internal_revenue_service number release date index number ------------------------ --------------------------------- ------------- ------------------------------- ---------------------- in re department of the treasury washington dc third party communication none date of communication not applicable_person to contact ----------------- id no ------------- telephone number --------------------- refer reply to cc psi b01 plr-112573-04 date date x ----------------------------------------------------- ----------------------- ---------------------- ----------------- -------------------------- ---------------------------------------------- a_trust d1 d2 dear -------------- requesting a ruling under sec_301_9100-3 of the procedure and administration regulations that x be granted an extension of time to make an election sec_754 of the internal_revenue_code facts this letter responds to a letter dated date written on behalf of x according to the information submitted a owned an interest in x through trust a grantor_trust a died on d1 as a result of a’s death there was a deemed transfer of a’s interest in x to trust x filed its partnership return for the taxable_year ending d2 without making a sec_754 election having relied on its accountant who failed to advise x of the availability and benefits of such election x represents that it has acted reasonably and in good_faith that granting relief will not prejudice the interest of the government and that it is not using hindsight in making the election plr-112573-04 law and analysis under sec_754 a partnership may elect to adjust the basis of partnership property where there is a distribution_of_property or a transfer of a partnership_interest the election applies to all distributions of property by the partnership and to all transfers of interests in the partnership during the taxable_year that the election applies and all subsequent taxable years sec_1_754-1 of the income_tax regulations provides that an election under sec_754 is made in a written_statement filed with the partnership return for the taxable_year during which the distribution or transfer occurs for the election to be valid the return must be filed no later than the time for filing for the taxable_year including extensions sec_301_9100-1 provides that the commissioner may grant a reasonable extension of time to make a regulatory election or a statutory election but no more than 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 deadline is prescribed by a regulation published in the federal_register or a revenue_ruling revenue_procedure notice or announcement published in the internal_revenue_bulletin sec_301_9100-2 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 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 interest of the government conclusion based solely on the facts submitted and the representations made we conclude that x has satisfied the requirements of sec_301_9100-3 as a result x is granted an extension of time for making the sec_754 election until sixty days from the date of this letter x should make the election by filing an amended_return with the applicable service_center for the taxable_year ending d2 with a properly completed sec_754 election attached a copy of this letter should be attached to the election concerning the federal tax consequences of the facts described above under any other provision of the code except as specifically set forth above no opinion is expressed or implied this ruling is directed only to the taxpayer who requested it sec_6110 plr-112573-04 of the code provides that it may not be used or cited as precedent being sent to the taxpayer sincerely pursuant to the power_of_attorney on file with this office a copy of this letter is s heather c maloy heather c maloy associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes cc ---------------------------- ------------------------------------------- --------------------- ---------------------------- ------------------------------------------------------------- ------------------------------- ----------------- ------------------------


t c memo united_states tax_court alvin d craighead petitioner v commissioner of internal revenue respondent docket no filed date alvin d craighead pro_se britton g wilson for respondent memorandum findings_of_fact and opinion paris judge respondent issued to petitioner a notice_of_deficiency for the tax_year in response petitioner filed a petition on date raising the defense that he was not required to file a tax_return for the tax_year after preparing his own self-assessment petitioner maintains that he was not required to file a federal tax_return because his gross_income was below the filing threshold further petitioner contends that respondent’s determination was incorrect because he did not remember receiving the income reflected on respondent’s substitute for return prepared under sec_6020 after concessions the issues for decision are whether petitioner was required to file a federal tax_return for the tax_year the amount of petitioner’s taxable_income for the tax_year and whether petitioner was entitled to a making_work_pay_credit for the tax_year findings_of_fact some of the facts have been stipulated and are so found the stipulation of facts the exhibit attached to the stipulation of facts and the exhibits admitted at trial and by order are incorporated herein by this reference petitioner resided in oklahoma when the petition was filed on date respondent prepared for petitioner a substitute for return for under sec_6020 on date respondent issued petitioner a notice_of_deficiency for the tax_year determining that petitioner unless otherwise indicated all section references are to the internal_revenue_code code in effect for the year in issue and all rule references are to the tax_court rules_of_practice and procedure respondent conceded petitioner is not liable for additions to tax under sec_6651 and for the tax_year received wages of dollar_figure social_security_benefits of dollar_figure unemployment_compensation of dollar_figure royalties of dollar_figure and an annuity distribution of dollar_figure in the tax_year respondent supported all of the income determinations through third-party documentation except for the royalties respondent supported the royalties with information provided on a form 1099-misc miscellaneous income reflecting the name of the payer but this form was not directly entered into evidence at trial petitioner did not remember most of the income received in the tax_year he remembered working for terra soil farming llc but could not remember whether he received wages from the company in he recognized that he owned a small amount of mineral rights but did not remember whether he received royalties in tax_year petitioner remembered receiving unemployment benefits but did not remember how much he received in the tax_year petitioner did not remember receiving any retirement or annuity distribution but did remember working for the company for whom the annuity was all amounts are rounded to the nearest dollar as discussed below petitioner admitted to owning the property for which the royalties were paid paid petitioner remembered receiving social_security_benefits but disputed the amount he received in respondent’s original substitute for return included dollar_figure of social_security_benefits respondent later determined that petitioner repaid dollar_figure of the social_security_benefits thereby reducing his net social_security_benefits to dollar_figure for the tax_year similarly in addition to the dollar_figure standard_deduction allowed on the original substitute for return respondent later determined at trial that petitioner was entitled to an additional dollar_figure standard_deduction for the tax_year because he was over the age of as a result of these subsequent determinations respondent decreased petitioner’s deficiency from dollar_figure to dollar_figure opinion the commissioner’s determinations in a notice_of_deficiency are generally presumed correct and the taxpayer bears the burden of proving that the determinations are erroneous rule a 290_us_111 the retirement income was paid in the form of an annuity distribution by principal life_insurance for the benefit of terra renewal services inc as discussed below respondent conceded that petitioner received net social_security_benefits lower than originally determined in the notice of deficiency--aligning with petitioner’s testimony at trial 948_f2d_1188 10th cir in unreported income cases the presumption of correctness does not attach until the commissioner has produced some substantive evidence demonstrating the taxpayer received the unreported income mcmullin f 2d pincite see also 937_f2d_1548 10th cir aff’g tcmemo_1989_552 respondent produced third-party evidence to establish that petitioner received unreported income and the presumption has attached further petitioner has not asserted that the burden has shifted and in fact he has openly accepted the burden sec_6012 requires every individual who has gross_income over a certain amount to file an income_tax return an unmarried individual taxpayer must make a return if he or she has gross_income in excess of the sum of the exemption_amount plus the basic_standard_deduction applicable to that individual see sec_6012 further the threshold_amount is increased by an additional standard deduction--as defined by sec_63 --if a single_taxpayer is over the age of at the end of the tax_year see sec_6012 under sec_151 an individual is allowed an income exemption as a deduction when computing his or her taxable_income the exemption_amount is adjusted each year for inflation and was dollar_figure for each tax_year exemption see sec_151 revproc_2008_66 2008_45_irb_1107 the exemption_amount is phased out when a taxpayer’s adjusted_gross_income exceeds a threshold_amount which was dollar_figure for the tax_year see sec_151 revproc_2008_66 supra as discussed below petitioner’s adjusted_gross_income is below dollar_figure and his dollar_figure personal_exemption is not reduced for the tax_year under sec_63 an individual taxpayer who does not elect to itemize deductions is allowed to deduct a standard amount--known as a standard deduction--from his or her income see sec_63 and c an individual’s standard_deduction may be made up of several smaller components see sec_63 single taxpayers who do not itemize are generally allowed a basic_standard_deduction which was dollar_figure for the tax_year sec_63 revproc_2008_66 supra an additional standard_deduction which was dollar_figure for the tax_year is allowed for single taxpayers who are not surviving spouses and over the age of before the end of the taxable_year see sec_63 petitioner testified that in he was over and did not itemize his deductions petitioner does not contend that he was entitled to any other deductions provided in sec_63 accordingly he was entitled to a basic_standard_deduction of dollar_figure and an additional standard_deduction of dollar_figure because he was older than at the end of the tax_year to summarize for the tax_year petitioner is entitled to a personal_exemption of dollar_figure under sec_151 a basic_standard_deduction of dollar_figure under sec_63 and an additional standard_deduction of dollar_figure under sec_63 the sum of these three amounts helps determine whether petitioner was exempt from filing a federal_income_tax return for the tax_year see sec_6012 and b in other words petitioner would not be required to file a return if he received less than dollar_figure of gross_income in the tax_year gross_income means all income from whatever source derived including wages royalties pensions annuities and several other types of income sec_61 respondent reconstructed petitioner’s gross_income using information from third- party returns and records respondent adequately supported the determination that petitioner received dollar_figure of wages from terra soil farming llc in the tax_year by introducing third-party documentation respondent also showed that petitioner received dollar_figure of mineral royalties from edward oil co and a dollar_figure annuity distribution from principal life_insurance on behalf of terra renewal services inc in the tax_year petitioner did not assert any reasonable dispute of the third-party returns under sec_6201 or otherwise meet his burden of proving he did not receive the unreported income accordingly petitioner’s gross_income includes his wages royalties and an annuity distribution for the tax_year gross_income for individual taxpayers also generally includes unemployment_compensation sec_85 this includes any amount received under a law of the united_states or any state that is in the nature of unemployment_compensation sec_85 for the tax_year however a taxpayer is entitled to exempt dollar_figure of his or her unemployment_compensation from gross_income sec_85 in other words a taxpayer is required to include only unemployment_compensation over dollar_figure in his or her gross_income respondent introduced evidence to support the determination that petitioner received dollar_figure of unemployment_compensation from the oklahoma employment security commission in the tax_year after applying the exemption petitioner’s gross_income includes dollar_figure of unemployment_compensation for the tax_year generally gross_income includes at least some portion of any social_security_benefits received by a taxpayer see sec_86 however a taxpayer’s gross_income will not include any social_security_benefits if the sum of the taxpayer’s modified_adjusted_gross_income plus one half of his or her social_security_benefits does not exceed a base_amount sec_86 the base_amount provided in sec_86 for a single_taxpayer was dollar_figure for the tax_year sec_86 for this equation social_security_benefits means any amount received by a taxpayer by reason of entitlement to a monthly benefit under title ii of the social_security act sec_86 the amount of social_security_benefits received during any taxable_year shall be reduced by any repayment made by a taxpayer during the taxable_year of a social_security_benefit previously received by the taxpayer regardless of whether the benefit was received during the taxable_year see sec_86 third-party reporting originally reflected that petitioner received a total of dollar_figure in social_security_benefits and certified transcripts from the social_security administration later showed that petitioner repaid dollar_figure of the benefits during the tax_year this means that petitioner received social_security_benefits of dollar_figure for purposes of sec_86 one- half of this amount is dollar_figure under sec_86 modified_adjusted_gross_income means a taxpayer’s adjusted_gross_income without regard to social_security_benefits but includes any tax-exempt_interest the taxpayer received petitioner did not have any adjustments the repayments were actually withheld from social_security_benefits before payment to petitioner to his gross_income and therefore his adjusted_gross_income is equal to his gross_income further petitioner did not receive any tax-exempt_interest accordingly his modified_adjusted_gross_income equals his gross_income without including any social_security_benefits as discussed above petitioner’s gross_income includes dollar_figure of wages dollar_figure of mineral royalties dollar_figure of annuity income and dollar_figure of unemployment compensation--for a total modified_adjusted_gross_income of dollar_figure the sum of one-half of petitioner’s social_security_benefits dollar_figure plus his modified_adjusted_gross_income dollar_figure equals dollar_figure the base_amount for a single_taxpayer is dollar_figure sec_86 accordingly petitioner’s gross_income does not include his social_security_benefits because under sec_86 the sum of his modified_adjusted_gross_income plus his received social_security_benefits was less than the base_amount as a result respondent has adequately supported the determination that petitioner’s taxable_income for the tax_year was dollar_figure this amount exceeds his filing threshold of dollar_figure computed under sec_6012 respondent’s opening brief reports two different sums for this equation an erroneous sum of dollar_figure and the correct sum of dollar_figure as discussed above petitioner’s gross_income equaled his adjusted_gross_income because he did not have any adjustments to his gross_income see sec_62 and b accordingly petitioner was required to file a federal tax_return for the tax_year under sec_36a an eligible_individual taxpayer is allowed a credit against tax equal to the lesser_of of the taxpayer’s earned_income or dollar_figure the credit--called the making work pay credit--starts to phase out when a taxpayer’s modified_adjusted_gross_income is more than dollar_figure sec_36a under sec_36a and sec_32 earned_income means wages salaries tips and other employee compensation earned_income does not include pension or annuity income sec_32 only petitioner’s dollar_figure of wages received from terra soil farming llc satisfies the definition of earned_income accordingly because of petitioner’s dollar_figure of wages is dollar_figure which is more than dollar_figure petitioner is entitled to a dollar_figure making_work_pay_credit in conclusion petitioner did not carry his burden of proving that respondent’s determinations were erroneous respondent’s determination that petitioner’s gross_income included dollar_figure of wages dollar_figure of royalties a dollar_figure annuity distribution and dollar_figure of unemployment_compensation for the tax the term modified_adjusted_gross_income under sec_36a is different from modified_adjusted_gross_income in sec_86 as discussed above the difference is moot because the phaseout of the sec_36a credit does not apply to petitioner year is sustained as a result petitioner was required to file a tax_return because his gross_income was more than the sum of his standard_deduction and personal_exemption respondent’s determination as modified to reflect the increased standard_deduction for single taxpayers over the age of and the removal of petitioner’s social_security_benefits is sustained respondent’s determination that petitioner was entitled to a dollar_figure making_work_pay_credit is also sustained for the tax yeardollar_figure to reflect the foregoing an appropriate decision will be entered as noted above respondent miscalculated the sum of one-half petitioner’s social_security_benefits and his modified_adjusted_gross_income this error however does not change petitioner’s taxable_income because the correct sum is still below the dollar_figure base provided in sec_86 respondent conformed the determinations to reflect the exhibits presented at trial--described above--and subsequently decreased petitioner’s deficiency to dollar_figure respondent also conceded the additions to tax under sec_6651 and for tax years


internal_revenue_service number release date index number ---------------------------------- ------------------------------- ---------------------- in re ------------------------------------ - department of the treasury washington dc person to contact --------------------- id no ------------- telephone number --------------------- refer reply to cc psi b01 - plr-163527-03 date feb ------------------------------------ legend x ------------------------------------------------- date dear -------------------- --------------------------- this responds to a letter dated date and subsequent correspondence submitted on behalf of x requesting relief under ' b of the internal_revenue_code facts x was incorporated on date the shareholders of x desired that x elect s_corporation treatment effective on date but the election to be treated as an s_corporation was not timely filed accordingly x requests a ruling that it will be treated as an s_corporation effective date law and analysis sec_1362 provides that a small_business_corporation may elect to be an s_corporation sec_1362 provides the rule on when an s election will be effective sec_1362 provides in relevant part that if an s election is made within the first two and one-half months of a corporation's taxable_year then the corporation will be treated as an s_corporation for the year in which the election is made under ' b however if an s election is made after the first two and one-half months of plr-163527-03 a corporation's taxable_year then that corporation will not be treated as an s_corporation until the taxable_year after the year in which the s election is filed sec_1362 provides that if no ' a 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 ' b shall not apply x did not file an election to be treated as an s_corporation under ' a x has however established reasonable_cause for not making a timely s election and is entitled to relief under ' b conclusion except as expressly provided herein no opinion is expressed or implied based solely on the facts submitted and the representations made and provided that x otherwise qualifies as an s_corporation we conclude that x will be treated as an s_corporation effective date within days from the date of this letter x should submit a properly completed form_2553 effective date with a copy of this letter attached to the relevant service_center concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter the code provides that it may not be used or cited as precedent representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination this ruling is directed only to the taxpayer s requesting it sec_6110 of the rulings contained in this letter are based upon information and sincerely dianna miosi branch chief branch office of the associate chief_counsel passthroughs special industries enclosures


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 b02 plr-135913-09 date date internal_revenue_service number release date index number ------------------------------- ------------------ ----------------------------------- -------------------------------- legend x ------------------------------------------ ------------------ state -------- d1 d2 -------------------------- ---------------------- dear -------------- this responds to a letter dated date submitted on behalf of x by x’s authorized representative requesting a ruling under sec_1362 of the internal_revenue_code the information submitted states that x was incorporated in state on d1 it was intended that x elect s_corporation treatment effective d2 however a form_2553 election by a small_business_corporation was not timely filed for x sec_1362 provides that a small_business_corporation may elect to be an s_corporation sec_1362 provides the rule on when an s election will be effective generally if an s election is made within the first two and one-half months of a corporation's taxable_year then the 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 the corporation will not be treated as an s_corporation until the taxable_year after the year in which the s election is made plr-135913-09 sec_1362 provides that if an election under sec_1362 is made for any taxable_year after the date prescribed by sec_1362 for making the election for the taxable_year or 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 the election then the secretary may treat the election as timely made for such taxable_year and sec_1362 shall not apply 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 effective d2 accordingly provided that x makes an election to be an s_corporation by filing a completed form_2553 with the appropriate service_center effective d2 within days following the date of this letter then such election will be treated as timely made for x's taxable_year beginning d2 a copy of this letter should be attached to the form_2553 except as specifically set forth above no opinion is expressed or implied as to the federal_income_tax consequences of the transaction described above under any other provision of the code specifically no opinion is expressed concerning whether x is in fact 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 pursuant to the power_of_attorney on file with this office a copy of this letter is being sent to x’s authorized representative sincerely bradford r poston senior counsel branch passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes


internal_revenue_service department of the treasury index number cid cid cid cid cid cid cid cid cid cid washington dc 0wodgt cid cid cid cid cid cid cid cid cid cid cid 4gngcug cid cvg cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid person to contact cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid telephone number cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid refer reply to cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid date date cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid wpf cid cid cid wpf cid cid cid cid wpf cid cid cid 6twuv cid gct cid cid gct cid dollar_figure cid gct cid cid gct cid cid gct cid ’ cid 5vcvg cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid gct cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid ’ cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid ’ cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid ’ cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid cid 6jku cid ku cid kp cid tgrn cid vq cid c cid ngvvgt cid fcvgf cid cpwct cid cid cid cid cid cid cid cid cid cid cid uggmkpi cid vjg cid 5getgvct u cid eqpugpv cid vq tgxqmg cid cid hqt cid gct cid cid cpf cid uwdugswgpv cid ecngpfct cid gctu cid vjgtgchvgt cid cid cp cid gngevkqp cid rtgxkqwun cid ocfg cid d wpf cid cid cid cid wpf cid cid cid cpf cid wpf cid cid cid wpf cid qt cid wpfu cid cid wpfgt cid ugevkqp cid cid cid cid cid g cid cid cid cid cid qh cid vjg cid pvgtpcn 4gxgpwg cid qfg cid qh cid cid cid cid cid cid cu cid cogpfgf cid cid vjg cid qfg cid cid cid cid cid ffkvkqpcnn cid cid vjg cid wpfu cid tgswguv cid vjcv cid vjg cid ecnewncvkqp cid qh cid gcej cid qh cid vjgkt cid tgswktgf fkuvtkdwvkqpu cid qh cid ecrkvcn cid ickp cid pgv cid kpeqog cid wpfgt cid ugevkqp cid cid cid cid cid d cid cid cid dollar_figure cid cid cpf cid cid cid cid cid g cid cid cid cid cpf cid ickp cid qt nquu cid htqo cid hqtgkip cid ewttgpe cid vtcpucevkqpu cid wpfgt cid ugevkqp cid cid cid cid cid g cid cid cid cid hqt cid vjg cid ecngpfct cid gct cid gpfkpi gegodgt cid cid cid cid cid gct cid cid cid dg cid fgvgtokpgf cid qp cid vjg cid dcuku cid qh cid ecrkvcn cid ickpu cid cpf cid nquugu cid cpf cid hqtgkip ewttgpe cid ickpu cid cpf cid nquugu cid cid tgurgevkxgn cid cid tgcnk gf cid cpf cid tgeqipk gf cid fwtkpi cid vjg cid vgp cid oqpvj cid rgtkqf htqo cid cpwct cid cid cid vjtqwij cid 1evqdgt cid cid cid cid cid gct cid cid plr-101813-00 wpfu cid ctg cid rctv cid qh cid 6twuv cid cid c cid ugtkgu cid hwpf cid vjcv cid ku cid qticpk gf cid cu cid c cid 5vcvg cid dwukpguu cid vtwuv cid cpf cid ku tgikuvgtgf cid ykvj cid vjg cid 5gewtkvkgu cid cpf cid ’zejcpig cid qookuukqp cid wpfgt cid vjg cid pxguvogpv cid qorcp cid ev qh cid cid cid cid cid cid cu cid cp cid qrgp cid gpf cid ocpcigogpv cid kpxguvogpv cid eqorcp cid cid cid cid cid cid cid cid cid cid cid c cid cid cid gv cid ugs cid cid cid ’cej cid wpf ku cid vtgcvgf cid cu cid c cid ugrctcvg cid eqtrqtcvkqp cid wpfgt cid ugevkqp cid cid cid cid i cid cid qh cid vjg cid qfg cid cpf cid jcu cid gngevgf cid vq cid dg vtgcvgf cid cpf cid jcu cid swcnkhkgf cid cu 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kpvgtguvu cid qh cid vjg iqxgtpogpv cid cu cid c cid tguwnv cid qh cid dgkpi cid rgtokvvgf cid vq cid tgxqmg cid vjg cid gngevkqp cid cid cid eeqtfkpin cid cid rwtuwcpv cid vq cid ugevkqp cid cid cid cid cid g cid cid cid dollar_figure cid cid cid vjg cid 5getgvct cid eqpugpvu cid vq cid vjg cid tgxqecvkqp qh cid vjg cid gngevkqp cid ocfg cid d cid gcej cid wpf cid wpfgt cid ugevkqp cid cid cid cid cid g cid cid cid cid cid ghhgevkxg cid ecngpfct cid gct cid cid cpf uwdugswgpv cid gctu cid cid cid p cid ecnewncvkpi cid vjg cid cid tgswktgf cid fkuvtkdwvkqp cid cid hqt cid ecngpfct cid gct cid cid cid hqt cid rwtrqugu qh cid ugevkqp cid cid cid cid cid d cid cid cid dollar_figure cid cid cpf cid cid cid cid cid g cid cid cid cid cid vjg cid ecrkvcn cid ickp cid pgv cid kpeqog cid yknn cid dg cid fgvgtokpgf cid qp cid vjg dcuku cid qh cid vjg cid ecrkvcn cid ickpu cid cpf cid nquugu cid vcmgp cid kpvq cid ceeqwpv cid fwtkpi cid vjg cid cid cid cid oqpvj cid rgtkqf cid htqo cpwct cid cid cid cid gct cid cid vjtqwij cid 1evqdgt cid cid cid cid cid gct cid cid cid cid 6jg cid pgv cid ickp cid qt cid nquu cid htqo cid hqtgkip cid ewttgpe vtcpucevkqpu cid kpenwfgf cid kp cid vjg cid qtfkpct cid kpeqog cid qh cid gcej cid wpf cid oc cid cnuq cid dg cid ecnewncvgf cid fwtkpi cid vjg cid cid cid oqpvj cid rgtkqf cid htqo cid cpwct cid cid cid vjtqwij cid 1evqdgt cid cid cid cid qh cid gct cid cid cid cid u cid c cid eqpfkvkqp cid vq cid vjg cid 5getgvct u cid eqpugpv cid vq cid vjg cid tgxqecvkqp cid rwtuwcpv cid vq cid ugevkqp cid cid cid cid g cid cid cid dollar_figure cid cid cid gcej cid wpf cid oc cid pqv cid ocmg cid c cid uwdugswgpv cid gngevkqp cid wpfgt cid ugevkqp cid cid cid cid cid g cid cid cid cid cid hqt c cid rgtkqf cid qh cid cid cid ecngpfct cid gctu cid hqnnqykpi cid vjg cid gct cid vq cid yjkej cid vjg cid itcpv cid qh cid tgxqecvkqp cid crrnkgu cid cid vjcv cid ku cid gct cid cid vjtqwij cid gct cid ’ cid ’zegrv cid cu cid urgekhkecnn cid twngf cid wrqp cid cdqxg cid cid pq cid qrkpkqp cid ku cid gzrtguugf cid qt cid kornkgf cid cu cid vq cid vjg hgfgtcn cid gzekug cid qt cid kpeqog cid vcz cid eqpugswgpegu cid tgictfkpi cid vjg cid wpfu cid 6jku cid twnkpi cid ku cid fktgevgf cid qpn cid vq cid vjg cid vczrc gtu cid tgswguvkpi cid kv cid cid cid 5gevkqp cid cid cid cid cid m cid cid cid cid qh cid vjg cid cid cid cid cid cid qfg cid rtqxkfgu cid vjcv cid kv cid oc cid pqv cid dg cid wugf cid qt cid ekvgf cid cu cid rtgegfgpv cid v cid ku cid korqtvcpv cid vjcv cid c cid eqr cid qh cid vjku cid ngvvgt cid dg cid cvvcejgf cid vq cid vjg cid hgfgtcn cid kpeqog cid cpf cid gzekug cid vcz tgvwtp cid hkngf cid d cid gcej cid wpf cid hqt cid vjg cid hktuv cid gct cid vq cid yjkej cid vjku cid twnkpi cid crrnkgu cid 5kpegtgn cid uukuvcpv cid jkgh cid qwpugn kpcpekcn cid puvkvwvkqpu cid cid cid 2tqfwevu cid dollar_figure cid 9knnkco cid ’ cid cid qrrgtuokvj jkgh cid cid dollar_figuretcpej cid cid ’penquwtg cid qr cid qh cid vjku cid ngvvgt 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t c memo united_states tax_court lander gibson petitioner v commissioner of internal revenue respondent docket no filed date lander gibson pro_se edward d fickess for respondent memorandum opinion vasquez judge this case is before the court on respondent’s motion to dismiss for lack of jurisdiction on the ground that the petition was not filed within the time prescribed by sec_6213 or sec_7502 unless otherwise indicated all section references are to the internal_revenue_code as amended and all rule references continued background at the time he filed his petition and amended petition petitioner resided in syracuse new york in the notice_of_deficiency dated date respondent determined a deficiency in petitioner’s federal_income_tax of dollar_figure the notice_of_deficiency advised petitioner that he had days from the date of the notice to file a petition in the tax_court for a redetermination of the deficiency the notice_of_deficiency stated that the last date to petition the tax_court was date petitioner mailed a petition properly addressed to the court in late date at a post office in the carousel shopping mall in syracuse after he finished work the court received the petition on date which i sec_120 days after the mailing of the notice_of_deficiency in november and date and date the court was experiencing significant anthrax- related mail delays following the closure of the post office serving the court in date the court was still receiving mail from november and date all of the regular u s mail received by the court was subject_to irradiation treatment as a result of the irradiation treatment t continued are to the tax_court rules_of_practice and procedure amounts are rounded to the nearest dollar - - the postmark on the envelope in which the petition arrived was illegible on date respondent filed a motion to dismiss for lack of jurisdiction on the ground that the petition was not timely filed on date petitioner objected to the granting of this motion discussion our jurisdiction to redetermine a deficiency depends on the issuance of a valid notice_of_deficiency and a timely filed petition rule a c 93_tc_22 90_tc_142 sec_6212 expressly authorizes the commissioner after determining a deficiency to send a notice_of_deficiency to the taxpayer by certified or registered mail it is sufficient for jurisdictional purposes if the commissioner mails the notice_of_deficiency to the taxpayer’s last_known_address sec_6212 b 81_tc_42 the taxpayer in turn ha sec_90 days or days if the notice is addressed to a person outside of the united_states from the date that the notice_of_deficiency is mailed to file a petition in this court for a redetermination of the deficiency sec_6213 a we take judicial_notice of the facts regarding the mail delivery service to the court see also mail delays addressed daily tax rept bna g-2 date q4e- sec_7502 provides that in certain circumstances a timely mailed petition will be treated as though it were timely filed sec_7502 provides that the timely mailing timely filing rule applies if the postmark date on an envelope falls within the prescribed period or on or before the prescribed date petitioner did not challenge the validity of the notice_of_deficiency our jurisdiction depends on whether the petition was timely filed the petition was received and filed by this court more than days after the mailing of the notice_of_deficiency as noted above the court was experiencing delays in u s mail delivery when the petition was mailed additionally the postmark was illegible by the time it was received by the court because of the irradiation treatment if the postmark is illegible the taxpayer may offer extrinsic evidence to establish what was or should have been the actual date of the postmark 65_tc_548 45_tc_320 the taxpayer bears the burden of proving timely mailing sec_301_7502-1 a proced admin regs petitioner through testimony sought to establish that he mailed his petition timely and that the postmark although illegible was timely see 68_tc_354 - - finding on the basis of the taxpayer’s testimony that he mailed his petition timely we found petitioner to be forthright and candid and his testimony to be credible petitioner testified that in mailing the petition he was rushing to make sure he beat the time several days ahead and the post office assured him that the petition would arrive on time petitioner testified that he mailed the petition return receipt requested and made sure the receipt was stamped at the post office once the petition arrived at the court however he testified that he did not think to save the receipt because he did not think it was important once he knew that the court had received the petition further petitioner provided credible testimony as to where and when the petition was mailed we conclude that petitioner timely mailed his petition accordingly respondent’s motion to dismiss for lack of jurisdiction will be denied to reflect the foregoing an appropriate order will be issued


t c summary opinion united_states tax_court dan b isaac petitioner v commissioner of internal revenue respondent docket no 7581-01s filed date dan b isaac pro_se frank j jackson for respondent powell special_trial_judge this case was heard pursuant to the provisions of 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 unless otherwise indicated subsequent section references are to the internal_revenue_code in effect for the year in issue and 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 and additions to tax under sec_665l1 a a and a in the respective amounts of dollar_figure dollar_figure and dollar_figure after concessions ’ discussed infra the issues are petitioner’s basis in shares of ibm stock sold by petitioner on date and petitioner’s entitlement to a dependency_exemption deduction and head_of_household filing_status petitioner resided in new york new york at the time the petition was filed the facts may be summarized as follows petitioner did not file a federal_income_tax return for the taxable_year in paragraphs and of the stipulation of facts the parties stipulated that the amount_realized by petitioner from the sale of securities was dollar_figure and that of this amount stock in the amount of dollar_figure had a cost_basis of dollar_figure resulting in a dollar_figure gain of which dollar_figure is long term gain dollar_figure is a short term gain and dollar_figure is short term loss the parties also agree that the difference between the gross_sales dollar_figure and the dollar_figure referred to above is dollar_figure it is stipulated that during petitioner received social_security_benefits of dollar_figure interest_income of dollar_figure dividend income of dollar_figure and royalty payments of dollar_figure also petitioner has never disputed that he is liable for the failure_to_file and failure to pay additions to tax under sec_6651 a and a the brokerage statement shows that the amount received was continued - - and is from the sale of shares of ibm stock sold on date the basic problem with this case is that we have precious little evidence during and petitioner made a number of trades including long and short stock transactions and puts_and_calls we have end-of-the-year tax statements for and and three different confirmations of the sale of shares of ibm stock one of the confirmations canceled another purchase confirmation none of the confirmations refer to specific stock purchased and neither do the tax statements although petitioner received monthly statements none of them were introduced into evidence with this sparse record we do the best that we can in sorting out the facts we must rely on inferences and absolute certainty is impossible to a great extent these uncertainties bear heavily against petitioner because the inexactitude is of his own making see 39_f2d_540 2d cir for convenience we have combined our findings_of_fact and discussion transaction involving ibm stock at trial petitioner testified that he frequently traded ibm stock but he could not identify any purchase of the shares he further testified that he did not know his cost_basis for the continued dollar_figure the difference dollar_figure from the stipulated figure appears to be the result of rounding figures in the stipulation q4e- shares we note that on date ibm stock was split for the tax statement for shows that petitioner sold shares of ibm stock for dollar_figure on date purchased shares of ibm stock for dollar_figure on date and had received a dividend from ibm of dollar_figure on date the receipt of this dividend indicates that he must have owned ibm stock prior to the sale on date because the distribution record_date had to have been prior to that date furthermore the quarterly dividend rate for ibm at that time was dollar_figure per share indicating that petitioner owned shares the statement also shows that petitioner sold shares on date thus at the end of petitioner owned presplit shares of ibm stock purchased for dollar_figure dollar_figure divided by on date during the statement for that year shows that petitioner purchased presplit shares of ibm stock for dollar_figure on date postsplit shares of ibm stock for dollar_figure on date postsplit shares of ibm stock for dollar_figure on date and postsplit shares of ibm stock for dollar_figure on date that statement also shows that he sold presplit shares on date presplit shares on date and the postsplit shares on date - from this we distill the following first prior to date petitioner owned shares of ibm stock as evidenced by the fact that he received the date dividend second during petitioner purchased and sold shares of ibm stock he therefore still owned the same number of shares that he owned prior to date third during date petitioner purchased shares and sold shares of presplit stock during petitioner purchased shares and sold shares as follows transaction balance of shares opening balance ibm shares sell big_number -o- buy big_number sell big_number -0- date - stock split sell big_number buy big_number buy big_number -o- buy big_number the cost of shares is petitioner’s basis for determining a gain_or_loss on the transaction see sec_1011 sec_1012 sec_1016 in attempting to identify which shares were sold and in the absence of other identification we use the first-in_first-out method_of_accounting 617_f2d_323 2d cir affg 69_tc_925 sec_1_1012-1 income_tax regs with regard to the sale on date this stock was purchased on date for - - dollar_figure there was therefore a short-term_capital_gain of dollar_figure with respect to the date sale this stock was purchased on date for dollar_figure and sold for dollar_figure resulting in a short term capital_gain of dollar_figure with regard to the date sale petitioner owned no shares of ibm stock and this must have been a short_sale that was covered on date shares for dollar_figure and on date shares for dollar_figure with income realized in the amount of dollar_figure dollar_figure - dollar_figure dollar_figure to the extent however that any of these transactions were included in paragraph of the stipulation of facts and are inconsistent with that stipulation the stipulation will control in the rule computation other issues initially we observe that petitioner has the burden_of_proof when this case was called from the calendar on date there had been no meaningful communication with respondent’s counsel petitioner was instructed to get his records and meet with counsel for respondent that day petitioner did obtain some records and met with counsel the case was recalled on date and set for trial days sec_7491 places the burden_of_proof on respondent in certain cases petitioner however has not satisfied the requirements of sec_7491 accordingly sec_7491 a has no bearing on the resolution of this case - later pincite p m on date at a pre-trial conference the morning of date petitioner for the first time raised the question whether he was entitled to various deductions including a dependency_exemption deduction for his daughter certain alleged personal and business_expense deductions and losses from trading in options none of these items were raised in the petition and with one exception we decline to entertain these issues at this late date see rule b allowing petitioner to belatedly raise these issues would be unfair to respondent see toyota town inc v commissioner tcmemo_2000_40 affd sub nom 268_f3d_1156 9th cir the one exception concerns petitioner’s dependency_exemption claim petitioner is unmarried and has a daughter who lives with him petitioner’s daughter was years old during the year at issue and received approximately dollar_figure a month or dollar_figure per year from social_security petitioner did not pay more than half of the daughter’s support petitioner argues that he is entitled to claim a dependency_exemption deduction for his daughter we note however that petitioner has not substantiated the alleged business deductions and it appears that even if we were to accept the evidence such as it is with regard to the personal deductions the amount would not exceed the basic_standard_deduction contained in sec_63 finally while petitioner did engage in option trading the record is devoid of evidence from which we could even make an estimate of his gains and losses --- - sec_152 defines a dependent inter alia as a daughter of the taxpayer over half of whose support for the calendar_year was received from the taxpayer since petitioner did not contribute over half of his daughter’s support she is not a dependent and petitioner is not entitled to claim a dependency_exemption deduction for his daughter under sec_151 nonetheless under sec_1 a head_of_household is entitled to a more favorable filing_status than a single individual a head_of_household is defined inter alia as an individual who is not married and maintains a household which constitutes for more than one-half of such taxable_year the principal_place_of_abode of an unmarried daughter sec_2 a petitioner satisfies these requirements and is entitled to head_of_household filing_status after the stipulation was filed and this case was tried petitioner moved to reopen the record respondent objected as to some of the documents that petitioner lodged with the motion to the extent that we found the documents relevant and trustworthy we have incorporated them in this opinion in all other respects petitioner’s motion is denied --- - reviewed and adopted as the report of the small_tax_case division an appropriate order will be issued and decision will be entered under rule


internal_revenue_service index no number release date department of the treasury p o box ben franklin station washington dc person to contact telephone number refer reply to cc dom p si - plr-122320-98 date date re legend taxpayers decedent spouse date trust agreement z this is in response to your letter of date and subsequent correspondence requesting an extension of time under sec_301_9100-1 of the procedure and administration regulations to make a reverse qualified_terminable_interest_property qtip_election under sec_2652 of the internal_revenue_code decedent died testate on date survived by spouse and three adult children under decedent’s will his estate passed to a_trust established under trust agreement under article iii of the trust agreement dollar_figure was distributed outright to each of decedent’s children under article v the residuary_trust estate passed to a marital trust during her life spouse is to receive all of the net_income from the marital trust at least quarter-annually spouse may also receive any amount of principal the trustee other than spouse in the trustee’s discretion deems necessary or advisable for spouse’s maintenance welfare and comfort or for any other purpose the trustee deems to be worthwhile and in the best interests of spouse at spouse’s death the trustee will pay all of the taxes attributable to the inclusion of the marital trust in spouse’s gross_estate on spouse’s death the remainder of the marital trust will be divided into two equal parts under article v a a one- half of the remainder will be distributed as spouse appoints in her will to persons other than herself her creditors her estate or creditors of her estate however as long as a descendant of decedent is living the appointment must be made in a manner to ensure that this one-half of the remainder can only vest in a descendant of the decedent or in a spouse of the descendant to the extent spouse fails to exercise this power this one-half of the remainder of the marital trust will be distributed per stirpes to decedent’s descendants who survive spouse under article v a b the other one-half of the remainder of the marital trust will be distributed per stirpes to decedent’s descendants who survive spouse any distribution for an individual under age must be retained in trust for the benefit of the individual article viii h authorizes the trustees in case of a division into shares to make up the several shares of similar or of different property article viii h directs the trustee to divide the marital trust into two separate trusts the exempt trust for which the reverse_qtip_election under sec_2652 has been made and the nonexempt trust for which that election has not been made the provision further directs that any distribution of principal from the marital trust to spouse under article v as well as any payment of estate inheritance or succession taxes with respect to property passing from the marital trust at spouse’s death must be made first from the nonexempt trust on schedule m of form_706 which was timely filed by the estate the personal_representatives made an election under sec_2056 with respect to the entire value of the marital trust a deduction under sec_2056 was claimed for the amount passing to the trust on schedule r of form_706 the personal_representatives failed to indicate that the marital trust would be severed as directed under article viii h failed to make an election under sec_2652 with respect to any part of the marital trust and did not make an effective allocation with respect to decedent’s available gst_exemption the marital trust has not yet been severed in accordance with article viii h since decedent’s death discretionary payments of principal have been made to spouse under article v of trust agreement on date the estate filed an amended schedule r that signifies that a reverse_qtip_election is being made for the exempt marital trust on a rider to the amended schedule r the estate reported that pursuant to article viii h of trust agreement the marital trust will be severed into two separate trusts an exempt marital trust and nonexempt marital trust exempt marital trust will consist of an amount determined by multiplying the current fair_market_value of the marital trust corpus on the date of severance plus the amount of principal distributions made from the marital trust by a fraction the numerator of the fraction will be dollar_figure million and the denominator will be dollar_figurez the value as finally determined for federal estate_tax purposes of the marital trust the nonexempt marital trust will consist of the remaining balance of the current value of the marital trust on the date of severance the exempt marital trust and the nonexempt marital trust will both have identical terms except that pursuant to article viii h of trust agreement any payment of principal to spouse under article v made after the date on which the reverse_qtip_election is made and any payment of estate inheritance or succession taxes with respect to property passing from the marital trust will be made first from the nonexempt marital trust and next from the exempt marital trust one-half of the remainder of exempt marital trust and one-half of the remainder of nonexempt marital trust will pass under the provisions of article v a a pursuant to the exercise of spouse’s testamentary special_power_of_appointment the other one-half of the remainder of each trust will pass under the provisions in article v a b decedent’s estate requests an extension of time under sec_301_9100-1 to sever the marital trust and to make the reverse_qtip_election under sec_2652 with respect to exempt marital trust in addition the estate requests that we rule as follows the severance of the marital trust pursuant to article viii h of trust agreement and sec_26_2654-1 into two separate trusts the exempt marital trust the nonexempt marital trust will be effective for gstt purposes as a result of the reverse_qtip_election the exempt marital trust will have an inclusion_ratio of zero under sec_2642 by operation of the automatic allocation rules under sec_2632 sec_2056 provides that the value of a decedent's taxable_estate shall be determined by deducting from the value of the gross_estate an amount equal to the value of any interest in property that passes or has passed_from_the_decedent to the surviving_spouse sec_2056 provides that qualified_terminable_interest_property shall be treated as passing to the surviving_spouse and no part of such property shall be treated as passing to any person other than the surviving_spouse thus the value of such property is deductible from the value of the gross_estate under sec_2056 under sec_2044 the value of the trust on the death of the surviving_spouse is includible in the gross_estate of the spouse sec_2601 imposes a tax on every generation-skipping_transfer made after date sec_2631 provides for a gst_exemption of dollar_figure which may be allocated by the individual or the individual's executor to any property of which the individual is the transferor for gstt purposes under sec_2652 sec_2632 states that any allocation of an individual's gst_exemption may be made at any time on or before the date prescribed for filing the individual's estate_tax_return including extensions in general the generation-skipping_transfer_tax is computed by multiplying the taxable_amount by the applicable_rate the applicable_rate is the highest federal estate_tax rate multiplied by the inclusion_ratio with respect to the transfer under sec_2642 the inclusion_ratio is the excess if any of over the applicable_fraction determined for the trust from which such transfer is made the applicable_fraction is a fraction - a the numerator of which is the amount of the gst_exemption allocated to the trust and b the denominator of which is - i the value of the property transferred to the trust reduced by ii the sum of i the federal estate_tax or state death_tax actually recovered from the trust attributable to such property and ii any charitable deduction allowed under sec_2055 and sec_2522 with respect to the such property under sec_2632 and sec_26_2632-1 a decedent's unused gst_exemption is automatically allocated on the due_date for filing the federal estate_tax_return to the extent not otherwise allocated by the decedent's executor on or before that date unused gst_exemption is allocated pro_rata on the basis of the value of the property as finally determined for federal estate_tax purposes first to direct skips treated as occurring at the transferor's death any balance is allocated pro_rata on the basis of the value of the property as finally determined for federal estate_tax purposes to trusts with respect to which a taxable_termination may occur or from which a taxable_distribution may be made the automatic allocation is irrevocable no automatic allocation of gst_exemption is made to a_trust that will have a new transferor with respect to the entire trust prior to the occurrence of any generation skipping transfer with respect to the trust sec_2642 provides that if property is transferred as a result of the death of the transferor the value of such property for purposes of determining the inclusion_ratio with respect to that property shall be its value for federal estate_tax purposes except that if the requirements in the regulations respecting allocation of post-death changes in value are not met the value of such property shall be determined as of the time of the distribution concerned under sec_2652 the term transferor means in the case of any property subject_to the estate_tax the decedent sec_2652 states that with respect to any trust for which a deduction is allowed under sec_2056 the estate of the decedent may elect to treat all of the property in such trust for purposes of the gstt provisions as if the sec_2056 qtip_election had not been made this election is referred to as the reverse_qtip_election the consequence of a reverse_qtip_election is that the decedent remains for gstt purposes the transferor of the qtip_trust for which the election is made as a result that decedent's gstt exemption may be allocated to that qtip_trust sec_26_2654-1 and ii provide that the severance of a_trust that is included in the transferor's gross_estate or created under the transferor's will into two or more trusts is recognized for generation-skipping_transfer_tax purposes if the trust is severed pursuant to a direction in the governing instrument providing that the trust is to be divided upon the death of the transferor the trust is severed pursuant to discretionary authority granted either under the governing instrument or local law under sec_26 b ii b and b the trust must be severed prior to the date prescribed for filing the federal estate_tax_return or in the alternative the federal estate_tax_return must contain a statement that the trust will be severed in addition the trust must be severed either on a fractional basis or if required to be severed on a pecuniary basis in a manner that satisfies the requirements of sec_26 a ii under sec_301_9100-1 of the procedure and administration regulations the commissioner may grant a reasonable extension of time to make a regulatory election or a statutory election but no more than months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except subtitles e g h and i if the taxpayer demonstrates to the satisfaction of the commissioner that the taxpayer has acted reasonably and in good_faith and granting relief will not prejudice the interests of the government sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make an election sec_301_9100-1 sec_301_9100-2 provides automatic extensions of time for making certain elections sec_301_9100-3 provides extensions of time for making elections that do not meet the requirements of sec_301_9100-2 requests for relief under sec_301_9100-3 will be granted when the taxpayer provides the evidence to establish that the taxpayer acted reasonably and in good_faith and granting relief will not prejudice the interests of the government sec_301_9100-3 in this case the standards of sec_301_9100-1 and sec_301_9100-3 have been satisfied consequently an extension of time is granted until date for making a reverse_qtip_election under sec_2652 and an extension of time for severing the marital trust is granted until days after the date of this letter however relief under sec_301_9100-1 is not available to extend the time to make an allocation of gst_exemption accordingly in this case the decedent’s available gst_exemption is allocated in accordance with the automatic allocation rules under sec_2632 based on the facts presented we conclude as follows the severance of the marital trust as proposed pursuant to article viii h of trust agreement and sec_26_2654-1 into two separate trusts the exempt marital trust the nonexempt marital trust will be effective for gstt purposes as a result of the reverse_qtip_election and by operation of the automatic allocation rules contained in sec_2632 the exempt marital trust will have an inclusion_ratio of zero under sec_2642 except as specifically ruled herein we express no opinion on the federal tax consequences of the transaction under the cited provisions or under any other provisions of the code 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 paul f kugler assistant chief_counsel passthroughs and special industries enclosure 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 br 1-plr-124971-00 date date legend x d1 this letter responds to the ruling_request dated date which you submitted on behalf of x and which requests relief under sec_1362 of the internal_revenue_code facts x was incorporated on d1 x intended to be treated as an s_corporation for federal_income_tax purposes effective on d1 but the s election was not timely filed law and analysis sec_1362 provides that a small_business_corporation may elect to be an s_corporation sec_1362 provides the rule on when an s election will be effective if an s election is made within the first two and one-half months of a corporation’s taxable_year then the corporation will be treated as an s_corporation for the year in which the election is made if the election is made after the first two and one-half months of a corporation’s taxable_year then the corporation will not be treated as an s_corporation until the taxable_year after the year in which the s election is made sec_1362 provides that if no election is made pursuant to sec_1362 or if plr-124971-00 made the election is made after the date prescribed for making such an election and the secretary determines there was reasonable_cause for the failure to timely make the election then the secretary may treat such an election as timely made for such taxable_year and effective as of the first day of that tax_year x did not file a timely election to be treated as an s_corporation under sec_1362 effective on d1 x has however established reasonable_cause for not making a timely election and is entitled to relief under sec_1362 conclusion based solely on the facts submitted and representations made and provided that x otherwise qualifies as a subchapter_s_corporation we conclude that x will be recognized as an s_corporation effective d1 within days from the date of this letter x should submit a properly completed form_2553 with a copy of this letter attached to the relevant service_center except as specifically set forth above no opinion is expressed as to the federal tax consequences of the transaction described above under any other provision of the internal_revenue_code 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 as precedent pursuant to the power_of_attorney on file with this office a copy of this letter is being sent to the taxpayer sincerely yours matthew lay assistant to the branch chief branch associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes


t c memo united_states tax_court devery w hennard petitioner v commissioner of internal revenue respondent docket no filed date devery w hennard pro_se adam l flick for respondent memorandum opinion wells judge this matter is before the court on respondent’s motion for summary_judgment pursuant to rule all section references are to the internal_revenue_code as amended and all rule references are to the tax_court rules_of_practice and procedure background the facts in this case have been established by the court’s order of date at the time of filing the petition petitioner resided in fort worth texas petitioner worked as a contractor for tuttle roofing during the and taxable years tuttle roofing paid petitioner dollar_figure during dollar_figure during dollar_figure during and dollar_figure during petitioner also earned dollar_figure in savings bond interest from nationsbank in petitioner did not make estimated_tax payments have tax withheld or file a form_1040 u s individual_income_tax_return for any of the taxable years or on date respondent prepared pursuant to sec_6020 four substitute returns for petitioner after petitioner failed to comply with respondent’s requests to file returns for the four years in issue on date respondent mailed to petitioner at his last_known_address warden street fort worth texas four statutory notices of deficiency asserting deficiencies and additions to tax under sec_1 on date respondent filed a motion to show cause why proposed facts in evidence should not be admitted as established pursuant to rule f on date we granted respondent’s motion and further ordered petitioner to file a response in compliance with rule f or respondent’s proposed stipulations would be deemed established and an order would be entered pursuant to rule f petitioner never responded to our order and we accordingly ordered the facts deemed established on date a failure_to_file a return a failure_to_pay_tax shown on a return and failure to pay estimated income_tax for the and taxable years as follows year deficiency dollar_figure dollar_figure dollar_figure dollar_figure a dollar_figure dollar_figure dollar_figure dollar_figure a dollar_figure dollar_figure dollar_figure dollar_figure dollar_figure dollar_figure dollar_figure dollar_figure petitioner timely filed a petition with this court asserting all of his inalienable rights and commercial rights at natural law common_law and maritime law as well as any statutory rights that may exist and apply and raised numerous typical tax_protester arguments including the secretary including the irs is not authorized to practice law in this state yet every single publication and practically every letter includes statements that can be considered as nothing but the rendering of legal advice especially regarding the accounting_method applicable and thus the form suitable for using that accounting_method whatever else this fact may support the irs has tendered legal advice to petitioner giving rise at the very least to a definite conflict of interest the secretary acts as a collection agent for an undisclosed principal which principal is an unknown beneficiary of the alleged fiduciary obligation at issue without a known beneficiary petitioner has no fiduciary obligation there being no principal_amount due there is no basis for penalties there being no petitioner warns respondent that it is a potentially serious offense to use the united_states postal service to attempt to coerce an alleged fiduciary to divert funds from a known beneficiary to an unknown beneficiary principal_amount due there is no basis for interest the substitute form sec_1040 are not subscribed by the secretary per sec_6020 petitioner will need to engage in a handwriting analysis during discovery to verify that this is not a machine-written signature but is rather the signature of the human being to be charged with the responsibility of verifying the alleged figures about the only way to cross-examine a computer is to have a complete printout of the human- readable source code of all modules used to produce these reports and statements additionally petitioner thanked the secretary but respectfully declined the secretary’s unsolicited and bad legal and accounting advice and asked to be placed on the no call list respondent filed a motion for summary_judgment on date on date we ordered petitioner to file a response to respondent’s motion on or before date petitioner has not filed a response and did not appear at the call of the instant case for trial on date in dallas texas whether the substitute form sec_1040 qualify as returns under sec_6020 for purposes of the sec_6651 failure to pay addition_to_tax is discussed below in regard to the secretary’s advice petitioner states the secretary’s proposed accounting_method form_1040 while applicable is not as complete or accurate as the accounting_method preferred by petitioner the commonly available form most competently applicable to the alleged obligation is form_1041 by applying more suitable accounting methods petitioner’s distribution amount if any is considerably less than that asserted by the collections agent by petitioner’s analysis the amount due is dollar_figure form_1041 is the u s income_tax return for estates and trusts discussion summary_judgment is intended to expedite litigation and avoid unnecessary and expensive trials fla peach corp v commissioner 90_tc_678 summary_judgment may be granted where there is no genuine issue of material fact and a decision may be rendered as a matter of law rule a and b the moving party bears the burden proving that there is no genuine issue of material fact and factual inferences are viewed in a light most favorable to the nonmoving party 119_tc_252 85_tc_812 79_tc_340 the party opposing summary_judgment must set forth specific facts which show that a question of genuine material fact exists and may not rely merely on allegations or denials in the pleadings 91_tc_322 87_tc_214 petitioner has not set forth specific facts showing a genuine issue of material fact exists petitioner ignored our order to file an answer to respondent’s motion and failed to appear at trial the petition contains nothing but nonsensical tax_protester arguments that are frivolous and we do not address petitioner’s arguments with somber reasoning and copious citations of precedent as to do so might suggest that petitioner’s arguments possess some degree of colorable merit see 737_f2d_1417 5th cir sec_6651 provides for an addition_to_tax in instances where there is a failure to pay the amount of tax shown on a return and it applies only when an amount of tax is shown on a return 120_tc_163 petitioner did not file valid returns for the years in issue and respondent prepared substitute returns pursuant to sec_6020 under sec_6651 a return prepared by the secretary under sec_6020 is treated as the return filed by the taxpayer for purposes of determining an addition_to_tax under a cabirac v commissioner supra pincite in 91_tc_926 we held that an unsubscribed form_1040 together with attached revenue agent’s reports which contained sufficient information to compute the tax_liability met the requirements for a sec_6020 return id pincite the record in the instant case contains unsubscribed form sec_1040 copies of the revenue agent’s reports from which petitioner’s tax_liability could be calculated and a form sec_6020 certification signed by carolyn levy respondent’s examination operation manager we find the substitute form sec_1040 meet the requirements of sec_6020 accordingly respondent is entitled to summary_judgment sec_6673 authorizes the tax_court to require a taxpayer to pay to the united_states a penalty not in excess of dollar_figure whenever it appears that proceedings have been instituted or maintained by the taxpayer primarily for delay or that the taxpayer's position in such proceeding is frivolous or groundless although we will not impose a penalty on petitioner in this case we will take this opportunity to admonish petitioner that the court will consider imposing such a penalty should he return to the court and advance similar arguments in the future to reflect the foregoing an appropriate order and decision will be entered for respondent


internal_revenue_service department of the treasury index number washington dc number release date person to contact telephone number refer reply to cc dom corp 3-plr-109886-99 date date distributing controlled state a state b shareholder shareholder shareholder shareholder busine sec_1 busine sec_2 busine sec_3 busine sec_4 plr-109886-99 sub sub sub sub sub sub sub a b c d e f g h this letter responds to a request dated date for rulings relating to the federal_income_tax treatment of a proposed transaction we have received additional information in letters dated date date date date and date the information submitted for consideration is summarized below distributing is a holding_company engaged through affiliates in the busine sec_1 and busine sec_2 distributing has two classes of common_stock issued and outstanding its regular common_stock the distributing common_stock and its class b common_stock the distributing class b stock distributing also has one class of preferred_stock outstanding series a cumulative convertible stock the distributing series a stock the distributing common_stock and the distributing series a stock are plr-109886-99 publicly traded the distributing class b stock is owned substantially by shareholder distributing has three shareholders who own percent or more of the distributing common_stock shareholder shareholder and shareholder distributing owns all of the outstanding_stock of both sub and sub sub is a holding_company that does not engage in any business directly sub owns all of the outstanding_stock of sub sub sub and sub sub and sub own a percent and b percent respectively of sub sub is directly engaged in the busine sec_1 sub is directly engaged in the busine sec_1 and busine sec_2 sub is directly engaged in busine sec_3 controlled is engaged directly and through affiliates in the busine sec_4 controlled has one class of publicly traded common_stock the controlled common_stock sub owns c shares of controlled common_stock approximately d and sub owns e shares of controlled common_stock approximately f members of the public own the remaining shares over financial information has been received which indicates that controlled sub sub and sub each have had gross_receipts and operating_expenses representative of the active_conduct_of_a_trade_or_business for each of the past five years information has also been received indicating the need for distributing to obtain capital to grow and expand its busine sec_1 in order to raise capital to effectuate its plans distributing proposes to undertake an initial_public_offering ipo of approximately dollar_figureg worth of distributing’s total outstanding_stock distributing has concluded based upon documentation provided by its investment banker that an ipo will be significantly more effective if the busine sec_4 is separated from distributing to accomplish these objectives the taxpayer has proposed the following transaction the proposed transaction sub will be merged into distributing under state a law sub will be merged into sub under state b law and sub will be merged into distributing under state a and state b law as a result distributing will directly own e shares of controlled common_stock and all of the outstanding shares of sub sub will form a limited_liability_company llc that will elect to be treated as a corporation under sec_301_7701-3 the llc will be merged with and into sub pursuant to the merger distributing will exchange its sub shares for voting common_stock of sub sub will contribute the stock of sub to a newly-formed wholly-owned state b corporation newco plr-109886-99 the e shares of controlled common_stock owned by distributing will be converted into controlled class b stock and the remaining controlled common_stock including the c shares held by sub will be converted into controlled class a stock the recapitalization the recapitalization will be accomplished in the following steps i ii iii iv distributing will form a wholly-owned state a corporation merger sub and transfer the e shares of controlled common_stock to merger sub in exchange for all of merger sub’s stock merger sub will merge with and into controlled with distributing receiving e shares of controlled class b stock in exchange for its merger sub stock pursuant to the merger the remaining h shares of controlled common_stock including the c shares held by sub will be redesignated as controlled class a stock and the controlled class b stock and the controlled class a stock will be identical except that the controlled class b stock will have the right to elect over percent of the directors of controlled distributing will distribute the controlled class b stock pro_rata to the holders of the distributing common_stock and the distributing class b stock the distribution no fractional shares of controlled will be issued in lieu thereof the distribution agent will aggregate all fractional share interests sell the aggregated shares and remit the proceeds to the shareholders entitled thereto sub will retain the c shares of controlled class a stock in order to improve distributing‘s debt-equity_ratio solidify its credit rating and to provide distributing with a source of cash for expansion and acquisition sub will dispose_of the retained shares consistent with the above purposes but in any event within five years of the distribution during this period the shares will be voted in proportion to the votes cast by the other controlled class a stock shareholders the taxpayer has made the following representations in connection with the proposed recapitalization a b controlled and its shareholders will each pay their own expenses if any incurred in connection with the recapitalization the fair_market_value of the controlled stock held by each controlled shareholder immediately following the recapitalization will be approximately plr-109886-99 equal to the fair_market_value of the controlled stock held by such shareholder immediately before the recapitalization controlled is not under the jurisdiction of a court in a title_11_or_similar_case within the meaning of sec_368 there is no plan intention or formal or informal understanding to change the capital structure of controlled to eliminate the two-tiered voting structure of the controlled class a stock and controlled class b stock established in the recapitalization the recapitalization is a single isolated transaction and is not part of a plan to periodically increase the proportionate interest of any shareholder in the assets or earnings_and_profits of controlled c d e the taxpayer has made the following representations in connection with the proposed distribution a b c d e f g distributing controlled and the distributing shareholders will each pay their own expenses if any incurred in connection with the transaction the indebtedness if any owed by controlled to distributing after the distribution of the controlled stock will not constitute stock_or_securities no part of the controlled class b stock to be distributed by distributing will be received by a shareholder of distributing as a creditor employee or in any capacity other than that of a shareholder of distributing the five years of financial information submitted on behalf of controlled is representative of controlled’s present operations and with regard to such corporation there have been no substantial operational changes since the date of the last financial statements submitted the five years of financial information submitted on behalf of each of sub sub and sub is representative of the present operations of such businesses and with regard to such corporations there have been no substantial operational changes since the date of the last financial statements submitted following the distribution sub sub sub and controlled will each continue the active_conduct of its business independently and with its separate employees immediately after the distribution at least percent of the fair_market_value of the gross assets of distributing will consist of the stock of controlled corporations plr-109886-99 that are engaged in the active_conduct_of_a_trade_or_business as defined in sec_355 the distribution is carried out for the following corporate business purposes to increase the anticipated proceeds of an equity offering by distributing the distribution is motivated in whole or substantial part by this corporate business_purpose distributing will complete a public offering of approximately dollar_figureg worth of distributing’s total outstanding_stock within one year of the distribution there is no plan or intention by any shareholder who own sec_5 percent or more of the stock of distributing and the management of distributing to its best knowledge is not aware of any plan or intention on the part of any particular remaining shareholder or security holder of distributing to sell exchange transfer by gift or otherwise dispose_of any stock_or_securities of either distributing or controlled after the distribution except for i intra-family gifts by members of shareholder to their children and grandchildren ii annual transfers of distributing stock by grantor retained annuity trusts grats to the grantor of the grats to the extent necessary to satisfy annual annuity requirements iii sales of fractional share interests and iv dispositions by sub of the c shares of controlled class a stock to be retained in the distribution there is no plan or intention by either distributing or controlled directly or through any subsidiary_corporation to purchase any of its outstanding_stock after the distribution other than possible purchases by controlled of the c shares of controlled class a stock to be retained by sub in the distribution or by distributing or controlled pursuant to open market stock repurchase programs meeting the requirements of sec_4 b of revproc_96_30 1996_1_cb_696 there is no plan or intention to liquidate either controlled or distributing to merge either corporation with any other corporation or to sell or otherwise dispose_of the assets of either corporation after the distribution except in the ordinary course of business no intercorporate debt will exist between distributing and controlled at the time of or subsequent to the distribution except for short-term receivables if any arising out of an intercompany services agreement payments made in connection with all continuing transactions if any between distributing and controlled will be for fair_market_value based on terms and conditions arrived at by the parties bargaining at arm’s length h i j k l m n plr-109886-99 o p q r the payment of cash in lieu of fractional shares of controlled stock is solely for the purpose of avoiding the expense and inconvenience to controlled of issuing and maintaining fractional shares and will not represent separately bargained-for consideration the total cash that will be paid in the transaction to the distributing shareholders in lieu of fractional shares of controlled stock will not exceed percent of the total consideration that will be distributed in the transaction the merger of sub into distributing will qualify as a liquidation pursuant to sec_332 or as a reorganization pursuant to sec_368 there are no outstanding options or warrants to purchase distributing or controlled stock nor are there any outstanding debentures convertible securities other than the distributing class b stock and distributing series a stock or any other type of right pursuant to which any person could acquire distributing or controlled stock that would be considered distributing or controlled stock the distribution is not part of a plan or series of related transactions within the meaning of sec_355 pursuant to which one or more persons will acquire directly or indirectly stock possessing percent or more of the total combined voting power of all classes of stock of either distributing or controlled entitled to vote or stock possessing percent or more of the total value of all classes of stock of either distributing or controlled based solely on the information submitted and on the representations set forth above we hold as follows for federal_income_tax purposes step sec_4 through iv above will be treated as exchanges by the controlled shareholders of their existing controlled common_stock for new controlled class a stock and controlled class b stock and will qualify as a reorganization within the meaning of sec_368 controlled will be a_party_to_a_reorganization within the meaning of sec_368 no gain_or_loss will be recognized by the shareholders of controlled common_stock upon their exchange of the controlled common_stock for controlled class a stock or controlled class b stock sec_354 the basis of the controlled class a stock or controlled class b stock received in the recapitalization will be the same as the basis of the controlled common_stock surrendered in exchange therefor sec_358 the holding_period of the controlled class a stock or controlled class b stock received in the recapitalization will include the period during which the plr-109886-99 controlled common_stock surrendered in exchange therefor was held provided such controlled common_stock was held as a capital_asset on the date of the exchange sec_1223 no gain_or_loss will be recognized by and no amount will be included in the income of the distributing shareholders upon their receipt of controlled class b stock sec_355 no gain_or_loss will be recognized by distributing upon the pro-rata distribution of the controlled class b stock sec_355 the distributing shareholders’ aggregate basis in the distributing common_stock and or distributing class b stock as applicable and the controlled class b stock after the distribution will equal the aggregate basis of the distributing common_stock and or the distributing class b stock as applicable held by such shareholders immediately before the distribution allocated in proportion to the fair_market_value of each in accordance with sec_1_358-2 sec_358 b and c the holding_period of the controlled class b stock received by the distributing shareholders in the distribution will include the holding_period of the distributing shares with respect to which the distribution will be made provided that such distributing shares are held as capital assets on the date of the distribution sec_1223 as provided in sec_312 proper allocation of earnings_and_profits between distributing and controlled will be made under sec_1_312-10 any payments of cash in lieu of fractional share interests in controlled will be treated for federal_income_tax purposes as if the fractional shares were issued in the distribution and then were redeemed by controlled the cash payments will be treated as having been received as a distribution in full payment in exchange for the stock redeemed as provided in sec_302 provided the fractional share interest is a capital_asset in the hands of the recipient shareholder the gain_or_loss will constitute capital_gain or loss subject_to the provisions and limitations of subchapter_p of chapter revrul_66_365 1966_2_cb_116 revproc_77_41 1977_2_cb_574 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 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 plr-109886-99 a copy of this letter must be attached to any income_tax return to which it is relevant in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to the taxpayer and an authorized representative the rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination sincerely yours assistant chief_counsel corporate by ken cohen senior technical reviewer branch