toe department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division date hov sv s0 ein contact person identification_number telephone number - b4 dear sir or madam this is in response to a letter dated date which requested certain rulings with respect to a proposed transfer of all of the assets of b to c d and e b and c are exempt under sec_501 of the internal_revenue_code and are classified as private_foundations under sec_509 we have determined that d and e are tax-exempt under sec_501 of the code and are classified as private_foundations under sec_509 in separate correspondence the charitable interests and management strategies of the trustees of b have diverged in recent years and they currently are interested in supporting different charities and adopting different management strategies in order to resolve these differences the directors of b have proposed to reorganize by transferring percent of its assets to c percent to d and percent to e for the purpose of this ruling_request these proposed asset transfers are referred to as the spin-off distributions t b currently has outstanding pledges in the amount of x these pledges will be paid_by date after the pledges have been paid b will distribute its remaining assets in a final distribution to c d and e in equal shares and undergo a voluntary termination of its private_foundation_status under sec_507 of the code for the purpose of this ruling_request these distributions are referred to as the final distributions following the transfer c d and e would be effectively controlled by the same trustees who controlled b b has never notified the service in the past that it intends to terminate its private_foundation_status nor has b ever received notification that its status as a private_foundation has been terminated furthermore b has not committed willful repeated acts or failures to act or a willful and flagrant act or failure to act giving rise to liability for tax under chapter sec_501 of the code provides for the exemption from federal_income_tax of organizations organized and operated exclusively for charitable purposes no part of the net_earnings of which inures to the benefit of any private_shareholder_or_individual sec_507 of the code and the regulations to sec_507 sets forth rules applicable to terminating foundations the internal_revenue_service in revrul_2002_28 2002_20_irb_941 copy attached has issued guidance on the filing obligations and tax issues that arise when a private_foundation transfers all of its assets fo one or more other private_foundations under sec_507 of the code the rev_rul presents three situations in which a private_foundation transfers all of its assets to one or more private_foundations in situation one the foundation under a plan of dissolution distributes all of its remaining assets in equal shares to three other private_foundations in situation two the trustees of a private_foundation trust create a not-for-profit corporation to carry on the trust’s charitable activities which the trustees have determined can be more effectively accomplished by operating in corporate form all of the trust’s assets and liabilities are transferred to the not-for-profit corporation tn situation three two private_foundations transfer all of their assets and liabilities to a newly formed private_foundation in the rev_rul the service has ruled that a private_foundation that transfers all of its assets to one or more private_foundations in a transfer described in sec_507 is not required to notify the manager exempt_organizations determinations tax exempt government entities that it plans to terminate its private_foundation_status under sec_507 the ruling further states that if the private_foundation does not provide notice and does not terminate it is not subject_to termination_tax under sec_507 if the private_foundation provides notice and terminates then it is subject_to the tax however if the private_foundation has no assets on the day it provides notice the sec_507 tax will be zero the rev_rul gives detailed information as to the applicability of the excise_taxes imposed by sections of the code the ruling further provides that a private_foundation that has disposed of all its assets and terminates its private_foundation_status must file a form pf for the tax_year of the disposition and must comply with any expenditure_responsibility reporting obligations on the return a private_foundation that has disposed of all its assets and does not terminate its private_foundation_status must file a form_990-pf for the tax_year of the disposition and must comply with any expenditure_responsibility reporting obligations on the return but does not need to file returns in the following tax years if it has no assets and does not engage in any activities activities in later years it must resume filing form_990-pf for those years if the private_foundation receives additional assets or resumes our evaluation of the facts and circumstances in your ruling_request indicates that the transfer of b’s assets to c d and e would be similar to the facts and circumstances described in situation one of the rev_rul under the facts described the foundations would not be subject_to tax under sec_507 and sections of the code accordingly based on the information furnished and the code and regulations as interpreted in revrul_2002_28 we rule as follows that both the spin-off distributions and final distributions will qualify insofar as b is concerned as transfers of assets described in sec_507 of the code and will neither result in the termination of b's private_foundation_status under sec_507 nor subject b to the tax imposed by sec_507 that c d and e will not be treated as newly created organizations as a result of b's spin-off distributions or final distributions that neither the spin-off distributions the final distributions nor the combination of the spin-off distributions and the final distributions will constitute either a willful flagrant act or failure to act or one of a series of willful repeated acts or failures to act giving rise to liability for tax under chapter of the code that neither the spin-off distributions nor the final distributions will be a taxable_expenditure by b under sec_4945 of the code and that b will not be required to exercise expenditure_responsibility under sec_4945 and sec_4945 with respect to such transfers that b and its disqualified persons will neither be deemed to have engaged in an act of self-dealing under sec_4941 of the code nor be subject_to any_tax under sec_4941 through of the code as a result of the formation of d and e and the spin-off distributions and the final distributions that the spin-off distributions and the final distributions may be counted toward satisfaction of b's minimum distribution_requirements under sec_4942 of the code to the extent the transfers meet the requirements of sec_4942 that the legal accounting and other expenses_incurred by b c d and e in connection with this ruling_request and effectuating the spin-off distributions and the final distributions will not constitute taxable_expenditures pursuant to sec_4945 and will not be considered qualifying distributions under sec_4942 that the spin-off distributions and final distributions will not result in the imposition of any other taxes under the code that the spin-off distributions and the final distributions will not affect the tax-exempt status under sec_501 of the code of b c d and e that at such time as b makes its final distributions and notifies the service at least one day after the final distributions that it intends to terminate its private_foundation_status under sec_507 of the code b's status as a private_foundation will be terminated and no tax will be due pursuant to sec_507 of the code or any other provision of the code because b will have no assets as of its notice of termination that at such time as b makes its final distributions and notifies the service that it intends to terminate its private_foundation_status under sec_507 of the code neither the preparation and or filing of any final accounting or other documents required by state law in winding up dissolution and termination of b will result in imposition of tax under sec_507 of the code or any other provision of the code we are informing the your organization’s permanent records te_ge office of this action please keep a copy of this ruling in 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 precedent if you have any questions about this ruling please contact the person whose name and telephone number are shown in the heading of this letter sincerely meret v sack gerald v sack manager exempt_organizations technical group


t c memo united_states tax_court silvia s rodriguez petitioner v commissioner of internal revenue respondent docket no 9686-00l filed date silvia s rodriguez pro_se nancy c carver for respondent memorandum findings_of_fact and opinion colvin judge on date respondent sent petitioner a notice_of_determination concerning collection action s under sec_6320 and or the lien or levy determination in which respondent determined to proceed with collection of deficiencies in petitioner’s income_tax additions to tax and interest for petitioner did not file tax returns for tax years the issues for decision are whether respondent was time barred from collecting taxes due for we hold that respondent is not whether respondent’s refusal to consider petitioner’s offer_in_compromise because petitioner had not filed all required tax returns was an abuse_of_discretion we hold that it was not section references are to the internal_revenue_code in effect for the applicable years findings_of_fact some of the facts have been stipulated and are so found a petitioner petitioner is a self-employed real_estate broker who lived in gaithersburg maryland when she filed the petition she has been a real_estate broker from before to the time of trial she owned a business known as sylvia international realty she had not filed income_tax returns for tax years through as of the time of trial b respondent’s notice_of_deficiency and collection activity relating to petitioner’s tax years respondent issued a notice_of_deficiency to petitioner for tax years and petitioner timely filed a petition in this court sheryl fast fast a paralegal for respondent worked with petitioner in settling that case in october and date petitioner signed stipulated decisions in which she agreed that she had deficiencies in income_tax of dollar_figure for and dollar_figure for and was liable for additions to tax of dollar_figure for and dollar_figure for for failure_to_file a return under sec_6651 and failure to pay estimated_tax under sec_6654 petitioner also agreed that respondent could assess and collect the deficiencies additions to tax and interest respondent assessed petitioner’s tax for on date c petitioner’s offer_in_compromise petitioner contacted fast because petitioner received a notice not otherwise described in the record from respondent stating that she owed taxes for fast told petitioner how to submit an offer_in_compromise and that respondent would not consider her offer_in_compromise unless petitioner had filed all required tax returns fast checked respondent’s computer records and discovered that respondent had no record of petitioner’s having filed returns for fast told petitioner that respondent would not collect taxes owed by petitioner for until date to give petitioner time to submit an offer_in_compromise at a time not stated in the record a friend of petitioner’s delivered copies of what appeared to be two or three of petitioner’s returns to fast those copies did not have original signatures on date petitioner gave fast a copy of what appeared to be her return dated date it did not have an original signature on date petitioner submitted a form_656 offer_in_compromise to fast in it petitioner offered to pay dollar_figure of the taxes she owed for in a letter dated date fast told petitioner that she had received a copy of petitioner’s return that did not have an original signature fast also told petitioner that respondent would not consider the offer_in_compromise because respondent had no record that petitioner had filed original tax returns for fast also told petitioner that respondent would begin to collect tax from her on date and that petitioner must file returns for before respondent would process her offer_in_compromise in date petitioner gave fast what appeared to be copies of her tax returns for dated date and for dated date those copies did not bear original signatures petitioner had not filed original returns for as of the time of trial and had given fast copies of what appeared to be petitioner’s returns for only of those years d notice_of_intent_to_levy and sec_6330 hearing on date respondent issued to petitioner a notice_of_intent_to_levy and notice of your right to a hearing relating to petitioner’s tax years on date petitioner filed a request for a collection_due_process_hearing form related to her tax_year in which she stated that she wanted respondent to consider her offer_in_compromise for that year in her request for a hearing she said that she had health and financial difficulties respondent’s appeals officer j chris neighbor neighbor reviewed petitioner’s request for a hearing and her offer_in_compromise on date neighbor told petitioner by letter that respondent would not consider her offer_in_compromise because she had not filed returns for neighbor scheduled a hearing for date to review petitioner’s tax_liabilities for and asked her to let him know within days if she preferred a different date he also asked petitioner to give him the following items a financial statement for petitioner and her business signed income_tax returns for petitioner’s most recent mortgage statement showing the remaining balance and the amount of the monthly payment and information about silvia international realty such as whether it produces income and has employees neighbor sent blank financial statement forms for petitioner to complete respondent apparently assumed petitioner requested a hearing under sec_6330 for both and even though her request only stated petitioner did not complete the forms or send any mortgage statements to neighbor on date petitioner asked neighbor to reschedule the hearing because she was ill on date neighbor rescheduled the hearing for date and again asked petitioner to give him the information described above on date petitioner sent copies of her and returns to neighbor the copies did not bear original signatures on date petitioner asked respondent to postpone the may hearing for health reasons she told neighbor she would contact him after date by letter dated date neighbor told petitioner that in consideration of her health problems he had postponed the may hearing and she had until date to propose collection alternatives neighbor told petitioner that respondent had received from petitioner copies of certain returns but that original returns had not been filed with the irs he invited her to contact him so that they could schedule a hearing before date he told her that he would issue a notice_of_determination after that time on date petitioner told neighbor that she had filed original returns with the philadelphia service_center however she did not say which returns she had filed she also asked neighbor to postpone the date deadline to date because of her poor health on date petitioner sent some of the financial information to neighbor that he had requested petitioner did not give neighbor any of her mortgage statements neighbor checked respondent’s records and found that respondent had no record that petitioner had filed returns for neighbor did not consider petitioner’s offer_in_compromise because the internal_revenue_manual part section states that respondent will not consider offers in compromise unless the taxpayer has filed all required tax returns on date respondent sent petitioner a notice_of_determination concerning collection action s under sec_6320 and or the lien or levy determination in which respondent determined to proceed with collection of deficiencies in petitioner’s income_tax additions to tax and interest for opinion a whether respondent is time barred from collecting petitioner’s taxes for petitioner contends that respondent is time barred from collecting taxes she owes for for reasons stated next we conclude that respondent may collect taxes from petitioner for a claim that the time to assess tax has expired is a challenge to the underlying tax_liability 119_tc_140 117_tc_127 thus petitioner may not now claim that the assessment_period expired before respondent issued the notice_of_deficiency because she received a notice_of_deficiency and could have raised that issue in her deficiency case see sec_6330 respondent is not time barred under sec_6501 from collecting or assessing tax due from petitioner for because she did not file returns for those years respondent is also not time barred under sec_6502 from collecting taxes due from petitioner for the commissioner may collect tax by levy if the levy is made within years after the assessment of tax sec_6502 petitioner signed decision documents in and respondent assessed petitioner’s taxes due for on date thus respondent has at least until date to collect petitioner’s taxes b whether respondent’s refusal to consider petitioner’s offer_in_compromise for tax years was an abuse_of_discretion petitioner contends that respondent’s refusal to consider her offer_in_compromise for because she had not filed all required income_tax returns was an abuse_of_discretion we disagree whether petitioner had filed all required tax returns petitioner testified that she filed original income_tax returns for with the philadelphia service_center we are not persuaded by her testimony the parties stipulated the admission into evidence of respondent’s form_2866 certificate_of_official_record which states that respondent has no record of petitioner’s having filed income_tax returns for tax years fast and neighbor both testified that they searched respondent’s records fast found that respondent had no record that petitioner had filed returns for neighbor found that respondent had no record that petitioner had filed returns for respondent’s certificate_of_official_record and the testimony of fast and neighbor were more persuasive in showing that petitioner had not filed returns for than petitioner’s testimony and the copies of some of her returns were in showing that she had thus we find that petitioner did not file returns for petitioner contends that respondent erred in not filing the copies of the returns for and that she gave to fast and neighbor we disagree those returns did not include petitioner’s original signature sec_6061 82_tc_766 affd 793_f2d_139 6th cir sec_1_6061-1 income_tax regs petitioner did not provide copies of her returns for or petitioner does not contend that she was not required to file tax returns for any of these years we conclude that petitioner had not filed all required tax returns when she filed her offer_in_compromise whether respondent’s refusal to consider petitioner’s offer_in_compromise because petitioner had not filed all required tax returns was an abuse_of_discretion petitioner contends that respondent’s refusal to consider her offer_in_compromise because she had not filed required income_tax returns was unreasonable and thus an abuse_of_discretion we disagree petitioner did not submit all of the financial information supporting her offer_in_compromise that was requested by neighbor the commissioner will not process an offer that lacks sufficient information to permit the commissioner to evaluate its acceptability sec_301_7122-1t c temporary proced admin regs fed reg date sec_5 and of the internal_revenue_manual promulgated on date and in effect at all time relevant here provides that the commissioner may not process an offer_in_compromise if the taxpayer has not filed all required tax returns administration internal_revenue_manual cch sec_5 at big_number the commissioner’s decision not to process an offer_in_compromise or a proposed collection alternative from taxpayers who have not filed all required tax returns is not an abuse_of_discretion londono v commissioner tcmemo_2003_99 ashley v commissioner tcmemo_2002_286 richter v united_states aftr 2d ustc par big_number c d cal ajp mgmt v united_states aftr 2d ustc par big_number c d cal ttk mgmt v united_states aftr 2d ustc par big_number c d cal the commissioner may set reasonable priorities for internal_revenue_service staff as needed to effectively administer the revenue laws the decision not to accept the offer_in_compromise submitted by petitioner on account of her failure_to_file all required returns was an entirely reasonable exercise of the commissioner’s discretion in administering the offer_in_compromise program we conclude that respondent’s determination to proceed with collection as to petitioner’s tax_liabilities was not an abuse_of_discretion accordingly decision will be entered for respondent


department of the treasury internal_revenue_service p o box irs cincinnati oh number release date uil dear date date employer id number contact person id number contact telephone number form you must file tax years this letter is our final_determination that you don’t qualify for tax-exempt status under sec_501 of the internal_revenue_code the code recently we sent you a proposed adverse determination in response to your application the proposed adverse determination explained the facts law and basis for our conclusion and it gave you days to file a protest because we didn’t receive a protest within the required days the proposed determination is now final because you don’t qualify as a tax-exempt_organization under sec_501 of the code donors can’t deduct contributions to you under sec_170 of the code you must file federal_income_tax returns for the tax years listed at the top of this letter using the required form also listed at the top of this letter within days of this letter unless you request an extension of time to file we'll make this final adverse determination_letter and the proposed adverse determination_letter available for public inspection as required under sec_6110 of the code after deleting certain identifying information please read the enclosed notice notice of intention to disclose and review the two attached letters that show our proposed deletions if you disagree with our proposed deletions follow the instructions in the notice on how to notify us if you agree with our deletions you don’t need to take any further action we’ll also notify the appropriate state officials of our determination by sending them a copy of this final letter and the proposed determination_letter under sec_6104 of the code you should contact your state officials if you have questions about how this determination will affect your state responsibilities and requirements letter rev catalog number 47632s if you have questions about this letter you can contact the person listed at the top of this letter if you have questions about your federal_income_tax status and responsibilities call our customer service number pincite-829-1040 tty for deaf or hard of hearing or customer service for businesses pincite-829-4933 sincerely stephen a martin director exempt_organizations rulings and agreements enclosures notice redacted letter proposed adverse determination under sec_501 c redacted letter final adverse determination under sec_501 - no protest letter rev catalog number 47632s department of the treasury internal_revenue_service cincinnati oh legend b disease c state dear date date employer id number person to contact id number contact telephone number contact fax number uil we considered your application_for recognition of exemption from federal_income_tax under sec_501 of the internal_revenue_code the code based on the information provided we determined that you don’t qualify for exemption under sec_501 of the code this letter explains the basis for our conclusion please keep it for your records issues do you qualify for exemption under sec_501 of the code no for the reasons stated below facts during review of your form_1023 application_for recognition of exemption under sec_501 of the code detailed information was requested you did not provide a complete response as part of your form_1023 application you submitted a document titled articles of incorporation but it did not show that it was filed with c we requested your legal date of formation the date your organizing document was filed you did not provide a response to support being formed as a legal entity as of a specific date in your narrative description of activities you explained how you will fundraise at professional sporting events in the area funding for activities will be provided through private charitable donations professional sports team concession operations sports facility operators and grants as much a sec_80 of funds raised will provide services to children seeking their first job the financial information you provided on page of your form_1023 only reflected income from other sources and expenses for compensation of officers directors and trustees we requested additional information about this service and your selection process you did not provide a response additionally you explained how individuals who receive benefits from you will apply in a competitive process the benefits will be provided only to families who have an immediate member with for review by your board a medically certified diagnosis of b we requested additional information regarding these benefits and your selection process you did not provide a response you described part of your fundraising to include website donations that will be accepted on another foundation’s website we requested an explanation of your relationship with this entity financial and non- financial and the reason for use of their website you did not provide a response on your form_1023 you provided your website address it could not be found we requested a representative copy of information from your website which you did not provide on part x of your form_1023 you requested private_operating_foundation status which appeared incorrect you replied to our inquiry requesting to continue pursuing classification as a private_operating_foundation however you did not explain how you meet the requirements for this status law sec_501 of the code provides for the recognition of exemption of organizations that are organized and operated exclusively for religious charitable or other purposes as specified in the statute no part of the net_earnings may inure to the benefit of any private_shareholder_or_individual sec_1_501_c_3_-1 states that in order to be exempt as an organization described in sec_501 of the code an organization must be both organized and operated exclusively for one or more of the purposes specified in such section if an organization fails to meet either the organizational_test or the operational_test it is not exempt sec_1_501_c_3_-1 provides that an organization is organized exclusively for one or more exempt purposes only if its articles of organization a limit the purposes of such organization to one or more exempt purposes and b do not expressly empower the organization engage otherwise than as an insubstantial part of its activities in activities that in themselves are not in furtherance of one or more exempt purposes sec_1_501_c_3_-1 holds that an organization is not organized exclusively for one or more exempt purposes unless its assets are dedicated to an exempt_purpose an organization’s assets will be considered dedicated to an exempt_purpose for example if upon dissolution such assets would by reason of a provision in the organization’s articles or operation of law be distributed for one or more exempt purposes sec_1_501_c_3_-1 provides that an organization will be regarded as operated exclusively for one or more exempt purposes only if it engages primarily in activities which accomplish one or more of such exempt purposes specified in sec_501 of the code an organization will not be so regarded if more than an insubstantial part of its activities is not in furtherance of an exempt_purpose sec_1_501_c_3_-1 defines the term charitable as including the relief of the poor and distressed or of the underprivileged and the promotion of social welfare by organizations designed to lessen neighborhood tensions to eliminate prejudice and discrimination or to combat community deterioration the term charitable also includes lessening of the burdens of government sec_1_501_c_3_-1 defines the term educational as the instruction or training of the individual for the purpose of improving or developing his capabilities or the instruction of the public on subjects useful to the individual and beneficial to the community letter rev catalog number 47630w revproc_2017_5 2017_1_irb_2321 section and its predecessors provides that a favorable determination_letter or ruling will be issued to an organization only if its application and supporting documents establish that it meets the particular requirements of the section under which exemption from federal_income_tax is claimed sec_3 states that a determination_letter or ruling on exempt status is issued based solely upon the facts and representations contained in the administrative record the applicant is responsible for the accuracy of any factual representations contained in the application in 372_fsupp_770 e d cal the court concluded that one seeking a tax exemption has the burden of establishing his right to a tax-exempt status pius xii academy v commissioner tcmemo_1982_97 provides that an organization must establish through the administrative record that it operates as an exempt_organization denial of exemption may be based solely upon failure to provide information describing in adequate detail how the operational_test will be met in 82_tc_215 the administrative record did not demonstrate that the organization would operate exclusively in furtherance of an exempt_purpose therefore denial of organization’s request for tax-exempt status was reasonable 70_fedclaims_782 was an action for declaratory_judgment that the petitioner brought to challenge the denial of his application_for exempt status the court in finding that the actual purposes displayed in the administrative record supported the service’s denial stated it is well- accepted that in initial qualification cases such as this gaps in the administrative record are resolved against the applicant the court noted that if the petitioner had evidence that contradicted these findings it should have submitted it as part of the administrative process the court also highlighted the principle that exemptions from income_tax are matters of legislative grace ohio disability association v commissioner t c memo states denial is justified because responses to requests for additional information failed to supplement the initial application or clarify purposes and activities and generalizations did not provide sufficient detail to determine that the organization would be operated exclusively for exempt purposes application of law a ruling on exempt status is based solely on facts and representations in the administrative file you have not provided supporting documentation to establish you meet the requirements of sec_501 of the code sec_501 sets forth two main tests for qualification for exempt status as stated in sec_1_501_c_3_-1 an organization must be both organized and operated exclusively for purposes described in sec_501 you did not submit a copy of your articles of incorporation that were properly executed and filed with c your response did not include your date of formation therefore we were not able to determine you are a legal entity that meets the organizational_test described in sec_1_501_c_3_-1 and c - b letter rev catalog number 47630w you have not submitted sufficient information establishing you are operated exclusively for c purposes see universal life church pius xii academy la verdad new dynamics foundation and ohio disability association without the information we requested it is unknown how your services or benefits are either charitable or educational in nature and that no part of your net_earnings inure to the benefit of any private_shareholder_or_individual further for these reasons we are unable to determine that you pass the operational_test and are furthering charitable or educational_purposes as outlines in sec_1_501_c_3_-1 sec_1_501_c_3_-1 and sec_1_501_c_3_-1 therefore there is not sufficient documentation to establish that you are exempt from taxation as required by sec_501 of the code and revproc_2017_5 as in universal you have the burden of establishing that you qualify for tax exemption in pius la verdad and new dynamics it was established that an organization must establish through its administrative record that it meets the requirements for exemption because you failed to provide sufficient details in your initial application and the additional documentation you provided did not meet the statutory and regulatory requirements for exemption you have not established that you meet the requirements for exemption under sec_501 of the code as provided in new dynamics any gaps in the administrative record will be resolved against the applicant similarly in ohio disability association the court found that even when additional information was provided but it contained generalizations and failed to clarify purposes denial is justified you did not provide supplemental information therefore we are unable to determine that you qualify for exemption conclusion based on the information submitted you have failed to establish that you are organized and operated exclusively for exempt purposes within the meaning of sec_501 of the code and the related_income tax regulations therefore based on the administrative record you fail to qualify for exemption under sec_501 if you don’t agree you have a right to file a protest if you don’t agree with our proposed adverse determination to do so you must send a statement to us within days of the date of this letter the statement must include e e e e e your name address employer_identification_number ein and a daytime phone number acopy of this letter highlighting the findings you disagree with anexplanation of why you disagree including any supporting documents the law or authority if any you are relying on the signature of an officer director trustee or other official who is authorized to sign for the organization or your authorized representative e one of the following declarations letter rev catalog number 47630w for an officer director trustee or other official who is authorized to sign for the organization under penalties of perjury i declare that i examined this protest statement including accompanying documents and to the best of my knowledge and belief the statement contains all relevant facts and such facts are true correct and complete for authorized representatives under penalties of perjury i declare that i prepared this protest statement including accompanying documents and to the best of my knowledge and belief the statement contains all relevant facts and such facts are true correct and complete your representative attorney certified_public_accountant or other individual enrolled to practice_before_the_irs must file a form_2848 power_of_attorney and declaration of representative with us if he or she hasn’t already done so you can find more information about representation in publication practice_before_the_irs and power_of_attorney we’ll review your protest statement and decide if you provided a basis for us to reconsider our determination if so we’ll continue to process your case considering the information you provided if you haven’t provided a basis for reconsideration we’ll forward your case to the office of appeals and notify you you can find more information about the role of the appeals_office in publication how to appeal an irs decision on tax- exempt status if you don’t file a protest within days you can’t seek a declaratory_judgment in court at a later date because the law requires that you use the irs administrative process first sec_7428 of the code where to send your protest please send your protest statement form_2848 if needed and any supporting documents to the applicable address u s mail street address for delivery service internal_revenue_service eo determinations quality assurance room p o box cincinnati oh internal_revenue_service eo determinations quality assurance main street room cincinnati oh you can also fax your statement and supporting documents to the fax number listed at the top of this letter if you fax your statement please contact the person listed at the top of this letter to confirm that he or she received it if you agree if you agree with our proposed adverse determination you don’t need to do anything if we don’t hear from you within days we’ll issue a final adverse determination_letter that letter will provide information on your income_tax filing_requirements letter rev catalog number 47630w you can find all forms and publications mentioned in this letter on our website at www irs gov formspubs if you have questions you can contact the person listed at the top of this letter sincerely stephen a martin director exempt_organizations rulings and agreements enclosure publication letter rev catalog number 47630w


internal_revenue_service number release date index number -------------------- -------------------------------------- -------------------------------------------- ----------------------------------- ------------------------------ in re -------------------------------------- -------------------------------------------- ----------------------------------- ------------------------------ department of the treasury washington dc third party communication none date of communication not applicable_person to contact ------------------- id no ------------- telephone number --------------------- refer reply to cc tege eoeg eo2 plr-155923-05 date date legend corporation -------------------------------------- trust alaska ------------------------------------------------------------------------- state --------- act ------------------------------------------------- transportation system --------------------- dear ---------------- correspondence requesting the following rulings this is in response to your letter dated date and subsequent the income of trust is excluded from gross_income under sec_115 of the internal_revenue_code code 2a trust is an ordinary_trust within the meaning of sec_7701 of the code and sec_301_7701-4 of the procedure and administration regulations 2b trust is not required under sec_6012 to file federal_income_tax returns contributions to trust by corporation are excluded from gross_income by sec_105 of the code amounts paid from trust on behalf of employees and their surviving spouses and dependents as defined in sec_152 of the code are excluded from gross_income under sec_106 of the code for insurance premiums and sec_105 for medical_expenses facts corporation established and maintains a health insurance plan plan for its corporation is a public corporation of state congress enacted act to transfer with respect to retirees coverage is available to retirees who receive an annuity plr-155923-05 the operation of transportation system from the federal government to state the act deemed the operation of transportation system by a public corporation of state to be an exercise of an essential_governmental_function and the revenue derived from such operation shall be deemed to accrue to state for purposes of sec_115 the operation of transportation system by corporation is the performance of an essential_governmental_function of state active and retired employees their spouses and eligible dependents under plan employees may elect coverage under a major medical group_insurance policy under corporation’s pension_plan or through the federal civil service retirement_system csrs an employee who retires under corporation’s pension_plan and meets plan’s age requirement for subsidized coverage or older if not represented by collective bargaining or or older if represented by collective bargaining may continue health care coverage for the retired employee and the retired employee’s spouse and dependents on a cost-sharing basis employees who retire on disability retirement are also eligible to receive subsidized coverage after the death of a retired employee certain family members covered under the plan may continue the health coverage a surviving_spouse who is entitled to a monthly annuity from corporation’s pension_plan or from the federal csrs may continue coverage as may surviving dependents enrolled in plan at the time of the retiree’s death in the case of csrs participants a child eligible to receive an annuity from csrs after the retiree’s death may also continue coverage under plan medical coverage for each plan participant eligible for subsidized health care coverage the participants are responsible for paying the remaining percent of premium amounts health care coverage to retired employees their spouses and dependents and surviving spouses and dependents contributions by corporation are the sole source of funds for trust authority in all matters pertaining to trust corporation’s board has delegated management of day-to-day matters to a committee committee composed of officers of corporation corporation has contracted with a bank to act as custodial trustee trustee for trust corporation committee and trustee are named as fiduciaries of trust the board_of directors of corporation adopted trust to fund its liability to provide corporation pay sec_40 percent of the insurance premium for the post-retirement corporation acting through its board and chief_executive_officer is the final plr-155923-05 article iv sec_4 of trust in general prohibits any part of trust to be used for or diverted to purposes other than for the exclusive purpose of providing benefits to participants and beneficiaries covered under plan article viii section of trust provides that upon termination of trust after payment of all trust liabilities trustee shall distribute the remaining trust assets to corporation law and analysis in revrul_77_261 1977_2_cb_45 income from an investment fund in determining if sec_115 applies the service considers all the facts and sec_115 provides that gross_income does not include income derived from sec_115 any essential_governmental_function and accruing to a state or political_subdivision circumstances relating to the organization to determine whether the organization performs an essential_governmental_function and whether the income accrues to a state or political_subdivision established under a written declaration of trust by a state for the temporary investment of cash balances of the state and its participating political subdivisions is excludable from gross_income for federal_income_tax purposes under sec_115 the revenue_ruling reasons that the investment of cash balances by a state or political_subdivision thereof in order to receive some yield on the funds until needed to meet expenses is a necessary incident of the power of the state or political_subdivision to collect taxes and other revenue to fund government expenses the ruling points out that it may be assumed that congress did not desire in any way to restrict a state’s participation in enterprises that might be useful in carrying out projects that are desirable from the standpoint of a state government and which are within the ambit of a sovereign to properly conduct organization formed funded and operated by political subdivisions to pool various risks casualty public liability workers’ compensation and employees’ health is excludable from gross_income under sec_115 revrul_90_74 states that the income of such an organization is excluded from gross_income under sec_115 so long as private interests do not participate in the organization or benefit more than incidentally from the organization the benefit to retirees their spouses and dependents of the medical insurance coverage is deemed incidental to the public benefit in revrul_90_74 1990_2_cb_34 the service determined the income of an article viii section of trust provides that upon trust termination after to be excludable from gross_income under sec_115 the income of trust sec_301_7701-1 of the procedure and administration regulations provides plr-155923-05 trust was established to fund corporation’s obligation to provide health care coverage for its retirees based on revrul_77_261 and revrul_90_74 the trust performs an essential_governmental_function within the meaning of sec_115 must accrue to state any political_subdivision of the state or another entity the income of which is excluded from gross_income under sec_115 no part of the trust’s net_earnings may inure to the benefit of any private person private interests do not participate in or benefit from income of trust other than as provided in revrul_90_74 payment of all trust liabilities the trustee shall distribute the remaining trust assets to corporation the act deemed the revenue derived from the operation of transportation system by a public corporation of state to accrue to state for purposes of sec_115 accordingly the income of trust accrues to corporation a public corporation whose income is excludable from gross_income under sec_301_7701-4 that the classification of organizations that are recognized as separate entities is determined under sec_301_7701-2 sec_301_7701-3 and sec_301_7701-4 unless a provision of the internal_revenue_code provides for special treatment of that organization sec_301_7701-4 provides that in general an arrangement will be treated as a_trust if it can be shown that the purpose of the arrangement is to vest in trustees responsibility for the protection and conservation of property for beneficiaries who cannot share in the discharge of this responsibility and therefore are not associates in a joint enterprise for the conduct of business for profit if an entity has both associates and a business_purpose it cannot be classified as a_trust for federal_income_tax purposes trust is classified as a_trust under sec_301_7701-4 sec_6012 year any taxable_income or having gross_income of dollar_figure or over regardless of the amount of taxable_income shall make returns with respect to income taxes under subtitle a sec_7701 and sec_301_7701-4 define trusts for purposes of sec_6012 trust is classified as a_trust under sec_301_7701-4 sec_6012 does not require trust to make returns of income when gross_income is not dollar_figure or over because trust’s income is excludable from gross_income under sec_115 trust will not have gross_income of dollar_figure or over sec_106 sec_6012 of the code provides that every trust having for the taxable plr-155923-05 all income from whatever source derived sec_61 provides that except as otherwise provided gross_income includes revrul_62_199 1962_2_cb_38 holds that employer contributions to an sec_106 provides that the gross_income of an employee does not include employer-provided coverage under an accident_or_health_plan sec_1_106-1 states that the gross_income of an employee does not include contributions which his employer makes to an accident_or_health_plan for compensation through insurance or otherwise to the employee for personal injuries or sickness incurred by the employee the employee’s spouse or the employee’s dependents as defined in sec_152 the employer may contribute to an accident_or_health_plan either by paying the premium on a policy of accident_or_health_insurance covering one or more of the employees or by contributing to a separate trust or fund which provides accident or health benefits directly or through insurance to one or more of the employees however if the insurance_policy trust or fund provides other_benefits in addition to accident or health sec_106 applies only to the portion of the contributions allocable to accident or health benefits accident_and_health_plan that provides insurance coverage to employees who continue health coverage into retirement are excludable from the retired employees’ gross_income accident_or_health_plan that provides coverage for an employee and the employee’s spouse and dependents before and after the employee’s retirement and for a deceased employee’s surviving_spouse and dependents are excludable from the gross_income of the participants under sec_106 fund the cost of health_insurance_coverage of retirees their spouses and dependents as defined in sec_152 and surviving spouses and dependents under the plan are excludable from gross_income under sec_106 conclusions conclude trust’s income is excludable from gross_income under sec_115 2a trust is classified as a_trust for federal_income_tax purposes under sec_301_7701-4 based solely on the information submitted and the representations made we contributions to trust made by corporation and payments which are used to revrul_82_196 1982_2_cb_53 holds that employer contributions to an except as specifically ruled upon above no opinion is expressed or implied as to 2b because trust is classified as a_trust trust will not be required to file an annual income_tax return under sec_6012 as trust will not have gross_income of dollar_figure or over and contributions to trust made by corporation and payments from trust which are used to fund the cost of health_insurance_coverage of retirees their spouses and dependents as defined in sec_152 and surviving spouses and dependents under the plan are excludable from gross_income under sec_106 plr-155923-05 the federal tax consequences of the transaction described above under any other provision of the internal_revenue_code of the code provides that it may not be used or cited as precedent sending a copy of this ruling to your authorized representative enclosures ____________________________ david l marshall chief exempt_organizations branch office of division counsel associate chief_counsel tax exempt and government entities this ruling is directed only to the taxpayer who requested it sec_6110 in accordance with the provisions of a power_of_attorney currently on file we are sincerely


department of the treasury internal_revenue_service washington d c nov tax_exempt_and_government_entities_division uniform issue list a a hamar irakirk irie eere hrkkikikkkeriekeerekrereeriik weeirkekrikkrikekeekrerrereakeereriek legend taxpayer spouse ira x ira y amount a ieidioecidcociccbicktk krekkkeieaeeekreieriarereiaek fr iti ii iii iti ta riki aai hii ia iiia aaai iiia aaa iaai aia arerr air fei iii iiis ii itt i fri iri iti iii tk tait iai iia ania aaai iaa aarirtiaiaiaiaiaiaaes in fed sdddiceic tech ttc ick tts tick tock ici amount b ei investment_advisor financial_institution hrkkerrerriarire harare ekeekeererkeekaree dear rrekkkkkkkkkkkkkkkkkkeke this is in response to your request dated date as supplemented by correspondence dated date 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 page taxpayer represents that he received a distribution from ira x totaling amount a spouse represents that she received a distribution from ira y totaling amount b taxpayer and spouse assert that their failure to accomplish a rollover within the 60-day period prescribed by sec_408 was due to fraud committed by investment_advisor taxpayer and spouse further represent that neither amount a nor amount b has been used for any other purpose taxpayer and spouse withdrew amount a and amount b from their respective iras with the intent to roll those amounts over into new iras within days within the day period spouse contacted investment_advisor who worked at that time with financial_institution and who handled all withdrawal and deposit transactions to request that he deposit the funds into taxpayer’s and spouse’s new iras before the expiration of the 60-day period investment_advisor stated that he would do so and sent a statement to taxpayer and spouse showing that the funds were deposited within that period the statement however proved to be fraudulent and the investment_advisor had not actually executed the rollover until after the 60-day period financial_institution provided documentation taking responsibility for the failure to roll over amount a and amount b into the new iras within the 60-day period based on the facts and representations you request a ruling that the internal_revenue_service waive the day rollover requirement contained in sec_408 of the code with respect to the distribution of amount a and amount b sec_408 of the code provides that except as otherwise provided in sec_408 any amount_paid or distributed out of an ira shall be included in gross_income by the payee or distributee as the case may be in the manner provided under sec_72 of the code sec_408 of the code defines and provides the rules applicable to ira_rollovers sec_408 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 i 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 ii the entire amount received including money and any other_property is paid into an eligible_retirement_plan 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 not exceed the portion of the amount received which is includible in gross_income determined without regard to sec_408 sec_408 of the code provides that sec_408 does not apply to any amount described in sec_408 received by an individual from an ira 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 i from an ira which was not includible in gross_income because of the application of sec_408 sec_408 of the code provides a similar 60-day rollover period for partial rollovers 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 of the code provides that the secretary may waive the day requirement under sec_408 and sec_408 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 individual subject_to such requirement only distributions that occurred after date are eligible for the waiver under sec_408 of the code revproc_2003_16 r b date provides that in determining whether to grant a waiver of the 60-day rollover requirement pursuant to sec_408 the service will consider all relevant facts and 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 and spouse is consistent with their assertion that their failure to accomplish a timely rollover was caused by investment advisor’s fraudulent actions therefore pursuant to sec_408 of the code the service hereby into a rollover ira spouse is waives the 60-day rollover requirement with respect to the distribution of amount a from ira x and amount b from ira y taxpayer is granted a period of days from the issuance of this ruling letter to contribute amount a granted a period of days from the issuance of this ruling letter to contribute amount b into a rollover ira provided all other requirements of sec_408 of the code except the 60-day requirement are met with respect to such contribution amount a and amount b will be considered rollover_contributions within the meaning of sec_408 of the code of the code provides that it may not be used or cited as precedent 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_6110 this ruling does not authorize the rollover of amounts that are required to be no opinion is expressed as to the tax treatment of the transaction described distributed by sec_401 of the code page if you wish to inquire about this ruling please contact id - at - _ please address all correspondence to se t ep ra t2 sincerely yours ome cai a donzell employee_plans technical group littlejohn manager enclosures deleted copy of ruling letter notice of intention to disclose


internal_revenue_service number release date index numbers -------------- ------------------------------------------------ ------------------------------------ ----------------------------- -------------------------- 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 b3 plr-127133-16 plr-132992-16 plr-132993-16 date date legend x -------------------- --------------------------------------- sub --------------------------- --------------------------------------- sub ------------------------------------- --------------------------------------- sub ------------------------------------------- --------------------------------------- a ------------------------- ----------------------------------------- b ---------------------- ----------------------------------------- state --------- date ---------------------------- date ----------------------- date ------------------------ plr-127133-16 date -------------------------- date -------------------------- dear --------------- this letter responds to a letter dated date and subsequent correspondence submitted on behalf of x by its authorized representative requesting relief under sec_1362 of the internal_revenue_code code for x to elect to be an s_corporation and an extension of time under sec_301_9100-3 of the procedure and administration regulations for x to elect to treat sub sub and sub as qualified subchapter_s subsidiaries qsubs facts the information submitted states that x was incorporated under the laws of state on date a and b are the shareholders of x x intended to elect to be an s_corporation effective date but did not file a timely election x also owns of sub sub and sub which were formed on date date and date respectively x intended to make qsub elections for sub sub and sub effective date date and date respectively however the proper elections were not filed x represents that x and its shareholders have treated x as an s_corporation from date and sub sub and sub as qsubs since their formation law and analysis sec_1362 provides that except as provided in sec_1362 a small_business_corporation may elect in accordance with the provisions of sec_1362 to be an s_corporation sec_1362 provides that an election under sec_1362 may be made by a small_business_corporation for any taxable_year a at any time during the preceding_taxable_year or b at any time during the taxable_year and on or before the 15th day of the 3d month of the taxable_year sec_1362 provides that if a an election under sec_1362 is made for any taxable_year after the date prescribed by sec_1362 for making such election for such taxable_year or no such election is made for any taxable_year and b the secretary determines that there was reasonable_cause for the failure to timely make such election then the secretary may treat such an election as timely made for such taxable_year plr-127133-16 sec_1361 generally provides that i a corporation which is a qsub shall not be treated as a separate corporation and ii all assets liabilities and items of income deduction and credit of a qsub shall be treated as assets liabilities and such items as the case may be of the s_corporation sec_1361 provides that for purposes of sec_1361 the term qualified_subchapter_s_subsidiary means any domestic_corporation which is not an ineligible_corporation as defined in sec_1361 if i percent of the stock of such corporation is held by the s_corporation and ii the s_corporation elects to treat such corporation as a qsub sec_1_1361-3 of the income_tax regulations prescribes the time and manner for making an election to be classified as a qsub sec_1_1361-3 provides that an election cannot be effective more than two months and days prior to the date the election is filed or more than months after the election is filed the proper form for making the election is form_8869 qualified_subchapter_s_subsidiary election sec_1_1361-3 provides that an extension of time to make a qsub election may be available under the procedures applicable under sec_301_9100-1 and sec_301_9100-3 sec_301_9100-1 provides that the commissioner may 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 not 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_9100-2 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 sec_301_9100-3 provides that requests for relief subject_to sec_301_9100-3 will be granted when the taxpayer provides 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 conclusion based solely on the facts submitted and representations made we conclude that x has established reasonable_cause for failing to make a timely election to be an s_corporation effective date and thus is eligible for relief under sec_1362 accordingly provided that x makes an election to be an s_corporation by filing a plr-127133-16 completed form_2553 election by a small_business_corporation effective date along with a copy of this letter with the appropriate service_center within days from the date of this letter then such election will be treated as timely made for date in addition we conclude that x has satisfied the requirements of sec_301_9100-3 with respect to the late qsub elections for sub sub and sub as a result provided that x makes a qsub election for sub sub and sub by filing completed forms effective date date and date respectively along with a copy of this letter with the appropriate service_center within days from the date of this letter then such elections will be treated as timely made for date date and date except as specifically ruled above we express or imply no opinion concerning the federal tax consequences of the facts described above under any other provision of the code including whether x was otherwise a valid s_corporation and whether sub sub and sub were otherwise valid qsubs this ruling is directed only to the taxpayer that requested it sec_6110 of the code provides that it may not be used or cited for precedent pursuant to a power_of_attorney on file we are sending a copy of this letter to x’s authorized representative the rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the rulings requested it is subject_to verification on examination sincerely holly porter chief branch office of the associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes


internal_revenue_service number release date index numbers ------------------------------------ ------------------------------ ------------------------------------- ----------------------------- 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-107803-17 date date legend ---------------------------------------- x --------------------------------------- sub ----------------------------------------------- ------------------------------------------------------------ --------------------------------------- state --------------- d1 d2 ------------------------ -------------------- dear ------------- this letter responds to a letter dated date and subsequent correspondence submitted on behalf of x by its authorized representative requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations for x to elect to treat sub as a qualified_subchapter_s_subsidiary qsub under sec_1361 of the internal_revenue_code code facts the information submitted states that x was formed under the laws of state on and elected to be an s_corporation effective d1 x represents that it intended to elect to plr-107803-17 treat sub as a qsub effective d2 when x formed sub however x failed to timely file form_8869 qualified_subchapter_s_subsidiary election for sub x represents that it has filed its tax returns for all of the relevant tax years consistent with sub being a qsub since d2 law and analysis sec_1361 provides that except as provided in regulations prescribed by the secretary for purposes of title_26 i a corporation that is a qsub shall not be treated as a separate corporation and ii all assets liabilities and items of income deduction and credit of a qsub shall be treated as assets liabilities and such items as the case may be of the s_corporation sec_1361 defines the term qualified_subchapter_s_subsidiary as a domestic_corporation that is not an ineligible_corporation as defined in sec_1361 if percent of the stock of the corporation is held by an s_corporation and the s_corporation elects to treat the corporation as a qsub sec_1_1361-3 of the income_tax regulations provides the time and manner of making a qsub election a taxpayer makes a qsub election for a subsidiary by filing form_8869 with the appropriate service_center sec_1_1361-3 provides that a qsub election cannot be effective more than two months and days prior to the date of filing sec_1_1361-3 provides that an extension of time to make a qsub election may be available under sec_301_9100-1 and sec_301_9100-3 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 plr-107803-17 acted reasonably and in good_faith and the grant of relief will not prejudice the interests of the government conclusion based on the facts and representations submitted we conclude that the requirements of sec_301_9100-3 have been satisfied accordingly x is granted an extension of time of one hundred twenty days from the date of this letter to elect to treat sub as a qsub effective d2 the election should be made for sub by filing form_8869 with the appropriate service_center with a copy of this letter attached a copy is enclosed for that purpose except for the specific ruling above we express or imply no opinion concerning the federal tax consequences of the facts of this case under any other provision of the code specifically we express or imply no opinion concerning whether x is a valid s_corporation or whether sub is eligible to be a qsub 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 representative the ruling contained in this letter is 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 ruling_request it is subject_to verification on examination sincerely associate chief_counsel passthroughs special industries by ___ s ________________________________ bradford poston senior counsel branch office of the associate chief_counsel passthroughs 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 uil internal_revenue_service p o box cincinnati oh release number release date date legend b fellowship name c fellowship name r school name s military branch x program name y number dear you asked for advance approval of your 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 our determination we approved your procedures for awarding educational grants based on the information you submitted and assuming you will conduct your program as proposed we determined 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 is to further the development of strong effective current and future description of your request your letter indicates that you will operate an educational grant program called x the purpose of x business leaders and entrepreneurs and officers in s for the betterment of the free enterprise system s and the nation x will achieve this by providing travel grants to recipients of either b or c the purposes of b and c are to enable outstanding current or past members of s to expand their potential through an r business school education the b and c recipients fellows receive funding to attend advance educational programs at r business school although you provide funding to r business school for the fellowships you have no role in the application or selection process of the fellows the recipient of b is selected by r business school while the recipient of c is selected by s in addition discretion and control of b and c rests with r business school and s your travel grants will enable the fellows to attend a reunion conducted by you and each individual grant will cover reasonable and necessary costs incurred by the fellows for transportation to and from the reunion site lodging while at the reunion and certain other costs the purpose of the reunion is to help the fellows further their careers and the nation by providing valuable networking opportunities so the fellows can leverage off of one another as an extension of their r business school education the reunion will also provide the fellows development resource and problem solving opportunities as well as enable the fellows to create and sustain relationships that will help them as individuals business leaders and officers in s the reunions are anticipated to have certain components which can include items such as the following individual updates a speaker to address a topic of interest ie the future of s recognition and awards for the fellows who received promotions and other noteworthy accomplishments forums to discuss ideas concepts and guidance where the fellows can provide assistance to one another and breakout sessions for personal education and applications for what one has learned in s to the business environment the reunions occur y times per year at this time you expect the reunion will be conducted at locations within the united_states at some time in the future you may consider conducting it in a foreign_country if the use of such a location would serve to further your charitable purposes but this would be rare for example you may consider hosting a reunion at or near a location of great historical significance to s and the nation due to the unique nature of x there is no formal application you send out an announcement for the upcoming reunion via email that includes dates location draft itinerary and events the number of annual travel grants will be determined by the number of fellows who attend the reunion there is no separate selection committee two of your board members will be principally responsible for confirming eligibility of the potential recipient recommended to you by r business school and s connection to any potential recipient be in a position to confirm the eligibility of such a person likewise no directors with any personal family or business connections to any recipient will be in a position to approve the grants administered under x to such persons at no time will any director with any personal family or business the amount of an individual grant is based on receipts submitted to you for travel expenditures and in line with your published travel policy the policy generally provides that only coach class airfare is to be purchased lodging will be at pre-approved hotels incidental_expenses will not be reimbursed and there are limitations to certain expenditures such as airport parking expenses are to be reasonable and prudent you will not cover transportation costs of spouses or family members you will not make a grant until an expense report is reviewed and determined to be compliant with your travel policy and all expenditures have been properly substantiated 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 letter catalog number 58222y 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 toachieve 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 covers only 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 precedent you cannot rely on the conclusions in this letter if the facts you provided have changed substantially you may report any significant changes to your program by completing form_8940 and sending it to the cincinnati office of exempt_organizations at internal_revenue_service exempt_organizations determinations p o box cincinnati oh e you cannot make grants to your creators officers directors trustees foundation managers or members of selection committees or their relatives letter catalog number 58222y a e e all funds distributed to individuals must be made on a charitable basis and must 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 any questions please contact the person listed at the top of this letter sincerely tamera l ripperda director exempt_organizations letter catalog number 58222y


internal_revenue_service department of the treasury number release date index numbers washington dc person to contact telephone number refer reply to cc corp - plr-162188-02 date date legend purchaser target seller seller seller seller seller seller plr-162188-02 date a date b company official tax professional tax professional dear this letter responds to a letter dated date submitted on behalf of purchaser and seller seller seller seller seller and seller sometimes hereinafter referred to collectively as sellers requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations to file an election purchaser and sellers are requesting an extension to file a sec_338 election under sec_338 and sec_338 of the internal_revenue_code and sec_1_338_h_10_-1t c of the income_tax regulations with respect to purchaser’s acquisition of the stock of target sometimes hereinafter referred to as the election on date a all citations in this letter to regulations under sec_338 are to regulations in effect on date a additional information was received in letters dated date and date the material information is summarized below purchaser a c_corporation is not a member of a consolidated_group target was an s_corporation whose shareholders were seller seller seller seller seller and seller on date a purchaser and sellers entered into a stock purchase agreement for purchaser to acquire all of the target stock from sellers and purchaser acquired all of the stock of target from sellers in exchange for cash it is represented that purchaser’s acquisition of the stock of target qualified as a qualified_stock_purchase as defined in sec_338 purchaser and sellers intended to file the election the election was due on date b but for various reasons a valid election was not filed after the due_date for the election it was discovered that the election had not been filed subsequently this request was submitted under sec_301_9100-3 for an extension of time to file the election plr-162188-02 the period of limitations on assessment under sec_6501 has not expired for purchaser’s target’s or sellers’ taxable years in which the acquisition occurred the taxable years in which the election should have been filed or any taxable years that would have been affected by the election had it been timely filed sec_338 permits certain stock purchases to be treated as asset acquisitions if the purchasing_corporation makes or is treated as having made a sec_338 election or a sec_338 election and the acquisition is a qualified_stock_purchase sec_338 permits the purchasing_corporation and sellers to elect jointly to treat the target_corporation as deemed to sell all of its assets and distribute the proceeds in complete_liquidation a sec_338 election may be made for target only if purchaser acquires stock meeting the requirements of sec_1504 from a selling_consolidated_group a selling affiliate or the s_corporation shareholders in a qualified_stock_purchase sec_1_338_h_10_-1t c 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 sec_301_9100-2 provides automatic extensions of time for making certain elections requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 in this case the time for filing the election is fixed by the regulations ie sec_1_338_h_10_-1t c therefore the commissioner has discretionary authority under sec_301_9100-3 to grant an extension of time for purchaser and sellers to file the election provided purchaser and sellers show they 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 purchaser sellers company official tax professional and tax professional explain the circumstances that resulted in the failure to timely file a valid election the information establishes that purchaser reasonably relied on qualified_tax professionals who failed to make or advise purchaser to make the election and that the interests of the government will not be prejudiced if relief is granted see sec_301_9100-3 plr-162188-02 based on the facts and information submitted including the representations made we conclude that purchaser and sellers have shown they 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 accordingly an extension of time is granted under sec_301_9100-3 until days from the date on this letter for purchaser and sellers to file the election with respect to the acquisition of the stock of target as described above within days of the date on this letter purchaser and sellers must file the election on form_8023 executed on or after the date on this letter in accordance with sec_1_338_h_10_-1t c and the instructions to the form a copy of this letter must be attached to form_8023 also within days of the date on this letter all relevant parties must file or amend as applicable all returns and amended returns if any necessary to report the transaction as a sec_338 transaction for the taxable_year in which the transaction was consummated and for any other affected_taxable_year a copy of this letter and a copy of form_8023 must be attached to the returns the above extension of time is conditioned on the taxpayers' purchaser's sellers’ and target’s tax_liability if any being not 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 no opinion is expressed as to the taxpayers’ tax_liability for the years involved a determination thereof will be made by the applicable director’s office upon audit of the federal_income_tax returns involved further no opinion is expressed as to the federal_income_tax effect if any if it is determined that the taxpayers’ tax_liability is lower sec_301_9100-3 we express no opinion as to whether the acquisition sale of the target stock qualifies as a qualified_stock_purchase under sec_338 whether the acquisition sale of target stock qualifies for sec_338 treatment or any other tax consequences arising from the election in addition we express no opinion as to the tax consequences of filing the election late under the provisions of any other section of the code and 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 the above ruling for purposes of granting relief under sec_301_9100-3 we relied on certain statements and representations made by the taxpayers however the director should verify all essential facts in addition notwithstanding that an extension is granted under sec_301_9100-3 to file the election penalties and interest that would otherwise be applicable if any continue to apply purchaser must provide sellers with a copy of this letter plr-162188-02 this letter is directed only to the taxpayers who requested it sec_6110 provides that it may not be used or cited as precedent pursuant to the power_of_attorney on file in this office a copy of this letter is being sent to your authorized representative sincerely ken cohen senior technician reviewer branch office of associate chief_counsel corporate plr-162188-02 cc