department of the treasury internal_revenue_service qc washington d c o05 zz tax_exempt_and_government_entities_division uics apr se t ep lat legend taxpayer a individual b individual c individual d individual e individual f individual g trust t subtrust u subtrust v date date date date date date page date date date date ira x ira y plan w account u company l company m company n state o rule q percentage percentage sec_4 page dea this is in response to the request for letter rulings under sec_401 and sec_408 of the internal_revenue_code submitted on your behalf by your authorized representative as supplemented and revised by correspondence dated as further supplemented by correspondence dated and date and as revised by correspondence dated the request for letter rulings is based on the following facts and representations taxpayer a whose date of birth was date died on date at age a resident of state o as of her date of death taxpayer a owned ira x which was maintained with company l and was entitled to receive amounts under plan w which was maintained with company m taxpayer a was survived by her husband individual g and by five nieces and nephews individuals b through f individual b taxpayer a’s nephew was born on date individual c was born on date individuals d and e were born on date and individual f was born on date individual c is the eldest of individuals b through f individual g is older than individual c on or about date taxpayer a named trust t as the beneficiary of of her ira x and subtrust u created under the provisions of trust t as the beneficiary of the remaining of ira x consistent with the language of trust t and as required under the statutes of state o the of ira x payable to trust t as beneficiary thereof was allocated to subtrust v created thereunder in order to fully utilize taxpayer a’s federal estate_tax exemption said allocation was made prior to date the calendar_year following the calendar_year of taxpayer a’s death furthermore said allocation was reflected on the federal form_706 united_states estate and generation- skipping transfer_tax return filed with respect to taxpayer a’s estate respect to the estate of taxpayer a on date the internal_revenue_service issued an acceptance letter with with respect to the allocation of ira x your authorized representative has asserted that rule q found at sec_4 of the statutes of state o required the trustee of trust t to allocatel of ira x to subtrust v in order to minimize the tax consequences of making distributions from ira x furthermore your authorized representative has asserted that said allocation was made in order to comply with the trustee’s duty to manage trust t assets consistent with the trustee’s duty_of impartiality and the purposes of the trust as required under sec_4 of the statutes of state o veges on or about date taxpayer a named trust t as the beneficiary of her interest in plan w in accordance with article fourth of the second amendment of trust t percentage of taxpayer a’s interest in plan w was allocated to subtrust u and percentage of said interest was allocated to subtrust v trust t was created by taxpayer a as grantor and trustor on date trust t has been subsequently amended and restated your authorized representative has asserted that trust t is valid under the laws of state o article ninth of trust t as amended provides that trust t became irrevocable at the death of taxpayer a individual b and company n are the co-trustees of trust t article fourth of the second amendment to trust t creates subtrust u for the benefit of individual g article fifth of the second amendment to trust t creates subtrust v to benefit individuals b through f article fifth sec_1 of the second amendment to trust t provides in relevant part that a beneficiary’s interest under subtrust v shall be distributed to said beneficiary when he or she reaches the age of individuals b through f had all attained age as of date the date of taxpayer a’s death pursuant to article fifth sec_1 of trust t the interests of the five beneficiaries named therein shall be equal it has been represented that copies of the amended trust t were provided to company l and company m within one month of the date of taxpayer a’s death subsequent to the death of taxpayer a the my of ira x payable to trust t and allocated to subtrust v pursuant to the provisions of trust t and as required under the statutes of state o was transferred by means of a trustee to trustee transfer to ira y set up and maintained with company n in the name of taxpayer a with subtrust v as the beneficiary thereof additionally subsequent to the death of taxpayer a the percentage of plan w that was payable to subtrust v percentage was transferred by means of a direct trustee-to-trustee transfer to account u set up and maintained with company n in the name of taxpayer a with subtrust v as the beneficiary thereof individual d intends to accomplish trustee to trustee transfers of his interest in taxpayer a’s ira x now ira y and of his interest in taxpayer a’s plan w now account u such transfers will be into an ira maintained in the name of taxpayer a to benefit individual d and into a sec_403 account set up and maintained in the name of taxpayer a to benefit individual d respectively page your authorized representative has asserted that with respect to calendar_year distributions intended to meet the requirements of code sec_401 have been made from ira x now ira y to trust t over the life expectancy of individual c furthermore with respect to calendar_year to comply with the minimum_required_distribution rules have been made using the life expectancy of individual g distributions from plan w now account u intended based on the above facts and representations you through your authorized representative request the following letter rulings that for purposes of code sec_401 taxpayer a timely named individual d as a beneficiary of the interest in her ira x now ira y payable to trust t and allocated to subtrust v that for purposes of code sec_401 taxpayer a timely named individual d as a beneficiary of the percentage percentage of her interest in plan w now account u payable to trust t that individual d as a beneficiary of trust t’s subtrust v’s interest in taxpayer a’s ira x now ira y may transfer by means of a direct trustee to trustee transfer his interest in ira y into another ira described in code sec_408 set up and maintained in the name of taxpayer a for the benefit of subtrust v beneficiary thereof and payable to individual d beneficiary thereof and that individual d as a beneficiary of subtrust v’s interest percentage of taxpayer a’s interest in plan w now account u may transfer by a direct trustee to trustee transfer his interest in account u into another account described in code sec_403 set up and maintained in the name of taxpayer a deceased for the benefit of subtrust v beneficiary thereof and payable to individual d beneficiary thereof that individual d as a beneficiary of subtrust v the beneficiary offi of taxpayer a’s ira x now ira y may use the life expectancy of the eldest beneficiary of subtrust v individual c computed using the single life table which table is found at sec_1 a -9 of the final income_tax regulations question and answer-1 for computing the required_distribution with respect to his interest in ira x now ira y with respect to calendar_year calendar_year that elapses after said life expectancy is reduced by one for each and page that individual d as a beneficiary of trust t the beneficiary of taxpayer a’s plan w now account u may use the life expectancy of the eldest beneficiary of trust t individual g computed using the single life table which table is found at sec_1 a -9 of the final income_tax regulations question and answer-1 for computing the required distributions with respect to his interest in plan w now account u with respect to calendar_year a said life expectancy is reduced by one for each calendar_year that elapses afer with respect to your ruling requests code sec_401 provides in general that a_trust will not be considered qualified unless the plan provides that the entire_interest of each employee- i ii will be distributed to such employee not later than the required_beginning_date or will be distributed beginning not later than the required_beginning_date over the life of such employee or over the lives of such employee and a designated_beneficiary or over a period not extending beyond the life expectancy of such employee or the life expectancy of such employee and a designated_beneficiary code sec_401 provides in general that if a plan participant ira holder dies before the distribution of his interest has begun in accordance with subparagraph a ii prior to his required_beginning_date then his entire_interest must be distributed within years of his death code sec_401 provides in general that if any portion of the interest of a deceased plan participant ira holder is payable to or for the benefit of a designated_beneficiary such portion will be distributed beginning not later than year after the date of the deceased’s death or a later date as prescribed by the secretary under regulations in accordance with regulations over the life of the designated_beneficiary or a period not extending beyond the life expectancy of the beneficiary code sec_401 provides in relevant part that for purposes of this with respect to your ruling requests final income_tax regulations under code paragraph the term required_beginning_date means april of the calendar_year following the calendar_year in which the employee attains age sec_401 and sec_408 were published in the federal_register pincite federal_register date and in the internal_revenue_bulletin pincite lr b date the preamble to the final regulations in relevant part page provide that the regulations apply for determining required minimum distributions for calendar years beginning after my for determining required distributions for calendar_year axpayers may rely on the proposed_regulations the proposed_regulations or the final regulations sec_1_401_a_9_-3 of the final regulations q a-3 a provides in general that with respect to the life expectancy exception to the 5-year rule described in code sec_401 and in a-1 distributions are required to begin to a non-spouse beneficiary on or before the end of the calendar_year immediately following the calendar_year in which the employee died sec_1_401_a_9_-3 of the final regulations q a-4 a provides in relevant part that in the absence of a plan provision to the contrary with respect to an individual who dies prior to reaching his required_beginning_date if said individual has designated a beneficiary distributions from his plan or ira are to be made in accordance with the life_expectancy_rule of code sec_401 and iv sec_1_401_a_9_-5 of the final regulations q a-5 b provides in general sec_1_401_a_9_-5 of the final regulations q a-5 c provides in that if an employee dies before his required_beginning_date in order to satisfy the requirements of code sec_401 or iv and the life_expectancy_rule described in a-1 of sec_1_401_a_9_-3 the applicable distribution period for distribution calendar years after the distribution calendar_year containing the employee’s date of death is determined in accordance with paragraph c of this a-5 general that with respect to a non-spouse beneficiary the applicable distribution period measured by the beneficiary’s remaining life expectancy is determined using the beneficiary’s age as of the beneficiary’s birthday in the calendar_year immediately following the calendar_year of the employee’s death in subsequent calendar years the applicable distribution period is reduced by one for each calendar_year that has elapsed after the calendar_year immediately following the calendar_year of the employee’s death sec_1_401_a_9_-4 of the final regulations q a-1 provides in relevant part that a designated_beneficiary is an individual who is designated as a beneficiary under a plan either by the terms of the plan or by an affirmative election by the employee q a-1 further provides that a person who takes under a will or otherwise under applicable state law will not be a designated_beneficiary unless that individual also takes under a plan that except as otherwise provided in paragraph c of this a-7 not pertinent to this ruling_request if more than one individual is designated as a beneficiary with respect to an sec_1_401_a_9_-5 of the final regulations q a-7 a provides in summary page employee as of the applicable_date for determining the designated_beneficiary the named beneficiary with the shortest life expectancy will be the designated_beneficiary for purposes of determining the applicable distribution period sec_1_401_a_9_-4 of the final regulations q a-4 provides in relevant part that in order to be a designated_beneficiary an individual must be a beneficiary as of the date of the employee’s death generally an employee’s designated_beneficiary will be determined based on the beneficiaries designated as of the date of death who remain beneficiaries as of september of the calendar_year following the calendar_year of death sec_1_401_a_9_-4 of the final regulations q a-3 provides that only individuals may be designated beneficiaries for purposes of sec_401 a person who is not an individual such as the employee's estate may not be a designated_beneficiary however q a-5 of sec_1_401_a_9_-4 provides that beneficiaries of a_trust with respect to the trust's interest in an employee's benefit may be treated as designated beneficiaries if the following requirements are met the trust is valid under state law or would be but for the fact that there is no corpus plan_administrator irrevocable upon the death of the employee sec_1_401_a_9_-4 of the final regulations q a-6 b provides generally the beneficiaries of the trust who are beneficiaries with respect to the trust's the documentation described in a-6 of this section has been provided to the the trust is irrevocable or the trust contains language to the effect it becomes interest in the employee's benefit are identifiable within the meaning of a-1 of this section from the trust instrument with respect to required minimum distributions after the death of the employee that documentation described therein must be provided by the trustee of the trust_beneficiary to the plan_administrator by october of the calendar_year following the calendar_year in which the employee died part that the separate_account rules under a-2 of sec_1_401_a_9_-8 are not available to beneficiaries of a_trust with respect to the trust’s interest in the employee’s benefit sec_1_401_a_9_-4 of the final regulations q a-5 c provides in relevant page sec_1_401_a_9_-9 of the final regulations q a-1 sets forth the single life table used to compute the life expectancy of an individual as previously noted taxpayers must compute minimum required distributions for calendar years beginning with calendar_year regulations referenced above in accordance with the final code sec_408 provides that under regulations prescribed by the secretary rules similar to the rules of sec_401 and the incidental death_benefit requirements of sec_401 shall apply to the distribution of the entire_interest of an individual for whose benefit the trust is maintained code sec_403 provides in relevant part that the amount actually distributed to any distribute under an annuity_contract described herein is taxable to the distribute in the year so distributed under sec_72 relating to annuities code sec_408 provides generally that in accordance with the rules of sec_72 code sec_408 provides generally that amounts from an inherited ira amounts paid or distributed from an ira are included in the gross_income by the payee or distributee code sec_403 provides that under regulations prescribed by the secretary this subsection shall not apply to any annuity_contract or any custodial_account described in paragraph or retirement_income_account described in paragraph unless requirements similar to the requirements of sec_401 and sec_401 are met requirements similar to the incidental death_benefit requirements of sec_401 are met with respect to such annuity_contract or custodial_account or retirement_income_account cannot be rolled over into another ira in general an inherited ira is an ira maintained by an individual who acquired said ira by reason of the death of another if the acquiring individual is not the surviving_spouse of said other individual in this case as noted above taxpayer b is taxpayer a’s nephew through and of sec_402 and sec_402 apply for purposes of paragraph a relating to rollovers of distributions of code sec_403 annuities c apply to a surviving_spouse of an employee who receives a distribution from a qualified_plan attributable to said employee code sec_402 provides in general that the rollover provisions of code section code sec_403 provides in general that the rules of paragraphs page revrul_78_406 1978_2_cb_157 provides that the direct transfer of funds from one ira trustee to another ira trustee even if at the behest of the ira holder does not constitute a payment or distribution to a participant payee or distributee as those terms are used in code sec_408 furthermore such a transfer does not constitute a rollover_distribution additionally a trustee to trustee transfer as described in revrul_78_406 does not constitute a distribution or payment as those terms are defined for purposes of code sec_408 finally revrul_78_406 is applicable if the trustee to trustee transfer is directed by the beneficiary of an ira after the death of the ira owner as long as the transferee ira is set up and maintained in the name of the deceased ira owner for the benefit of the beneficiary revrul_90_24 1990_1_cb_97 provides that that there is no actual distribution within the meaning of code sec_403 where funds are transferred from one sec_403 investment to another sec_403 investment if the transferred funds continue after the transfer to be subject_to any distribution restrictions imposed on them prior to the transfer by sec_403 or sec_403 revrul_90_24 also provides that in determining whether any of the transfers referenced therein constitutes an actual distribution it is irrelevant whether a complete interest or partial interest is transferred and whether the transferring individual is a current employee a former employee or a beneficiary of a former employee with respect to your first two ruling requests ps of taxpayer a’s ira x now ira y was payable to trust t and allocated to subtrust v created thereunder percentage of taxpayer a’s interest in plan w now account u was allocated to subtrust v trust t and the subtrusts created thereunder became irrevocable at the death of taxpayer a_trust t and the subtrusts created thereunder are valid under the laws of state o a copy of trust t was timely delivered to companies l and m finally the identity of the beneficiaries of trust t and subtrust v can be determined by perusing their terms individual d is a named beneficiary of subtrust v thus trust t and the subtrusts created thereunder constitute see-through trusts within the meaning of sec_1_401_a_9_-4 of the final regulations q a-5 as a beneficiary of subtrust v the life expectancy of individual d must be scrutinized in order to determine the life expectancy to be used to compute required distributions from ira x now ira y and plan w now account u thus with respect to your first two ruling requests we conclude as follows page that for purposes of code sec_401 taxpayer a timely named individual d as a beneficiary of the interest in her ira x now ira y payable to trust t and allocated to subtrust v that for purposes of code sec_401 taxpayer a timely named individual d as a beneficiary of the percentage percentage of her interest in plan w now account u payable to trust t with respect to your third god fourth ruling_request as noted above individual d of taxpayer a’s ira x now ira y allocated to is one of five beneficiaries of nel subtrust v and one of five beneficiaries of percentage of taxpayer a’s interest in plan w now account vu allocated to subtrust v individual d is not taxpayer a’s surviving_spouse thus individual d is not eligible to receive a distribution of his interest in either ira x now ira y or plan w now account u and roll over either distribution into an ira or another sec_403 account even if the recipient ira or sec_403 account is set up in the name of - taxpayer a to benefit individual d however a trustee-to-trustee transfer does not constitute a distribution thus such a transfer may be accomplished by a beneficiary who is not the surviving_spouse of either a deceased ira owner or a deceased sec_403 annuitant furthermore a trustee to trustee transfer from one ira to another or one b account to another may be accomplished after the date of death of an ira owner or sec_403 annuitant by a beneficiary of said ira owner or sec_403 annuitant as long as the transferee ira or sec_403 account remains in the name of the decedent for the benefit of a beneficiary in this case individual d intends to accomplish trustee to trustee transfers of his interest in taxpayer a’s ira x now ira y and also of his interest in taxpayer a’s plan w now account u such transfers will be into an ira maintained in the name of taxpayer a to benefit individual d and into a sec_403 account set up and maintained in the name of taxpayer a to benefit individual d respectively follows that individual d as a beneficiary of trust t’s subtrust thus with respect to your third and fourth ruling requests we conclude as v’s interest in taxpayer a’s ira x now ira y may transfer by means of a direct trustee to trustee transfer his interest in ira y into another ira described in code sec_408 set up page and maintained in the name of taxpayer a for the benefit of subtrust v beneficiary thereof and payable to individual d beneficiary thereof and that individual d as a beneficiary of subtrust v’s interest percentage of taxpayer a’s interest in plan w now account u may transfer by a direct trustee to trustee transfer his interest in account u into another account described in code sec_403 set up and maintained in the name of taxpayer a deceased for the benefit of subtrust v beneficiary thereof and payable to individual d beneficiary of subtrust v thereof with respect to your fifth and sixth ruling requests as noted above if distributions are made to a_trust even if the trust is a see-through trust within the meaning of q a-5 of sec_1_401_a_9_-4 of the final regulations the separate_account rules of a-2 of sec_1_401_a_9_-8 of the final regulations are not available to the beneficiaries of the trust thus in general each beneficiary of a_trust must receive minimum required distributions over the life expectancy of the eldest beneficiary for purposes of determining which trust beneficiary’s life expectancy will be used to determine the minimum_required_distribution payout period the term beneficiary in general includes individuals or entities who are not eligible to be treated as designated beneficiaries within the meaning of code sec_401 the generic issue raised in your fifth and sixth ruling requests is which trust t beneficiaries must be considered in determining who is the designated_beneficiary of both ira x redesignated ira y and plan w redesignated account u the specific issue raised with respect to your fifth ruling_request is whether for purposes of code sec_401 the life expectancy of individual g a beneficiary of subtrust u but not of subtrust v must be considered with respect to thelff of ira x now ira y allocated to subtrust v in this regard we note that although trust t was the named beneficiary of created under the provisions of trust t by the trustee of trust t was allocated directly to subtrust v of said ira sai as a general_rule if a_trust is named as the beneficiary of either a qualified_plan or an ira all of the beneficiaries of said trust must be considered for purposes of determining who if anyone is the designated_beneficiary for purposes of code sec_401 thus under the general_rule the beneficiaries of subtrust u would have to be considered to determine who is the code sec_401 designated_beneficiary with respect to the i of ira x now ira y that was bequeathed by taxpayer a to trust t page in this case it has been represented that the jjj of ira x payable to trust t was allocated to subtrust v in order to comply with the statutes of state o it has also been represented that said allocation occurred prior to date however said actions cannot negate the language of taxpayer a’s beneficiary designation pursuant to which trust t and not subtrust v was the named beneficiary of mi of his ira x the allocation of said of ira x to subtrust v was made in accordance with the laws of state o and not in accordance with the beneficiary designation of taxpayer a and thus falls within the limitations found in sec_1_401_a_9_-4 of the final regulations q a-1 therefore under this specific set of facts we will apply the general_rule set forth above and for purposes of determining who is the designated_beneficiary of the of ira x now ira y allocated to subtrust v we will consider the beneficiaries of subtrust v and of subtrust u individual g 1s the eldest of said beneficiaries thus with respect to your fifth ruling_request we conclude as follows that individual d as a beneficiary of subtrust v the beneficiary of taxpayer a’s ira x now ira y must use the life expectancy of tfi beneficiary of subtrust u individual g computed using the single life table which table is found at sec_1 a -9 of the final income_tax regulations question and answer-1 for computing the required_distribution with respect to his interest in ira x now ira y with respect to calendar calendar_year that elapses after said life expectancy is reduced by one for each ll he of eldest with respect to your sixth letter_ruling request which refers to plan w now account u we note that percentage thereof was allocated to trust t and subsequently reallocated to subtrust v in order to benefit individuals b through f however such reallocation was accomplished by the trustee s of trust t and was not done by taxpayer a thus based on the specific facts and representations surrounding this ruling_request we conclude as follows with respect to your sixth ruling_request that individual d as a beneficiary of trust t the beneficiary of taxpayer a’s plan w now account u may use the life expectancy of the eldest beneficiary of trust t individual g computed using the single life table which table is found at sec_1 a -9 of the final income_tax regulations question and answer-1 for computing the required distributions with respect to his interest in plan w now account u with page respect to calendar_year calendar_year that elapses after said life expectancy is reduced by one for each this ruling letter is based on the assumption that ira x and ira y either have met are meeting or will meet the requirements of code sec_408 at all times relevant thereto it also assumes that trust t and subtrusts u and v created thereunder are valid under the laws of state o as represented finally it assumes that plan w now account u constitutes an account described in code sec_403 pursuant to a power_of_attorney on file with this office a copy of this letter_ruling is being sent to your authorized representative this letter is directed only to the taxpayer that requested it and is based solely on the representations made with respect thereto sec_6110 of the code provides that it may not be used or cited as precedent if you have any questions concerning this letter_ruling please contact esquire at not a toll-free number or fax sincerely yours frances v sloan manager employee_plans technical group enclosures deleted copy of ruling letter notice of intention to disclose


internal_revenue_service department of the treasury washington dc contact person - g ov telephone number in reference to op e b0 t date nov employer_identification_number key district legend g n o r a v d p dear sir or madam this is tax in response to s’s and h’s ruling requests concerning internal the revenue code of the following proposed transactions transactions among h implication sec_501 c section i and m under the of from a business the prcposed conversion corporation to a nonprofit corporation pursuant to your state laws conversion and of i the proposed statutory merger merger pursuant to your state nonprofit corporation law of i and m with and into h facts y is exempt h charity public b a iii s public under sec_501 c of the code and described of the code sections in h’s sole corporate member is the code and a which is exempt under sec_501 c of charity described in sec_509 of the code is a and is a ss n ra operates as the parent holding_company of a multi-corporate health h has historically owned and operated three care delivery system acute care hospital facilities i i is which corporation for-profit s wholly-owned a you state that i was formed for the purpose of subsidiary of providing a vehicle whereby sdollar_figure and its exempt affiliates could enter into certain ventures which furthered s’s charitable missions ventures’ however activities and or ownership structures might be inconsistent with certain of these ventures are wholly-owned and tax-exempt status operated by i while others consist of joint ventures between i and third parties a brief description of each venture follows uncertainty whether there some was the is a wholly-owned ventures s or and to private physicians h s hospitals and elsewhere i individually owns and manages real_estate in the vicinity of the real_estate is leased to one of does business under the h fictitious name t and provides home intravenous therapy services on you state these services are provided without an outpatient basis a regard above private-duty nursing service known as activities will be continued by h subsequent to the effective date of the transactions also state patient’s operates ability pay you the the to to n i i joint ventures with other health systems i and o partners in r that r's services are provided to patients of community another sec_501 an outpatient radiation therapy business sole the you state h and o and to the hospital are is a i resonance imaging facility include an affiliate of partners general_partner interests patients of a general_partner in which operates a magnetic the other investors in this venture and a small number of physician limited together i and o’s affiliate represent a majority of a are made available to services at h and o and to the community a vv v is a general_partnership which owns and a physician tenant are and manages a the only medical office facility general partners of the facility i d d is a general_partnership which owns and manages a is one general_partner and the other is medical office facility a private non-physician individual i i has you that state limited and managing medical office facilities its primary revenue source is and historically has been the operation either directly or in its capacity as general_partner of partnerships of medical service a manner businesses and these businesses have been operated in consistent with sdollar_figure’s mission notwithstanding their corporate form of organization involvement owning in m s is in turn m is p an affiliate of a non-stock membership corporation whose sole member is formed for the principal p p purpose of owning and operating satellite physician practices of the code and is described in is exempt under sec_501 m was incorporated as a sec_509 for-profit corporation and was initially owned and operated by a a private physician until m was acquired by p nonprofit corporation simultaneously with its acquisition by p m has not sought sec_501 exemption since its acquisition by p you state that m has provided primary care medical services to the general_public without regard to ability to pay m was converted to p s sole member is s reasons for proposed transactions that local taxing authorities recently h's exemption from real_estate sales and use taxes challenges was challenged by resulted in protracted litigation because of these challenges by local taxing authorities the state legislature recently enacted exempt laws organizations to merge back into their parent to avoid challenges taxes to its best interest to qualify accordingly a single institution under together with all this necessitate the provisions of the newly enacted state laws s carrying on activities currently carried on by i and m its subsidiaries as s determined it estate in subsidiaries non-exempt exemption encourage real is these their sales from and tax use of mechanics of the merger its s will eliminate converting it and into h file articles of conversion of conversion corporation whose sole member be will s first to a nonprofit corporation and then merging it with i will on the effective date of the articles non-stock membership upon receipt of the rulings requested herein will become a nonprofit subsidiary for-profit by i i as indicated above nonprofit and h status in the same manner as described above for i have entered into an agreement and plan of merger plan of merger procedurally the plan of merger will be accomplished pursuant to the merger state already converted to the effective time of you state that law has at m i m é a i m h be and will will will rulings receipt conditioned and herein consummated requested the which i favorable in conversion substantially the form you have submitted with the ruling_request of h incorporation and bylaws will be the articles of incorporation and h will succeed to all of the bylaws of the surviving corporation i and m and thereafter will conduct all assets and liabilities of and the merger of or non-exempt will nonprofit entity the operations currently conducted by i and m any for-profit upon completion of dollar_figure’s ownership of of merger corporation eliminate surviving articles articles file and h's the the be of rulings requested the merger of i and m with and into h and the resulting by transfer operation of state law will not result in the recognition of any gain_or_loss under sec_511 through of the code by either the h or s operations respective assets their and of to h i by a h’s the and direct without ownership conducted activities limitation theretofore i and m with and into h the merger of of and h’s subsequent m conduct and including ni’s hospital management of real_estate in the vicinity of one of facilities and elsewhere and leasing of office space to hospital based private physicians b h’s direct ownership and operation of h’s ownership the assets employed in t’s and n’s businesses its general_partnership of and conduct of activities relating to and conduct of activities interest in h's a to relating its general ownership of h's direct ownership and partnership interests in d and vv and operation of the assets formerly owned and operated by m will not a charitable have an adverse effect on h’s continuing status as an of organization organization described in sec_170 a iii in its and conduct of activities relating to h's ownership of partnership c interest section general under code and the c f d e as r law sec_501 of the code provides an exemption from federal sec_501 income including organizations that are organized and operated exclusively for charitable educational or scientific purposes organizations described tax for in sec_1 ce -1 d is organization an or or more exempt purposes unless it a ii of the income_tax regulations operated serves a the meet an private subdivision organized necessary interest thus not for to is it that states exclusively for public requirement rather of one than this organization to establish that it the benefit of private interests is not organized or operated for sec_1 c -1 d of the regulations states that the of the code in its term charitable is used in sec_501 generally accepted legal sense revrul_69_545 promotion of health is sec_501 of the code the a charitable purpose within the meaning of recognizes that c b sec_509 private_foundation means an organization described in sec_501 other than one described in sec_509 states term code that the the of or sec_509 of the code states in pertinent part that an organization will not be considered to be a private_foundation other if than in clauses vii an organization described in sec_170 a and viii is it sec_170 of the code provides in part for the allowance of charitable_contribution deductions to organizations described in sec_170 which includes hospitals described in sec_170 b a iii sec_511 of the code imposes a tax on of organizations described in the unrelated section busine sec_50l c taxable_income sec_512 a term unrelated any business organization from any unrelated_trade_or_business regularly carried on computed with the modifications listed in sec_512 less certain allowable deductions code defines derived taxable_income income gross the the the it by of as by sec_512 of the code exempts from the definition of unrelated_business_taxable_income all gains and losses from the and sale items not held_for_sale in the ordinary course of business exchange or other_disposition of non-inventory items of the section regulation sec_1 d from unrelated_business_income_tax gains and losses from the sale of this section provides that there shall be excluded from property or the computation of unrelated business_losses from the sale exchange or other_disposition of property a kind which other than would properly be included in the inventory of the organization if ii property held on hand at primarily_for_sale_to_customers in the ordinary course of the trade_or_business stock_in_trade or other_property of the taxable_year the close of excludes taxable_income gains i or sec_513 of the code defines unrelated_trade_or_business as any trade_or_business the conduct of which is not substantially the organization for income or related funds or the use it makes of the profits derived to the exercise of the organization’s exempt purposes or functions from the need of aside of where business conduct the achievement of sec_1_513-1 of the regulations provides that a trade_or_business is related to exempt purposes in the relevant sense causal the only is it and relationship to a is relationship substantially for the conduct of substantial one trade_or_business from which a particular amount of gross_income is derived to be substantially related to purposes for which exemption or granted is performance derived must contribute importantly to the accomplishment of those purposes the regulation states that distribution the or from which production services exempt purposes of gross activities related_income causal goods only has the the the the of if is a_ the code of provides of income sec_512 taxation under section section of the code however provides that the definition b a i property of substantially_all the use of which is substantially related to the the charitable exercise or performance by its exemption under section purposes constituting the basis for from debt-financed_property such organization of debt-financed_property include does any for the not rationale i s to are the that state facts submitted be merged into h non-exempt this affiliates of the facts in merger h will also acquire i‘s business interests your submission indicate that although the merger and subsequent h may result in some level of operation of these activities by h's primary unrelated_trade_or_business exempt_purpose of promoting health in addition assumption of these activities will not change h’s primary function of operating a hospital a result of they will change and the not as m accordingly section dollar_figure c merger of qualify a sec_170 b a iii i we conclude that under of the code will not be adversely affected by the further h will continue to and a nonprivate foundation under sec_509 and m with and into h tax exempt status h’s of the code based on its hospital operations the tax on unrelated_business_income imposed by sec_511 of the proposed code the and v will be excluded from the transactions among h t contributions of m because any deemed gain on be applicable with respect and r will i n not to a m d i h's and s's computation of unrelated_business_taxable_income under transactions section described in this paragraph will not result in unrelated_business_income under sec_511 through of the code for s or h therefore b code the the of conclusion accordingly based on all the facts and circumstances described above we rule as follows the merger of i and m with and into h and the resulting by transfer operation of state law will not result in the recognition of any of the code by either gain_or_loss under sec_511 through the h or s operations respective assets their and of to h i a the h’s and direct without ownership activities limitation theretofore conducted by i and m with and into h the merger of of and conduct of activities relating to and h's subsequent m conduct and including management of real_estate in the vicinity of one of h’s hospital facilities and elsewhere and leasing of office space to hospital based private physicians b h's direct ownership and operation of h’s ownership the assets employed in t’s and n’s businesses its general_partnership of and conduct of activities interest in h's a to relating its general ownership of h’s direct ownership and partnership interests in d and v and f operation of the assets formerly owned and operated by m will not a charitable have an adverse effect on h’s continuing status as an of organization organization described in sec_170 a iii in its and conduct of activities relating to h's ownership of partnership interest general section under code and the c e d as r these rulings do not address the question of whether income v’s activities is the from m's unrelated_business_income under sec_511 through code a’s n‘s t's r’s d's i's and of these rulings are directed only requested them may not be used or cited as precedent sec_6110 to the organization that of the code provides that they a these rulings do not address the applicability of any section of the code or regulations to the facts submitted other than with these rulings are based on the respect to the sections described no material_change in the facts understanding that there will be any changes that may have a bearing on upon which they are based are your please keep informing your key district_director of this ruling this ruling letter in your permanent records reported service should status tax the we be to sincerely yours marvin friedlander marvin friedlander chief exempt_organizations technical branch


internal_revenue_service p o box cincinnati oh release number release date date date legend v grant program x dollars amount y dollars amount dear department of the treasury employer_identification_number contact person - id number contact telephone number uil you asked for advance approval of your scholarship grant procedures and educational grant procedures under internal_revenue_code sec_4945 this approval is required because you are a private_foundation that is exempt from federal_income_tax you requested approval of your scholarship program to fund the education of certain qualifying students our determination we approved your procedures for awarding scholarships and educational grants based on the information you submitted and assuming you will conduct your program as proposed we determined that your procedures for awarding scholarships meet the requirements of code sec_4945 and that your procedures for awarding educational grants meet the requirements of code sec_4945 as a result expenditures you make under these procedures won't be taxable also awards made under these procedures are scholarship or fellowship grants and are not taxable to the recipients if they use them for qualified_tuition_and_related_expenses subject_to the limitations provide in code sec_117 description of your request your mission is to promote entrepreneurship self-reliance global understanding free enterprise and to enhance the quality of life by supporting the arts education health advancements and preservation of the environment you also support the promotion of national security as an integral part of the values of duty and freedom you will award grants under the v for the following types of fellowships and or other activities and products in support of your mission study writing teaching lecturing and or research at an educational_institution governmental agency or public charity development of curriculum initiatives or programs within an educational_institution governmental agency or public charity development of and or presentations at a symposium writing and publication of articles books treatises policies procedures white papers or other publications in print or electronic media transcription recording and or filming of interviews and other content regarding activities in support of your mission travel to national and international locations to visit institutions programs and or persons involved in activities in support of your mission and or other activities serving to broaden the understanding of the grantee regarding your mission and which would make a contribution to the body of knowledge regarding your mission you will post an announcement of the availability of the grant program on your website and will include application procedures to apply applicants must be currently enrolled in or have completed a graduate degree program or phd program at an accredited university and possess at least two years of significant professional or research experience in the applicant’s chosen subject area applicants must be exceptionally qualified and possess a deep comprehension of their chosen subject area related to your mission each applicant must have an established record of individual and or professional achievements relatives of the selection committee and relatives of your trustees offices employees or substantial contributors are not eligible for the grant award you will select your grantees from a diverse pool of applicants you have identified including graduate students academicians journalists policy makers practitioners researchers scientists and other professionals in various fields your staff will invite qualified candidates to submit a brief letter of inquiry accompanied by curriculum vitae before proceeding with a full proposal applicants who are selected to submit a full proposal will submit the complete application to the selection committee applicants who are selected to submit a full proposal should submit the following information along with the application form two-page executive summary of the project consisting of project description goals and objectives application to your mission evaluation process amount requested and timeline complete project description including purpose goals and objectives application to your mission and process for measuring success of project implementation process and timeline including beginning and ending dates description and role of educational_institution governmental entity or public charity evaluation process including expected outcomes manner in which results will be calculated and description of funding of project in future years if applicable geographic scope of project temized budget including sources of additional funding if applicable curriculum vitae two letters of recommendation from academic and or professional references and appendices your selection committee consists of your president and trustee your vice president and trustee and an additional trustee as defined in your bylaws members of the selection committee must be currently serving as your family trustees any vacancy on the selection committee will be filled by the unanimous vote of the remaining committee members no member of the selection committee shall be in a position to derive a private benefit directly or indirectly in the event that a certain grant applicant is selected over any other applicant grants will be awarded on an annual basis in an amount commensurate with the expenses of a fellowship as well as funding research travel administration and related expenses grant awards may range from x dollars to y dollars per year subject_to funding availability grantees will be eligible to receive a set term of renewals appropriate to the scope of the project you will award the grant directly to an educational_institution governmental agency or public charity the educational_institution governmental agency or public charity will house the applicant and supervise the progress of the fellowship for grants to support the enrollment of a grantee at an educational_institution the grant shall be used only for qualified_tuition_and_related_expenses within the meaning of sec_117 of the code and for room and board applicants requesting funds from you must provide a notarized statement that funds received will be used for the intended purposes of the v you will also require this of the host institution in addition the grantee and host institution will enter into a grant agreement with you that sets forth their individual responsibilities under the grant you will monitor and evaluate grants to ensure that funds are properly utilized in accordance with the following e e e e e written progress report provided by each grantee on an annual basis summary of use of funds awarded the manner in which such use fulfilled grant purposes verification of the report by an appropriate_official at the educational_institution governmental agency or public charity and final report at the conclusion of the grant period if there is an instance where the reports submitted or other information including the failure to submit reports indicate that all or any part of a grant is not being used for its intended purposes you will contact the grantee and conduct an investigation the investigation will include verbal and written responses from the grantee to inquiries from you as well as corroboration of information by the educational_institution governmental agency or public charity involved in the project as applicable you will withhold further payments of grant funds until the investigation is complete and the grantee has complied with required reporting if you determine that all or any part of a grant is being diverted from its intended purposes you will take reasonable and appropriate steps to recover the grant funds and or to ensure restoration of diverted funds to the purposes of the grant this would include the pursuit of legal remedies as appropriate under the circumstances you will retain complete records with respect to all individual grants awarded including the following e e e e e e all information obtained by you to evaluate the qualifications of potential grantees identification of grantees including confirmation that no grantee bears any relationship to a director officer or other disqualified_person of you within the meaning of sec_4946 of the code completed application of each grantee amount and purpose of each grant_date of each grant payment information provided by the grantee and educational_institution governmental agency or public charity as applicable as part of monitoring and evaluation procedures to ensure that grant funds are properly utilized and progress has been made to achieve the purpose of the grant e information regarding investigation of jeopardized grants and e any additional information secured in the course of the grant administration process basis for our determination the law imposes certain excise_taxes on the taxable_expenditures of private_foundations code sec_4945 a taxable_expenditure is any amount a private_foundation pays as a grant to an individual for travel study or other similar purposes however a grant that meets all of the following requirements of code sec_4945 is not a taxable_expenditure e e e the foundation awards the grant on an objective and nondiscriminatory basis the irs approves in advance the procedure for awarding the grant the grant is - - - ascholarship or fellowship subject_to sec_117 and is to be used for study at an educational_organization described in sec_170 or aprize or award subject_to the provisions of sec_74 if the recipient of the prize or award is selected from the general_public or to achieve a specific objective produce a report or similar product or improve or enhance a literary artistic musical scientific teaching or other similar skill or talent of the recipient to receive approval of its educational grant procedures sec_53_4945-4 requires that a private_foundation show e e e the grant procedure includes an objective and nondiscriminatory selection process the grant procedure results in the recipients performing the activities the grants were intended to finance the foundation plans to obtain reports to determine whether the recipients have performed the activities that the grants were intended to finance other conditions that apply to this determination e e e this determination only covers the grant program described above this approval will apply to succeeding grant programs only if their standards and procedures don't differ significantly from those described in your original request this determination applies only to you it may not be cited as a precedent you cannot rely on the conclusions in this letter if the facts you provided have changed substantially you must report any significant changes to your program to the cincinnati office of exempt_organizations at internal_revenue_service exempt_organizations determinations p o box cincinnati oh e e e you cannot award grants to your creators officers directors trustees foundation managers or members of selection committees or their relatives all funds distributed to individuals must be made on a charitable basis and further the purposes of your organization you cannot award grants for a purpose that is inconsistent with code sec_170 you should keep adequate_records and case histories so that you can substantiate your grant distributions with the irs if necessary we've sent a copy of this letter to your representative as indicated in your power_of_attorney please keep a copy of this letter in your records if you have questions please contact the person listed at the top of this letter sincerely jeffrey cooper director exempt_organizations rulings and agreements


department of the treasury internal_revenue_service washington d c dec cc ebeo uilc number release date memorandum for district_counsel from subject legend assistant chief_counsel employee_benefits and exempt_organizations cc ebeo date date date date city state we are forwarding the attached tax_court case legal file to you for assignment to an attorney in your office because the designated place for trial is city state the petition was served on the irs chief counsel’s office on date on date the service sent the taxpayer a notice_of_determination concerning worker classification under sec_7436 advising the taxpayer that the service had determined during the course of an employment_tax audit that one or more individuals performing services for the taxpayer are to be legally classified as employees for purposes of the federal employment_taxes under subtitle c of the internal_revenue_code and that the taxpayer is not entitled to employment_tax relief pursuant to sec_530 of the revenue act of with respect to such individuals taxpayer filed a petition for review of that determination with the tax_court on date the petition bears a postmark date of date because the postmark date is not before the 91st day after the notice_of_determination was sent the petition is not considered timely filed therefore you should file a motion to dismiss for lack of jurisdiction please refer to rules through of the tax court’s rules_of_practice and procedure for guidance in filing responsive pleadings finally because the tax_court has yet to issue any reported decisions on proceedings under sec_7436 you should coordinate all documents filed with the tax_court with the national_office employee_benefits and exempt_organizations division branch two the name of the branch two attorney assigned to the case appears in national_office attorney field of case screen of the tl-cats computer system and she can be reached pincite-6040 when the case is assigned your attorney may contact her to send you a sample motion and answer to assist you in litigating this case mary oppenheimer by jerry e holmes chief branch cc ebeo attachments legal file


id office uilc cca_2011083111503733 ---------------------------- number release date from -------------------- sent wednesday date am to --------------------- cc -------------------------------------- subject request for advice ---------------------- hi -------- - the following represents a summary of our phone conversation yesterday the internal_revenue_service retains the authority in this case to abate any unpaid liability to the extent that it is excessive sec_6404 see also 829_f2d_828 fn4 9th cir indicating that abatement may be appropriate under sec_6404 in circumstances similar to the present case to the extent that payment has been made on the liability however no refund can be issued sec_6512 prohibits a refund_or_credit for a year before the tax_court unless the court determines an overpayment and in this case the decision specifically determined that there was no overpayment additionally nothing can be done to amend the final tax_court decision please feel free to contact me if you have any additional questions or concerns thanks -------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------- ------------------


internal_revenue_service number release date index numbers -------------------------- ------------------------------------------------------------ ----- ------------------------------------------------------ ------------------------------------- department of the treasury washington dc person to contact ----------------------- id no -------------- telephone number ---------------------- refer reply to cc psi b03 - plr-127554-12 date date legend x ------------------------------------------------------------ ------------------------------------------------------- y ------------------------------------------------------------ ---------------------------------------- state a --------------- --------------------- dear -------------------- this letter 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 to file an election under sec_301_7701-3 to be classified as an association for federal tax purposes facts the information submitted discloses that x was formed on a as a limited_liability_company under the laws of state x’s ultimate owner is y the common parent_corporation of an affiliated_group that files a consolidated_return x failed to file timely a form_8832 entity classification election to be classified as an association for federal tax purposes effective a law and analysis plr-127554-12 sec_301_7701-3 provides in part that a business_entity that is not classified as a corporation under sec_301_7701-2 or an eligible_entity can elect its classification for federal tax purposes as provided in sec_301_7701-3 an eligible_entity with at least two members can elect to be classified as either an association and thus a corporation under sec_301_7701-2 or a partnership and an eligible_entity with a single owner can elect to be classified as an association or to be disregarded as an entity separate from its owner sec_301_7701-3 provides that except as provided in sec_301 b unless the entity elects otherwise a domestic eligible_entity is i a partnership if it has two or more members or ii disregarded as an entity separate from its owner if it has a single owner sec_301_7701-3 provides in part that except as provided in sec_301_7701-3 and v an eligible_entity may elect to be classified other than as provided under sec_301_7701-3 or to change its classification by filing form_8832 entity classification election with the service_center designated on form_8832 sec_301_7701-3 provides in part that an election made under sec_301_7701-3 will be effective on the date specified by the entity on form_8832 or on the date filed if no such date is specified on the election form the effective date specified on form_8832 can not be more than days prior to the date on which the election is filed and can not be more than months after the date on which the election is filed under sec_301_9100-1 the commissioner may grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code 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 an election sec_301_9100-2 provides automatic extensions of time for making certain elections sec_301_9100-3 provides extensions of time for regulatory elections that do not meet the requirements of sec_301_9100-2 sec_301_9100-3 provides that requests for relief under sec_301_9100-3 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 plr-127554-12 conclusion based on the facts and representations submitted x has established that the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied consequently x is granted an extension of time of one hundred twenty days from the date of this letter to elect under sec_301_7701-3 to be treated as an association effective a x must file form_8832 within the extension period with the appropriate service_center with a copy of this letter attached except for the specific ruling above we express or imply no opinion concerning the federal tax consequences of the facts of this case under any other provision of the code in addition sec_301_9100-1 provides that the granting of an extension of time for making an election is not a determination that the taxpayer is otherwise eligible to make the election this ruling is directed only to the taxpayer requesting it according to sec_6110 of the code this ruling may not be used or cited as precedent under a power_of_attorney on file with this office we are sending a copy of this letter to x’s authorized representatives sincerely associate chief_counsel passthroughs special industries by s james a quinn senior counsel branch office of the associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes


internal_revenue_service department of the treasury number release date index number 468a 468a washington dc person to contact telephone number refer reply to cc psi 6-plr-112200-02 date date re request for a revised schedule of ruling amounts taxpayer utility parent subsidiary plant location commission fund dear this letter responds to the request of taxpayer dated date and supplemental information as submitted by taxpayer for a revised schedule of ruling amounts in accordance with sec_1_468a-3 and sec_1_468a-6 of the income_tax regulations the request is the result of the commission decreasing the decommissioning costs utility was previously granted a revised schedule of ruling amounts by letter dated date information was submitted in accordance with sec_1_468a-3 taxpayer owns percent of the plant which is situated in location the proposed method of decommissioning the plant is prompt removal dismantling the license for the plant expires on on the commission issued order no approving an increase in the annual decommissioning costs included in cost of service for the plant plr-112200-02 to dollar_figure this increase was due to the completion of an independent site- specific study of the taxpayer’s plant for decommissioning purposes the nuclear regulatory commission nrc permits utilities to use such studies in place of its generic decommissioning formulas which were used previously in calculating the decommissioning cost for taxpayer on the utility entered into a settlement agreement before the commission that specified the framework for deregulation for the utility’s electric generation business this agreement also provides for the collection and recovery_of decommissioning costs relating to deregulated nuclear generation assets as part of the utility’s unbundled delivery service rates as part of that settlement agreement annual decommissioning costs for the plant were reduced to dollar_figure on utility transferred the plant the qualified nuclear decommissioning trust funds and its rights to recover decommissioning costs to taxpayer in exchange for the stock of taxpayer pursuant to a tax-free reorganization that qualified under sec_355 and sec_368 of the code the utility then distributed the stock of taxpayer to parent parent then contributed the stock of taxpayer to subsidiary all the parties involved are members of the same consolidated_group in connection with this restructuring parent taxpayer and utility received a private_letter_ruling from the internal_revenue_service dated date plr which stated in part that following the transfer of the plant and nuclear decommissioning funds to taxpayer taxpayer will be considered as the eligible_taxpayer and electing taxpayer with respect to the nuclear decommissioning funds as a result taxpayer may make deductible contributions to its qualified nuclear decommissioning funds in an amount consistent with sec_468a of the code and the regulations thereunder this ruling was expressly conditioned on the utility receiving an order from the commission requiring that it collect decommissioning costs as an agent for the taxpayer and pay all such collections to the taxpayer and on the continued direct or indirect ownership of the taxpayer by parent or subsidiary the estimated cost of decommissioning the plant is dollar_figure dollars which includes percent of the cost of decommissioning the isfsi which is equally shared with the estimated future cost of decommissioning the plant escalated at percent annually is dollar_figure dollars the funding_period and levelized funding limitation period began on plr-112200-02 and ends on the assumed after-tax rate of return to be earned on the assets of the fund is percent the estimated date on which the plant will no longer be included in taxpayer’s rate base is pursuant to the utility’s previous election under sec_1_468a-8 of the regulations the estimated period for which the fund will be in effect is years through and the estimated_useful_life of the plant is years through therefore the qualifying percentage is percent no proceedings are pending before the commission that may result in an increase or decrease in the amount of decommissioning costs for the plant to be included in taxpayer’s cost of service for ratemaking purposes sec_468a of the code provides that a taxpayer may elect to deduct the amount of payments made to a qualified nuclear decommissioning fund however sec_468a limits the amount_paid into the fund for any_tax year to the lesser_of the amount of nuclear decommissioning costs allocable to the fund that is included in the taxpayer’s cost of service for ratemaking purposes for the tax_year or the ruling_amount applicable to that year sec_468a of the code provides that no deduction shall be allowed for any payment to the nuclear decommissioning fund unless the taxpayer requests and receives from the secretary a schedule of ruling amounts the ruling_amount for any_tax year is defined under sec_468a as the amount which the secretary determines to be necessary to fund that portion of nuclear decommissioning costs which bears the same ratio to the nuclear power plant as the period for which the fund is in effect bears to the estimated_useful_life of the plant this term is further defined to include the amount necessary to prevent excessive funding of nuclear decommissioning costs or funding of these costs at a rate more rapid than level_funding taking into account such discount rates as the secretary deems appropriate sec_468a of the code defines the term nuclear_powerplant as including any unit thereof sec_1_468a-1 of the regulations further defines the term nuclear power plant as any nuclear power reactor that is used predominantly in the trade_or_business of the furnishing or sale of electric energy if the rates for such furnishing or sale as the case may be have been established or approved by a public_utility commission each unit ie nuclear reactor located on a multi-unit site is a separate nuclear power plant plr-112200-02 sec_468a of the code provides that a taxpayer shall be deemed to have made a payment to the nuclear decommissioning fund on the last day of the tax_year if the payment is made on account of this tax_year within months after the close of the tax_year sec_1_468a-1 of the regulations provides in part that an eligible_taxpayer may elect to deduct nuclear decommissioning costs under sec_468a of the code an eligible_taxpayer as defined under sec_1_468a-1 is a taxpayer that has a qualifying interest in a nuclear power plant as defined under sec_1_468a-1 a qualifying interest is among other things a direct ownership_interest including an interest held as a tenant in common or joint tenant sec_1_468a-2 of the regulations provides in part that the maximum amount of cash payments made or deemed made to a nuclear decommissioning fund during any_tax year shall not exceed the lesser_of i the cost of service amount applicable to the nuclear decommissioning fund for such tax_year ii or the ruling_amount applicable to the nuclear decommissioning fund for such tax_year sec_1_468a-3 of the regulations generally provides in part that a schedule of ruling amounts for a nuclear decommissioning fund is a ruling specifying annual payments that over the tax years remaining in the funding_period as of the date the schedule first applies will result in a projected balance of the nuclear decommissioning fund as of the last day of the funding_period equal to and in no event more than the amount of decommissioning costs allocable to the fund sec_1_468a-3 of the regulations provides that to the extent consistent with the principles and provisions of sec_1_468a-3 each schedule of ruling amounts shall be based on the reasonable assumptions and determinations used by the applicable public_utility commission s in establishing or approving the amount of decommissioning costs to be included in the cost of service for ratemaking purposes taking into account amounts that are otherwise required to be included in the taxpayer’s income under sec_88 of the code and the regulations thereunder thus for example each schedule of ruling amounts shall be based on the public_utility commission’s reasonable assumptions concerning i the after-tax rate of return to be earned by the amounts collected for decommissioning ii the total estimated cost of decommissioning the nuclear power plant and iii the frequency of contributions to the nuclear decommissioning fund for a tax_year under sec_1_468a-3 of the regulations the service shall provide a schedule of ruling amounts that is identical to the schedule proposed by the taxpayer plr-112200-02 but no such schedule shall be provided unless the taxpayer’s proposed schedule is consistent with the principles and provisions of sec_1_468a-3 sec_1_468a-3 of the regulations provides that the ruling_amount specified in a schedule of ruling amounts for any_tax year in the level_funding limitation period shall not be less than the ruling_amount specified in such schedule for any earlier tax_year under sec_1_468a-3 the level_funding limitation period begins on the first day of the first tax_year for which a deductible payment is made to the nuclear decommissioning fund and ends on the last day of the tax_year that includes the estimated date on which the nuclear power plant will no longer be included in the taxpayer’s rate base for ratemaking purposes sec_1_468a-3 of the regulations provides that the amount of decommissioning costs allocable to a nuclear decommissioning fund is the taxpayer’s share of the total estimated cost of decommissioning the nuclear power plant multiplied by the qualifying percentage sec_1_468a-3 of the regulations provides in part that the total estimated cost of decommissioning a nuclear power plant is the reasonably estimated cost of decommissioning used by the applicable public_utility commission in establishing or approving the amount of these costs to be included in cost of service for ratemaking purposes sec_1_468a-3 of the regulations provides that a taxpayer’s share of the total estimated cost of decommissioning a nuclear power plant equals the total estimated cost of decommissioning the plant multiplied by the taxpayer’s qualifying interest in the plant sec_1_468a-3 of the regulations provides that the qualifying percentage for any nuclear decommissioning fund is equal to the fraction the numerator of which is the number of tax years in the estimated period for which the nuclear decommissioning fund is to be in effect and the denominator of which is the number of tax years in the estimated_useful_life of the applicable nuclear power plant under the special elective transition rule_of sec_1_468a-8 of the regulations for purposes of sec_1_468a-3 the estimated period for which a nuclear decommissioning fund is to be in effect begins on the later of the first day of the taxable_year that includes the date that the nuclear power plant began commercial operations or the first day of the taxable_year that includes date under the special elective transition rule_of sec_1_468a-8 for purposes of section plr-112200-02 468a-3 d ii and iii the estimated period for which the nuclear decommissioning fund is to be in effect and the estimated_useful_life of the nuclear plant both end on the earlier of the last day of the taxable_year in which it is estimated that decommissioning will begin or the last day of the taxable_year that includes the expiration date of the nuclear regulatory commission operating license as in effect on date without regard to any extensions or amendments thereto sec_1_468a-3 of the regulations provides that for purposes of sec_1_468a-3 and iii the estimated date on which the nuclear power plant to which the nuclear decommissioning fund relates will no longer be included in the taxpayer’s rate base for ratemaking purposes is determined under the ratemaking assumptions used by the applicable public_utility commission in establishing or approving rates during the first ratemaking proceeding in which the nuclear power plant was included in the taxpayer’s rate base sec_1_468a-3 of the regulations provides that the service shall not provide a taxpayer with a schedule of ruling amounts for any nuclear decommissioning fund unless the public_utility commission that establishes or approves the rates for electric energy generated by the plant to which the nuclear decommissioning fund relates has determined the amount of decommissioning costs to be included in the taxpayer’s cost of service for ratemaking purposes and has disclosed the after-tax rate of return and any other assumptions and determinations used in establishing or approving the amount sec_1_468a-3 of the regulations enumerates the information required to be submitted by a taxpayer in order to receive a ruling_amount for any_tax year sec_1_468a-3 of the regulations provides that a taxpayer is required to request a revised schedule of ruling amounts for a nuclear decommissioning fund if a any public_utility commission that establishes or approves rates for the furnishing or sale of electric energy generated by a nuclear power plant to which the nuclear decommissioning fund relates increases the proposed period over which decommissioning costs of the nuclear power plant will be included in cost of service for ratemaking purposes adjust the estimated date on which the nuclear power plant will no longer be included in the taxpayer’s rate base for ratemaking purposes or reduces the amount of decommissioning costs to be included in cost of service for any taxable_year and b the taxpayer’s most recent request for a schedule of ruling amounts did not provide notice to the service of the action by the public_utility commission plr-112200-02 sec_1_468a-3 of the regulations provides that any taxpayer that has obtained a schedule of ruling amounts pursuant to sec_1_468a-3 can request a revised schedule of ruling amounts such a request must be made in accordance with the rules of sec_1_468a-3 thus the service shall not provide a revised ruling_amount applicable to a taxable_year in response to a request for a schedule of ruling amounts that is filed after the deemed payment deadline date for such taxable_year sec_1_468a-6 generally provides rules for the transfer of an interest in a nuclear power plant and transfer of the qualified_fund where after the transfer the transferee is an eligible_taxpayer under sec_1_468a-6 the service may treat any disposition of an interest in a nuclear power plant occurring after date as satisfying the requirements of the regulations if the service determines that such treatment is necessary or appropriate to carry out the purposes of sec_468a sec_1_468a-6 of the regulations provides that a transferee of a qualifying interest in a nuclear power plant must file a request for a revised schedule of ruling amounts with respect to that interest on or before the deemed payment deadline for the first taxable_year of the transferee beginning after the disposition see sec_1_468a-2 if the transferee does not timely file such a request the transferee’s ruling_amount with respect to that interest for the affected year or years will be zero unless the internal_revenue_service waives the application of sec_1 468a- e ii upon a showing of good cause for the delay sec_1_468a-7 of the regulations provides in general that an eligible_taxpayer is allowed a deduction for the taxable_year in which the taxpayer makes a cash payment or is deemed to make a cash payment to a nuclear decommissioning fund only if the taxpayer elects the application of sec_468a a separate election is required for each nuclear decommissioning fund and for each taxable_year with respect to which payments are to be deducted under sec_468a in the case of an affiliated_group_of_corporations that join in filing a consolidated_return for a taxable_year the common parent must make a separate election on behalf of each member whose payments to a nuclear decommissioning fund during such taxable_year are to be deducted under sec_468a the election under sec_468a for any taxable_year is irrevocable and must be made by attaching a statement election statement and a copy of the schedule of ruling amounts provided pursuant to the rules of sec_1_468a-3 to the taxpayer's federal_income_tax return or in the case of an affiliated_group_of_corporations that join in filing a consolidated_return the consolidated_return for such taxable_year the return to which the election statement and a copy of the schedule of ruling amounts is attached must be filed on or before the time prescribed by plr-112200-02 law including extensions for filing the return for the taxable_year with respect to which payments are to be deducted under sec_468a we have examined the representations submitted by the taxpayer based solely on these representations we reach the following conclusions the taxpayer has a qualifying interest in the plant and therefore an eligible_taxpayer under sec_1_468a-1 and of the regulations as required by sec_1_468a-3 of the regulations the commission has authorized decommissioning costs to be included in the taxpayer’s cost of service for ratemaking purposes this authorization is effective only during such period as the utility is authorized to collect decommissioning costs and is obligated to pay such amounts to the taxpayer the taxpayer was eligible for and properly elected the special transition_rules of sec_1_468a-8 of the regulations the taxpayer’s qualifying percentage under sec_1_468a-3 is percent the taxpayer has proposed a schedule of ruling amounts which meets the requirements of sec_1_468a-3 and of the regulations the annual payments specified in the proposed schedule of ruling amounts are based on the reasonable assumptions and determinations used by the commission and will result in a projected fund balance at the end of the funding_period equal to or less than the amount of decommissioning costs allocable to the fund based on the above determinations we conclude that the taxpayer’s revised schedule of ruling amounts satisfies the requirements of sec_468a of the code approved schedule of ruling amounts tax years through year amount dollar_figure plr-112200-02 each year through approval of the schedule of ruling amounts is contingent on there being no change in the facts and circumstances known or assumed at the time this ruling is issued if any of the events described in sec_1_468a-3 of the regulations occur in future years the taxpayer must request a review and revision of the schedule of ruling amounts under sec_1_468a-3 the taxpayer is required to file such a request on or before the deemed payment deadline date for the first tax_year in which the rates reflecting such action became effective in addition approval of the schedule of ruling amounts is expressly conditioned on the continued existence of the commission order requiring that the utility collect decommissioning costs as an agent for the taxpayer and pay all such collections to the taxpayer and on the continued direct or indirect ownership of the taxpayer by parent or subsidiary the approved schedule of ruling amounts is relevant only to those payments made to the fund payments allocable to any funds other than the fund cannot qualify for purposes of the deduction under the provisions of sec_468a of the code as stated above payments made to the fund can qualify only to the extent that they do not exceed the lesser_of the decommissioning costs applicable to the fund or the ruling amounts applicable to the fund in the tax_year further approval of the schedule of ruling amounts is contingent on the continued direct or indirect ownership and control of taxpayer by the parent or its subsidiary except as specifically set forth above no opinion is expressed concerning the federal_income_tax consequences of the above described facts under any other provision of the code or regulations in particular no opinion is expressed or implied concerning whether the collection of decommissioning costs by utility and payment of those collections to the taxpayer is includible in the gross_income of and deductible by any entity other than taxpayer this letter_ruling is directed only to the taxpayer who requested it sec_6110 of the code provides that this ruling may not be used or cited as precedent pursuant to sec_1_468a-7 of the regulations a copy of this letter must be attached with the required election statement to the taxpayer’s federal_income_tax plr-112200-02 return for each tax_year in which the taxpayer claims a deduction for payments made to the fund copies of this letter are being sent to your authorized representatives and to the industry director natural_resources lm nr sincerely yours peter c friedman senior technician reviewer branch office of the associate chief_counsel passthroughs and special industries cc


office_of_chief_counsel internal_revenue_service memorandum number release date cc tege eoeg et1 postn-127203-06 uilc date date to director submission processing cincinnati oh attn entity unit from office of division counsel associate chief_counsel tax exempt government entities ------------------------------------------------ subject railroad_retirement_tax_act status in accordance with the coordination procedure established between the service and the railroad retirement board rrb the rrb has provided us with its opinion dated ------------------ that the following business became an employer under the railroad retirement act and the railroad unemployment insurance act effective ----------------------- ------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------------- ---------------------------------------------- we have reviewed the opinion of the rrb and based upon the information submitted to us by the rrb we also conclude that -------------------------------------------became an employer under the railroad_retirement_tax_act on ----------------------- please take the appropriate action regarding this business cc janine cook


significant index no tax_exempt_and_government_entities_division department of the treasury internal_revenue_service washington d c jun ‘ in re this letter constitutes notice that a waiver of the minimum_funding_standard has been granted for the above-named pension_plan for the plan_year beginning date the waiver has been granted in accordance with sec_412 of the internal_revenue_code the code and sec_303 of the employee_retirement_income_security_act_of_1974 erisa the amount for which the waiver has been granted is the contribution that would otherwise be required to reduce the balance in the funding_standard_account of the plan to zero as of the end of the plan_year for which the waiver has been granted the company’ founded in used in the building industry the majority of the production is is a manufacturer of custom commercial work manufactured under signed contracts the company is located in on the company adopted the plan the plan covers a total of __ participants _ active participants and and its primary sales region includes inactive participants the current economic recession has had a significant impact on the company's ability to meet the minimum_funding_standard for the plan_year beginning their already difficult cash_flow situation was made worse by the events of september after which work orders were sharply curtailed the company experienced temporary substantial business hardship as evidenced by an approximate drop in sales from that resulted in net losses in income fiscal years ending and oe all benefit accruals under the plan were frozen further the asof- company s prospects for recovery from this business hardship are significantly affected by the overall condition of the economy as the general economy continues to improve the company's expectation is that their financial situation will also improve for ' the company projects an improvement in sales and a profit for the year your attention is called to sec_412 of the code and sec_304 of erisa which describes the consequences which result in the event the plan is amended to increase benefits to change the rate in the accrual_of_benefits or to change the rate of vesting while any portion of the waived amount remains unamortized this ruling is directed only to the organization that requested it sec_61 k of the code provides that it may not be used or cited as others as precedent when re-filing form_5500 for the plan_year beginning letter should be entered on schedule b actuarial information we have sent a copy of this letter to the area manager in _ the date of this if you have any questions concerning this matter please contact sincerely martin l pippins manager employee_plans actuarial group