internal_revenue_service number release date index number -------------------------------------------- ------------ ------------------------------- --------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact ------------------------ id no ------------------ ---------------------------------------------------- telephone number ---------------------- refer reply to cc corp b05 plr-113145-13 date date legend parent -------------------------------------------------------------------- ------------------------------------------------------------ -------------- date date date x --------------------------- --------------------------- ---------------------------- -- company official ------------------------------------------------- ---------------------------------------------- tax professional ------------------------------------------------- -------------------------------------------------------------- dear ----------------------- this letter responds to a letter dated date submitted on behalf of parent requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations to file an election in particular parent is requesting an extension of time for the consolidated_group of which parent is the common parent to elect an extended carryback period the election for a consolidated_net_operating_loss cnol the material information submitted for consideration is summarized below plr-113145-13 parent is the common parent of a consolidated_group the parent group parent group incurred a cnol in the taxable_year ending date the year cnol parent seeks to carry back the year cnol x years to its taxable_year ending on date under sec_172 of the internal_revenue_code parent was required to file the election in order to carry back the year cnol to its taxable_year ending on date and obtain the benefit of sec_56 the election was due on date but for various reasons parent did not file a valid election after the due_date for the election parent discovered that the election had not been filed subsequently parent submitted this request under sec_301_9100-3 for an extension of time to file the election parent has represented that it is not seeking to alter a return position for which an accuracy related penalty has been or could be imposed under sec_6662 at the time parent requested relief parent has also represented that none of the year cnol is attributable to a corporate_equity_reduction_transaction sec_172 generally permits a taxpayer to carry back a net_operating_loss nol to each of the taxable years preceding the taxable_year of the nol sec_172 permits a taxpayer to elect to carry back an applicable net_operating_loss applicable nol to each of the or taxable years preceding the taxable_year of the applicable nol in lieu of the 2-year period provided by sec_172 sec_172 provides that an applicable nol is the taxpayer’s nol for a taxable_year ending after date and beginning before date sec_172 provides that the election under sec_172 shall be made by the due_date including extension of time for filing the return for the taxpayer’s last taxable_year beginning in the election is irrevocable and in general may be made only with respect to one taxable_year sec_1502 provides that the secretary shall prescribe such regulations as he may deem necessary in order that the tax_liability of any affiliated_group_of_corporations making a consolidated_return and of each corporation in the group both during and after the period of affiliation may be returned determined computed assessed collected and adjusted in such manner as clearly to reflect the income_tax_liability and the various factors necessary for the determination of such liability and in order to prevent avoidance of such tax_liability in carrying out the preceding sentence the secretary may prescribe rules that are different from the provisions of chapter that would apply if such corporations filed separate returns sec_1_1502-21 of the income_tax regulations provides that losses taken into account in determining a cnol may be carried to other taxable years whether consolidated or separate only under paragraph b of sec_1_1502-21 plr-113145-13 sec_1_1502-21 provides that nol carryovers and carrybacks to a taxable_year are determined under the principles of sec_172 and sec_1_1502-21 sec_1_1502-21t provides that a consolidated_group may elect an extended carryback period pursuant to sec_172 with regard to a cnol arising in a taxable_year ending after date and beginning before date revproc_2009_52 2009_49_irb_744 provides when and how a taxpayer may make an election under sec_172 sec_4 of revproc_2009_52 provides that the common parent of a consolidated_group makes the election for the group sec_4 and of revproc_2009_52 permit the election to be made for consolidated taxpayers by attaching a statement to the original or amended consolidated_return for the taxable_year of the applicable cnol by attaching a statement to the taxpayer’s amended consolidated_return applying the applicable cnol to the carryback_year or by attaching a statement to a claim for a tentative_carryback_adjustment on form_1139 corporation application_for tentative refund sec_4 b and b of revproc_2009_52 require the election regardless of the manner in which made to be filed no later than the due_date including extensions for filing the return for the taxpayer’s last taxable_year beginning in under sec_301_9100-1 the commissioner has discretion to grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make a regulatory election sec_301_9100-1 requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 the election by a consolidated_group to extend the carryback period under sec_172 for a cnol is a regulatory election therefore the commissioner has discretionary authority under sec_301_9100-3 to grant an extension of time for parent to file the election provided parent establishes to the satisfaction of the commissioner that it acted reasonably and in good_faith the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and granting relief will not prejudice the interests of the government information affidavits and representations submitted by parent company official and tax professional explain the circumstances that resulted in the failure to timely file a valid election the information establishes that parent reasonably relied on plr-113145-13 a qualified_tax professional who failed to make or advise parent to make the election and that the request for relief was filed before the internal_revenue_service discovered the failure to timely make the election see sec_301_9100-3 and v based on the facts and information submitted including the affidavits submitted and the representations made we conclude that parent has shown it acted reasonably and in good_faith that the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and that granting relief will not prejudice the interests of the government accordingly provided that and to the extent that the parent group qualifies substantively to file the election we grant an extension of time under sec_301_9100-3 until sixty days from the date on this letter for parent to file the election this letter does not extend the period of time described in sec_6511 by which a taxpayer is required to file a claim for credit or refund of an overpayment_of_tax the time in which parent may file a form_1139 for the year cnol has expired parent may however file the election under sec_172 to carry back the year cnol to its taxable_year ending on date on form 1120x amended u s_corporation income_tax return for the taxable_year ending date according to the procedures set forth in revproc_2009_52 a copy of this letter must be attached to the form 1120x if parent files form 1120x electronically parent may satisfy the requirement of attaching a copy of this letter by attaching a statement to the parent group’s amended_return that provides the date and control number plr-113145-13 of this letter_ruling the above extension of time is conditioned on the parent group’s tax_liability if any not being lower in the aggregate for all years to which the election applies than it would have been if the election had been timely made taking into account the time_value_of_money we express no opinion as to the parent group’s tax_liability for the years involved a determination thereof will be made by the director’s office upon audit of the income_tax returns involved except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any item discussed or referenced in this letter in particular we express no opinion with respect to whether parent qualifies substantively to make the election in addition we express no opinion as to the tax effects or consequences of filing the election late under the provisions of any other section of the internal_revenue_code or regulations or as to the tax treatment of any conditions existing at the time of or resulting from filing the election late that are not specifically set forth in this letter for purposes of granting relief under sec_301_9100-3 we relied on certain statements and representations made under penalty of perjury by parent company official and tax professional the director however should verify all essential facts in addition notwithstanding that an extension is granted under sec_301_9100-3 to file the plr-113145-13 election any penalties and interest that would otherwise be applicable continue to apply 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 representatives sincerely _ken cohen_______________________ ken cohen senior technician reviewer branch office of associate chief_counsel corporate


internal_revenue_service number release date index number ------------------------------------- ------------------------------ ------------------------ ----------------------------------- -------------- ----------------------------------- - department of the treasury washington dc third party communication none date of communication not applicable_person to contact ------------------------ id no ------------- telephone number -------------------- refer reply to cc psi plr-164506-05 date date ------------------ ------------------ ------------------------------------- ----------------------- legend llc state d1 dear ----------------- this responds to a letter dated date together with subsequent correspondence submitted on behalf of llc requesting an extension of time under sec_301_9100-1 and sec_301_9100-3 of the procedure and administration regulations to file an entity classification election facts according to the information submitted llc was formed as a limited_liability_company under the laws of state on d1 llc intended to make an entity classification election to be treated for federal tax purposes as an association_taxable_as_a_corporation effective d1 however due to inadvertence a form_8832 was not timely filed law and analysis sec_301_7701-3 provides that a business_entity that is not classified as a corporation under sec_301_7701-2 or an eligible plr-164506-05 entity can elect its classification for federal tax purposes elections are necessary only when an eligible_entity does not want to be classified under the default classification or when an eligible_entity chooses to change its classification sec_301_7701-3 provides that unless a domestic eligible_entity elects otherwise it is a partnership if it has two or more members sec_301_7701-3 provides that an eligible_entity may elect to be classified other than as provided under sec_301_7701-3 by filing form_8832 entity classification election with the appropriate service_center under sec_301_7701-3 this election will be effective on the date specified by the entity on form_8832 or on the date filed if no such date is specified the date specified on form_8832 cannot be more than days prior to the date on which the election is filed under sec_301_9100-1 the commissioner may grant a reasonable sec_301_9100-1 through provide the standards the 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 e g h and i sec_301_9100-1 defines the term regulatory election as including an election whose deadline is prescribed by a regulation published in the federal_register 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 interests of the government conclusion based solely on the facts submitted and representations made we conclude that llc has satisfied the requirements of sec_301_9100-1 and sec_301_9100-3 and therefore is granted an extension of time of sixty days from the date of this letter to file a form_8832 to elect to be treated as an association_taxable_as_a_corporation effective d1 a copy of this letter should be attached to the election a copy is enclosed for that purpose 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 plr-164506-05 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 heather c maloy associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes cc ------------------------ ------------------------------------------ -------------------------------- ------------------------------------------- -------------------------- ------------------ ----------------------------- ---------------------------------- ----------------------------------------------------------------- ---------------------------------- -----------------------------


internal_revenue_service department of the treasury washington dc person to contact telephone number refer reply to cc intl plr date date legend index number number release date in re taxpayer cpa firm date a dear this replies to a letter dated date in which taxpayer requests an extension of time under sec_301_9100-3 to file form_8279 election to be treated as a fsc or as a small_fsc pursuant to temp sec_1_921-1t q a effective for the tax_year beginning on date a the information submitted for consideration is substantially as set forth below the ruling contained in this letter is predicated 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 a part of the audit process taxpayer timely filed form_1120 fsc for its tax_year later taxpayer received a notice from the irs stating it had no record of taxpayer filing form_8279 taxpayer questioned its tax advisors cpa firm about the irs notice cpa firm reviewed the matter and determined that a mis-communication between cpa firm and taxpayer resulted in form_8279 not being filed with the irs as each assumed that the other had filed form_8279 sec_301_9100-1 provides that the commissioner may grant a taxpayer a reasonable extension of time to make a regulatory election under all subtitles of the internal_revenue_code except subtitles e g h and i under the standards set forth in sec_301_9100-3 in re plr sec_301 -1 b defines a regulatory election as an election whose due_date is prescribed by a regulation a revenue_ruling revenue_procedure notice or announcement sec_301_9100-3 provides standards for extensions of time for making regulatory elections sec_301_9100-3 provides that requests for relief subject_to this section will be granted when the taxpayer provides the evidence including affidavits described in sec_301_9100-3 to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and the grant of relief will not prejudice the interests of the government in the present situation sec_1_921-1t q a fixes the time to elect treatment as an fsc or small_fsc thus the commissioner has discretionary authority pursuant to sec_301_9100-1 to grant taxpayer an extension of time provided that taxpayer acted reasonably and in good_faith and the grant of relief will not prejudice the interests of the government based on the facts and circumstances of this case we conclude that taxpayer satisfies sec_301_9100-3 accordingly taxpayer is granted an extension of time until days from the date of this ruling letter to file form_8279 effective for the tax_year beginning on date a this ruling is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent no ruling has been requested and none is expressed as to the application of any other section of the code or regulations to the facts presented pursuant to a power_of_attorney on file in this office a copy of this letter is being sent to the taxpayer and the other authorized representative sincerely allen goldstein reviewer office of the associate chief_counsel international


internal_revenue_service number release date index number ----------------------------------------------------- ------------------------------------------------------------- ------------------------- ------------------------------ ------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact ------------------------ id no ------------ telephone number -------------------- refer reply to cc psi b02 plr-112826-08 date date legend x ------------------------------------------------------------------------------ ------------------------------- y ---------------------------------------------------------- ------------------------------- a -------------------------- -------------------------------- country1 ------------------------------------ country2 --------------------------- date1 ---------------------- date2 ------------------- dear ----------------- this responds to a letter dated date and subsequent correspondence submitted on behalf of x requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations for x to file an entity classification election plr-112826-08 the information submitted states that x was formed under the laws of country1 on date1 x is wholly owned by y which was formed under the laws of country2 on date2 the ownership of y has varied but it has always been owned entirely by u s persons a is the majority owner of y and has always been in control of both y and x x represents that x is a foreign_entity eligible to elect to be treated as a disregarded_entity for federal tax purposes x intended to elect to be treated as a disregarded_entity for federal tax purposes effective on date1 the election however was not timely filed nevertheless x represents that it has been consistently treated by y and a as a disregarded_entity for federal tax purposes sec_301_7701-3 provides that a business_entity that is not classified as a corporation under sec_301_7701-2 or an eligible_entity can elect its classification for federal tax purposes elections are necessary only when an eligible_entity does not want to be classified under the default classification or when an eligible_entity chooses to change its classification sec_301_7701-3 provides that except for certain existing entities described in sec_301_7701-3 unless a foreign eligible_entity elects otherwise the entity is a a partnership if it has two or more members and at least one member does not have limited_liability b an association if all members have limited_liability or c disregarded as an entity separate from its owner if it has a single member that does not have limited_liability sec_301_7701-3 provides that an eligible_entity may elect to be classified other than as provided under sec_301 b by filing form_8832 with the appropriate service_center under sec_301_7701-3 this election will be effective on the date specified by the entity on form_8832 or on the date filed if no such date is specified the date specified on form_8832 cannot be more than days prior to the date on which the election is filed 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 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 sec_301_9100-1 provides that the term regulatory election includes an election whose due_date is prescribed by a regulation published in the federal_register sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make the election sec_301_9100-2 provides the rules governing automatic extensions of time for making certain elections sec_301_9100-3 provides the standards the commissioner will use to determine whether to grant an extension of time for regulatory elections that do not meet the requirements of sec_301_9100-2 under sec_301_9100-3 a request for relief will be granted when the taxpayer provides evidence to establish to the plr-112826-08 satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and granting relief will not prejudice the interests of the government based solely on the information submitted and the representations made we conclude that the requirements of sec_301_9100-1 and sec_301_9100-3 have been satisfied as a result x is granted an extension of time of days from the date of this letter to file a form_8832 with the appropriate service_center and elect to be treated as a disregarded_entity for federal tax purposes effective date1 a copy of this letter should be attached to the form_8832 a copy is enclosed for that purpose except as specifically set forth above no opinion is expressed concerning the federal tax consequences of the facts described above under any other provision of the internal_revenue_code and the regulations thereunder 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 x’s authorized representative sincerely william p o’shea associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes cc


internal_revenue_service number release date index number --------------------------------------------- ----------------------- ------------------------ ------------------------------------------------------------ ---------------------- re department of the treasury washington dc third party communication none date of communication not applicable_person to contact ------------------------------------- --------------- ----------------- telephone number ---------------------- refer reply to cc psi b04 plr-134411-13 date january legend husband wife attorney date date date year child child child trust trust trust a ---------------------------------------------------- ------------------------------------------------- --------------------------------- ------------------ -------------------- ------------------ ------- --------------------------- ----------------------------- -------------------------- ------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------- -------------- dear ------------------------------ this letter responds to your authorized representative’s letter dated date requesting an extension of time under sec_2642 of the internal_revenue_code and sec_301_9100-3 of the procedure and administration regulations to elect out of the generation-skipping_transfer gst_exemption automatic allocation rules the facts and representations submitted are summarized as follows on date husband established three irrevocable trusts for the benefit of his three children trust to benefit child trust to benefit child and trust to benefit child husband funded each trust with dollar_figurea on date each trust provides the respective child with net_income and so much of the principal for the child’s health education maintenance or plr-134411-13 support each respective child has a withdrawal right not to exceed dollar_figure or percent of the value of the principal as of the date of receipt of the written request upon each respective child’s death the then remaining principal will be paid outright to the child’s then-living issue per stirpes if the child has no then living issue then the trustees must distribute the trust principal to the settlor’s then living issue per stirpes in trust husband retained attorney to prepare husband’s and wife’s form sec_709 united_states gift and generation-skipping_transfer_tax return for year husband and wife elected to split the gifts to the trusts on the form sec_709 attorney prepared the form sec_709 but did not inform husband and wife that they had to elect out of the automatic allocation rules of sec_2632 in order not to have their gst_exemption automatically allocated to the trusts consequently attorney failed to make the proper written election out of the automatic allocation rules on husband’s and wife’s form sec_709 which were timely filed on date husband and wife request an extension of time under sec_2642 and sec_301_9100-3 to opt_out of the automatic allocation rules with respect to the year transfers to trust trust and trust law and analysis sec_2513 provides that a gift made by one spouse to any person other than his spouse shall be considered as made one -half by him and one-half by his spouse but only if at the time of the gift each spouse is a citizen or resident_of_the_united_states sec_2513 only applies if both spouses have signified their consent to the application of this section in the case of all such gifts made during the calendar_year by either while married to the other sec_2601 provides that a tax is imposed on every generation-skipping_transfer gst sec_2611 provides that the term generation-skipping_transfer means a taxable_distribution a taxable_termination and a direct_skip sec_2631 provides that for purposes of determining the inclusion_ratio every individual shall be allowed a gst_exemption amount which may be allocated by such individual or his executor to any property with respect to which such individual is the transferor sec_2631 provides that any allocation under sec_2631 once made shall be irrevocable sec_2631 provides that for purposes of sec_2631 the gst_exemption amount for any calendar_year shall be equal to the applicable_exclusion_amount under sec_2010 for such calendar_year sec_2632 provides that if any individual makes an indirect_skip during such individual’s lifetime any unused portion of such individual’s gst_exemption shall be allocated to the property transferred to the extent necessary to make the inclusion_ratio for such plr-134411-13 property zero if the amount of the indirect_skip exceeds such unused portion the entire unused portion shall be allocated to the property transferred sec_2632 provides that for purposes of this subsection the term indirect_skip means any transfer of property other than a direct_skip subject_to the tax imposed by chapter made to a gst_trust sec_2632 provides in part that the term gst_trust means a_trust that could have a generation-skipping_transfer with respect to the transferor unless the exceptions enumerated in i through vi apply sec_2632 provides that an individual may elect to have this subsection not apply to any or all transfers made by such individual to a particular trust sec_2632 provides that an election under sec_2632 may be made on a timely filed gift_tax_return for the calendar_year for which the election is to become effective sec_2641 defines the applicable_rate as the product of the maximum_federal_estate_tax_rate and the inclusion_ratio with respect to the transfer sec_2641 provides that the term maximum_federal_estate_tax_rate means the maximum rate imposed by sec_2001 on the estates of decedents dying at the time of the taxable_distribution taxable_termination or direct_skip as the case may be sec_2652 provides that if under sec_2513 one-half of a gift is treated as made by an individual and one-half of such gift is treated as made by the spouse of such individual such gift shall be so treated for purposes of chapter under sec_26_2652-1 of the generation-skipping_transfer_tax regulations in the case of a transfer with respect to which the donor’s spouse makes an election under sec_2513 to treat the gift as made one-half by the spouse the electing spouse is treated as the transferor of one-half of the entire value of the property transferred by the donor regardless of the interest the electing spouse is actually deemed to have transferred under sec_2513 the donor is treated as the transferor of one-half of the value of the entire property under sec_2642 the inclusion_ratio with respect to any property transferred in a generation-skipping_transfer is the excess if any of over the applicable_fraction the applicable_fraction as defined in sec_2642 is a fraction the numerator of which is the amount of the gst_exemption under sec_2631 allocated to the trust or to property transferred in a direct_skip and the denominator of which is the value of the property transferred to the trust or involved in the direct_skip reduced by the sum of any federal estate_tax or state death_tax actually recovered from the trust attributable to such property and any charitable deduction allowed under sec_2055 or sec_2522 with respect to such property sec_2642 provides generally that the secretary shall by regulation prescribe such circumstances and procedures under which extensions of time will be granted to make an allocation of gst_exemption described in sec_2642 or and an election plr-134411-13 under sec_2632 or c such regulations shall include procedures for requesting comparable relief with respect to transfers made before the date of the enactment of this paragraph sec_2642 provides that in determining whether to grant relief under sec_2642 the secretary shall take into account all relevant circumstances including evidence of intent contained in the trust instrument or instrument of transfer and such other factors as the secretary deems relevant for purposes of determining whether to grant relief the time for making the allocation or election shall be treated as if not expressly prescribed by statute notice_2001_50 2001_2_cb_189 provides that under sec_2642 the time for allocating the gst_exemption to lifetime transfers and transfers at death the time for electing out of the automatic allocation rules and the time for electing to treat any trust as a generation-skipping_transfer_trust are to be treated as if not expressly prescribed by statute the notice further provides that taxpayers may seek an extension of time to make an allocation described in sec_2642 or b or an election described in sec_2632 or c under the provisions of sec_301_9100-3 sec_301_9100-1 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_9100-1 provides that the commissioner has discretion to grant a reasonable extension of time under the rules set forth in sec_301_9100-2 and sec_301_9100-3 to make a regulatory election or a statutory election but no more than 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 sec_301_9100-3 provides the standards used to determine whether to grant an extension of time to make an election whose due_date is prescribed by a regulation and not expressly provided by statute under sec_301_9100-1 a regulatory election includes an election whose due_date is prescribed by a notice published in the internal_revenue_bulletin in accordance with sec_2642 and notice_2001_50 taxpayers may seek an extension of time to make an allocation described in sec_2642 or b or an election described in sec_2632 or c under the provisions of sec_301_9100-3 sec_301_9100-3 provides in part that requests for relief subject_to sec_301_9100-3 will be granted when the taxpayer provides the evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and the grant of relief will not prejudice the interests of the government sec_301_9100-3 provides in part except as provided in sec_301 b i through iii that a taxpayer is deemed to have acted reasonably and in good_faith if the plr-134411-13 taxpayer reasonably relied on a qualified_tax professional including a tax professional employed by the taxpayer and the tax professional failed to make or advise the taxpayer to make the election a gst_trust is defined in sec_2632 in general as any trust that could have a generation-skipping_transfer a_trust is a gst_trust unless it meets one of the exceptions described in sec_2632 through vi where a sufficient possibility exists based on the statutory criteria that the trust corpus will not be distributed to lower generations based upon the facts submitted and the representations made none of the exceptions in sec_2632 apply to the trusts accordingly trust trust and trust are gst trusts for purposes of sec_2632 based upon the facts submitted and representations made we conclude that the requirements of sec_301_9100-3 have been satisfied therefore husband and wife are granted an extension of time of days from the date of this letter to elect out of the automatic allocation rules under sec_2632 with respect to the year transfers to trust trust and trust the elections should be made on supplemental form sec_709 filed with cincinnati service_center at the following address internal_revenue_service cincinnati service_center - stop cincinnati oh you should attach a copy of this letter to the supplemental form_709 we have enclosed a copy for this purpose in accordance with the power_of_attorney on file with this office we have sent a copy of this letter to your authorized representatives except as expressly provided herein we neither express nor imply any opinion concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter 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 plr-134411-13 this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent sincerely associate chief_counsel passthroughs special industries by _________________________ lorraine e gardner senior counsel branch office of the associate chief_counsel passthroughs and special industries enclosures copy for sec_6110 purposes copy of this letter cc


internal_revenue_service number release date index number ----------------------------- -------------------- --------------------------- - department of the treasury washington dc third party communication none date of communication not applicable_person to contact ------------------------- id no ------------ telephone number -------------------- refer reply to cc ita b04 plr-154081-04 date date ---------- taxpayer ------------------------------------------- spouse ------------------------------------------ --------------------------- date ---------------- date -------------- date ---------------------- date ------------------ date ------------------- date house ----------------------------------- house ------------------------------------- x dear -------------- this responds to your letter dated date requesting a ruling on whether you are eligible to exclude gain from the sale of residence under sec_121 of the internal_revenue_code facts on date taxpayer purchased house taxpayer and spouse were married on date house was located outside the school district of spouse’s children in order for the children to attend the same schools as before their move to house they had to provide their own transportation until the end of the school year spouse’s older child was able to drive the children to school but after her graduation on date she was no longer able to provide transportation on date the family moved into house which was located in the school district of spouse’s child taxpayer represents that they intended to return to house after spouse’s younger child graduated from school in x because of their intent to return taxpayer rented out house until date after the family moved to house taxpayer and spouse had a plr-154081-04 child and represent that house was no longer large enough for their family accordingly house was sold on date law and analysis sec_121 provides that a taxpayer's gross_income will not include gain from the sale_or_exchange of property if during the five-year period ending on the date of the sale_or_exchange such property has been owned and used by the taxpayer as the taxpayer's principal_residence for periods aggregating two years or more the full exclusion is available only once every two years sec_121 provides that the maximum exclusion amount is dollar_figure if a husband and wife file a joint_return for the year of the sale both spouses meet the year use test at least one of the spouses meets the 2-year ownership test and neither spouse used the sec_121 exclusion during the last two years sec_121 provides for a reduced maximum exclusion for taxpayers who fail to satisfy the ownership and use tests or the limit of one sale every two years if the primary reason for sale_or_exchange is a change in place of employment health or unforeseen circumstances a sale is by reason of unforeseen circumstances if the primary reason for the sale is the occurrence of an event that the taxpayer does not anticipate before purchasing and occupying the residence a taxpayer's primary reason for the sale_or_exchange is deemed to be unforeseen circumstances if one of the safe_harbor events such as involuntary_conversion of the residence death or divorce occurs during the period of the taxpayer's ownership and use of the residence as the taxpayer's principal_residence in addition the commissioner may designate other events or situations as unforeseen circumstances in published guidance of general applicability or in a ruling directed to a specific taxpayer see sec_1_121-3t e of the income_tax regulations sec_1_121-3 provides that if a safe_harbor does not apply a sale is by reason of unforeseen circumstances only if the primary reason for the sale is unforeseen circumstances factors that may be relevant in determining the taxpayer’s primary reason for the sale include but are not limited to the extent to which the sale and the circumstances giving rise to the sale are proximate in time the suitability of the property as the taxpayer’s principal_residence materially changes the taxpayer’s financial ability to maintain the property is materially impaired the taxpayer uses the property as the taxpayer’s residence during the period of ownership of the property the circumstances giving rise to the sale are not reasonably foreseeable when the taxpayer begins using the property as the taxpayer’s principal_residence and the circumstances giving rise to the sale occur during the period of the taxpayer’s ownership and use of the property as the taxpayer’s principal_residence plr-154081-04 the reduced maximum exclusion is computed by multiplying the maximum dollar limitation of dollar_figure dollar_figure for certain joint filers by a fraction the numerator of the fraction is the shortest of the following periods the period of time that the taxpayer owned the property during the 5-year period ending on the date of the sale_or_exchange the period of time that the taxpayer used the property as the taxpayer's principal_residence during the 5-year period ending on the date of the sale_or_exchange or the period of time between the date of a prior sale_or_exchange of property for which the taxpayer excluded gain under sec_121 and the date of the current sale_or_exchange the numerator of the fraction may be expressed in days or months the denominator of the fraction is days or months depending on the measure of time used in the numerator based on the facts representations and the relevant law as set forth above we conclude that your primary reason for the sale of house was an unforeseen circumstance consequently the sale of house which you owned and used as your principal_residence for less than two of the preceding five years will allow you to exclude gain up to the reduced maximum exclusion amount under sec_121 caveats a copy of this letter must be attached to any income_tax return to which it is relevant we enclose a copy of the letter for this purpose also enclosed is a copy of the letter_ruling showing the deletions proposed to be made in the letter when it is disclosed under ' except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any item discussed or referenced in this letter in addition no opinion is expressed or implied as to whether taxpayer and spouse have used house as their principal_residence this ruling is directed only to the taxpayer s requesting it sec_6110 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 the authorized representative sincerely george f wright assistant branch chief branch office of associate chief_counsel income_tax accounting


department of the treasury internal_revenue_service washington d c uniform issue list apr - se-t ep pa t3 legend taxpayer a amount m irax bank c bank c representative l bank m date date date dear this is in response to your letters dated date date and date submitted on your behalf by your authorized representative in which you request a waiver of the 60-day rollover requirement contained in sec_408 of the internal_revenue_code the code the following facts and representations have been submitted under penalty of perjury in support of the ruling requested taxpayer a asserts that on date taxpayer a received a distribution of amount m from ira x and that his failure to accomplish a rollover of amount m within the page day period prescribed by sec_408 of the code was due to bank c error in failing to follow taxpayer a's instructions on date taxpayer a intended to rollover the traditional individual_retirement_account ira x he maintained at bank m into a new ira at bank c where taxpayer a had a long-term banking relationship on date taxpayer a obtained a check from bank m which was for amount m and which included the rotation on the face of the check ira total_distribution on date taxpayer a bersonally presented the bank m check to bank c representative l and discussed with her his intentions to open a rollover ira with the bank m check bank representative l prepared paperwork for a certificate of deposit and stated in response to taxpayer a's express instruction that there should be na taxes that there would be not taxes due except for interest_income taxpayer a emphasized that he did not want to be penalized and or taxed for closing out ira x and rolling over amount m into an account with bank c taxpayer a believed he was purchasing a certificate of deposit as part of a rollover of the bank m check in amount m taxpayer a first became aware that bank c placed his intended rollover into a non-ira certificate of deposit months later when taxpayer a’s tax preparer informed him that he had received a distribution of ‘amount m from ira x on date taxpayer a has submitted a letter dated date in which bank c’s representative stated that taxpayer a had been a customer for years and that bank c routinely presented taxpayer a with investment advice in addition taxpayer a has submitted a fetter dated date in which the president of bank c agreed to pay for fees associated with the filing of a 60-day waiver request with the internal_revenue_service taxpayer a further represents that she has not used amount m for any other purpose based on the facts and representations you request a ruling that the internal_revenue_service waive the 60-day rollover requirement with respect to the distribution of amount m contained in sec_408 of the code ‘the code sec_408 of the code provides that except as otherwise provided in sec_408 any amount_paid of distributed out of an ira shall be included in gross_income by the payee or distribute as the case may be in the manner provided under sec_72 of the cade sec_408 of the code defines and provides the rules applicable to ira_rollovers page sec_408 of the code provides that the rollover provisions of sec_408 do not apply to any amount required to be distributed under sec_408 sec_408 d a of the code provides that sec_408 of the code does not apply to any amount_paid or distributed out of an ira to the individual for whose benefit the ira is maintained if the entire amount received including money and any other_property is paid into an ira for the benefit of such individual not later than the day after the day on which the individual receives the payment or distribution or i the entire amount received including money and any other_property is paid into an eligible retirement pian other than an ira for the benefit of such individual not later than the day after the date on which the payment or distribution is received except that the maximum amount which may be paid into such plan may nat exceed the portion of the amount received which is includible in gross_income determined without regard to sec_408 sec_408 b of the code provides that sec_408 dy3 does not apply to any amount described in sec_408 a i received by an individual from an ra if at any time during the 1-year period ending on the day of such receipt such individual received any other amount described in sec_408 d a from an ira which was not includible in gross_income because of the application of sec_408 sec_408 d d of the code provides a similar 60-day rollover period for partial rollovers sec_408 e of the code provides that the roliover provisions of sec_408 do not apply to any amount required to be distributed under sec_408 sec_408 i of the code provides that the secretary may waive the day requirement under sec_408 and sec_408 dx3 d of the code where the failure to waive such requirement would be against equity or good conscience including casualty disaster or other events beyond the reasonable control of the individua subject_to such requirement only distributions that occurred after date are eligible for the waiver under sec_408 of the code rav proc lr b date provides that in determining whether to grant a waiver of the 66-day rollover requirement pursuant to sec_408 i the service will consider all relevant facts and page circumstances including errors committed by a financial_institution inability to complete a rollover due to death disability hospitalization incarceration restrictions imposed by a foreign_country or postal error the use of the amount distributed for example in the case of payment by check whether the check was cashed and the time elapsed since the distribution occurred the information presented and documentation submitted by taxpayer a is consistent with his assertion that on date taxpayer a received a distribution of amount m from ira x and that his failure to accomplish a rollover of amount m within the day period prescribed by sec_408 of the code was due to bank c error in failing to follow taxpayer a's instructions therefore pursuant to sec_408 of the code the service hereby waives the 60-day rollover requirement with respect to the distribution of amount m from ira x pursuant to this ruling letter taxpayer a is granted a period of days measured from the date of the issuance of this letter_ruling to make a rollover_contribution of an amount equal to amount m to an ira or iras described in code sec_408 provided all other requirements of code sec_408 except the 60-day requirement are met with respect to such ra contribution the contribution will be considered a rolfover contribution within the meaning of code sec_408 please note that pursuant to code sec_408 e this ruling letter doas not authorize the rollover of the code sec_404 minimum required distributions no opinion is expressed as to the tax treatment of the transaction described herein under the provisions of any other section of either the code or regulations which may be applicable thereto this letter is directed only to the taxpayer who requested it sec_61 k of the code provides that it may not be used or cited as precedent a copy of this letter_ruling is sent to your authorized representative pursuant to the provisions of a power_of_attorney on file in this office if you have any questions please contact page sincerely yours vi employee_plans technical group enclosures deleted copy of ruling letter notice of intention to disclose


department of the treasury internal_revenue_service washington d c of f i c e of c h i e f c ou n s e l date number release date cc pa apjp b01 postn-138502-03 uilc memorandum for m k mortensen associate area_counsel cc sb slc attn r craig schneider attorney from john j mcgreevy senior advisor cc pa apjp subject postn-138502-03 this chief_counsel_advice responds to your memorandum dated date in accordance with sec_6110 this chief_counsel_advice should not be cited as precedent legend corporation a corporation b corporation c year year year year year cc pa apjp b01 postn-138502-03 year year year year year year year year year year year issue sec_1 whether corporation b may file a valid interest_netting claim under sec_6621 with respect to corporation a corporation a filed a consolidated_return as the parent of an affiliated_group for overpayment year sec_5 and and subsequently filed a consolidated_return as a member of a second affiliated_group for which corporation b is the parent for underpayment years through whether corporation b may file a valid interest_netting claim under sec_6621 with respect to corporation c_corporation c had an underpayment in year and subsequently filed a consolidated_return with the affiliated_group for which corporation b is the parent for overpayment years and conclusion sec_1 interest_netting is possible to the extent corporation a is both entitled to interest from the year sec_5 and overpayments and severally liable for interest owing from the years through underpayments cc pa apjp b01 postn-138502-03 corporation c will meet the same taxpayer test to the extent it is entitled to a portion of the years and overpayments however interest_netting is not possible in this case because sec_6621 requires that both the period of limitation for both the underpayments and overpayments be open as of date and the period of limitations for corporation c’s year underpayment expired well before date facts in year corporation c filed its year return sometime after year it was determined that corporation c had an underpayment for its year tax_year this underpayment was paid in year prior to year corporation a was the parent of an affiliated_group in year and year the affiliated_group filed consolidated_returns and had overpayments for each year the service refunded the overpayments in year in year corporation a transferred many of its assets to corporation b corporation a was not dissolved beginning year corporation b was the parent of an affiliated_group of which corporation a and corporation c were subsidiaries in year and year the affiliated_group had overpayments which the service refunded in year in year through year the affiliated_group had underpayments corporation b wants to net interest from the year and year overpayments against interest from the year through year underpayments in addition corporation b wants to net interest from the year and year overpayments against interest from corporation c’s year underpayment law and analysis sec_6601 requires that interest be paid_by a taxpayer if any amount of tax is not paid on or before the last date prescribed for payment which is generally the date prescribed by sec_6072 for filing the return any_tax that has not been paid on or before the return_due_date is an underpayment in addition where a taxpayer has made an overpayment with respect to any internal revenue tax sec_6611 requires that interest be paid to the taxpayer who made the overpayment neither the code nor the regulations promulgated thereunder define the term overpayment the united_states supreme court defines overpayment as any payment in excess of that which is properly due 332_us_524 see also 494_us_596 cc pa apjp b01 postn-138502-03 sec_6621 and establish the interest rates for both overpayments and underpayments of tax sec_6621 provides that to the extent interest is payable for any period under subchapter_a and allowable under subchapter_b on equivalent underpayments and overpayments by the same taxpayer of tax imposed by the code the net rate of interest under sec_6621 on such amounts shall be zero for such period each overpayment or underpayment is only considered once in determining whether equivalent overpayments and underpayments exist however if the full amount of the overpayment or underpayment has not been used in a netting calculation the remaining portion may be used in another netting calculation see revproc_2000_26 2000_1_cb_1257 revproc_99_43 sec_1501 allows affiliated corporations to file a consolidated_return with respect to income_tax a condition for filing a consolidated_return is that all members of the affiliated_group must consent to be bound by all regulations promulgated under sec_1502 id the making of a consolidated_return is considered to be such consent id sec_1_1502-6 provides that in general all members of an affiliated_group that filed a consolidated_return are severally liable for the tax for such year sec_1_1502-77a provides that the use of the affiliated group’s overpayment will generally be at the discretion of the parent of the affiliated_group further any claim for credit or refund is to be made by the parent and such refund will be made directly to and in the name of the parent and will discharge any liability of the government with respect to any subsidiary id netting of the year and year overpayment interest against the year through year underpayment interest as described above sec_6621 requires that the same taxpayer both be liable for the underpayment_of_tax and entitled to the overpayment_of_tax here corporation a which was the parent of an affiliated_group in year sec_5 and the overpayment years and a member_of_an_affiliated_group in years through the underpayment years as all members of an affiliated_group that file a consolidated_return are severally liable for the tax for such year corporation a is severally liable for the affiliated group's years through underpayments therefore because corporation a is the same taxpayer with respect to its allocable share of the year and overpayments and the years through underpayments interest_netting is possible in this situation corporation b as parent of the affiliated_group is permitted to file the interest claim pursuant to sec_1_1502-77a if all of the members of the affiliated_group cc pa apjp b01 postn-138502-03 for which corporation a was the parent became members of the affiliated_group for which corporation b is the parent then no allocation of the year and year overpayment is required however the facts are unclear on this point before interest_netting is allowed however the service must take into account any portions of the year and year overpayments that have been previously used as part of a netting calculation because it is only possible to use an overpayment once in a netting calculation the amount of the year and year overpayments that are available for interest_netting will be reduced by the amount previously netted against any underpayments netting of the year and year overpayment interest against corporation c’s year underpayment interest sec_6621 generally applies to interest for periods beginning after date see sec_3301 of the irs restructuring and reform act of rra however sec_3301 of the rra provides that sec_6621 applies to interest for periods beginning before date ie interest accruing before date provided certain conditions are met first such netting is subject_to any applicable statute of limitation not having expired with regard to either a tax underpayment or a tax overpayment second the taxpayer must reasonably identify and establish periods of tax overpayments and underpayments for which the net interest rate of zero applies third the taxpayer must request the secretary_of_the_treasury apply sec_6621 to such periods no later than date id with respect to the first requirement revproc_99_43 in applying sec_3301 of the rra states that the period of limitations for both the applicable underpayment and overpayment periods must have been open as of date revproc_99_43 1999_2_cb_579 at sec_4 the applicable underpayment interest period expires either three years from the time the tax_return was filed or two years from the time the interest was paid whichever comes later id at sec_4 corporation c will be the same taxpayer with respect to its year underpayment and its share of the year and year overpayments corporation c filed its year return in year and fully paid its year underpayment in year the later period of either three years from the time the return was filed or two years from the time the interest was paid is the two year period from the time the interest was paid in year two years from year is year year occurred well before date accordingly the period of limitations for corporation c’s year underpayment was closed prior to date because corporation c’s year tax_year was closed as of date interest_netting is not possible in this case cc pa apjp b01 postn-138502-03 case development hazards and other considerations there are some litigation hazards associated with the situation involving corporation c’s year underpayment as stated above for periods before date sec_3301 of the rra provides that netting is subject_to any applicable statute of limitation not having expired with regard to either a tax underpayment or a tax overpayment revproc_99_43 states that the statute requires the applicable periods of limitation for both the underpayments and overpayments be open on date in 56_fedclaims_228 the court refused to follow revproc_99_43 and held that only one of the periods of limitation must be open our office does not agree with the court of claims and is recommending that federal_national_mortgage_association be appealed if you have concerns regarding the status of this issue we recommend you contact our office for further advice this writing may contain privileged information any unauthorized disclosure of this writing may have an adverse effect on privileges such as the attorney client privilege if disclosure becomes necessary please contact this office for our views please call if you have any further questions


internal_revenue_service department of the treasury number release date index number washington dc person to contact telephone number refer reply to cc psi - plr-130546-01 date date g b_trust corp d1 d2 d3 d4 d5 d6 d7 d8 dear this is in reply to your letter dated date and subsequent correspondence submitted on behalf of trust requesting rulings under sec_678 and sec_1361 of the internal_revenue_code the information submitted states that trust is an irrevocable_trust created by g on d1 b is the sole beneficiary of trust and is over thirty-five years old g contributed corp stock to trust on d2 d3 d4 d5 d6 and d7 corp elected to be an s_corporation effective d8 trust elected to be treated as an electing small_business plr-130546-01 trust esbt effective d8 article ii paragraph a of the trust agreement provides that if an addition is made to the trust in a calendar_year the beneficiary of the trust shall have the power in his sole discretion commencing with the date of the addition and ending days after notification from the trustee to withdraw property belonging to the principal of the trust including property constituting the addition having a value equal at the time of the withdrawal to the value of the addition at the time of the addition article ii paragraph a i provides that while the beneficiary is under the age of twenty-one years the trustee may use for the beneficiary’s benefit so much or all of the net_income of the trust as the trustee in the trustee’s sole and absolute discretion determines to be required or desirable for the beneficiary’s support welfare education and best interests adding to principal any income not so used after the beneficiary reaches the age of twenty-one years the trustee shall pay all the net_income of the trust to the beneficiary in convenient installments at least quarter-annually article ii paragraph a i also provides that after the beneficiary has reached the age of twenty-five years the trustee shall distribute to the beneficiary such portion or all of the principal of the trust other than corp stock as the beneficiary from time to time requests in writing not exceeding in the aggregate however one-third in value of such assets other than corp stock before the beneficiary has reached the age of thirty years nor two-thirds in value after the beneficiary has reached the age of thirty-five years article ii paragraph a ii provides that the trustee may pay to the beneficiary or use for the beneficiary’s benefit so much or all of the principal of the trust other than corp stock as the trustee from time to time in the trustee’s sole and absolute discretion determines to be required or desirable for the beneficiary’s support welfare education and best interests article ii paragraph b provides that if the trust has not yet terminated upon the death of b the trust as then constituted shall be distributed to such appointee or appointees including b’s own estate upon such conditions and estates in trust or otherwise with such powers in such manner and at such times as b appoints and directs by will specifically referring to the power_of_appointment sec_671 of the code provides that when the grantor or another person is treated as the owner of any portion of a_trust there shall be included in computing the taxable_income and credits of the grantor or the other person those items of income deduction and credits against tax of the trust which are attributable to that portion of the trust to the extent that such items would be taken into account under chapter of the code in computing the taxable_income or credits against tax of an individual plr-130546-01 sec_673 through specify the circumstances under which the grantor or another person will be treated as the owner of a portion of a_trust sec_674 provides that the grantor is treated as the owner of any portion of a_trust in respect of which the beneficial_enjoyment of the corpus or the income therefrom is subject_to a power of disposition exercisable by the grantor a nonadverse_party or both without the approval or consent of an adverse_party sec_674 provides that sec_674 does not apply to a power exercisable only by will other than a power in the grantor to appoint by will the income of the trust where the income is accumulated for such disposition by the grantor or may be so accumulated in the discretion of the grantor or a nonadverse_party or both without the approval or consent of any adverse_party sec_677 provides that the grantor will be treated as the owner of any portion of a_trust whether or not he is treated as such owner under sec_674 whose income without the approval or consent of any adverse_party is or in the discretion of the grantor or a nonadverse_party or both may be distributed to the grantor or the grantor's spouse or held or accumulated for future distribution to the grantor or the grantor's spouse sec_678 provides that a person other than the grantor shall be treated as the owner of any portion of a_trust with respect to which such person has a power exercisable solely by himself to vest the corpus or the income therefrom in himself or the person has previously partially released or otherwise modified such a power and after the release or modification retains such control as would cause a grantor to be treated as the owner of such a portion of the trust within the principles of sec_671 to inclusive sec_1361 c a i provides that a_trust all of which is treated under subpart e of part i of subchapter_j of chapter as owned by an individual who is a citizen or resident_of_the_united_states may be an s_corporation shareholder b had the right to withdraw the stock of corp on the first day of its contribution to trust under article ii paragraph a of the trust if b received notice of the contribution on the day of the contribution assuming that b received notice of the contributions on the day of each contribution b will be treated as having a power to vest the stock in herself within the meaning of sec_678 because b failed to exercise the withdrawal power while retaining a testamentary general_power_of_appointment over all the assets held by trust at b’s death including corp stock and gains allocable to corpus not otherwise distributed to b and the right to have all the income of trust including corpus other than corp stock and gains allocable to corpus in the discretion of the trustee distributed to her or accumulated for future distributions to her b will be treated as having released the withdrawal power while retaining such control as would cause a plr-130546-01 grantor to be treated as the owner of trust under sec_674 and sec_677 therefore b will be treated as the owner of trust under sec_678 because b will be considered the owner of the entire trust for purposes of sec_671 trust is a permitted s_corporation shareholder as described in sec_1361 except as specifically ruled upon above no opinion is expressed as to the federal tax consequences of the transaction described above under any other provision of the code moreover if the trust instrument is amended this ruling may not remain in effect 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 trust sincerely yours j thomas hines chief branch associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes


department of the treasury employer_identification_number contact person - id number contact telephone number vil list internal_revenue_service p o box cincinnati oh release number release date date date legend v w l l m i q i n u o n dear why you are receiving this letter this is our response to your date letter requesting approval of a set- aside under internal_revenue_code sec_4942 you’ve been recognized as tax-exempt under sec_501 of the code and have been determined to be a private_foundation under sec_509 our determination based on the information furnished your set-aside program is approved under internal_revenue_code sec_4942 as required under sec_4942 the set_aside amount must be paid within the 60-month period after the date of the first set-aside description of set-aside request you have requested approval of a set-aside of a dollars for the taxable_year ending december public charity described in sec_501 of the internal_revenue_code v will for the purpose of a matching grant pledged to v a __ oe use the funds it raises with the help of your matching grant to assist in the construction of w a major addition to x a hospital facility located in y the total is b dollars of which approximately dollars in pledges have estimated cost of w currently been made by government and private sources your agreement with v aims to raise a total of d dollars by establishing a dollar for dollar match on or __ you will pay to v from the set-aside an amount equal betore december to the contributions it received for the project up to the amount of the set-aside you believe that v can reasonably be expected to raise a dollars by december __ the date the matching_contribution offer expires your project is better accomplished through a set-aside than through an immediate payment of funds because the purpose of a matching grant is to stimulate contributions by other persons or entities and this cannot be accomplished unless the payment of the grant is deferred until the contributions that qualify for matching are actually received in the present case it is likely that will require an extended period of time to secure a dollars in contributions the set- aside will also allow you to retain control_over the matching funds in order to ensure that construction progresses as planned and that the funds disbursed are used solely for the construction of w one of your foundation managers has provided a written_statement that the a dollars set_aside will actually be paid to v within months to the date of the set- aside basis for our determination internal_revenue_code sec_4942 states that an amount set_aside for a specific project which includes one or more purposes described in sec_170 may be treated as a qualifying_distribution if requirements of sec_4942 it meets the sec_4942 of the code states that an amount set_aside for a specific project will meet the requirements of this subparagraph if at the time of the set- aside the foundation establishes that the amount will be paid within five years and either clause i or ii are satisfied sec_4942 of the code is satisfied if at the time of the set-aside the private_foundation establishes that the project can better be accomplished using the set-aside than by making an immediate payment sec_53_4942_a_-3 of the foundations and similar excise_taxes regulations provides that a private_foundation may establish a project as better accomplished by a set-aside than by immediate payment if the set-aside satisfies the suitability test described in sec_53_4942_a_-3 sec_53_4942_a_-3 of the foundations and similar excise_taxes regulations provides that specific projects better accomplished using a set-aside include projects where grants are made as part of a matching-grant program what you must do your approved set-aside will be documented on your records as a pledge or obligation to be paid_by the date specified the amounts set_aside will be taken into account to determine your minimum_investment_return under internal_revenue_code sec_4942 and the income attributable to your set_aside s will also be taken into account in computing your adjusted_net_income under sec_4942 f of the code additional information this determination is directed only to the organization that requested it internal_revenue_code sec_6110 provides that it may not be used or cited as a precedent please keep a copy of this letter in your records we have sent a copy of this letter to your representative as indicated in your power_of_attorney if you have any questions please contact the person listed in the heading of this letter sincerely holly o paz director exempt_organizations rulings and agreements enclosure


internal_revenue_service number release date index number ----------------------------------- --------------------------------------------------- ----------------------------------- ---------------------------------------- ----------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact --------------------- id no ----------- telephone number ---------------------- refer reply to cc ita b04 plr-126060-15 date february legend taxpayer state date date ----------------------------------------- -------------- ------------------ -------------------------- dear ---------------- this responds to your request for a private_letter_ruling dated date regarding the application of sec_1033 of the internal_revenue_code to your transaction specifically you request a ruling that the sale_or_other_disposition of the spectrum-based content distribution rights currently associated with the taxpayer’s broadcast services pursuant to the actions of the federal communications commission fcc constitutes a sale under a threat of an involuntary_conversion of its fcc licenses and related property for purposes of sec_1033 of the internal_revenue_code facts taxpayer owns and operates a full-power television station in the state market that operates in the upper mhz band taxpayer’s uhf tv station operates pursuant to licenses and permits issued by the fcc which authorize the station to deliver video audio data and other content over specific broadcast frequencies plr-126060-15 pursuant to applicable provisions of the middle class tax relief and job creation act of spectrum act the fcc is implementing a mandate by congress to repurpose spectrum in the mhz band currently used by television broadcasters to help meet the nation’s accelerating needs for mobile broadband and other new bandwidth- intensive technologies the spectrum act calls for the fcc to undertake two related but independent processes to reclaim spectrum currently used for television broadcasting i an incentive auction and ii a repacking the incentive auction is intended to motivate existing television broadcasters to relinquish some or all of their spectrum usage rights to accommodate the requirements of the wireless carriers within the repurposed spectrum repacking is an involuntary reassignment of remaining broadcast television stations to a narrower segment of spectrum lower in the band this repacking will allow the fcc to assemble a near nation-wide contiguous band of spectrum in the upper mhz band for reallocation to mobile broadband the spectrum act provides broadcasters with three relinquishment options for participating in the incentive auction first broadcasters can relinquish their spectrum- based content distribution rights in their entirety and cease broadcasting go off- air second broadcasters currently operating on frequencies in the uhf band can voluntarily agree to relocate to frequencies in the vhf band2 move to vhf third broadcasters can relinquish their rights to deliver content over a television broadcast channel and instead agree to share a single channel with another broadcaster sharing arrangement alternatively broadcasters can also forgo participation in the incentive auction altogether and remain on the air however that would mean accepting as part of the repacking process the potential to be reassigned to a different possibly inferior less valuable uhf channel without compensation other than reimbursement from a limited fund for the cost of moving to the new channel on date the fcc released a report and order3 adopting rules to implement the spectrum act including the broadcast television spectrum incentive auction and repacking under the rules the incentive auction will consist of a reverse auction and a forward auction the reverse auction will determine the price at which a broadcast station would be willing to relinquish some or all of its spectrum-based content distribution rights the forward auction will set the price that the wireless carriers will pay for the new licenses for repurposed spectrum after the auction is completed broadcasters whose bids were accepted in the auction will receive their payments from the forward auction proceeds the fcc will also use proceeds from the forward auction middle class tax relief and job creation act of pub_l_no sec_6403 it is widely accepted within the industry that vhf spectrum is grossly inferior to uhf spectrum for distribution of video audio data and other content in digital form expanding the economic and innovation opportunities of spectrum through incentive auctions report and order fcc rcd plr-126060-15 to reimburse certain spectrum relocation costs of broadcasters who do not elect to sell any remaining proceeds will be deposited with the federal treasury as stated broadcasters who choose to forego the incentive auction and instead remain on the air are subject_to mandatory relocation to different operating frequencies at the direction of the fcc non-participating stations that currently operate in that portion of the upper mhz band that will be repurposed for mobile broadband licenses will almost certainly be forced to change to a new channel in a lower portion of the existing uhf band non-participating stations that do not currently operate in the purposed band may still be required to operate on new channels as necessary to accommodate other stations being moved to other frequencies if taxpayer does not participate in the incentive auction it is almost certain that taxpayer would be repacked into a different lower channel taxpayer is one of only a limited number of broadcast television stations that the fcc will force to relocate to another channel under virtually any scenario taxpayer’s tv station is located in the premium location of state one of the nation’s largest television and wireless markets in addition its assigned station on the spectrum in the upper mhz band is optimal for use in mobile broadband and the new bandwidth technologies these circumstances make taxpayer’s station strategically important to the fcc’s spectrum reclamation project -- virtually ensuring that the fcc would compel taxpayer to relocate to a new channel in the repacking process if taxpayer fails to participate in the incentive auction the fcc is obligated to use all reasonable efforts to replicate a station’s coverage area and population served however the fcc is not required to account for all of the real and substantial technical commercial and economic differences between the current value of taxpayer’s uhf spectrum and the future value of residual lower band uhf spectrum in light of the spectrum act and the fcc’s activities implementing congress’ directive taxpayer plans to sell the spectrum-based content distribution rights currently associated with its broadcasting services as part of the incentive auction and reinvest such proceeds in property that is similar_or_related_in_service_or_use on date taxpayer filed its application with the fcc electing to participate in the incentive auction taxpayer’s application notified the fcc that it is retaining all three relinquishment options i go off-air ii move to vhf and iii enter into a sharing arrangement however this private_letter_ruling deals only with the first option to go off-air to the exclusion of options ii and iii this private_letter_ruling only addresses the transaction as currently proposed requested ruling plr-126060-15 the sale_or_other_disposition of the spectrum-based content distribution rights and related assets currently associated with taxpayer’s broadcast services constitutes a sale under a threat of an involuntary_conversion for purposes of sec_1033 law and analysis sec_1033 of the code provides in part that if property as a result of its destruction in whole or in part theft seizure or requisition or condemnation or threat or imminence thereof is compulsorily or involuntarily converted into money and if the taxpayer during the period specified in sec_1033 for the purpose of replacing the property so converted purchases other_property similar_or_related_in_service_or_use to the property so converted then at the election of the taxpayer the gain shall be recognized only to the extent that the amount_realized upon such conversion exceeds the cost of such property repacking under sec_1033 one of the circumstances in which a sec_1033 requisition or condemnation occurs is where a taxpayer's property is subjected to a compensable governmental taking for public use under the fifth_amendment of the u s constitution 279_f2d_220 ct_cl 196_fsupp_129 d c mass revrul_69_254 1969_2_cb_162 revrul_58_11 1958_1_cb_273 the fifth_amendment provides in part that no private property be taken for public use without just compensation however the meaning of condemnation or requisition for purposes of sec_1033 of the code is not strictly limited to takings within the meaning of the fifth_amendment in revrul_82_147 1982_1_cb_190 a federal_law prohibited the use of motor boats with motors of greater than horsepower on designated lakes in wilderness areas it also provided that if the horsepower restriction made the operation of a resort uneconomical the owner of the resort could require the government to purchase its resort at its fair_market_value determined without regard to the horsepower restrictions the horsepower restriction made the operation of the taxpayer’s resort uneconomical and the taxpayer sold its fishing lodge to the federal government in holding that the government’s purchase of the resort constituted a condemnation within the meaning of sec_1033 the service did not refer to a fifth_amendment taking but instead emphasized that the horsepower restriction in addition to the provision authorizing purchase of a resort at its fair_market_value without regard to the restriction effectively constitutes a taking of property upon payment of fair compensation in the present case the fcc’s repacking process is functionally equivalent to a direct physical taking of private property for a public use without the consent of the property owner because it effectively deprives the taxpayer of its assets taxpayer’s choice to participate in the incentive auction is not a meaningful choice choosing to forgo the plr-126060-15 incentive auction would mean subjecting itself to the repacking process due to taxpayer’s unique circumstances if taxpayer does not participate in the incentive auction it is virtually assured of being repacked into a different lower band channel without compensation other than reimbursement from a limited fund for the cost of moving to the new channel sale under threat of repacking in revrul_63_221 1963_2_cb_332 the service stated that for purposes of sec_1033 threat_or_imminence_of_condemnation is generally considered to exist where a property owner is informed either orally or in writing by a representative of a governmental body that the government_entity has decided to acquire his property and the property owner has reasonable grounds to believe from the information conveyed to him by such representative that the necessary steps to condemn the property will be instituted if a voluntary sale is not arranged in revrul_81_180 1981_2_cb_161 the service considered a situation where a taxpayer learned through newspaper reports that a city intended to acquire its property by condemnation for public use if a sale could not be negotiated city officials confirmed the accuracy of the reports the taxpayer sold its property to a third party thereafter but before the city actually condemned the property the service concluded that the sale was made under the threat_or_imminence_of_condemnation because the property was sold after the taxpayer was given reasonable grounds to believe that its property would be taken these authorities indicate that a voluntary sale qualifies as an involuntary_conversion under sec_1033 if the threat_or_imminence_of_condemnation is present at the time of sale however the threat need not be a certainty a threat exists if the taxpayer may reasonably believe from representations of the government and surrounding circumstances that a forced sale is likely to take place in the present situation the fcc’s decision to impose on taxpayer mandatory modification of its broadcast facilities if it decides not to participate in the incentive auction including forced relocation to a different operating frequency and the potential to incur service losses unreimbursed out-of-pocket costs and reduced value for its remaining assets creates the reasonable grounds to believe that condemnation is forthcoming the involuntary_conversion is the fcc’s threat of repacking taxpayer’s station to a different frequency and the consequent loss of economic utility of its related property the fcc has provided taxpayer with notice through the spectrum act and the report and order of its intent to acquire the type of spectrum-based distribution rights that taxpayer possesses under its unique circumstances taxpayer reasonably believes that if it does not participate in the incentive auction the fcc will take taxpayer’s plr-126060-15 spectrum resell it to wireless carriers and then force taxpayer to relocate its station to an inferior frequency accordingly under the relinquishment option to go off air taxpayer’s sale of spectrum- based content distribution rights and related assets currently associated with its broadcast services to the fcc constitutes a disposition under the threat_or_imminence_of_condemnation for purpose of sec_1033 of the code conclusions under the relinquishment option to go off air the sale_or_other_disposition of the spectrum-based content distribution rights and related assets currently associated with taxpayer’s broadcast services to the fcc constitutes a sale under a threat of an involuntary_conversion for purposes of sec_1033 caveats 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 thus as noted above we do not express any opinion about the tax consequences under sec_1033 or any other provision of the code if taxpayer proceeds with relinquishment option ii move to vhf or relinquishment option iii enter into a sharing arrangement the service does not issue letter rulings on alternative plans of proposed transactions or on hypothetical situations see section dollar_figure of revproc_2016_1 2016_1_irb_1 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 representatives a copy of this letter must be attached to any income_tax return to which it is relevant alternatively taxpayers filing their returns electronically may satisfy this requirement by attaching a statement to their return that provides the date and control number of the letter_ruling the ruling contained in this letter is based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement plr-126060-15 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 j peter baumgarten assistant to the branch chief branch office_of_chief_counsel income_tax accounting


t c memo united_states tax_court mehdi h hajiyani petitioner v commissioner of internal revenue respondent docket no 4008-04l filed date mehdi h hajiyani pro_se roger w bracken for respondent memorandum findings_of_fact and opinion gerber chief_judge petitioner pursuant to sec_6330 seeks review of respondent’s determination to proceed with collection by means of levy of petitioner’s unpaid 1unless otherwise indicated all section references are to the internal_revenue_code and all rule references are to the tax_court rules_of_practice and procedure and federal_income_tax liabilities the issue for our consideration is whether respondent abused his discretion by determining to proceed with the proposed levy findings of fact2 at the time of the filing of the petition in this case petitioner resided in rockville maryland on date petitioner was provided with the opportunity to contest his and income_tax deficiencies in a trial before this court on date the court held in a summary opinion inter alia that petitioner was engaged in a money- lending business for the years to and was allowed to deduct certain expenses associated with that business see hajiyani v commissioner t c summary opinion in the above-referenced deficiency proceeding the parties were required to provide the court with computations reflecting the holdings in t c summary opinion for purposes of entry of decision see rule respondent submitted a computation but petitioner did not after a time respondent moved for an entry of decision in accord with his proposed computation which was based on the court’s summary opinion on date petitioner through his attorney kenneth wall filed an objection to the entry of decision 2the parties’ stipulation of facts is incorporated by this reference alleging that additional information for the year could alter the decision to be entered on date this court ordered petitioner to file an alternative computation by date petitioner failed to file an alternative computation and on date a decision was entered determining deficiencies in income_tax for the taxable years and of dollar_figure and dollar_figure respectively on date respondent sent petitioner a final notice_of_intent_to_levy and notice of your right to a hearing levy notice for petitioner’s and taxable years the levy notice reflected an unpaid tax_liability including interest of dollar_figure for the taxable_year and dollar_figure for the taxable_year on date respondent received petitioner’s timely form request for a collection_due_process_hearing request for taxable years and as a basis for his request petitioner attached documents showing that he had objected to respondent’s original decision petitioner’s original sec_6330 hearing was scheduled for date but it was rescheduled for a later date because of conflicts petitioner failed to appear for the rescheduled meeting on date respondent mailed petitioner a notice_of_determination concerning collection action s under sec_6320 and or final notice determining that the proposed levy should be sustained as of that date petitioner had not proposed any collection alternatives the sole issue petitioner raised was whether he was liable for the unpaid and tax_liabilities on date petitioner sent an offer-in-compromise to respondent offering to settle the and tax_liabilities for dollar_figure on the basis of doubt as to liability opinion petitioner essentially makes three arguments in support of his position that respondent should not be allowed to proceed with collection first petitioner argues that the rule_155_computations in the deficiency proceeding for the and tax years are incorrect because they did not account for petitioner’s claimed loss relating to his money-lending business in second petitioner argues that his offer-in-compromise was not considered finally petitioner contends that part of his tax_liabilities was satisfied by offsets of tax refunds and attachment of his bank accounts sec_6331 authorizes the commissioner to levy on property and property rights of a taxpayer who fails to pay a tax_liability after notice_and_demand sec_6331 and sec_6330 however require the secretary before proceeding with collection to send written notice to the taxpayer of the intent to levy and of the taxpayer’s right to a hearing sec_6330 provides that at the hearing the taxpayer may raise any relevant issue relating to the unpaid tax or the proposed levy including spousal defenses challenges to the appropriateness of collection actions and alternatives to collection sec_6330 requires that the appeals officer obtain verification that the requirements of any applicable law or administrative procedure have been met when an appeals officer issues a determination regarding a disputed collection action a taxpayer may seek judicial review with the tax_court or a district_court as appropriate sec_6330 see 115_tc_35 114_tc_176 the underlying tax_liability may be questioned if the taxpayer did not receive any statutory_notice_of_deficiency for such tax_liability or did not otherwise have an opportunity to dispute such tax_liability sec_6330 where the validity of the underlying tax_liability is properly at issue the court will review the matter de novo 114_tc_604 where the validity of the underlying tax is not at issue the court will review the commissioner’s administrative determination for an abuse_of_discretion id goza v commissioner supra pincite- petitioner had the opportunity to dispute the underlying tax_liabilities and did so in the deficiency proceeding therefore the validity of the underlying tax_liabilities may not be questioned and we review respondent’s determination under an abuse_of_discretion standard the main thrust of petitioner’s challenge concerns the computations in the deficiency proceeding under rule however as noted petitioner is not entitled to question the underlying tax_liabilities because he already has been provided the opportunity to challenge his liabilities see sec_6330 in that regard petitioner was provided with the opportunity to submit a computation under rule but failed to timely do so petitioner contends that mr wall his attorney did not submit a rule computation petitioner’s contention with respect to his attorney’s failure does not change the limitation upon petitioner or the court with respect to addressing the underlying merits of his or tax_liability see sec_6330 with respect to petitioner’s second argument concerning his attempted offer-in-compromise our review of the commissioner’s determination generally is limited to issues raised at the sec_6330 hearing 118_tc_488 petitioner’s offer-in-compromise was submitted after the scheduled sec_6330 hearing and the issuance of the final notice accordingly the offer-in-compromise could not have been considered at the sec_6330 hearing there would therefore be no basis for the court to hold that there was an abuse_of_discretion with respect to the offer-in-compromise petitioner’s final argument is that a portion of his tax_liabilities had been satisfied through offset and other collection by respondent however the specific amounts of petitioner’s tax_liabilities that remain unpaid have not been addressed by him and there is no evidence that respondent is attempting to collect more than petitioner’s unpaid balance in summary before the scheduled sec_6330 hearing petitioner’s sole defense to the proposed levy was his challenge to the underlying tax_liability petitioner did not attend the scheduled hearing and through the time of the final notice he did not offer spousal defenses challenges to the appropriateness of the collection action or collection alternatives we accordingly hold that respondent did not commit error or abuse his discretion in his determination to proceed with collection to reflect the foregoing decision will be entered for respondent 3it should be noted that petitioner’s offer-in-compromise was with respect to doubt as to liability which would address the merits of the underlying liability since petitioner is precluded from questioning the underlying liabilities his offer would not provide him any relief in the setting of this proceeding