internal_revenue_service department of the treasury number release date index number washington dc person to contact telephone number refer reply to plr-116620-00 cc intl b1 date date legend a date b date c country d this is in response to your letter dated requesting a ruling under sec_877 of the internal_revenue_code_of_1986 code that a’s loss of u s citizenship did not have for one of its principal purposes the avoidance of u s taxes under subtitle a or subtitle b of the code the information submitted for consideration is substantially as set forth below the ruling contained in this letter is based upon information and representations submitted by the taxpayer and accompanied by penalty of perjury statements executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination a was born on date b in the united_states and became a dual citizen of country d on the basis of his parents being citizens of country d a is a citizen and a resident of country d for income_tax purposes a renounced his united_states citizenship on date c before reaching the age of eighteen and one-half on the date of a’s expatriation his net_worth exceeded the net_worth required under sec_877 sec_877 generally provides that a citizen who loses u s citizenship or a u s long-term_resident who ceases to be taxed as a lawful permanent resident individuals who expatriate within the 10-year period immediately preceding the close of the plr-116620-00 taxable_year will be subject_to the special rules of sec_877 for such taxable_year unless such loss did not have for one of its principal purposes the avoidance of u s taxes sec_2107 and sec_2501 provide special estate and gift_tax regimes respectively for individuals who expatriate with a principal purpose to avoid u s taxes a former citizen or former long term-resident will be treated as having expatriated with a principal purpose to avoid u s taxes for purposes of sec_877 sec_2107 and sec_2501 if the individual’s average income_tax_liability or the individual’s net_worth on the date of expatriation exceed certain thresholds see sec_877 sec_2107 and sec_2501 a former u s citizen whose net_worth or average tax_liability exceeds these thresholds however will not be presumed to have a principal purpose of tax_avoidance if that former citizen is described within certain statutory categories and submits a request for a ruling within one year of the date of loss of u s citizenship for the secretary’s determination as to whether such loss had for one of its principal purposes the avoidance of u s taxes see sec_877 sec_2107 and sec_2501 under notice_98_34 1998_2_cb_29 an eligible former citizen will not be presumed to have a principal purpose of tax_avoidance if that former citizen submits a complete and good_faith request for a ruling as to whether such loss had for one of its principal purposes the avoidance of u s taxes notice_98_34 requires that certain information be submitted with a request for a ruling that an individual’s expatriation did not have for one of its principal purposes the avoidance of u s taxes a is eligible to request a ruling under sec_877 because a lost his u s citizenship before reaching the age of eighteen and one-half see sec_877 a submitted all the information required by notice_98_34 including any additional information requested by the service accordingly based solely on the information submitted and the representations made we conclude that a has made a complete and good_faith submission in accordance with sec_877 and notice_98_34 we further conclude that a will not be treated under sec_877 as having as one of his principal purposes of expatriating the avoidance of u s taxes because the information submitted clearly established the lack of a principal purpose to avoid taxes under subtitle a or b of the code except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any transaction or item discussed or referenced in this letter in addition no opinion is expressed as to a’s u s tax_liability for taxable periods prior to his loss of permanent resident status or for taxable periods after his loss of permanent residence status under sections of the code other than sec_877 plr-116620-00 and a a copy of this letter must be attached to a’s u s income_tax return for the year in which a obtained the ruling whether or not a is otherwise required to file a return this ruling is directed only to the taxpayer requesting it sec_6110 of 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 w edward williams senior technical reviewer branch office of the associate chief_counsel international


internal_revenue_service number release date index number ---------------------------------- --------------------------------------------- ---------------------------------------- --------------------------- - - department of the treasury washington dc person to contact -------------------- id no ------------- telephone number --------------------- refer reply to cc psi plr-167259-03 date date company --------------------------------------------- -------------------------- parent ---------------------------------------------------- -------------------------------------------------------------- ------------------------------------------------------------------------------------------ -------------------------------------- ------------------------- shareholder property state a b c d e f g h i k ---------- ------------------- ---------------------- -------------------------- ---------------- ----- ----------------- ----------------- ------- ----------------- --------------- plr-167259-03 dear ---------------- this letter responds to your letter dated date as well as subsequent correspondence requesting a ruling that the rental income received by company from the property is not passive_investment_income within the meaning of ' d c i of the internal_revenue_code company was incorporated under the laws of state on a and anticipates electing under ' a to be an s_corporation effective b it merged with parent on c with company as the surviving corporation it owns leases and manages the property shareholder doing business as a sole_proprietor is company’s tenant effective d company entered into a new lease with its tenant by which it undertook to provide all interior maintenance of the property in addition to company’s responsibilities under the prior lease company employs e persons full time through these employees as well as through outside contractors company provides various services to the property in its real_estate leasing and management activities company is responsible for the maintenance and repair of all areas of the property interior and exterior building structural_components such as roofs exterior walls and foundations all mechanical systems such as water supply sewer plumbing heating and cooling and power the sprinkler system and fire alarms the grounds including landscaping parking lots all furniture fixtures and equipment used in the tenant’s business and all signage company is responsible for providing all utilities trash removal pest control building security and on-call management services in addition to the services provided to its tenant company handles the usual leasing and administrative functions involved in managing rental real_estate based on the new lease that became effective d company expects annually to receive or accrue approximately f in rents and to pay or incur annually approximately g in relevant expenses on the property for h company received or accrued approximately i in rents and paid_or_incurred approximately k in relevant expenses on the property except as provided in ' g ' a provides that a small_business_corporation may elect in accordance with the provisions of ' to be an s_corporation sec_1362 provides that an election under ' a terminates whenever the corporation i has accumulated_earnings_and_profits at the close of each plr-167259-03 of three consecutive tax years and ii has gross_receipts for each of such tax years more than percent of which are passive_investment_income except as otherwise provided in ' d c ' d c i provides that the term passive_investment_income means gross_receipts derived from royalties rents dividends interest annuities and sales or exchanges of stock_or_securities sec_1_1362-2 of the income_tax regulations provides that rents means amounts received for_the_use_of or the right to use property whether real or personal of the corporation sec_1_1362-2 provides that rents does not include rents derived in the active trade_or_business of renting property rents received by a corporation are derived in an active trade_or_business of renting property only if based on all the facts and circumstances the corporation provides significant services or incurs substantial costs in the rental business generally significant services are not rendered and substantial costs are not incurred in connection with net leases whether significant services are performed or substantial costs are incurred in the rental business is determined based upon all the facts and circumstances including the number of persons employed to provide the services and the types and amounts of costs and expenses_incurred other than depreciation based solely on the facts and representations submitted we conclude that the rents company receives from the property are not passive_investment_income under ' d c i except for the specific ruling 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 the validity of company's election to be an s_corporation further the passive_investment_income rules of ' are independent of the passive_activity rules of ' under a power_of_attorney on file with this office we are sending copies of this letter to your authorized representatives plr-167259-03 this ruling is directed only to the taxpayer who requested it according to ' k this ruling may not be used or cited as precedent s sincerely jeanne sullivan senior technician reviewer branch office of associate chief_counsel passthroughs and special industries enclosures copy for ' purposes cc


t c memo united_states tax_court howard m morgan and glenice s morgan petitioners v commissioner of internal revenue respondent docket no filed date frank a weiser for petitioners edwin a herrera for respondent memorandum opinion laro judge respondent moves the court to dismiss this case for lack of jurisdiction arguing that petitioners failed to petition this court within the 90-day period of sec_6213 a ‘unless otherwise indicated section references are to the internal_revenue_code as applicable herein rule references are to the tax_court rules_of_practice and procedure see also rules c and on date respondent mailed to petitioners’ last_known_address and former address notices of deficiency determining a dollar_figure deficiency in their federal_income_tax and an dollar_figure accuracy-related_penalty under sec_6662 petitioners object to respondent’s motion petitioners argue primarily that the notices mailed to their last_known_address were invalid because they assert the notices did not contain notice of their right to contact a local office_of_the_taxpayer_advocate and the location and phone number of the appropriate office petitioners contend that such information is required by sec_6212 petitioners argue alternatively that the petition they filed with this court after the 90-day period was timely because they challenged respondent’s determination through a lawsuit filed in united_states district_court during the 90-day period we held an evidentiary hearing on respondent's motion and shall grant it background’ petitioners filed a joint federal_income_tax return on date respondent mailed to each petitioner by the court directed each party to file an opening brief and an answering brief the latter limited to making any objection to the opposing party’s proposed findings_of_fact petitioners have not filed an answering brief we conclude they have conceded respondent's proposed findings as correct except to the extent that their opening brief contains proposed findings inconsistent therewith see fankhanel v commissioner tcmemo_1998_403 affd by unpublished opinion 205_f3d_1333 4th cir certified mail two notices of deficiency addressed to both petitioners as to that year two of these notices were mailed to petitioners’ last_known_address the collins address and received by them the other two notices were mailed to petitioners’ former address the willow address which at the time was the residence of petitioners' daughter and son-in-law petitioners claim not to have received the latter two notices all four notices are identical in all material regards and each notice was mailed separately with a copy of notice helpful contacts for your notice_of_deficiency none of respondent’s mailings were returned to him as undeliverable during the first week of date mr morgan retained anne tahim a certified_public_accountant to appeal respondent’s determination on date ms tahim sent to the internal_revenue_service by facsimile an executed power_of_attorney listing her and a colleague collectively the representatives as petitioners’ representatives for petitioners’ through taxable years upon receiving the facsimile an employee of respondent spoke to ms tahim by telephone and among other an employee of respondent also hand delivered to mr morgan on that date a copy of one of these notices notice is a 2-page document that informs a person receiving a notice_of_deficiency that he or she may discuss the notice with the internal_revenue_service employee listed on the face of the notice or with a local taxpayer_advocate the notice lists a toll-free number for taxpayer_advocate assistance and the local phone numbers of the taxpayer_advocate offices things informed her that petitioners had until date to petition this court to redetermine respondent’s determination the employee also provided ms tahim with the telephone number of this court’s petition section on date days after respondent mailed to petitioners the notices of deficiency petitioners filed a lawsuit against the internal_revenue_service and doe sec_1 through collectively the defendants in the united_states district_court central district of california generally challenging respondent’s determination on date the defendants moved to dismiss the lawsuit without prejudice to petitioners’ paying the tax and filing a proper refund action asserting primarily that the district_court lacked subject matter jurisdiction following the district court’s filing of petitioners’ opposition to the defendant’s motion ’ the district_court on date filed a stipulation of the parties there stating that the court may dismiss petitioners’ complaint and action on the sole ground that the court lacks subject matter jurisdiction without prejudice to petitioners filing a subsequent suit in a court of competent petitioners agreed in their opposition that the district_court lacked jurisdiction but they went to great lengths to maintain that the court should dismiss the case without rendering judgment on the merits of the case petitioners’ opposition states that they do not want the court’s dismissal to be given res_judicata effect in any further proceeding jurisdiction the district_court dismissed petitioners’ lawsuit on or after that date petitioners petitioned this court on date to redetermine respondent’s determination petitioners resided in orange california at that time discussion our jurisdiction requires a valid notice_of_deficiency anda timely filed petition and when one or both of these items is missing we must dismiss a case for lack of jurisdiction see sec_6213 98_tc_613 83_tc_626 sec_6213 a provides that where a notice_of_deficiency is addressed to an individual within the united_states he or she may petition this court within days of the mailing of the notice_of_deficiency to redetermine the deficiency petitioners argue primarily that the notices of deficiency mailed to their last_known_address were invalid because they assert the notices failed to include all information required by sec_6212 we disagree with this assertion we find as a fact that the notices of deficiency mailed to petitioners’ last_known_address contain all statutorily required information petitioners point to the fact that respondent’s files contain one copy of the notices of deficiency mailed to the collins address one copy of the notices mailed to the willow address and one copy of notice which is attached to the copy of the notices mailed to the willow address petitioners draw from this fact that notice was mailed only to the willow address contrary to petitioners’ assertion the mere fact that respondent’s file contains only one copy of notice does not mean that respondent sent only one copy of that notice to them certain of respondent’s employees testified credibly that only one copy of notice is kept in the file of a taxpayer or taxpayers in the case of a joint_return notwithstanding the number of copies of that notice that are actually sent to the taxpayer s we conclude and hold that the notices of deficiency mailed to petitioners’ last_known_address were valid in so concluding we reject without further discussion petitioners’ assertion that all information required by sec_6212 must be included on the face of the notice_of_deficiency in order to comply with that section petitioners argue alternatively that their petition to this court was timely because they filed the lawsuit in the district_court within the applicable 90-day period we disagree the fact that a taxpayer files a lawsuit in a federal district_court challenging a notice_of_deficiency does not mean that a later petition to this court is considered filed as of the earlier filing in district_court see brave v 65_tc_1001 see also exhibit notice_of_deficiency issued to - petitioners at the collins address which states on its face that you have days from the date of this letter to file a petition with the united_states tax_court for a redetermination of the deficiency and the last day to file a petition with the united_states tax_court is july nor does it matter that the parties to the district_court proceeding agreed to dismiss that case without prejudice to petitioners’ challenging respondent’s determination in the appropriate forum petitioners’ reliance on the equitable powers of this and the equitable powers of the district_court to extend or otherwise toll the 90-day statutory period is unfounded under the facts herein we hold that we lack jurisdiction over this case because petitioners failed to petition this court within the applicable 90-day period accordingly we shall dismiss this case for that reason our dismissal does not leave petitioners without a right to contest respondent's determination in the appropriate forum petitioners may if they desire pay the tax claimed due by respondent file with respondent a claim_for_refund of any amount purportedly overpaid and if and when respondent denies that claim sue respondent for a refund in a united_states district we find nothing in the record to support petitioners’ naked assertion that the district_court remanded their case to this court or otherwise allowed them to petition this court effective as of the date of their district_court filing thus we need not and do not decide petitioners’ argument that the district_court has the power to do so --- - court or the court of federal claims our dismissal means that petitioners are unable to contest respondent's determination in this court see 58_tc_850 n 55_tc_138 n to reflect the foregoing an appropriate order will be entered


internal_revenue_service number release date index nos cc it a b9 plr-111760-00 attn date ein dear this is in reference to a form_1128 application to adopt change or retain a tax_year submitted on behalf of the taxpayer requesting permission to change its accounting_period for federal_income_tax purposes from a taxable_year ending to a taxable_year ending effective the taxpayer has requested that the form_1128 be considered timely filed under the authority contained in sec_301_9100-3 of the procedure and administration regulations the taxpayer failed to timely a file a form_1128 to change its tax_year under the automatic provisions of revproc_2000_11 2000_3_irb_309 the information furnished indicates that the application_for change in accounting_period was filed late because of an error or misunderstanding however the form was filed within days of the due_date this ruling letter is based upon a representation by the taxpayer that it is not using hindsight as defined in b iii in requesting relief sec_1_442-1 of the income_tax regulations provides that in order to secure the commissioner's consent to a change in accounting_period the taxpayer must file an application on form_1128 with the commissioner on or before the 15th day of the second calendar month following the close of the short_period section of revproc_2000_11 states in part that a form_1128 filed pursuant to this revenue_procedure will be considered timely filed for purposes of sec_1_442-1 b if and only if it is filed on or before the time including extensions for filing the return for the short_period required by such change sec_301_9100-3 of the regulations provides that requests for extensions of time for regulatory elections that do not meet the requirements of sec_301_9100-2 automatic extensions such as the instant case must be made under the rules of sec_301_9100-3 requests for relief subject_to 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 the granting of relief will not prejudice the interests of the government based on the facts and information submitted and the representations made it is held that the taxpayer acted reasonably and in good_faith and that the granting of relief will not prejudice the interests of the government accordingly the requirements of the regulations for the granting of relief have been satisfied in this case and the late filed form_1128 requesting permission to change to a tax_year ending effective is considered timely filed the ruling contained in this letter is based upon facts and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party this office has not verified any of the material submitted in support of the request for a ruling verification of the factual information representations and other data may be required as part of an examination process this ruling addresses the granting of sec_301_9100-3 relief only no opinion is expressed regarding the tax treatment of the instant transaction under the provisions of any other sections of the code or regulations that may be applicable thereto or regarding the tax treatment of any conditions existing at the time of or effects resulting from the instant transaction specifically no opinion is expressed as to whether the taxpayer is permitted under the code and applicable regulations to change to the tax_year requested in the subject form_1128 a copy of this letter_ruling and the form_1128 are being forwarded to the service_center where the taxpayer files its federal_income_tax returns with instructions that the form_1128 be considered timely filed and processed in accordance with established procedures under revproc_2000_11 in accordance with the provisions of a power_of_attorney currently on file we are sending a copy of this letter_ruling to the taxpayer’s authorized representative this ruling is directed only to the taxpayer that requested it sec_6110 of the internal_revenue_code provides that it may not be used or cited as precedent enclosures copy of this letter copy for sec_6110 purposes sincerely yours associate chief_counsel income_tax and accounting heather maloy


t c memo united_states tax_court carol anderson petitioner v commissioner of internal revenue respondent docket no filed date carol anderson pro_se reginald r corlew for respondent memorandum opinion dinan special_trial_judge this case was heard pursuant to the provisions of sec_7443a and rule sec_180 sec_181 and sec_182 unless otherwise indicated all section references are to the internal_revenue_code in effect for the taxable years in issue all rule references are to the tax_court rules_of_practice and procedure respondent determined deficiencies in petitioner's federal income taxes for and in the amounts of dollar_figure and dollar_figure respectively and accuracy-related_penalties pursuant to sec_6662 in the amounts of dollar_figure and dollar_figure respectively after concessions by petitioner the issues remaining for decision are whether petitioner is entitled to dependency_exemption deductions for her two nieces and two nephews for whether petitioner is entitled to claim head_of_household filing_status for whether petitioner is entitled to child care credits for and whether petitioner is entitled to business_expense deductions for in excess of the amount allowed by respondent whether petitioner is liable for self-employment_tax for whether petitioner is entitled to a medical_expense_deduction for and whether petitioner is liable for the sec_6662 accuracy-related_penalties for and some of the facts have been stipulated and are so found the stipulations of fact and attached exhibits are incorporated herein by this reference petitioner resided in miami florida on the date the petition was filed in this case petitioner works as a claims processor for ryder truck rental in its warranty department during january and february petitioner concedes that she received and failed to report interest_income in the amount of dollar_figure and dividend income in the amount of dollar_figure for the taxable_year petitioner also had a second part-time job promoting credit cards at shopping malls and college campuses petitioner and her husband morris richard anderson mr anderson were married on date marital difficulties arose and mr anderson vacated the marital residence in and never returned they are not legally_separated or divorced petitioner has a daughter morcie anderson who was born in date petitioner's sister-in-law was a drug addict who was in and out of drug rehabilitation programs during from date until date petitioner's two nieces shannon givens and timpest givens and two nephews benjamin givens and daniel wilcher stayed at petitioner's home the first issue for decision is whether petitioner is entitled to dependency_exemption deductions for her two nieces and two nephews for petitioner claimed dependency_exemption deductions for shannon timpest benjamin and daniel on her return respondent disallowed the claimed deductions in the statutory_notice_of_deficiency respondent's determinations in the statutory_notice_of_deficiency are presumed to be correct and petitioner bears the burden of proving otherwise rule a 290_us_111 in deciding whether this burden is satisfied the court is not bound to accept petitioner's self- serving unverified and undocumented testimony 338_f2d_602 9th cir affg 41_tc_593 99_tc_202 87_tc_74 65_tc_87 affd per curiam 540_f2d_821 5th cir taxpayers are required to substantiate amounts claimed as deductions credits etc by maintaining the records needed to establish such entitlement sec_6001 sec_1_6001-1 income_tax regs an individual taxpayer is allowed as a deduction in computing taxable_income an additional exemption for each dependent as defined in sec_152 sec_151 a dependent is generally defined as an individual who receives over half of his support from the taxpayer in the calendar_year in which the taxpayer's taxable_year begins sec_152 individuals listed under this general definition include among others an individual who is a son or daughter of a brother or sister of the taxpayer sec_152 respondent argues that petitioner failed to meet the support requirements of sec_152 we agree petitioner presented no records to establish that she provided more than half of her nieces' and nephews' support during she has not convinced us that the children were not supported by public assistance payments received by their mother or amounts received from their father petitioner's brother in the absence of any corroborating evidence we find that petitioner has not proved that she provided more than half of the support for her nieces and nephews during accordingly we hold that petitioner is not entitled to dependency_exemption deductions for for her two nieces and two nephews the second issue for decision is whether petitioner is entitled to claim head_of_household filing_status for in the statutory_notice_of_deficiency respondent determined that petitioner's proper filing_status for is married filing separate head_of_household is defined in pertinent part as an unmarried taxpayer who maintains a household which constitutes for more than one half of the taxable_year the principal_place_of_abode of a son daughter or other qualifying_individual if the taxpayer is entitled to a dependency_exemption deduction for such individual under sec_151 sec_2 we hold that petitioner may not claim head_of_household status because as we have held above she is not entitled to deductions for her nieces and nephews under sec_151 and thus does not meet the definition of head_of_household respondent's determination on this issue is sustained the third issue for decision is whether petitioner is entitled to child care credits for and petitioner claimed credits on her and returns in the amounts of dollar_figure and dollar_figure respectively respondent disallowed the claimed credits on the ground that petitioner did not establish that the amounts claimed were paid for child care expenses sec_21 generally allows a credit to any individual who maintains a household that includes as a member one or more qualifying individuals and pays employment-related_expenses the allowable credit is generally based upon employment-related_expenses that are paid to enable the taxpayer to be gainfully_employed including expenses paid for the care of a qualifying_individual sec_21 on her and returns petitioner claimed that she paid dollar_figure each year to a care provider by the name of mary jones however petitioner testified at trial that the care provider's name was ella kennedy and she paid her dollar_figure per week to care for her nephew daniel during and her daughter morcie during we are entirely unpersuaded by petitioner's testimony which is not supported by any credible_evidence the alleged payments would account for only dollar_figure of expenses per year if made over an entire year and neither daniel nor morcie was under petitioner's care for an entire year we find that petitioner has failed to prove that the amounts claimed were paid for child care expenses we hold that petitioner is not entitled to child care credits for and the fourth issue for decision is whether petitioner is entitled to business_expense deductions for in excess of the amount allowed by respondent petitioner claimed schedule c business_expenses on her return in the total amount of dollar_figure in the statutory_notice_of_deficiency respondent disallowed dollar_figure of the claimed expenses sec_162 allows a deduction for the ordinary and necessary expenses paid_or_incurred during the taxable_year in carrying_on_a_trade_or_business in the event that a taxpayer establishes that she has paid a deductible expense but is unable to substantiate the precise amount of the expense we may estimate the amount of the deductible expense 39_f2d_540 2d cir in order to make such an estimate the taxpayer must present evidence sufficient to provide some rational basis upon which an estimate may be made 85_tc_731 based on the record we find that petitioner has failed to substantiate the business_expense deductions claimed on her return in connection with her promotion activities further she has not provided the court with any evidence that would allow us to make an estimate of her deductible business_expenses under the cohan_rule therefore we hold that she is not entitled to business_expense deductions for in excess of the amount allowed by respondent the fifth issue for decision is whether petitioner is liable for self-employment_tax for after accounting for her allowed deductions petitioner realized net_income in the amount of dollar_figure from her promotion activities respondent determined that such amount is subject_to self-employment_tax sec_1401 imposes a tax on self-employment_income for old-age survivors and disability insurance an additional tax for hospital insurance is imposed on self-employment_income pursuant to sec_1401 self-employment_income is defined as the net_earnings_from_self-employment derived by an individual during any taxable_year sec_1402 the phrase net_earnings_from_self-employment is in turn defined as gross_income derived by an individual from any trade_or_business carried on by such individual less any attributable deductions sec_1402 based on the record we find that petitioner has not established that her promotion activities do not constitute a trade_or_business carried on by her in her individual capacity she presented no reliable evidence that she is properly treated as an employee of another person with respect to her promotion activities accordingly we hold that petitioner is liable for self-employment_tax as determined by respondent the sixth issue for decision is whether petitioner is entitled to a medical_expense_deduction for petitioner claimed a medical_expense_deduction in the amount of dollar_figure on her return in the statutory_notice_of_deficiency respondent disallowed the claimed deduction sec_213 allows as a deduction the expenses paid during the taxable_year not_compensated_for_by_insurance_or_otherwise for medical_care of the taxpayer the deduction is limited to expenses paid during the taxable_year which exceed percent of the taxpayer's adjusted_gross_income petitioner's adjusted_gross_income limitation on her deduction for medical_expenses is dollar_figure petitioner admitted at trial that the amount of her medical_expenses was overstated by dollar_figure due to a clerical_error she maintains however that she paid out-of-pocket medical_expenses of between dollar_figure and dollar_figure during for her prenatal and postnatal care which were not covered by her medical insurance through her job at ryder truck rental however she did not obtain any records which show what portions of her medical_expenses were paid_by her insurance and herself we find that petitioner has failed to meet her burden_of_proof with regard to her medical_expenses rule a respondent's determination is sustained on this issue the seventh issue for decision is whether petitioner is liable for the sec_6662 accuracy-related_penalties for and respondent's determinations of negligence are presumed to be correct and petitioner bears the burden of proving that the penalties do not apply rule a welch v helvering u s pincite 58_tc_757 sec_6662 imposes a 20-percent penalty on the portion of the underpayment attributable to any one of various factors one of which is negligence or disregard of rules or regulations sec_6662 respondent determined that petitioner is liable for the accuracy-related_penalty imposed by sec_6662 for her underpayments of taxes in and and that such underpayments were due to negligence or disregard of rules or regulations negligence includes a failure to make a reasonable attempt to comply with the provisions of the internal revenue laws or to exercise ordinary and reasonable care in the preparation of a tax_return sec_6662 sec_1_6662-3 income_tax regs disregard includes any careless reckless or intentional disregard of rules or regulations sec_6662 sec_1_6662-3 income_tax regs sec_6664 however provides that the penalty under sec_6662 shall not apply to any portion of an underpayment if it is shown that there was reasonable_cause for the taxpayer's position with respect to that portion and that the taxpayer acted in good_faith with respect to that portion the determination of whether a taxpayer acted with reasonable_cause and in good_faith is made on a case-by-case basis taking into account all the pertinent facts and circumstances sec_1_6664-4 income_tax regs the most important factor is the extent of the taxpayer's effort to assess her proper tax_liability for the year id based on the record we find that petitioner has not proved that her underpayments were due to reasonable_cause or that she acted in good_faith accordingly we hold that petitioner is liable for the sec_6662 accuracy-related_penalties as determined by respondent to reflect the foregoing decision will be entered for respondent


department of the treasury employer_identification_number person to contact employee 1d number tel fax internal_revenue_service - appeals_office capitol street suite fresno ca release number release date date date uil code a b certified mail dear this is a final adverse determination that you do not qualify for exemption from federal_income_tax under internal_revenue_code the code sec_501 as an organization described in sec_501 of the code we have hereby revoked the favorable determination_letter to you dated december no longer exempt under sec_501 of the code effective january and you are we made the adverse determination for the following reason you failed to demonstrate that you are operated exclusively for any exempt_purpose as described in internal_revenue_code c this failure includes failing to substantiate how your expenditures in _ further tax-exempt purposes contributions to your organization aic not deductible under sec_170 of the code you're required to file federal_income_tax returns on forms u s_corporation income_tax return mail your form to the appropriate internal_revenue_service center per the form’s instructions you can get forms and instructions by visiting our website at www irs gov forms-pubs or by calling 800-tax-form if you were a private_foundation as of the effective date of the adverse determination we will consider you to be taxable private_foundation until you terminate your private_foundation_status under sec_507 of the code in addition to your income_tax return you must also continue to file form_990-pf return of private_foundation or sec_4947 trust treated as a private_foundation by the 15th day of the fifth month after the end of your annual_accounting_period we'll make this letter and the proposed adverse determination_letter available for public inspection under code sec_6110 after deleting certain identifying information we have provided to you in a separate mailing notice notice of intention to disclose please review the notice and the documents attached that show our proposed deletions if you disagree with our proposed deletions follow the instructions in notice if you decide to contest this determination you may file an action for declaratory_judgment under the provisions of sec_7428 of the code in either e united_states tax_court e e the united_states court of federal claims the united_states district_court for the district of columbia you must file a petition or complaint in one of these three courts within days from the date we mailed this determination_letter to you contact the clerk of the appropriate court for rules and the appropriate forms for filing petitions for declaratory_judgment you can write to the courts at the following addresses united_states tax_court second street nw washington dc us court of federal claims madison place nw washington dc u s district_court for the district of columbia constitution ave n w washington dc note we will not delay processing income_tax returns and assessing any taxes due even if you file petition for declaratory_judgment under sec_7428 of the code please refer to the enclosed publication how to appeals an irs determination on tax -exempt status for more information about the appeals process you also have the right to contact the taxpayer_advocate_service tas tas is an independent organization within the irs that can help protect your taxpayer rights tas can offer you help if your tax problem is causing a hardship or you've tried but haven't been able to resolve your problem with the irs advocate assistance please contact the taxpayer_advocate for the irs office that issued this letter you if you qualify for tas assistance which is always free tax will do everything possible to help you visit www taxpayeradvocate irs gov or call tas assistance is not a substitute for established irs procedures such as the formal appeals process tas cannot reverse a legally correct_tax determination or extend the time fixed by law that you have to file a petition in a united_states court if you have any questions contact the person at the top of this letter sincerely appeals team manager enclosure publication department of the treasury internal_revenue_service irs tax exempt and government entities exempt_organizations examinations pate ember taxpayer_identification_number form tax_year s ended person to contact id number contact numbers telephone fax manaaer’s name id number manager's contact number response due_date certified mali return receipt requested dear why you are receiving this letter we propose to revoke your status as an organization described in sec_501 of the internal_revenue_code cade enclosed is our report of examination explaining the proposed action what you need to do if you agree if you agree with our proposal please sign the enclosed form_6018 consent to proposed action sec_7428 and return it to the contact person at the address listed above unless you have already provided us a signed form we'll issue a final revocation letter determining that you aren’t an organization described in sec_504 after we issue the final revocation letter we'll announce that your organization is no longer eligible for contributions deductible under sec_170 of the code if we don't hear from you if you don't respond to this proposal within calendar days from the date of this letter we'll issue a final revocation letter failing to respond to this proposal will adversely impact your legal standing to seek a declaratory_judgment because you failed to exhaust your administrative remedies effect of revocation status if you receive a final revocation fetter you'll be required to file federal_income_tax returns for the tax_year s shown above as well as for subsequent tax years what you need to do if you disagree with the proposed revocation letter rev catalog number 34809f for additional information if you have any questions please call the contact person at the telephone number shown in the heading of this letter if you write please provide a telephone number and the most convenient time to call if we need to contact you thank you for your cooperation sincerely sn fre mary a epps director eo examinations enclosures report of examination form_6018 publication publication letter rev catalog number 34809f depactnent of the ‘treasury - intemal revenue service schedule no or exhibit porn a year period ended name of taxpayer explanation of items continue to qualify for exemption from federal_income_tax issue does under internal_revenue_code sec_501 facts history - trust agreement on article il of the foundation’s trust agreement states exclusively for charitable religious scientific literary and educational_purposes including for such purposes the making of distributions to organizations that qualify as exempt_organizations under séction c of the internal_revenue_code i foundation was created by the execution of the state attachment ‘is created in in the foundation submitted form_1023 attachment application_for recognition of exemption under sec_501 to the internal_revenue_service service on the top margin of the first page of form_1023 shows disaster relief in a hand written note the narrative description in part iv narrative description of your activities provides in part the mission of resources to enable people to rise above the ashes of life’s disasters is to provide compassion hope and the foundation will be classified as a private non-operating foundation and plans to be exclusively a grant making foundation as defined in sec_4942 the foundation will make grants exclusively to other qualified c organizations classified as private non-operating or public_charities for religious charitable educational scientific and literary purposes see internal revenue publication the board_of trustees will develop operating procedures to assure that the foundation adheres to the rules of sec_4941 sec_4942 sec_4943 sec_4944 and sec_4945 as applicable to private operating_foundations partv shows sand _ husband and wife as the only trustees form 886-acrev deparement of the treasury - internal_revenue_service page of foun a department of the treasury - inteonal revenue service schedule no or exhibit explanation of items name of taxpayer year period ended part vii question indicates the foundation will make grants loans or other distributions to organization s and an attached narrative provides details regarding the question page labeled of the narrative states in part that grants loans and distributions will further foundation's charitable purposes the foundation will keep detailed records a grant application is necessary a grant proposal is required and provides for oversight procedures subsequent of the grant distribution see pages labeled through part x question 1b requests a statement to describe where the foundation’s organizational documents meet the provision provided by code sec_508 the foundation’s statement references trust agreement article 1v the statement provides in part no part of the foundation’s net earings shall inure to the benefit of any individual the trustees shall not engage in any act of self-dealing as defined in code sec_4941 nor make any taxable_expenditure as defined in code sec_4945 the service issued letter attachment on as an exempt_organization under code sec_501 and as a private_foundation under code sec_509 recognizing the foundation the foundation's form_990-pf attachment return of private present examination f9s0pf foundation for the period ending shows dollar_figure is a partial list of the of the items comprising the total expense amount part shows the foundation did not pay out any contributions gifts or grants part analysis of revenue and expenses in occupancy and dollar_figure in travel_expenses in total expenses dollar_figure part vil-a statements regarding activities indicates the foundation does not have a web site - part vii-b statements regarding activities for which form_4720 may be required question indicates the foundation did not reimburse the expenses or make any assets available for the benefit of disqualified_person part vill information about officers directors trustees shows and as the only trustees part ix-a summary of direct charitable activities shows n a form -acrev s-cxy department of the treasney - internal_revenue_service page of department af the treasury lntemal revenue servier schedule no or exhibit porm a explanation of items name of taxpayer year period ended part xi qualifying distributions shows dollar_figure charitable etc purposes as the amount_paid to accomplish part xv supplementary information indicates the foundation only makes contributions to preselected charitable organizations and does not accept unsolicited requests for funds but the recipient schedule shows n a schedule b schedule of contributors shows and contributed dollar_figure and dollar_figure respectively both entities are owned by the trustees the contributed i website the foundation has a website www five pages attachment the contact page provides the foundation’s contact information shows view cart oder status products category index product index and shipping returns tabs at the bottom of the page the disaster relief shows two donation tabs a general fund and relief fund the resources page shows check out a variety of sources available to heip get going again but the page does not list any resources the donate now page allows a visitor to click on a predetermined amount beginning with dollar_figure or enter another amount the product index page shows aromatherapy oils for sale up to dollar_figure org consisting of a letter was mailed to the foundation on found on file and ra called the foundation numerous times and left messages on trustee called and said he did not receive letter to each of the two addresses trustee and could not commit a ra back ra called tp twice and left messages but calls were not returned meeting he would check his calendar and call ra received a letter dated on from trustee attachment in which he states he will cooperate fully he is unable to meet face to face and instructs ra not to visit trustee's place of business the letter does not provide a telephone number and provides that all questions be sent to the foundation’s address trustee pledges to comply with idr by subsequent to i trustee has not returned any telephone calls - trustee provided the requested information on packet was returned to trustee by mail room personnel on packet as response to form_4654 information_document_request idr but for unknown reasons the ra received a form 886-actev department of the treasury - internal revenue secvice page of form 886a department of the treasury - intemal revenue seevice schedule no or exhibit name of taxpayer year period ended explanation of items onetere in a subsequent form_4564 idr trustee was asked detailed follow up questions regarding the documentation he provided as a response fo idr trustee provided a page response to idr attachment idr requested the minutes of the governing body trustee provided a letter attachment in which he cites article x of the trust agreement and provides no one dealing with the trustees need inquire concerning the validity of anything the trustees purport to do no one dealing with the trustees need see the application of anything paid or transferred to or upon the order of the trustees of the the letter also states trustee can’t comply in good conscience with the request idr requested an income and expense statement for the period under examination trustee provided three financial documents and the one with the hand written notes reflects the figures on the return attachment in building and property security expense dollar_figure dollar_figure utility expense which were combined and reported as the dollar_figure occupancy expense on the return in landscaping expense and the statement shows dollar_figure dr requested trustee have available income and expense receipts trustee provided receipts and grouped them by line item payment to in legal fees trustee provided a five page response to idr line 16a shows dollar_figure which consisted of three receipts including a dollar_figure attachment trustee's response to idr to explain and provide documentation to show how these expenses further the foundation's charitable purposes is provided in item number of his response and states in accordance with the trust agreement and supported by minutes the foundation purchased property to provide charitable religious scientific and educational_services to those in need in addition in order to construct the facility the decision was made to purchase a heavy duty pickup in order to move construction material to the remote location all expenses are in accordance with the trust agreement no other documentation was provided line shows dollar_figure in tax expense and trustee provided a response to idr which consisted of a closing statement for the purchase of two parcels of land as a receipt attachment trustee's response to dr to explain and provide documentation to show how the land purchase further the foundation’s charitable purposes is provided in item see question no other documentation was provided form 886-acev department of the treasury - internal_revenue_service page of form_886 a department of the treasury - intemal revenue service schedule no or exhibit name of taxpayer year period ended explanation of items line shows response to idr which consisted of from national retailers such in occupancy expense and trustee provided a page receipts attachment some receipts are and other receipts indicate a regional retailer for items such as a horse power tractor propane starter repair and a ford truck purchase trustee's response to idr to explain and provide documentation to show how these expenses further the foundation’s charitable purposes is provided in item see question no other documentation was provided miles the notes on in travel_expenses and trustee provided a response to idr line shows dollar_figure which consisted of pages containing expense reimbursement forms dated from june to december attachment the forms reimburse the trustee for mileage and items purchased on a weekly basis in which he traveled the form indicate some of the purchased items were fruit trees planting equipment chains saw repair propane pump fix a flat batteries heating lights heating pots fence connectors solar panels fuel coffee battery connectors solar battery minder air compressor chipper air filter tarp rope post driver tie downs power adaptor auto shelter chipper belt solar array and inverter axe breaker bar and deep cycie battery the form provide a place to insert a business_purpose some are blank some state the reason for the visit was to water orchard remove barb wire establish walking trails repair flat tire install solar panel brush clearing chipping install portable garage transport tractor install outhouse security check perimeter winterize trailer install battery install rod gates remove fallen trees brush burning weather stripping prepare for heat install and measure for stove install and provide documentation to show how these expenses further the foundation’s charitable purposes is provided in item see question no other documentation was provided trustee’s response to idr to explain idr item requested a narrative detailing the foundation’s charitable religious scientific literary and or educational activities the trustee’s response is the foundation endeavors to educate people who are interested in learning how to improve their lifestyles health marriage business based on biblical principles idr item requested a list of all the organizations and the amounts the foundation has made distributions to the trustee's response is found on page and it shows seven distribution ail distributions are dated in the first distribution was made to a go cart racing organization four distributions were made to presumably a church one distribution was made to form 886-a rev department of the treasury - intemal revenue service page of form b86 a departinent of the treasury - lateraal revenue service schedule no or exhibit name of taxpayer explanation of items year period ended presumably a charitable_organization and one distribution to presumably idr item sec_40 - requested details regarding the foundation’s website the foundation stated that some of the items found on the website were inserted by the web developer through a template of some sort the foundation did receive any donation for has been deactivated relief it did not sell aromatherapy oils and the web site the foundation's form_990-pf attachment for the period part t shows dollar_figure fosopf ending dollar_figure maintenance dollar_figure of the items comprising the total expense amount in landscaping dollar_figure in small tools equipment and dollar_figure in total expenses dollar_figure in mileage reimbursement dollar_figure in automotive in repairs in utilities is a partial list part vii-a indicates the foundation does not have a web site part vil-b question indicates the foundation did not reimburse the expenses or make any assets available for the benefit of disqualified_person part vill shows part ix-a shows n a and as the only trustees part xii shows dollar_figure ‘as the amount_paid to accomplish charitable etc purposes part xv does not indicates the foundation only makes contributions to preselected charitable organizations and does not accept unsolicited requests for funds and does not show it grants or contributions were paid schedule b shows trustees contributed dollar_figure is owned by the foundation has not filed its form 990pf for the period ending foundation filed a second extension making it due by report was prepared the return was not filed the but at the time this form 886-aciev department of the treasury - internal_revenue_service page of department of the treasury - internal_revenue_service schedule no or exhibit form 886a explanation of items name of taxpayer year period ended the foundation’s form 990pf for the period ending travel conference and meetings expenses part line indicates the foundation did not make any contributions gifts or grants part shows dollar_figure in and idr were sent to the foundation to advise the a letter dated examination was expanded to include the two subsequent years and to request corresponding documentation the response date was not comply with request the foundation did law code sec_501 exempts from federal_income_tax corporations and any community chest fund or foundation organized and operated exclusively for religious charitable scientific testing for public safety literary or educational_purposes or to foster national or international amateur sports competition but only if no part of its activities involve the provision of athletic_facilities or equipment or for the prevention of cruelty to children or animals no part of the net_earnings of which inures to the benefit of any private_shareholder_or_individual no substantial part of the activities of which is carrying on propaganda or otherwise attempting to influence legislation except as otherwise provided in subsection h and which does not participate in or intervene in including the publishing or distributing of statements any political campaign on behalf of or in opposition to any candidate for public_office code sec_509 provides in part the term private foundation’ means a domestic or foreign organization described in code sec_501 other than an organization described in code sec_170 other than in clauses vii and viii code sec_509 an organization which normally receives more than one-third of its support in each taxable_year from any combination of gifts grants contributions or membership fees and gross_receipts from admissions sales of merchandise performance of services or furnishing of facilities in an activity which is not an unrelated_trade_or_business within the meaning of code sec_513 not including such receipts from any person or from any bureau or similar agency of a governmental_unit code sec_509 an organization that is organized and at all times thereafter is operated exclusively for the benefit of to perform the functions of or to carry out the purposes of one or more specified organizations described in paragraph or is operated supervised or controlled by one or more organizations described in paragraph or supervised or controlled in connection with one or more such form 886-aciev department of the treasury - internal_revenue_service page of form_886 a deparument of the treasury - internal revenue seeeice schedule no or exhibit name of taxpayer year period ended explanation of items smememeeimannee organizations or operated in connection with one or more such organizations and is not controlled directly or indirectly by one or more disqualified persons as defined in code sec_4946 other than foundation managers and other than one or more organizations described in paragraph or and code sec_509 an organization which is organized and operated exclusively for testing for public safety code sec_170 i describes a church or a convention or association of churches code sec_170 describes an educational_organization which normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on code sec_170 iii describes an organization the principal purpose or functions of which are the providing of medical or hospital care or medical education or medical_research code sec_170 describes an organization which normally receives a substantial part of its support exclusive of income received in the exercise or performance by such organization of its charitable educational or other purpose or function constituting the basis for its exemption under code sec_501 from the united_states or any state or political_subdivision thereof or from direct or indirect_contributions from the general_public and which is organized and operated exclusively to receive hold invest and administer property and to make expenditures to or for the benefit of a college or university which is an organization referred to in clause ii of this subparagraph and which is an agency_or_instrumentality of a state or political_subdivision thereof or which is owned or operated by a state or political_subdivision thereof or by an agency_or_instrumentality of one or more states or political subdivisions code sec_170 describes a governmental_unit referred fo in subsection c code sec_170 describes an organization referred to in subsection c which normally receives a substantial part of its support exclusive of income received in the exercise or performance by such organization of its charitable educational or other purpose or function constituting the basis for its exemption under code section form b86-arev department of the treasury - internal_revenue_service page of form_886 a department of the ‘trvagury - intornal reveaue service schedule no orc exhibir name of taxpayer explanation of items year period ended a from a governmental_unit referred to in subsection c or from direct or indirect_contributions from the general_public federal tax regulations regulations sec_1_501_c_3_-1 states in part that in order to be exempt as an organization described in code sec_501 the 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 itis not exempt the term exempt_purpose or purposes as used in this section means any purpose or purposes specified in code sec_501 regulations sec_1_501_c_3_-1 provides that an organization will not be regarded as operated exclusively for exempt purposes if more than an insubstantial part of its activities is not in furtherance of exempt purposes regulations sec_1_501_c_3_-1 states in part that an organization is not organized exclusively for one or more exempt purposes unless its assets are dedicated to an exempt_purpose an organization's assets will be considered dedicated to an exempt_purpose for example if upon dissolution such assets would by reason of a provision in the organization's articles or by operation of law be distributed for one or more exempt purposes or to the federal government or to a state_or_local_government for a public purpose or would be distributed by a court to another organization to be used in such manner as in the judgment of the court will best accomplish the general purposes for which the dissolved organization was organized however an organization does not meet the organizational_test if its articles or the law of the state in which it was created provide that its assets would upon dissolution be distributed to its members or shareholders regulations sec_1_6001-1 state in part except as provided in paragraph b of this section any person subject_to tax under subtitle a of the code including a qualified_state individual income_tax which is treated pursuant to sec_6361 as if it were imposed by chapter of subtitle a or any person required to file a return of information with respect to income shall keep such permanent books of account or records including inventories as are sufficient to establish the amount of gross_income deductions credits or other matters required to be shown by such person in any return of such tax or information in addition to such permanent books_and_records as are required by paragraph a of this section with respect to the tax imposed by code sec_511 on unrelated_business_income of certain exempt_organizations every organization exempt from tax under code sec_501 shall keep such permanent form 886-a cev -68 department of the treasury - internal_revenue_service page of form 886a name of taxpayer department of the treasury - internal revenne service explanation of items scheduk no or exhibit year period ended books of account or records including inventories as are sufficient to show specifically the items of gross_income receipts and disbursements such organizations shall also keep such books_and_records as are required to substantiate the information required by code sec_6033 the books_or_records required by this section shail be kept at alt times available for inspection by authorized internal revenue officers or employees and shall be retained so long as the contents thereof may become material in the administration of any internal revenue law taxpayer’s position a copy of this report has not yet been provided to tp government's position issue the foundation does not continue to qualify for exemption under code sec_501 because it did not demonstrate that it is organized or operated exclusively for a charitable purposes as required by the code sec_501 and regulation sec_1 c the trustees purchased land vehicies smail tools farming equipment trees other items and received expense reimbursements however the foundation’s proposed activities on form_1023 was to be exclusively a grant making foundation the trustees did not demonstrate the purchases furthered a charitable purpose based on the information provided by the trustee for the period ending review of the proposed to operate on form_1023 and forms 990pf the foundation never operated as it a conclusion the foundation does not continue to qualify for exemption under code sec_501 because it did not demonstrate that it is organized or operated for any charitable purpose and its assets inure to the benefit of the trustees the effective date of the proposed revocation is form 886-ariev department of the treasury - internal_revenue_service page of


department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division aug pepats uniform issue list legend decedent a individualb individual c company d amount e state f court g date l date p date n date m this is in response to your request for a private_letter_ruling submitted by your authorized representative by letter dated date concerning the ira x dear page proper treatment of amounts in decedent a’s individual_retirement_account ira x under sec_401 and sec_408 of the internal_revenue_code code correspondence dated date and date supplemented the request your authorized representative has submitted the following facts and representations ‘ decedent a was born on date l and died on date m while a resident of state f at age having attained his required_beginning_date as that term is is survived by three defined in sec_401 of the code decedent a children including you individual b and individual c you the son of decedent a were born on date n and were alive at the date of this ruling_request decedent a died testate and his estate is being administered in accordance with his last will and testament will individual b was appointed as executor of decedent a's estate and was granted letters of the office on date p by court g in accordance with section seven of the will decedent a’s non-ira estate has been distributed outright to the heirs you his son individual b his daughter and individual c his son in equal shares as of his date of death decedent a was the owner of an individual_retirement_arrangement ira ira x maintained with company d as of the date of this ruling_request ira x had a value of approximately amount e decedent a did not name a beneficiary of ira x thus decedent a's estate is the beneficiary thereof you individual b and individual c are entitled to equal shares of decedent a’s ira x in accordance with sections one and two of decedent a’s will individual b as executor of the estate of decedent a intends to divide ira x into three equal one-third shares-one for each of decedent a’s heirs this will be accomplished by dividing ira x by means of a series of trustee-to-trustee transfers into three distinct sub-iras established as inherited ira and titled as follows decedent a deceased ira f b o your name beneficiary of estate of decedent a decedent a deceased ira f b o individual b beneficiary of estate of decedent a and decedent a deceased ira f b o individual c beneficiary of estate of decedent a each sub-ira created as a result of the division of ira x will receive a pro-rata share of all earnings and interest calculated up to the date of transfer said trustee-to-trustee transfers will occur during calendar_year the three inherited iras will make distributions intended to meet the minimum distribution_requirements of sec_401 of the code based on the remaining life expectancy of decedent a said distributions will be made from each of the three transferee sub-iras and will commence during calendar_year page as of the date of this ruling_request the funds in ira x remain undistributed except that the required minimum distributions have been made with respect to calendar years and based on the foregoing you request the following rulings that your one-third interest of decedent a's ira x can be segregated and held in a separate inherited sub-ira for purposes of determining your minimum_required_distribution under sec_401 of the code that the ira created by means of a trustee to trustee transfer which will be titled decedent a deceased f b o your name beneficiary of the estate of decedent a thereof constitutes an inherited ira under sec_408 of the code that distribution the minimum required requirement under sec_401 of the code from your sub-ira may be met by distributing amounts annually from your distinct ira calculated using decedent a’s as of his birthday remaining life expectancy using the age of decedent a in the calendar_year of his death reduced by one for each subsequent calendar_year in accordance with sec_1_401_a_9_-5 q a-5 of the income_tax regulations and that the transfer of your one-third interest in decedent a’s ira to an ira in decedent a’s name for your benefit will not constitute a distribution be within the meaning of sec_408 of the code nor will considered an attempted rollover from ira x to your distinct ira it with respect to your ruling requests sec_401 of the code provides in general that if a plan participant ira holder dies after the distribution of his interest has begun in accordance with subparagraph a ii after his required_beginning_date the remaining portion of his interest must be distributed at least as rapidly as under the method of distribution being used under subparagraph a ii as of the date of death sec_401 of the code provides in relevant part that for purposes of this paragraph the term required_beginning_date means april of the calendar_year following the calendar_year in which the ira holder attains age final income_tax regulations regulations under sec_401 and sec_408 of the code were published in the federal_register pincite federal_register date and in the internal_revenue_bulletin pincite_19_irb_852 date the preamble to the regulations in relevant part provide that the regulations apply for determining required minimum distributions for calendar years beginning after date page sec_1_401_a_9_-4 of the regulations q a-4 provides in relevant part that in order to be a designated_beneficiary an individual must be a beneficiary as of the date of the employee's or ira holder's death generally an employee's designated_beneficiary will be determined based on the beneficiaries designated as of the date of death who remain beneficiaries as of september of the calendar_year following the calendar_year of death sec_1_401_a_9_-4 of the regulations q a-3 provides that only individuals may be designated beneficiaries for purposes of sec_401 a person who is not an individual such as the employee's estate may not be a designated_beneficiary sec_1_401_a_9_-5 of the regulations q a- a provides in summary that if an employee dies on or after his required_beginning_date without having designated a beneficiary then post-death distributions must be made over the remaining life expectancy of the employee determined in accordance with paragraph c of a-5 sec_1_401_a_9_-5 of the regulations q a- c provides in general that with respect to an employee who does not have a designated_beneficiary the applicable distribution period measured by the employee's remaining life expectancy is the life expectancy of the employee using the age of the employee as of the employee's birthday in the calendar_year of the employee's death in subsequent calendar years the applicable distribution period is reduced by one for each calendar_year that has elapsed after the calendar_year of the employee's death sec_1_401_a_9_-9 of the regulations q a-1 provides the relevant single life expectancy table sec_1_401_a_9_-8 of the regulations q a-2 a provides the separate_account rules with respect to defined contribution plans a separate_account is an account under which the beneficiary or beneficiaries differ from the beneficiary or beneficiaries of the other accounts in general if separate_accounts are set up for years subsequent to the calendar_year containing the date on which the separate_accounts were established or the date of death if later a separate_account under a plan is not aggregated with the other separate_accounts under the plan in order to determine whether the distributions from such separate_account satisfy the requirements of code sec_401 instead the rules in code sec_401 apply separately to each separate_account under the plan sec_1_401_a_9_-8 of the regulations q a-3 provides that a separate_account is a separate portion of an employee's benefit reflecting the separate interest of the employee's beneficiaries under the plan as of the date of the employee's death for which separate_accounting is maintained the separate_accounting must allocate all post-death investment gains and losses contributions and forfeitures for the period prior to the establishment of the separate_accounts on a pro-rata basis ina consistent and reasonable manner among the separate_accounts page sec_1_401_a_9_-4 of the regulations q a-5 c provides in relevant part that the separate_account rules are not available to beneficiaries of a_trust with respect to the trust's interest in an employee's benefit in like manner the separate_account rules are not available to beneficiaries of an estate with respect to the estate's interest in an employee's plan or ira interest sec_408 of the code provides generally that in accordance with the rules of sec_72 amounts paid or distributed from an ira are included in the gross_income by the payee or distributee sec_408 of the code provides generally that amounts from an inherited ira cannot be rolled over into another ira in general an inherited ira is an ira maintained by an individual who acquired said ira by reason of the death of another if the acquiring individual is not the surviving_spouse of said other individual in this case as noted above you are decedent a's son revrul_78_406 1978_2_cb_157 provides that the direct transfer of funds from one ira trustee to another ira trustee even if at the behest of the ira holder does not constitute a payment or distribution to a participant payee or distributee as those terms are used in code sec_408 furthermore such a transfer does not constitute a rollover_distribution finally revrul_78_406 is applicable if the trustee to trustee transfer is directed by the beneficiary of an ira after the death of the ira owner as long as the transferee ira is set up and maintained in the name of the deceased ira owner for the benefit of the beneficiary although neither the code nor the regulations promulgated under sec_401 of the code preclude the posthumous division of ira x into more than one ira the regulations do preclude separate_account treatment for code sec_401 purposes where amounts pass through an estate the issues raised in this ruling_request are whether a beneficiary-son of an ira holder may after the death of the ira holder transfer his one-third interest in the deceased's ira to an ira set up to solely benefit him and whether he may receive distributions from his beneficiary ira over the deceased's remaining life expectancy without regard to the distribution decisions made by the other ira beneficiaries in this case absent your decision to transfer by means of a trustee-to-trustee transfer your one-third interest in decedent a's ira x to your beneficiary ira as described above distributions of the entire ira x interest including your one-third would have to be made over decedent a's remaining life expectancy in accordance with sec_1_401_a_9_-5 of the regulations q a-5 c after the trustee to trustee transfer you will receive required distributions over decedent a's remaining t page life expectancy thus the trustee to trustee transfer will have no effect on the timing or amount of minimum required distributions additionally a trustee to trustee transfer as described in revrul_78_406 does not constitute a distribution or payment as those terms are defined for purposes of code sec_408 finally since you are decedent a's son your one-third interest in decedent a's ira x constitutes an inherited ira as that term is defined in sec_408 of the code thus based on the specific facts and representations surrounding this ruling_request we conclude as follows that your one-third interest of decedent a's ira x can be segregated a separate ira for purposes of determining your minimum and held in required_distribution under sec_401 of the code that the ira created by means of a trustee to trustee transfer which will be titled decedent a deceased f b o your name beneficiary of the estate of decedent a thereof constitutes an inherited ira under sec_408 of the code - that distribution requirement under the minimum required sec_401 of the code from your sub-ira may be met by distributing amounts annually from your distinct ira calculated using decedent a’s remaining life expectancy using the age of decedent a as of his birthday in the calendar_year of his death reduced by one for each subsequent calendar_year in accordance with sec_1_401_a_9_-5 q a-5s of the income_tax regulations and that the transfer of your one-third interest in decedent a’s ira to an ira in decedent a’s name for your benefit will not constitute a distribution be within the meaning of sec_408 of the code nor will considered an attempted rollover from ira x to your distinct ira it pursuant to a power_of_attorney on file with this office a copy of this letter_ruling is being sent to your authorized representative this ruling letter is based on the assumption that ira x and the beneficiary ira created after the trustee to trustee transfer either have met are meeting or will meet the requirements of code sec_408 at all times relevant thereto this ruling letter assumes that ira x either is or was qualified under code sec_408 at all times relevant thereto it also assumes that the transferee ira to be set page up to benefit you as a beneficiary of the estate of decedent a will also meet the requirements of sec_408 of the code at ail times relevant thereto please note that as stated above minimum required distributions from your transferee ira must commence no later than date this ruling is directed only to the taxpayer who requested it sec_61 k of the code provides that it may not be used or cited by others as precedent this ruling is directed only to the taxpayer who requested it sec_6110 of the code provides that it may not be used or cited by others as precedent ' a copy of this letter is being sent to your authorized representative in accordance with a power_of_attorney on file in this office if you have any questions please call id e_laerery ot fah _ not toll free number sincerely yours frances v sloan employee_plans technical group wanager enclosures notice of intention to disclose deleted copy of ruling cc