable insurance premiums would be deducted automatically from the employee’s paycheck and remitted to the taxpayer for these policies the premiums are not paid in advance instead the premiums are paid periodically throughout the coverage period law and analysis sec_461 provides that the amount of any deduction or credit must be taken for the taxable_year that is the proper taxable_year under the method_of_accounting used in computing taxable_income sec_461 and sec_1_461-1 provide that under an accrual_method of accounting a liability is incurred and is generally taken into account for federal_income_tax purposes in the taxable_year in which all the events have occurred that establish the fact of the liability the amount of the liability can be determined with reasonable accuracy and economic_performance has occurred with respect to the liability see also sec_1_446-1 sec_461 provides that the all_events_test is not met any earlier than when economic_performance occurs sec_1_461-4 provides that if the liability of the taxpayer arises out of the provision of services to the taxpayer economic_performance occurs as the services are provided the facts surrounding taxpayer’s contracts with its brokers will determine when the taxpayer’s liability to pay broker commissions under any policy becomes fixed until these facts are developed we have no legal issues to address this writing may contain privileged information any unauthorized disclosure of this writing may undermine our ability to protect the privileged information if disclosure is determined to be necessary please contact this office for our views postf-105930-08 please call if you have any further questions george e blaine associate chief_counsel income_tax accounting by _____________________________ thomas d moffitt branch chief branch income_tax accounting


dollar_figure department of the treasury internal_revenue_service p o box irs cincinnati oh number release date vil dear date date employer id number contact person id number contact telephone number form you must file tax years this letter is our final_determination that you don’t qualify for tax-exempt status under sec_501 of the internal_revenue_code the code recently we sent you a proposed adverse determination in response to your application the proposed adverse determination explained the facts law and basis for our conclusion and it gave you days to file a protest because we didn’t receive a protest within the required days the proposed determination is now final because you don’t qualify as a tax-exempt_organization under sec_501 of the code donors can’t deduct contributions to you under sec_170 of the code you must file federal_income_tax returns for the tax years listed at the top of this letter using the required form also listed at the top of this letter within days of this letter unless you request an extension of time to file we’ll make this final adverse determination_letter and the proposed adverse determination_letter available for public inspection as required under sec_6110 of the code after deleting certain identifying information please read the enclosed notice notice of intention to disclose and review the two attached letters that show our proposed deletions if you disagree with our proposed deletions follow the instructions in the notice on how to notify us if you agree with our deletions you don’t need to take any further action we'll also notify the appropriate state officials of our determination by sending them a copy of this final letter and the proposed determination_letter under sec_6104 of the code you should contact your state officials if you have questions about how this determination will affect your state responsibilities and requirements letter rev catalog number 47632s if you have questions about this letter you can contact the person listed at the top of this letter if you have questions about your federal_income_tax status and responsibilities call our customer service number pincite-829-1040 tty for deaf or hard of hearing or customer service for businesses pincite-829-4933 sincerely stephen a martin director exempt_organizations rulings and agreements enclosures notice redacted letter proposed adverse determination under sec_501 c redacted letter final adverse determination under sec_501 - no protest letter rev catalog number 47632s department of the treasury internal_revenue_service cincinnati oh legend y date z state dear date date employer id number contact person id number contact telephone number contact fax number uil we considered your application_for recognition of exemption from federal_income_tax under sec_501 of the internal_revenue_code the code based on the information provided we determined that you don’t qualify for exemption under sec_501 of the code this letter explains the basis for our conclusion please keep it for your records issues do you qualify for exemption under sec_501 of the code no for the reasons stated below facts you were formed as a corporation on y in the state of z your organizing document provides that you are organized for purposes described in sec_501 of the code and that upon dissolution any remaining assets would be distributed for one or more exempt purposes within sec_501 your form 1023-ez states that your mission is to provide a platform to collect genealogical information communicate and preserve family history and your heritage you want to help inform family and relatives about your ancestry and heritage during review of your form 1023-ez detailed information was requested supplemental to the attestations provided with your application you want your family members to be informed about their history you maintain a website with information concerning your family genealogy you have joined a couple of genealogical research websites to assist you with your research you hope to locate long lost relatives both in the united_states and from your ancestors’ homelands the only people participating in your activities are family members located in a particular metropolitan area you stated that you will have a lot of public activities and information for the public in upcoming years you expect to receive funding from grants and fundraisers you are collecting recipes from family members to put together a family cookbook to sell as a fundraiser your expenses include website related fees you plan to hire a researcher next year once you receive funding currently you do not charge any fees for your services law sec_501 of the code provides for the recognition of exemption of organizations that are organized and operated exclusively for religious charitable or other purposes as specified in the statute no part of the net_earnings may inure to the benefit of any private_shareholder_or_individual sec_1_501_c_3_-1 states that in order to be exempt as an organization described in sec_501 of the code an organization must be both organized and operated exclusively for one or more of the purposes specified in such section if an organization fails to meet either the organizational_test or the operational_test it is not exempt sec_1_501_c_3_-1 provides that an organization will be regarded as operated exclusively for one or more exempt purposes only if it engages primarily in activities which accomplish one or more of such exempt purposes specified in sec_501 of the code an organization will not be so regarded if more than an insubstantial part of its activities is not in furtherance of an exempt_purpose sec_1_501_c_3_-1 states that an organization is not organized or operated exclusively for exempt purposes unless it serves a public rather than a private interest thus to meet the requirement of this subdivision it is necessary for an organization to establish that it is not organized or operated for the benefit of private interests such as designated individuals the creator or his family shareholders of the organization or persons controlled directly or indirectly by such private interests sec_1_501_c_3_-1 example provides an illustration of when an organization serves a private interest rather than a public interest i o is an educational_organization the purpose of which is to study history and immigration o's educational activities include sponsoring lectures and publishing a journal the focus of o's historical studies is the genealogy of one family tracing the descent of its present members o actively solicits for membership only individuals who are members of that one family o's research is directed toward publishing a history of that family that will document the pedigrees of family members a major objective of o's research is to identify and locate living descendants of that family to enable those descendants to become acquainted with each other ii o's educational activities primarily serve the private interests of members of a single family rather than a public interest therefore o is operated for the benefit of private interests in violation of the restriction on private benefit in paragraph d ii of this section based on these facts and circumstances o is not operated exclusively for exempt purposes and therefore is not described in sec_501 sec_1_501_c_3_-1 defines the term educational as the instruction or training of the individual for the purpose of improving or developing his capabilities or the instruction of the public on subjects useful to the individual and beneficial to the community revrul_71_580 1971_2_cb_235 describes an organization formed by members of a particular family to compile genealogy research in order to perform religious ordinances of the religious denomination to which the family members belonged it qualified for recognition of exemption under sec_501 of the code letter rev catalog number 47630w revrul_80_301 c b describes an organization that had a membership open to all persons ina particular geographic area and provided instruction in genealogical research techniques the organization qualified for exemption as an educational_organization revrul_80_302 1980_2_cb_182 describes an organization formed to locate acquire restore and preserve all available genealogical records of a particular family membership was limited to lineal or legal descendants the organization did not qualify for exemption the activities served the private interests of its members in 326_us_279 the court held that the presence of a single non-exempt purpose if substantial in nature will preclude exemption regardless of the number or importance of statutorily exempt purposes the 71_tc_340 held that a family association formed as a nonprofit organization to study immigration to and migration within the united_states by focusing on its own family history and genealogy does not qualify for exemption under sec_501 of the code the association's activities included researching the genealogy of its members for the ultimate purpose of publishing a family history the court stated that the association's family genealogical activities were not insubstantial and were not in furtherance of an exempt_purpose rather they served the private interests of the members thus the association was not operated exclusively for exempt purposes in benjamin price genealogical association v internal_revenue_service u s t c p9361 d d c the court held that an organization formed to disseminate information on and to preserve documents relating to the genealogy of benjamin price did not qualify for exemption under sec_501 of the code because it was created and operated primarily for the benefit of the private interests of its members rather than exclusively for educational_purposes application of law as explained in sec_1_501_c_3_-1 to be exempt as an organization described in sec_501 of the code you must be both organized and operated exclusively for one or more of the purposes specified in such section although you are organized for sec_501 purposes you are not operated exclusively for sec_501 purposes you do not meet the operational_test of sec_501 of the code because you are not operating exclusively for exempt purposes as required under sec_1_501_c_3_-1 you do not meet the provisions of sec_1_501_c_3_-1 because you are operating for the private interests of your family members rather than the general_public any benefit to the general_public is merely incidental to the private benefit accruing to family members you are very similar to sec_1_501_c_3_-1 example because your genealogy activities primarily serve the private interests of members of a single family rather than a public interest your activities do not accomplish exclusively educational_purposes as required in sec_1_501_c_3_-1 rather your activities serve the private interests of your family members letter rev catalog number 47630w you are not like the organization described in revrul_71_580 because your activities are not conducted to fulfill a religious ordinance rather your stated purpose is to conduct genealogical research for your family so that they know their history unlike the organization described in revrul_80_301 you only perform genealogical research for your family members and not the general_public you are like the organization described in revrul_80_302 because your research is only related to one particular family similar to the organization described in the callaway family association inc and benjamin price genealogical association you are not exempt because you are formed for the benefit of members of a particular family and you focus on your own genealogy with limited public orientation therefore you are operated for the private interests of your family members and do not qualify for exemption under sec_501 of the code even if you do conduct some educational activities your activities which are in furtherance of the private interests of your family are more than insubstantial as explained in better business bureau of washington d c inc you do not qualify for exemption under sec_501 of the code because your genealogical research furthers a substantial non-exempt private purpose therefore you do not qualify for exemption under sec_501 conclusion based on the information provided you do not qualify for exemption because you are not operated exclusively for exempt purposes within the meaning of sec_501 of the code you have a substantial non-exempt purpose of conducting genealogical activities for the members of a particular family which furthers private interests therefore you do not qualify for exemption under sec_501 if you don’t agree you have a right to file a protest if you don’t agree with our proposed adverse determination to do so you must send a statement to us within days of the date of this letter the statement must include e e e e e your name address employer_identification_number ein and a daytime phone number acopy of this letter highlighting the findings you disagree with anexplanation of why you disagree including any supporting documents the law or authority if any you are relying on the signature of an officer director trustee or other official who is authorized to sign for the organization or your authorized representative e one of the following declarations for an officer director trustee or other official who is authorized to sign for the organization letter rev catalog number 47630w under penalties of perjury i declare that i examined this protest statement including accompanying documents and to the best of my knowledge and belief the statement contains all relevant facts and such facts are true correct and complete for authorized representatives under penalties of perjury i declare that i prepared this protest statement including accompanying documents and to the best of my knowledge and belief the statement contains all relevant facts and such facts are true correct and complete your representative attorney certified_public_accountant or other individual enrolled to practice_before_the_irs must file a form_2848 power_of_attorney and declaration of representative with us if he or she hasn’t already done so you can find more information about representation in publication practice_before_the_irs and power_of_attorney we’ll review your protest statement and decide if you provided a basis for us to reconsider our determination if so we’ll continue to process your case considering the information you provided if you haven’t provided a basis for reconsideration we’ll forward your case to the office of appeals and notify you you can find more information about the role of the appeals_office in publication how to appeal an irs decision on tax- exempt status if you don’t file a protest within days you can’t seek a declaratory_judgment in court at a later date because the law requires that you use the irs administrative process first sec_7428 of the code where to send your protest please send your protest statement form_2848 if needed and any supporting documents to the applicable address u s mail street address for delivery service internal_revenue_service eo determinations quality assurance room p o box cincinnati oh internal_revenue_service eo determinations quality assurance main street room cincinnati oh you can also fax your statement and supporting documents to the fax number listed at the top of this letter if you fax your statement please contact the person listed at the top of this letter to confirm that he or she received it if you agree if you agree with our proposed adverse determination you don’t need to do anything if we don’t hear from you within days we’ll issue a final adverse determination_letter that letter will provide information on your income_tax filing_requirements letter rev catalog number 47630w you can find all forms and publications mentioned in this letter on our website at www irs gov formspubs if you have questions you can contact the person listed at the top of this letter sincerely stephen a martin director exempt_organizations rulings and agreements enclosure publication letter rev catalog number 47630w


internal_revenue_service number release date index number -------------------------------------------- --------------------------------- -------------------------- ----------------------- - department of the treasury washington dc third party communication none date of communication not applicable_person to contact ------------------- id no ------------ telephone number -------------------- refer reply to cc psi b01 plr-111379-05 date date --------------------------------- -------------------- ---------------------- --- legend x ------------------------------------ a b a d1 --------------------- d2 --------------------- dear ---------------- this responds to the letter dated date submitted on behalf of x requesting relief under sec_1362 of the internal_revenue_code facts pursuant to the supplemental court order in the dissolution of the marriage between a and b a transferred a shares of x’s stock held in a’ sec_401 account to b’s ira account resulting in the termination of the s election of x corporation and filed their tax returns accordingly x and its shareholders agree to make any adjustments consistent with the treatment of x as an s_corporation as may be required by the secretary with respect to the period specified by sec_1362 x represents that at all relevant times x and its shareholders treated x as an s x made an election to be treated as an s_corporation effective d1 on d2 sec_1361 defines an s_corporation as a small_business_corporation for sec_1362 provides that if an election under sec_1362 by any sec_1361 defines a small_business_corporation as a domestic sec_1362 provides that an election under sec_1362 shall be plr-111379-05 law and analysis which an election under sec_1362 is in effect corporation which is not an ineligible_corporation which does not a have more than shareholders b have as a shareholder a person other than an estate and other than a_trust described in subsection c who is not an individual c have a nonresident_alien as a shareholder and d have more than class of stock terminated whenever the corporation ceases to be a small_business_corporation corporation was terminated under sec_1362 the secretary determines that the circumstances resulting in the termination were inadvertent no later than a reasonable period of time after the discovery of the circumstances resulting in the termination steps were taken so that the corporation is a small_business_corporation and the corporation and each person who was a shareholder of the corporation at any time during the period of inadvertent termination of the s election agrees to makes such adjustments consistent with the treatment of the corporation as an s_corporation as may be required by the secretary with respect to such period then notwithstanding the circumstances resulting in the termination the corporation is treated as an s_corporation during the period specified by the secretary conclusion based solely on the facts submitted and representation made we conclude that x’s election to be treated as an s_corporation terminated on d2 we also conclude that the termination constituted an inadvertent termination within the meaning of sec_1362 under the provisions of sec_1362 x will be treated as continuing to be an s_corporation from d2 and thereafter provided that x’s s_corporation_election is not otherwise terminated under sec_1362 except as expressly provided herein no opinion is expressed or implied as to the federal tax consequences of the facts described above under any other provision of the code in particular no opinion is expressed as to whether x is an s_corporation for federal tax purposes this ruling is directed only to the taxpayer requesting it sec_6110 of the code provides that it may not be used or cited as precedent plr-111379-05 pursuant to the power_of_attorney on file with this office a copy of this letter will be sent to x’s authorized representative sincerely dianna k miosi dianna k miosi chief branch associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes cc


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 corp b06 plr-122082-14 date date legend parent ----------------------------------- ------------------------------------ sub --------------------------------- --------------------------------- company official tax professional ---------------------------------------- ------------------------------------------------------------------------------------------------------------------ --------------------------------------------------------------------- date ------------------------- r ------------ dear ------------------ this letter responds to a letter dated date and subsequent materials submitted on behalf of parent and sub on date and date requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations to file an election parent and sub are requesting the extension in order to allow parent and sub to file an election to apportion a portion of the consolidated sec_382 limitation to sub under sec_1_1502-95 of the income_tax regulations hereinafter referred to as the election the material information submitted for consideration is summarized below prior to date parent was the common parent of a consolidated_group the parent group that owned all the stock in sub on date parent distributed sub to its shareholders in a transaction qualifying under sec_368 and sec_355 the spin-off plr-122082-14 sub then became the common parent of its own consolidated_group at the time of the spin-off the parent group had a consolidated sec_382 limitation parent and sub could have filed an election under sec_1_1502-95 to apportion all or part of the sec_382 limitation to sub the election to apportion all or part of a consolidated sec_382 limitation is made following the procedures set forth in sec_1_1502-95 the election was required to be filed with parent's consolidated federal_income_tax return for the tax_year in which sub ceased to be a member of the parent group and with the first consolidated federal_income_tax return of which sub is the common parent filed after the close of the consolidated_return_year of the parent group the submission includes representations that dollar_figurer of the consolidated sec_382 limitation was intended to be apportioned to sub however for various reasons parent and sub failed to make the election in a timely manner the submission also includes representations that parent and sub are not seeking to alter a return position for which an accuracy-related_penalty has been or could have been imposed under sec_6662 under sec_301_9100-1 the commissioner has discretion to 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 a regulatory election sec_301_9100-1 sec_301_9100-2 provides automatic extensions of time for making certain elections requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 in this case the time for filing the election is fixed by regulations ie sec_1_1502-95 therefore the commissioner has discretionary authority under sec_301_9100-3 to grant an extension of time for parent and sub to file the election provided they show that their actions were reasonable and in good_faith the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and granting relief will not prejudice the interests of the government information an affidavit and representations submitted by parent sub and company official tax professional explain the circumstances that resulted in the failure to timely file the election the submission establishes that parent and sub reasonably relied on a qualified_tax professional who failed to make or advise parent and sub to make a valid election and the request for relief was filed before the failure to make the election was discovered by the internal_revenue_service see sec_301_9100-3 and v based on the facts and information submitted including the representations made we conclude that parent and sub have shown they acted reasonably and in good_faith the plr-122082-14 requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and granting relief will not prejudice the interests of the government accordingly an extension of time is granted under sec_301_9100-3 until days from the date on this letter for parent and sub to file the election parent and sub should amend their returns to attach the election following the requirements of sec_1_1502-95 a copy of this letter must be attached to the returns alternatively parent and sub may satisfy the requirement of attaching a copy of this letter by attaching a statement to their returns that provides the date and control number plr-122082-14 of this letter_ruling the above extension of time is conditioned on the taxpayers' tax_liability if any not being lower in the aggregate for all the years to which the election applies than it would have been if the election had been timely made taking into account the time_value_of_money no opinion is expressed as to the taxpayers' tax_liability for the years involved a determination thereof will be made upon audit of the federal_income_tax returns involved except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter in addition we express no opinion as to the tax effects or consequences of filing the election late under the provisions of any other section of the code or regulations or as to the tax treatment of any conditions existing at the time of or effects resulting from filing the election late that are not specifically set forth in the above ruling for purposes of granting relief under sec_301_9100-3 we relied on certain statements and representations made by parent sub and company official tax professional under penalties of perjury however all of the essential facts must be verified moreover notwithstanding that the extension is granted under sec_301_9100-3 to file the election any penalties and interest that would otherwise be applicable will apply this ruling is directed only to the taxpayer s requesting it sec_6110 of the code provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office copies of this letter are being sent to your authorized representatives sincerely ken cohen senior technician reviewer branch office of associate chief_counsel corporate