department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division number release date date date contact person identification_number contact number employer_identification_number uil numbers form required to be filed tax years dear this is our final_determination that you do not qualify for exemption from federal_income_tax as an organization described in internal_revenue_code sec_501 recently we sent you a letter in response to your application that proposed an adverse determination the letter explained the facts law and rationale and gave you days to file a protest since we did not receive a protest within the requisite days the proposed adverse determination is now final because you do not qualify for exemption as an organization described in code sec_501 donors may not deduct contributions to you under code sec_170 you must file federal_income_tax returns on the form and for the years listed above within days of this letter unless you request an extension of time to file instructions and do not send them to this office failure_to_file the returns timely may result in a penalty file the returns in accordance with their we will make this letter and our proposed adverse determination_letter available for public inspection under code sec_6110 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 notice if you agree with our deletions you do not need to take any further action if you have any questions about this letter please contact the person whose name and telephone number are shown in the heading of this letter federal_income_tax status and responsibilities please contact irs customer service at if you have any questions about your or the irs customer service number for businesses the irs customer service number for people with hearing impairments is sincerely karen schiller acting director exempt_organizations rulings and agreements enclosure notice redacted proposed adverse determination_letter redacted final adverse determination_letter department of the treasury internal_revenue_service washington d c contact person identification_number contact number fax number employer_identification_number tax_exempt_and_government_entities_division date date uil number egend e w l o l z d a i - o o o o s dear we have considered your application_for recognition of exemption from federal_income_tax under sec_501 of the internal_revenue_code code as an organization described in sec_501 based on the information submitted we have concluded that you do not qualify for exemption under that section the basis for our conclusion is set forth below facts you are organized as a nonprofit corporation under state law article ill of your certificate of formation provides the corporation is organized and shall be operated exclusively for charitable and educational_purposes within the meaning of sec_501 of the internal_revenue_code sec_1 of your bylaws provides the purpose of the corporation shall be as set forth in the certificate of formation the specific mission of the corporation shall be to provide innovative high quality mental health care for vulnerable children adolescents and their family to maximize their cognitive abilities emotional well-being safety self-esteem and worldly functioning your application form_1023 provides that you will seek to provide access to quality mental health care to underserved children and adolescents including those who have- n w r a o brain-based developmental disabilities experienced abuse neglect or other trauma experienced placement in foster care joined adopting families later than a few months of age poverty or near poverty economic status families and need mental health care serious mental illnesses or have nuclear family members with serious mental illnesses and chronic medical conditions or have family members with chronic medical conditions the services that you will provide include psychiatric psychological neuropsychological assessments best practice psychotherapeutic interventions and psychopharmacologic interventions to accomplish your mission you will- provide high quality developmentally appropriate and evidence-based care in an integrated and interdisciplinary model of care delivery embed mental health services into existing nonprofits public agencies and primary care settings that serve the target population create flexible staffing programming and partnerships to be responsive to community need advance the training of practitioners of psychiatry psychology nursing and social work in the delivery and administration of mental health services establish and further prevention and early intervention programs that enhance children’s and family’s mental well-being and resiliency including in partnership with existing agencies create sustainable funding through private and government sources to provide these services provide clinical and programmatic consultative services to agencies and practitioners that serve the target population seek research grants focused on mental health interventions that benefit the target population advocate for community mental health practices and policy initiatives that enhance the availability comprehensiveness and quality of care incorporate a program evaluation and improvement component to measure and maximize impact in letter you revised the narrative description of your activities by adding that all services provided by applicant will be provided by licensed medical providers including psychiatrists and other mental health professionals who are not employees of applicant but who are operating pursuant to service agreements as independent contractors b is your executive director and medical director in letter you state that- bis currently rendering services free of charge it is anticipated that in the future he may receive annual payments in the indicated amount pursuant to a medical director agreement under the medical director agreement b will render services as an independent_contractor in such capacity applicant will in no way control or restrict the exercise of b’s independent medical judgment you provided a revised part x financial data of your form_1023 to reflect the fact that amounts paid to officers are being paid as professional fees pursuant to an independent_contractor agreement and not as compensation in letter you state that you will contract with medical professionals physicians to provide services on site at partner agencies your current partner agencies are p and s you do not bill patients for mental health services rather you receive a negotiated consulting fee from each partner agency with respect to the consulting fee charged to s you state- the consulting fee currently charged to s for the services of a child and adolescent psychiatrist is dollar_figurex hour this fee represents a discounted rate the undiscounted rates charged by local private practice child and adolescent psychiatrists range from approximately dollar_figurex-dollar_figurex hour depending on the service provided with respect to the consulting fee charged to p you state- the fee currently charged to p by n is dollar_figurex month the weekly services provided are two half-days of service provided by an advanced nurse practitioner specializing in mental health and approximately to hours_of_service and supervision by a child and adolescent psychiatrist plus on-call coverage the agreed fee represents a substantial discount from standard marketplace charges in addition the agreed fee covers applicant's conduct of a pilot program for teen mother residents of p to teach these young mothers empathic attachment to their children in addition applicant provides training and program planning services for both of these partner agencies without additional_charge training and program-planning time ranges from hours a month at present exhibit c to letter is a letter written by d who serves as healthcare regulatory counsel to you in that letter d renders a legal opinion on the issue of whether the manner in which you provide professional health mental services complies with the state’s prohibition on the corporate practice of medicine d writes- n may not legally employ psychiatrists or other licensed physicians as employees because doing so would violate the state’s prohibition on the corporate practice of medicine the corporate practice of medicine doctrine does not prohibit a non- physician or a non-physician entity from entering into an independent_contractor arrangement with physicians so long as the non-physician or non-physician entity does not split fees with the physicians does not control and is not in a position to exercise control_over the physician’s independent medical judgment n is not a physician or otherwise permitted under state law to employ physicians in the practice of medicine it may engage physicians on an independent_contractor basis to provide medical services so long as it does not share fees with the physicians have the right to or attempt to exercise control_over the physicians’ independent medical judgment at n’s request we have drafted the attached professional services agreement tempiate for the entity to engage physicians and other licensed health care professionals on an independent_contractor basis to provide mental health services to children and adolescents the draft agreement provides that the physician contractor’ is an independent_contractor and shall utilize independent professional judgment in the care it further provides that n shall neither have nor exercise and treatment of patients control or direction over the methods by which the contractor performs his her work the hourly fee to be paid to the contractor is calculated to reimburse the physician for his her professional services under the agreement the physician’s compensation is lower than standard rates in the community the lower amount is consistent with the below-market rates that n agreed to in its agreements with s and p which allow it to provide mental health services to a greater number of underserved children example n receives dollar_figurex per hour from s for physician services pays the physician dollar_figurex per hour and retains dollar_figurex to cover administrative costs by way of exhibit e to letter is an unexecuted medical director agreement between you and b under which b agrees to serve as your medical director article of the agreement provides that it is the intent of the parties that medical director shall not be deemed to be an employee of applicant for any purpose whatsoever in letter in response to our question - what percentage below your actual costs do you provide services to s and p - you provide additional information about your fee generating activities you explained that- applicant’s independent service providers are successful clinicians whose separate for- profit practices serve private patients who pay market rates applicant has requested that these clinicians provide services to at-risk populations at rates that are significantly below market the rates currently being paid_by applicant to its independent_contractor physicians is approximately below market rates applicant's administrative costs are quite low based upon the strength of applicant's board_of directors and indications to date of general community support applicant believes that when it obtains its determination_letter applicant will be able to generate donations and grant income in excess of its fee revenue and will therefore be able to provide services at less than one-half of the cost of such services letter also mentions that your present and proposed activities include educational training and research activities you estimate that of applicant's time is devoted to administering its contracts with p and s and of its time is devoted to the other consultation and advocacy initiatives law sec_501 of the code exempts from federal income_taxation organizations described in subsection c sec_501 describes corporations organized and operated exclusively for charitable religious educational and other specified exempt purposes sec_1_501_c_3_-1 of the income_tax regulations provides that in order to be exempt as an organization described in sec_501 an organization must be both organized and operated exclusively for one or more of the purposes specified in such section organization fails to meet either the organizational_test or the operational_test it is not exempt if an 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 an organization will not be so regarded if more than an insubstantial part of its activities is not in furtherance of an exempt_purpose revrul_69_528 1969_2_cb_127 concerns an organization formed to provide investment services for a fee exclusively to organizations exempt under sec_501 the ruling states that providing investment services on a regular basis for a fee is a trade_or_business ordinarily carried on for profit if the services were regularly provided by one tax-exempt_organization for other tax-exempt organizations such activity would constitute unrelated_trade_or_business thus the ruling holds that the organization is not described in sec_501 since it is regularly carrying on the business of providing investment services that would be unrelated_trade_or_business if carried on by any of the tax-exempt_organization on whose behalf it operates revrul_71_529 1971_2_cb_234 concerns an organization formed specifically to assist sec_501 organizations to manage more effectively their endowment or investment funds membership in the organization is restricted to colleges and universities exempt under sec_501 its board_of directors is composed of representatives of the member organizations most of the operating_expenses of the organization are paid for by grants from independent charitable organizations the member organizations pay only a nominal fee for the services performed these fees represent less than fifteen percent of the total costs of operation the ruling states that by providing the services described above to its members the organization is performing an essential function for charitable organizations by performing this function for the organizations for a charge that is substantially below cost the organization is performing a charitable activity within the meaning of sec_501 consequently the ruling holds that the organization qualifies for exemption under sec_501 revrul_72_369 1972_2_cb_245 concerns an organization formed to provide managerial and consulting services for nonprofit_organizations exempt under sec_501 to improve the administration of their charitable programs the organization enters into agreements with unrelated nonprofit_organizations to furnish managerial and consulting services on a cost_basis the ruling states that the provision of managerial and consulting services on a regular basis for a fee is a trade_or_business ordinarily carried on for profit the fact that the services in this case are provided at cost and solely for exempt_organizations is not sufficient to characterize this activity as charitable within the meaning of sec_501 of the code furnishing the services at cost lacks the donative element necessary to establish this activity as charitable accordingly the ruling holds that the organization's activities are not charitable and therefore the organization does not qualify for exemption under sec_501 in 326_us_279 the supreme court stated that the presence of a single nonexempt purpose if substantial in nature will destroy the exemption regardless of the number or importance of truly exempt purposes this case is the basis of sec_1_501_c_3_-1 which 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 an organization will not be so regarded if more than an insubstantial part of its activities are not in furtherance of an exempt_purpose in 102_tc_745 the tax_court addressed the issue of whether an organization which provided automobile insurance to a group of exempt_organizations under sec_501 qualified under the sec_501 exception to the definition of commercial-type_insurance in analyzing whether the taxpayer satisfied the substantially below cost threshold the court relied heavily on revrul_71_529 under that standard the court held that an arrangement whereby an organization’s members for the taxable years contributed and dollar_figure percent respectively of the total costs of providing insurance comes nowhere near the mark of evidencing substantially below cost services in 32_fedclaims_277 the court held that an organization formed by nonprofit exempt_organizations to administer a group self-insurance risk_pool and to provide insurance to members at the lowest possible cost was not exempt the court observing that the plaintiff's members had contributed as little as under sec_501 percent of the total costs of operation said that contributing percent of costs does not satisfy the policy underlying the substantially below cost analysis such a figure is neither the nominal fee described in revrul_71_529 nor does it manifest donative_intent analysis you contract with mental health professionals contractors who agree to provide professional services to you at reduced rates in turn you offer the services of these contractors to nonprofit clinics and public agencies that serve underserved children and adolescents in return for the services provided by the contractors the clinics and agencies pay you a consulting fee this fee is set at an hourly rate sufficient to cover the cost to you of the contractor and your administrative costs while it may be the case that your contractors provide their services at a fee below what is customarily and reasonable charged in private practice the provision of professional services at less than market rates does not in itself render such services charitable furthermore you have made it clear that the contractors provide such services in their capacities as independent contractors and not as your employees or agents you acknowledge that if the contractor's services were attributed to you you would be in violation of the state’s prohibition on the corporate practice of medicine consequently the contractor's services even if such services were deemed to be in furtherance of charitable purposes would not be attributed to you for purposes of determining whether you are engaged primarily in activities which accomplish any of the exempt purposes specified in sec_501 since the mental health services provided to clinics and agencies are carried on by independent contractors and not by you we must consider whether your actual activities - negotiating agreements with clinics and public agencies on behalf of your contractors and administering those agreements - furthers any purpose described in sec_501 the internal_revenue_service the service’ has recognized the exemption of organizations that provide administrative services to organizations exempt under sec_501 at substantially below cost on in effect similar to a grant-making charity assisting the the theory that such an organization is recipient organizations in carrying out their charitable programs for example in revrul_69_528 it was held that an organization providing investment services to a group of unrelated sec_501 organizations for a fee did not qualify for exemption under sec_501 because such activity would be considered an unrelated_trade_or_business if regularly provided by one tax- exempt_organization for another tax-exempt_organization on the other hand in revrul_71_529 it was held that a somewhat similar organization qualified for sec_501 exemption on the grounds that it was controlled by the organizations that it served and charged only a nominal amount for its services ie fees represented less than fifteen percent of the total cost of operation finally in revrul_72_369 it was held that an organization providing managerial and consulting services to sec_501 organizations at cost did not qualify for exemption under sec_501 the ruling states that it is not sufficient that the organization served only exempt_organizations and that its operations were not designed to show a profit the provision of commercial services at cost would not provide a basis for exemption under sec_501 insofar as your services to p s and other clinics and public agencies are of an ordinary commercial and administrative nature they will not be considered to further charitable purposes unless they are furnished solely to sec_501 organizations at substantially below your cost you guess that as a tax-exempt_organization you would be able to generate donations and grant income in excess of fee revenue and would therefore be able to provide services at less than one-half of the cost of such services in paratransit ins corp v comm'r the court concluded that revenues of to percent of expenditures did not evidence substantially below cost services in nonprofits’ ins alliance of calif v united_states the court concluded that charges equal to percent of costs did not satisfy the substantially below cost standard thus while you hope that tax-exempt status would enable you to provide services to clinics and agencies at less than one-half the cost of such services even one-half of cost is neither a nominal fee nor does it manifest a donative_intent therefore your activities on behalf of p s and other clinics and shelters would not be activities that further charitable purposes within the meaning of sec_501 while we recognize that you also engage in non-fee generating consultations and advocacy initiatives that may or may not further exempt purposes you devote by your own estimate to percent of your time to administering your contracts with p and s thus your non-exempt activities on behalf of p and s are not an insubstantial part of your total activities the supreme court in better business bureau of washington d c v united_states said that the presence of a single nonexempt purpose if substantial in nature will destroy the exemption regardless of the number or importance of truly exempt purposes insofar as we find that your activities with respect to your contractors p and s do not further exempt purposes and are not insubstantial we conclude that you have a substantial non-exempt purpose that precludes you from being recognized as an organization described in sec_501 accordingly you do not qualify for exemption as an organization described in sec_501 and you must file federal_income_tax returns contributions to you are not deductible under sec_170 you have the right to file a protest if you believe this determination is incorrect to protest you must submit a statement of your views and fully explain your reasoning you must submit the statement signed by one of your officers within days from the date of this letter we will consider your statement and decide if the information affects our determination your protest statement should be accompanied by the following declaration under penalties of perjury declare that have examined this protest statement including accompanying documents and to the best of my knowledge and belief the statement contains all the relevant facts and such facts are true correct and complete you also have a right to request a conference to discuss your protest this request should be made when you file your protest statement an attorney certified_public_accountant or an individual enrolled to practice before the internal_revenue_service may represent you if you want representation during the conference procedures you must file a proper power_of_attorney form_2848 power_of_attorney and declaration of representative if you have not already done so and power_of_attorney all forms and publications mentioned in this letter can be found at www irs gov forms and publications for more information about representation see publication practice_before_the_irs if you do not file a protest within days you will not be able to file a suit for declaratory_judgment in court because the service will consider the failure to protest as a failure to exhaust available administrative remedies sec_7428 provides in part that a declaratory_judgment or decree shall not be issued in any proceeding unless the tax_court the united_states court of federal claims or the district_court of the united_states for the district of columbia determines that the organization involved has exhausted all of the administrative remedies available to it within the i r s if you do not intend to protest this determination you do not need to take any further action if we do not hear from you within days we will issue a final adverse determination_letter that letter will provide information about filing tax returns and other matters please send your protest statement form_2848 and any supporting documents to this address internal_revenue_service nca constitution ave n w washington dc you may also fax your statement using the fax number shown in the heading of this letter if you fax your statement please call the person identified in the heading of this letter to confirm that he or she received your fax if you have any questions please contact the person whose name and telephone number are shown in the heading of this letter sincerely karen schiller acting director rulings and agreements


internal_revenue_service number release date index number ------------------------------------------------- ------------------------------------- -------------------------- ----------------------------------- ----------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact ----------------------- id no ------------- telephone number --------------------- refer reply to cc psi b03 plr-151513-06 date date ----------------------- ----------------------------------------------------------- ------------------------------------- ----------------------- ------------------------------------------------- ----------------------- legend x y z country d1 dear ------------- correspondence submitted on behalf of x requesting an extension of time pursuant to sec_301_9100-3 of the procedure and administration regulations for x to file an election under sec_301_7701-3 to be classified as an association_taxable_as_a_corporation this responds to a letter dated date and subsequent --------------------- ------------------ facts x was formed on d1 as a limited_partnership under the laws of country x has two partners y and z x intended to elect under sec_301_7701-3 to be classified as an association_taxable_as_a_corporation for federal tax purposes as of d1 however the election was not timely filed with the appropriate service_center plr-151513-06 law and analysis sec_301_7701-3 provides that a business_entity that is not classified as a corporation under sec_301_7701-2 or an eligible_entity can elect its classification for federal tax purposes 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 sec_301_7701-3 provides guidance on the classification of a foreign eligible_entity for federal tax purposes generally unless the entity elects otherwise a foreign eligible_entity is a partnership if it has two or more members and at least one member does not have limited_liability a foreign eligible_entity may elect to be classified other than as provided in sec_301_7701-3 or may change its classification pursuant to the rules of sec_301_7701-3 sec_301_7701-3 provides that an entity classification election must be filed on form_8832 entity classification election and can be effective up to days prior to the date the form is filed or up to months after the date the form 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 except subtitles e g h and i sec_301_9100-1 defines a regulatory election as an election whose due_date is prescribed by a regulation published in the federal_register or a revenue_ruling revenue_procedure notice or announcement published in the internal_revenue_bulletin sec_301_9100-1 through provide the standards that the commissioner will use to determine whether to grant an extension of time to make an election sec_301_9100-2 provides the rules governing automatic extensions of time for making certain elections sec_301_9100-3 provides the standards the commissioner will use to determine whether to grant an extension of time for regulatory elections that do not meet the requirements of sec_301_9100-2 requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government conclusion based solely on the facts submitted and the representations made we conclude that the requirements of sec_301_9100-3 have been satisfied accordingly x is granted an extension of time of days from the date of this letter to file form_8832 with the appropriate service_center to elect to be classified as an association_taxable_as_a_corporation for federal tax purposes effective d1 the election should be made by plr-151513-06 following the procedures set forth in form_8832 and a copy of this letter should be attached to the election a copy is enclosed for that purpose except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to x’s authorized representative sincerely s william p o'shea associate chief_counsel passthroughs special industries a copy of this letter a copy for sec_6110 purposes enclosures cc


id office uilc cca-491513-09 -------------- number release date from ---------------------- sent thu pm to -------------- cc -------------------------------------------------------------------------------------------- subject period of limitations and year carryback loss you asked whether a credit or refund is barred by the period of limitations in the following fact pattern the taxpayer timely filed form_1040 reflecting a net_operating_loss for the year ended --- ------------- on the same date the taxpayer filed a form_1045 for the year ended -------------to carryback the ------ loss to ------ under the new 5-year carryback rules the last payment on the -- ------ tax_year was made on ------------ the general_rule for limitations on credits or refunds consists of two parts the time period within which the claim must be filed and the limitations on the amount of the credit or refund these limitations are provided sec_6511 and b a taxpayer must first meet the requirements in sec_6511 which provides the time period within which the claim must be filed ie within years from the time the return was filed or years from the time the tax was paid whichever is later or if no claim is filed within years from the time the tax was paid if a taxpayer has filed the claim within the time period in a then the limitations on the amount provided in sec_6511 must be considered the limits on the amount depend on whether or not a claim was filed and if so whether the claim was filed within the 3-year period sec_6511 and d provide special rules exceptions for the application of the limitation periods in sec_6511 and b your case is controlled by the special rules in sec_6511 because it involves a net_operating_loss_carryback sec_6511 provides a special period of limitation for net_operating_loss or capital_loss carrybacks which replaces part one of the general_rule above sec_6511 provides that if a claim for credit or refund relates to an overpayment attributable to a net_operating_loss_carryback or a capital_loss_carryback in lieu of the 3-year period of limitation prescribed in subsection a the period shall be that period which end sec_3 years after the time prescribed by law for filing the return including extensions for the taxable_year of the net_operating_loss or net_capital_loss which results in such carryback or the period prescribed in subsection c in respect of such taxable_year whichever expires later the special rule for net_operating_loss carrybacks does not contain the or years from the time the tax was paid language that is in the general_rule in a thus a claim for credit or refund related to a loss carryback is timely if it is filed within years from due_date of the loss_year in the case of a claim for carryback of a net_operating_loss there is no requirement that the claim_for_refund must be filed within years from the time the tax was paid with respect to part two of the rules for limitations on credits or refund the flush language of sec_6511 provides that in the case of such a claim the amount of the credit or refund may exceed the portion of the tax paid within the period provided in subsection b or c whichever is applicable to the extent of the amount of the overpayment attributable to such carryback the amount of the credit or refund of a net_operating_loss up to the amount of the overpayment attributable to the carryback is not limited by the provisions in the sec_6511 or c thus a taxpayer can receive a credit or refund for up to the amount of the overpayment attributable to the carryback as a result in the case of a net_operating_loss arising on a form_1040 for the year ended ---------- ------------- a claim for credit or refund based on the carryback of that loss must be filed prior to ------------ assuming that the taxpayer has not secured an extension in the case of a net_operating_loss or capital_loss_carryback there is no requirement that the claim must be filed within years from the date the tax was paid further the taxpayer will be entitled to a credit or refund up to the amount of the carryback loss assuming sufficient taxable_income to offset the loss and that all other requirements for the carryback are met thus we believe that the in the above fact pattern the taxpayer's refund resulting from the net_operating_loss_carryback from ------ to -------is not barred by the period of limitations of sec_6511 or b we do not opine on whether the taxpayer meets any of the other requirements for the 5-year carryback of a net_operating_loss please call if you have any questions


internal_revenue_service number release date index number ----------------------------- ----------------------------------- ------------------------------------------- ----------------------------- department of the treasury washington dc third party communication date of communication month dd yyyy person to contact ------------------- id no ------------------ telephone number ---------------------- refer reply to cc psi b01 plr-110742-15 date date legend x ---------------------------------------------------- -------------------------------------- a --------------------------------------------- ------------------------------ b --------------------------------------------- ----------------------- c --------------------------------------------- ------------------------------- d --------------------------------------------- ----------------------------- e --------------------------------------------- ------------------------------- a b c date date ---- ---- ---- -------------------- --------------------------- plr-110742-15 date date state --------------------- ---------------------- -------------- dear this responds to a letter dated date and subsequent correspondence submitted on behalf of x by x’s authorized representative requesting permission for x to make a new s election prior to the expiration of the five-year period specified in section sec_1362 of the internal_revenue_code facts according to the information submitted x was incorporated on date in state prior to date x was taxed as an s_corporation on date x revoked its s_corporation_election on date a and b were shareholders of x owning a and b of the x shares respectively on date a and b sold b of their x shares to c d and e all eligible s_corporation shareholders after the sale a and b together owned c of the x shares law and analysis sec_1362 provides that if a small_business_corporation has made an election under sec_1362 and if such election has been terminated under sec_1362 such corporation and any successor_corporation shall not be eligible to make an election under subsection a for any taxable_year before it sec_5th taxable_year which begins after the 1st taxable_year for which such termination is effective unless the secretary consents to such election sec_1_1362-5 of the income_tax regulations provides in relevant part that the corporation has the burden of establishing that under the relevant facts and circumstances the commissioner should consent to a new election the fact that more than percent of the stock in the corporation is owned by persons who did not own any stock in the corporation on the date of the termination tends to establish that consent should be granted in the absence of this fact consent ordinarily is denied unless the corporation shows that the event causing termination was not reasonably within the control of the corporation or the shareholders having a substantial interest in plr-110742-15 the corporation and was not part of a plan of the corporation or of such shareholders to terminate the election conclusion based solely on the facts submitted and the representations made x is granted permission to elect to be an s_corporation effective date if within days from the date of this letter x submits a properly completed form_2553 election by a small_business_corporation with a copy of this letter attached to the appropriate service_center except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter specifically no opinion is expressed or implied concerning whether x otherwise qualifies as an s_corporation for federal tax purposes this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to the taxpayer’s authorized representative sincerely laura c fields laura c fields senior technician reviewer branch office of the associate chief_counsel passthroughs special industries enclosures copy of this letter copy of this letter for sec_6110 purposes


department of the treasury internal_revenue_service washington d c date cc el gl br2 gl-120400-98 uilc number release date memorandum for district_counsel illinois district from subject joseph w clark senior technical reviewer branch general litigation waiver of sec_6532 limitations_period by way of an electronic mail message on date you asked our views regarding a taxpayer’s ability to waive the sec_6532 two five year limitation period on suits brought by the service to recover erroneous refunds this document is not to be cited as precedent your concern that taxpayer agreements to extend the sec_6532 period may not be enforceable appears to stem from the absence of any express authorization for such extensions in sec_6532 this lack of any express authorization stands in sharp contrast to the express language allowing extensions found in sec_6532 which provides for the extension by the government of the two year limitation period on taxpayers’ right to file refund suits indeed the service has taken the position that the sec_6532 limitation periods on a taxpayers’ right to bring suits against the government are jurisdictional see 146_f3d_235 4th cir however the basis for claiming that the sec_6532 and c periods are jurisdictional is that the defendant in these suits is the government and the doctrine_of sovereign immunity is implicated see hull f 3d pincite 142_f3d_1459 fed cir 922_f2d_320 6th cir courts have held that the instances in which the government has allowed itself to be sued should be narrowly construed id in contrast no such doctrine is implicated under sec_6532 where the suit is brought by the government against the taxpayer indeed when applying a statute_of_limitations against the government as with sec_6532 it has been held that the statute should be strictly construed in favor of the government 66_f3d_1550 10th cir construing when a refund is made gl-120400-98 pursuant to sec_6532 following 303_us_414 when interpreting predecessor to sec_6532 court stated that the government’s right to recover funds from a person who received them by mistake and without right is not barred unless congress has clearly manifested its intention to raise a statutory barrier see also united_states v morgan u s app lexis 9th cir holding that taxpayer waived the affirmative defense that the government’s suit was barred by the sec_6532 statute_of_limitations by failing to raise the issue in the pleadings before the district_court there is also case law supporting the view that statutory authorization for waivers by taxpayers are unnecessary 282_us_277 holding that even prior to the enactment of the provision in the tax code expressly allowing waivers by the taxpayer of the limitation period on assessment the limitation periods on assessment could be waived by the taxpayer in the same fashion as other statutes of limitations are waived see also 288_us_420 further explaining that the purpose of the provision expressly allowing a taxpayer to waive the limitations_period on assessment was not to grant authority for waivers or to limit their effect but to remove any doubt as to their validity by expressly recognizing them citing h_rep_no 68th cong 1st sess p s rep no 68th cong 1st sess p but see of the restructuring and reform act of limiting the service’s ability to enter into consensual waivers with taxpayer of the sec_6502 collection limitations_period we have found only one decision addressing the precise sec_6532 issue at hand 75_f3d_1146 7th cir in national steel the taxpayer argued that its agreement to extend the sec_6532 period was ineffective because no statute authorizes the government to extend the statute_of_limitations whereas there is statutory authorization for the government to do so for refund suits brought against it the court nevertheless held that a taxpayer can waive the sec_6532 period explaining the reason for the asymmetry is obvious and is of no help to national steel a statute_of_limitations is a defense and unless jurisdictional can be waived by the defendant sec_6532 makes clear that the united_states has this normal right of defendants the right to waive the statute_of_limitations when the united_states is the plaintiff as in this case it has no occasion to waive the statute_of_limitations because the statute_of_limitations confers no right on it so there is nothing for it to waive only the defendant here the prospective defendant in a suit for the recovery_of an erroneous refund can waive the statute_of_limitations and did so no statute precludes such a waiver f 3d pincite gl-120400-98 in our view the holding in national steel is correct and it is controlling in your jurisdiction we have also coordinated with the department of justice on this issue and they are in concurrence if you have any further questions please call the attorney assigned to this matter in branch at


department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division number release date date date uil dear contact person identification_number contact number employer_identification_number form required to be filed tax years all years this is our final_determination that you do not qualify for exemption from federal_income_tax as an organization described in internal_revenue_code sec_501 recently we sent you a letter in response to your application that proposed an adverse determination the letter explained the facts law and rationale and gave you days to file a protest since we did not receive a protest within the requisite days the proposed adverse determination is now final since you do not qualify for exemption as an organization described in code sec_501 donors may not deduct contributions to you under code sec_170 you must file federal_income_tax returns on the form and for the years listed above within days of this letter unless you request an extension of time to file we will make this letter and our proposed adverse determination_letter available for public inspection under code sec_6110 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 you should follow the instructions in notice if you agree with our deletions you do not need to take any further action in accordance with code sec_6104 we will notify the appropriate state officials of our determination by sending them a copy of this final letter and the proposed adverse letter you should contact your state officials if you have any questions about how this determination may affect your state responsibilities and requirements letter cg catalog number 47632s if you have any questions about this letter please contact the person whose name and telephone number are shown in the heading of this letter federal_income_tax status and responsibilities please contact irs customer service pincite-829-1040 or the irs customer service number for businesses the irs customer service number for people with hearing impairments is if you have any questions about your sincerely holly o paz director exempt_organizations rulings and agreements enclosure notice redacted proposed adverse determination_letter redacted final adverse determination_letter letter cg catalog number 47632s department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division date date contact person identification_number contact number fax number employer_identification_number uil legend b name c name g name o state q date r date dear we have considered your application_for recognition of exemption from federal_income_tax under internal_revenue_code sec_501 based on the information provided we have concluded that you do not qualify for exemption under code sec_501 the basis for our conclusion is set forth below issues do you pass the organizational_test under sec_501 described below no for the reasons do you pass the operational_test under sec_501 described below no for the reasons facts you were formed by a_trust signed on q in the state of o based on submitted bank letter cg catalog number 47630w statements the trust was initially funded on r per your initial trust document you were formed for the following purposes to pay to or for the benefit of the widow b of her address and her unmarried children for their health education and support to the extent neither b nor her unmarried children earn sufficient income from their gainful employment and other business endeavors to operate in such a manner so as to qualify as an exempt_organization under sec_501 of the intemal revenue code of or the corresponding provisions of any subsequent federal tax laws but not as a private_foundation described in sec_509 of the code your trust also states disbursements will not be made for any luxury items but only for basic necessities such as rent food clothing medicine hospital and doctor expenses education health insurance term life_insurance and transportation for b and her unmarried children your initial application shows that you were established to help support the family of a widow b and her two unmarried children b’s husband c also referred to as g died suddenly in the same year you were created b was left alone to care for her children her estimated annual expenses to sustain her family include food rent utilities education and health insurance which far exceed her annual income c and b’s siblings and acquaintances established you a_trust to help b meet her basic needs you were named after g your trustees consist of three individuals two individuals who are friends of the family and the third who is b’s brother-in-law the trustees will make a monthly determination of b’s short term needs and a semi-annual determination of b’s long term needs they will review bank statements tax returns w- 2s 1099s bills and receipts to make determinations your budgets show estimated revenues from contributions and interest_income ranging from dollar_figure coming primarily from those who know the family or who have been made aware of the tragedy and wish to help annually you expect contributions to come from the public to dollar_figure your only listed expense is contributions paid out approximating dollar_figure you provided a listing of contributions paid out these expenses include weekly to b along with several payments to a cable company an payments of around dollar_figure electric company a mortgage company a phone company and a water company in the year following formation you paid out over dollar_figure addition to payments directly to service providers in checks written directly to b in letter cg catalog number 47630w annually solicitations will be made beginning with the local community of b a sample of a solicitation sent at the time of your formation refers to you as the g foundation it states that g had no life_insurance_policy and his family no longer has a breadwinner to support them financially and emotionally it describes you as a fund that was established for b and her children to create a solid financial foundation on which to rebuild their shattered lives during the exemption application process you modified your activities to provide assistance to b’s family and to provide assistance to other families in similar situations you indicated potential recipients will be families who have had a parent die in an accident and are supported by a surviving parent whose resources cannot meet their basic needs you will advertise this program by newspaper and word of mouth and you will contact families facing tragedies to determine whether or not they are eligible distributions will be made at least twice per year and will be based on income of potential recipients and the recipient’s expenses you have considered other people but you have not found anyone except b who meets of all aggregate contributions paid your requirements you state thatno more than out will be paid to b’s family in future years however all distributions to date have been made to or for the benefit of b you also modified your trust document during the application process you submitted a second copy of a signed trust document with a different purpose than the initial document but also dated q your first purpose paragraph in this trust was changed to state to pay to or for the benefit of the widow b of her address and her unmanried children and any other family in which a parent has died in a fatal accident for their health education and support to the extent neither the surviving parent and his or her unmarried children eam sufficient income from their gainful employment and other business endeavors you subsequently submitted an amendment to the trust in another response removing the reference to b in your purpose clause this purpose stated you were formed for the benefit of any jewish family where a parent has died in a fatal accident however the amendment was not signed nor was there any evidence that the amendment was adopted lastly you agreed to accept a prospective exemption after changes to your trust and activities were enacted letter cg catalog number 47630w law sec_501 of the code provides in relevant part exemption from federal_income_tax for corporations and any community chest fund or foundation organized and operated exclusively for religious charitable scientific literary or educational_purposes no part of the net_earnings inure to the benefit of any private_shareholder_or_individual sec_1_501_c_3_-1 of the regulations 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 of the regulations explains 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 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 of the regulations states that an organization is not organized or operated exclusively for exempt purposes unless it serves a public rather than a private interest organized or operated for the benefit of private interests such as designated individuals the creator or his family shareholders of the organization or persons controlled directly or indirectly by such private interests it is necessary for an organization to establish that it is not revrul_67_367 1967_2_cb_188 states that a nonprofit organization whose sole activity is the operation of a scholarship plan for making payments to pre- selected specifically named individuals does not qualify for exemption from federal_income_tax under sec_501 of the internal_revenue_code of in 325_us_844 the court held that the presence of a single non-exempt purpose if substantial in nature will destroy a claim for exemption regardless of the number or importance of truly exempt_purpose in wendy l parker rehabilitation foundation inc petitioner v commissioner tcmemo_1986_348 the tax_court upheld the service's position that a foundation formed to aid coma victims including a family_member of the founders was not entitled to recognition of exemption approximately of the organization’s net_income was letter cg catalog number 47630w expected to be distributed to aid the family coma victim the court found that the family coma victim was a substantial beneficiary of the foundation’s activities application of law sec_501 of the code sets forth two main tests for qualification for exempt status an organization must be both organized and operated exclusively for purposes described in sec_501 you are not described in sec_501 of the code because you are neither organized nor operated exclusively for charitable purposes instead you were formed to privately benefit b and her family in more than an insubstantial degree organizational_test the original signed trust document you provided states you were formed for the benefit of b and her children the second trust document still refers to b but expands your purposes to include other families even with this change in language this purpose clause empowers you to operate for a non-exempt purpose that results in more than insubstantial private benefit to b and her family you submitted an amendment removing the reference to b but the amendment to the trust was not signed and shows no evidence that it was adopted as a result you have not satisfied the organizational_test required by sec_1_501_c_3_-1 of the regulations operational_test you do not meet the requirements of sec_1_501_c_3_-1 of the regulations which requires you to engage primarily in activities which accomplish one or more exempt purposes since your operations more than insubstantially benefit b and her family you are not operating exclusively for charitable purposes in contradiction to sec_1_501_c_3_-1 of the regulations you are operated for the private benefit of designated individuals instead of benefitting the public as a whole the facts show you were formed with the intent of providing funds to b and her family you were named after g the spouse of b your solicitations for funding states you are a fund for b and her family created you to help the family establish a financial foundation your financial records show that to date substantially_all of your revenue has been distributed to or for the benefit of b during the exemption application process you amended your activities to include as possible recipients other widowed families who struggle to meet their basic needs due to a tragedy however you stated that you have been unable to find any other recipients aside from b even if you do actually distribute funds to other recipients in the future you still plan to give up to of your total contributions to or for the benefit of b this shows that your formation and letter cg catalog number 47630w operations provide for more than an insubstantial private benefit to b and her family these facts show you are operated for private not public benefit you are similar to the organization in described revrul_67_367 because you were formed to make distributions to a pre-selected specifically named individual the organization in the ruling you do not qualify for exemption because this form of distribution to a pre-selected individual provides more than insubstantial private benefit to the recipient even if other recipients are found in the future up to of your distributions will still be paid to b like you are like 326_us_279 in that you are not operated exclusively for exempt purposes your purposes and activities include furthering the private interests of b and her family in more than an insubstantial degree like the organization in this court case this single non-exempt purpose is substantial in nature and precludes exemption like the organization in wendy l parker rehabilitation foundation inc v the facts commissioner you were formed to benefit a specifically named individual show to date of your distributions have been paid to or for the benefit of b and her family therefore even if you do find other individuals qualified to be recipients b will still be a substantial beneficiary in addition as much a sec_25 will benefit b and her family in the future applicant’s position you maintain that you are operated exclusively for charitable purposes by providing financial assistance to widowed families who cannot meet their basic needs you provided an amended but not signed trust document amending your purposes you also amended your activities to include an expanded pool of recipients beyond b's lastly you suggested a prospective effective family to include other widowed families date based on the date changes to your operations were enacted you maintain that as a result of these changes you qualify for exemption under sec_501 of the code service response to applicant's position you do not qualify for exemption under c because your activities result in more than insubstantial private benefit to b and her family we have received no substantiation that the amendment to your trust was adopted thus the purpose for which you are organized remains to be benefiting b’s family even if the trust was signed and you met the organizational_test you would still fail the operational_test the facts show you were initially formed and operated solely to benefit a pre-selected specifically named individual you claim to have expanded your pool of recipients but letter cg catalog number 47630w have not substantiated that claim your financial records still show all distributions have been made to or for the benefit of b even if you do provide funds to individuais other than b in the future you still maintain that you will give up to of your distributions to b and the rest to other eligible recipients is b providing almost identical to the activities conducted by the organization described in wendy l parker rehabilitation foundation inc v commissioner and provides more than insubstantial private benefit to b of your distributions to conclusion based on the facts presented above you have failed both the operational_test and the organizational_test required of c organizations your organizational document shows you were created for the private benefit of b and her family in more than an insubstantial degree your operations show that you have operated for b's private benefit since formation rather than for public purposes even with your proposed changes your operations will still result in private benefit to b and her family accordingly we conclude that you do not qualify for exemption under sec_501 of the code you have the right to file a protest if you believe this determination is incorrect to protest you must submit a statement of your views and fully explain your reasoning you must submit the statement signed by one of your officers within days from the date of this letter we will consider your statement and decide if the information affects our determination if your statement does not provide a basis to reconsider our determination we will forward your case to our appeals_office you can find more information about the role of the appeals_office in publication exempt_organization appeal procedures for unagreed issues types of information that should be included in your appeal can be found on page of the statement of facts publication under the heading regional_office appeal item must be accompanied by the following declaration under penalties of perjury declare that have examined the statement of facts presented in this appeal and in any accompanying schedules and statements and to the best of my knowledge and belief they are true correct and complete the declaration must be signed by an officer or trustee of the organization who has personal knowledge of the facts your appeal will be considered incomplete without this statement if an organization’s representative submits the appeal a substitute declaration must be included stating that the representative prepared the appeal and accompanying letter cg catalog number 47630w documents and whether the representative knows personally that the statements of facts contained in the appeal and accompanying documents are true and correct an attorney certified_public_accountant or an individual enrolled to practice before the internal_revenue_service may represent you during the appeal process if you want representation during the appeal process you must file a proper power_of_attorney form_2848 power_of_attorney and declaration of representative if you have not already done so you can find more information about representation in publication practice_before_the_irs and power of attorey all forms and publications mentioned in this letter can be found at www irs gov forms and publications if you do not file a protest within days you will not be able to file a suit for declaratory_judgment in court because the internal_revenue_service irs will consider the failure to appeal as a failure to exhaust available administrative remedies code sec_7428 provides in part that a declaratory_judgment or decree shall not be issued in any proceeding unless the tax_court the united_states court of federal claims or the district_court of the united_states for the district of columbia determines that the organization involved has exhausted all of the administrative remedies available to it within the irs if you do not intend to protest this determination you do not need to take any further action determination_letter that letter will provide information about filing tax returns and other matters if we do not hear from you within days we will issue a final adverse please send your protest statement form_2848 and any supporting documents to the applicable address mail to deliver to internal_revenue_service eo determinations quality assurance internal_revenue_service eo determinations quality assurance you may fax your statement using the fax number shown in the heading of this letter you fax your statement please call the person identified in the heading of this letter to confirm that he or she received your fax if letter cg catalog number 47630w if you have any questions please contact the person whose name and telephone number are shown in the heading of this letter sincerely holly o paz director exempt_organizations rulings and agreements enclosure publication catalog number 47630w letter cg


t c memo united_states tax_court sandra l andary-stern petitioner v commissioner of internal revenue respondent docket no filed date sandra l andary-stern pro_se paul k voelker for respondent memorandum opinion beghe judge this matter is before us on petitioner’s motion for litigation and administrative costs under sec_7430 the issues for decision are whether respondent’ sec_1 unless otherwise indicated all section references are to the internal_revenue_code in effect for the years at issue and all rule references are to the tax_court rules_of_practice and continued - position was substantially justified and whether petitioner exhausted all administrative remedies available we hold that respondent’s position was substantially justified and petitioner failed to exhaust all administrative remedies available we therefore deny petitioner’s motion background on date respondent mailed a notice_of_deficiency to petitioner for the tax_year on date respondent mailed notices of deficiency to petitioner for the and tax years the address used by respondent on both these notices wa sec_451 e nellis c2134 las vegas nv the e nellis address on date respondent mailed notices of deficiency for the and tax years to petitioner pincite needles highway laughlin nv the needles highway address the notices of deficiency were based on substitute returns respondent prepared because petitioner prior to the mailing of the notices had not filed federal_income_tax returns for any of the years at issue the deficiencies were assessed between date and date on date respondent t continued procedure all references to sec_7430 are to that section as in effect when the petition was filed recorded a notice of a dollar_figure federal_tax_lien with the clark county recorder in las vegas nevada in date petitioner applied for a position as pit floor supervisor with ett gaming on date as part of the application process ett gaming purchased a consumer credit report on petitioner which petitioner reviewed the report showed the dollar_figure federal_tax_lien prior to reviewing the credit report petitioner was unaware of the federal_tax_lien on date petitioner asked for help from the taxpayer_advocate_service in removing the federal_tax_lien the taxpayer_advocate_service arranged for petitioner to prepare returns for each of the years for which respondent had assessed a deficiency petitioner prepared form sec_1040 individual_income_tax_return for and and joint returns for and on date petitioner submitted the returns to the taxpayer_advocate_service which forwarded them to the appropriate internal_revenue_service center for processing processing included abating the previous assessments and assessing the amounts shown on the returns prepared by petitioner it does not appear that petitioner submitted any payment for the taxes shown on the returns she prepared ’ the returns prepared by petitioner show much lower tax continued q4e- on date petitioner filed a petition for the through tax years ’ the court waived the filing fee on date petitioner filed a motion to dismiss for lack of jurisdiction for the tax years through petitioner’s motion alleged that the notices of deficiency were not mailed to petitioner’s last_known_address and that respondent had reason to know petitioner changed her address because of forms w-2 wage and tax statement filed by petitioner’s former employers the petition went on to state that petitioner was unable to work after her last job in until after approximately date when she applied for a position with ett gaming according to petitioner she was not hired by ett gaming because of the federal_tax_lien and the lien had prevented her from securing employment with other employers the court directed respondent to respond to petitioner’s motion by date on date respondent filed a motion for extension of time to respond stating that more time was needed for the investigation the court granted the extension and ordered respondent to respond by date continued liabilities than those prepared by respondent for example respondent’s return shows a tax of dollar_figure while petitioner’s return shows dollar_figure the petition was with respect to the years inclusive respondent’s assessments are with respect to and years - - on date respondent filed a motion to extend further the time to respond to petitioner’s motion respondent’s motion stated that respondent’s records indicated that the last return filed by petitioner prior to was for that petitioner had several address changes and that respondent was attempting to retrieve documents that would show the addresses for petitioner as of the dates the notices of deficiency were mailed the court granted respondent’s motion and ordered respondent to respond by date on date respondent sent petitioner a certificate of release of federal_tax_lien which petitioner recorded on date on date respondent filed a notice of no objection to petitioner’s motion to dismiss for lack of jurisdiction respondent’s notice stated that respondent did not object to petitioner’s motion to dismiss for lack of jurisdiction with respect to and on the ground that the notices of deficiency were not mailed to petitioner’s last_known_address respondent moved to dismiss as to and on the ground that respondent had not made any determination_of_a_deficiency in petitioner’s income_tax for either of those years on date we granted petitioner’s motion as to and on the ground that the notices of deficiency for those years were -- - not mailed to petitioner’s last_known_address on date we granted respondent’s motion to dismiss as to and on the ground that respondent had not issued a notice_of_deficiency or made any other determination that would confer jurisdiction on the court on date petitioner filed a motion for litigation and administrative costs the motion states that petitioner’s cost of litigating her claim was dollar_figure petitioner states that she borrowed dollar_figure from her parents to maintain a location and the ability to litigate and that she incurred dollar_figure in postage photocopying and typewriter costs on date the court vacated its order of dismissal for lack of jurisdiction so that the disposition of petitioner’s motion for litigation and administrative costs would be included in the decision entered in the case pursuant to rule f on date the court filed a letter from petitioner as petitioner’s motion to restrain assessment and collection petitioner’s motion states that she received notices of intent to levy for and without having received notice that any_tax was due and owing on date petitioner filed a first supplement restating much of what was in her original motion to restrain assessment and collection and on date she filed a second supplement the second supplement - states that petitioner received a notice_of_intent_to_levy for when her return showed she was entitled to a refund on date petitioner filed a third supplement which states that petitioner had not received responses to repeated phone calls to respondent regarding the proposed levies on date petitioner filed a fourth supplement in which petitioner objects to the imposition of a penalty and interest on her tax_liability on date respondent filed a response to petitioner’s motion for litigation and administrative costs respondent’s response states that respondent agrees that petitioner substantially prevailed but contends that respondent’s position was substantially justified and that petitioner failed to exhaust all administrative remedies on date respondent filed a response to petitioner’s motion to restrain assessment and collection respondent stated that petitioner’s motion was with respect to and respondent informed the court that the deficiencies previously assessed for and were abated that respondent assessed the amounts shown on joint returns of petitioner and her husband for and and that the notice_of_intent_to_levy was with respect to the amount shown on petitioner’s return plus penalties and interest respondent --- - stated that the court does not have jurisdiction to enjoin assessment and collection because no deficiency within the meaning of sec_6211 had been asserted on date petitioner filed a response to respondent’s response to petitioner’s motion for administrative and litigation costs petitioner’s response states that respondent’s position was not substantially justified because respondent sent the notices of deficiency to incorrect or fictitious addresses on date petitioner filed an objection to respondent’s response to petitioner’s motion to restrain assessment and collection petitioner said she never received a notice of an amount owed for and petitioner asserted respondent withheld the notices as a way to collect penalties and interest on date the court denied petitioner’s motion to restrain assessment and collection as supplemented in denying petitioner’s motion we stated that our jurisdiction to enjoin assessment and collection is limited to matters over which we have jurisdiction we concluded that because we lack jurisdiction of the matters set forth in the petition filed in this case we have no authority to enjoin the assessments pertaining to petitioner’s and taxable years discussion the driving force of petitioner’s prayers for relief seems to be the adverse effect of the tax_lien on her ability to obtain employment in the nevada gaming industry it is common practice in the nevada gaming industry to run credit checks on prospective employees who will be handling large amounts of cash and to hire only those whose credit is unblemished ett gaming among others who checked petitioner’s credit apparently regarded the federal_tax_lien disclosed by the report as a blemish petitioner who has worked in the nevada gaming industry since blames the adverse credit report for her inability to find work and we have no reason to believe otherwise although petitioner’s prayers for relief are wrapped in a request for administrative and litigation costs petitioner’s motion papers suggest she is actually complaining about consequential damages for which the tax law provides no relief whatever the source of petitioner’s request she cannot prevail in this proceeding before analyzing petitioner’s request for costs under sec_7430 and setting forth the technical grounds for denying her motion we explain petitioner’s role in causing her predicament -- - i the greatness of our nation is in no small part due to the willingness of our citizens to honestly and fairly participate in our tax collection system 68_tc_895 the method by which citizens complete the initial step of their annual participation in our tax collection system is of course to self-assess their income_tax liabilities by filing income_tax returns and by paying the liabilities shown thereon see reif v commissioner 77_tc_1169 in the case at hand the originating cause of petitioner’s problems is her failure_to_file timely federal_income_tax returns for the years and even though petitioner was delinguent in not filing returns and paying her tax_liabilities her employers and other third parties filed information returns indicating she had earned wages and received unemployment_compensation and gambling winnings from the information returns respondent concluded that petitioner was required to file returns for the years at issue and undertook to prepare substitute returns on her behalf the commissioner’s authority to prepare substitute returns derives from sec_6020 which provides that if any person fails to make any return required by any internal revenue law or regulation the secretary shall make such return from his own knowledge and from such information he can obtain through testimony or otherwise petitioner points out that the tax_liabilities on the returns she belatedly prepared and filed are substantially less than those prepared by respondent and that some of her returns even show refunds by focusing on what respondent did or should have done petitioner has lost sight of her responsibility to tell respondent what her tax_liability was for and and to make payments to the extent her liabilities had not been satisfied by withholding at the source ’ in any event the above-quoted language of sec_6020 b makes clear that the commissioner is not charged with preparing a perfectly accurate return the commissioner is required only to do the best he can with the information available to him in the absence of a return prepared and filed by the taxpayer a substitute return prepared by the commissioner gives rise to a deficiency equal to the tax_liability shown on the return and the deficiency procedures must be followed prior to assessment 118_tc_155 when petitioner did file her tax returns on date she did not include a payment for at least three of the years at issue and consequently respondent assessed the amounts shown on petitioner’s returns plus penalties for late filing and failure to pay as well as interest it is unclear whether petitioner has paid her tax_liabilities for any of the years at issue respondent therefore sent notices of deficiency to petitioner for each of the years a substitute return was prepared when a notice_of_deficiency is mailed the taxpayer ha sec_90 days to file a petition with the court for redetermination of the deficiency sec_6213 during the 90-day period the commissioner is precluded from assessing a deficiency or instituting collection proceedings until the expiration of the 90-day period id if a petition has been filed the restrictions on assessment and collection are in effect until the decision of the court has become final id in the case at hand petitioner did not file a petition within the 90-day period and respondent proceeded with assessment and collection respondent assessed the amounts shown on the substitute returns after the 90-day period expired assessment is effected by the recording of the taxpayer’s liability in the appropriate office of the commissioner sec_6203 after recording the taxpayer’s liability respondent may proceed with collection by giving notice to the taxpayer liable for the unpaid tax stating the amount and demanding payment such notice_and_demand is to be given as soon as practicable and within days of the assessment sec_6303 the so-called notice as discussed in connection with our analysis of petitioner’s request for administrative and litigation costs infra petitioner did not file a petition in response to any of the notices of deficiency respondent concedes that he did not mail the notices to petitioner’s last_known_address and demand is reguired to be sent to the taxpayer’s last_known_address id when a taxpayer fails to pay the amount assessed within days of the notice_and_demand a federal_tax_lien arises anda notice of the lien may be filed to inform potential purchasers of the taxpayer’s property or creditors of the taxpayer that the federal government has an interest in the taxpayer’s property sec_6321 sec_6323 sec_6331 in her motion papers in this proceeding petitioner has repeatedly complained that she never received notice of any_tax liability and only discovered the tax_lien when a prospective employer ran a credit check the thrust of petitioner’s argument is that if she did not receive notice_and_demand a statutory prerequisite to collection was missing and collection could not go forward sec_6321 indeed collection did not go forward after petitioner complained to respondent about the tax_lien respondent abated the amounts assessed pursuant to the substitute returns assessed the amounts shown on the returns prepared by petitioner and removed the lien petitioner did not discover the federal_tax_lien until years after it was filed and she blames it for her inability to ‘in the irs restructuring and reform act of rra publaw_105_206 112_stat_746 congress enacted sec_6320 which provides that respondent is required to give notice within business days of the filing of the notice of lien the notice is required to be left at the taxpayer’s continued - - get a job in the nevada gaming industry however the lien and petitioner’s adverse credit report may have contributed to her inability to secure employment the originating cause of petitioner’s problems was her failure to fulfill her obligations to prepare and file returns for the years at issue and to pay her tax_liabilities il to be entitled to an award of litigation costs under sec_7430 a taxpayer must among other things be the prevailing_party not have unreasonably protracted the proceedings and have exhausted all administrative remedies available in the internal_revenue_service sec_7430 and b respondent contends that petitioner does not satisfy the first and third requirements we agree with respondent to be a prevailing_party the taxpayer must substantially prevail with respect to either the amount in controversy or the most significant issue or issues presented and satisfy the applicable net_worth regquirement sec_7430 a however the taxpayer is not considered the prevailing_party if the commissioner can establish that his position in the proceedings continued dwelling or place of business or sent to the taxpayer’s last_known_address sec_6320 because notice of the tax_lien in the case at hand was filed prior to the effective date of rra petitioner is not entitled to its protections - - was substantially justified sec_7430 b respondent concedes that petitioner prevailed with respect to the issues presented and meets the applicable net_worth requirement but contends that his position was substantially justified whether respondent’s position was substantially justified is to be resolved by applying a reasonableness standard 487_us_552 89_tc_79 affd 861_f2d_131 5th cir respondent’s position is reasonable if the position had a reasonable basis in both fact and law 939_f2d_874 9th cir affg in part and revg in part tcmemo_1989_390 the fact that respondent concedes a case does not automatically mean that his position was not substantially justified 92_tc_760 in determining the reasonableness of respondent’s position the court may consider all relevant factors 88_tc_1329 to decide whether respondent’s position was substantially justified the court must first identify when respondent is considered to have taken a position and then decide whether the position taken from that day forward was substantially justified in general we bifurcate our analysis and consider separately the positions taken in the administrative_proceeding and the judicial proceeding huffman v commissioner 978_f2d_1139 9th - cir affg in part revg in part and remanding tcmemo_1991_144 respondent ordinarily takes a position in an administrative_proceeding when he issues a statutory_notice_of_deficiency see sec_7430 b in a court_proceeding respondent takes a position when he files an answer to a petition huffman v commissioner supra in the case at hand the position we scrutinize against the substantial justification standard in both the administrative and court proceedings is whether the notices of deficiency were mailed to petitioner’s last_known_address respondent first took the position that the notices of deficiency were sent to petitioner’s last_known_address when he mailed the notices sec_7430 b petitioner contends in her motion papers that the notices of deficiency were sent to incorrect or fictitious addresses petitioner states that the e nellis address to which respondent mailed notices of deficiency for and was incorrect on two counts first according to petitioner there is no fe nellis in las vegas the street petitioner lived on wa sec_451 n nellis second the unit on the address used by respondent c2134 was incorrect petitioner lived in unit petitioner also points out that the needles highway address to which respondent mailed the and notices was incorrect according to petitioner respondent used mailbox number when the correct number was in the notice of no objection to petitioner’s motion to dismiss respondent conceded that the notices of deficiency were not mailed to petitioner’s last_known_address petitioner contends that mailing the notices of deficiency to the wrong addresses was unreasonable because respondent should have been able to glean her correct addresses from various forms w-2 filed by her former employers ’ in determining a taxpayer’s last_known_address we have repeatedly held that the burden is on the taxpayer to provide the commissioner with clear and concise notification of her new address 83_tc_626 82_tc_618 while the commissioner must exercise reasonable diligence in ascertaining the taxpayer’s correct address administrative realities demand that the burden necessarily falls upon the taxpayer to keep respondent informed of his or her correct address or accept the consequences 62_tc_367 two relevant factors that influence our decision are ‘petitioner’s motion papers reveal that she frequently changed addresses and employers two forms w-2 filed by former employers for have different addresses merchant sparks nv and s virginia g12-243 reno nv a form_w-2 filed in by another employer shows petitioner’s address as needles laughlin nv finally a form_w-2 also filed by a different employer shows petitioner’s address as meadowood reno nv -- - petitioner’s own unreasonable conduct the failure_to_file returns or to otherwise notify respondent of any address changes and respondent’s conduct throughout the course of the administrative_proceeding which we find was reasonable petitioner states that she had no knowledge of any taxes owed and irs did nothing to inform her of any taxes owed it bears repeating that our scheme of taxation is premised on self- assessment through the filing of returns sloan v commissioner t cc affd 53_f3d_799 7th cir and it is the taxpayer’s obligation to inform the commissioner of taxes owed petitioner emphasizes that the forms w-2 filed by her former employers had the correct addresses it therefore follows that petitioner received the forms w-2 and that petitioner knew or should have known she was required to file returns by failing to file returns as the law requires her to do or to otherwise notify respondent of her address changes petitioner bears much of the responsibility for not having received the notices of deficiency respondent acted reasonably when petitioner brought to his attention that she had not received the notices of deficiency when petitioner contacted the taxpayer_advocate_service in date the period of limitations on assessment had not started to run because petitioner had not filed returns sec_6501 accordingly respondent could have reissued the notices of deficiency to petitioner and forced her to litigate her tax_liabilities instead respondent helped petitioner to prepare the returns she belatedly filed on date abated the amounts previously assessed and assessed the amounts petitioner showed on the returns she prepared at no point in the administrative process did respondent maintain that the notices of deficiency were sent to petitioner’s last_known_address in the proceedings before the court respondent was substantially justified respondent formally took a position in the proceedings before the court when he filed the notice of no objection to petitioner’s motion to dismiss for lack of jurisdiction see 930_f2d_759 9th cir for purposes of sec_7430 and the question whether respondent’s position was substantially justified respondent is given a reasonable period of time to resolve factual issues after receiving all relevant information sokol v commissioner t c pincite n johnson v commissioner tcmemo_1990_542 in the matter before us respondent never took the position that the notices of deficiency were mailed to petitioner’s last_known_address respondent did not file an answer disputing petitioner’s contention or otherwise contend that the notices of deficiency were mailed to petitioner’s last_known_address respondent investigated the matter and - - subsegquently conceded that he could not establish that the notices of deficiency were mailed to petitioner’s last_known_address respondent’s concession took the form of a notice of no objection to petitioner’s motion to dismiss with respect to all of the years for which a notice_of_deficiency was issued respondent’s position was not unreasonable respondent also contends that petitioner did not exhaust all administrative remedies available sec_7430 b provides that a judgment for reasonable_litigation_costs shall not be awarded unless the court determines the party has exhausted all administrative remedies available to her within the internal_revenue_service according to respondent at the time petitioner filed her petition she had been granted administrative reconsideration making the filing of a petition entirely unnecessary we agree with respondent in the case at hand petitioner initiated the administrative_proceeding when she contacted the taxpayer_advocate_service on date requesting relief from assessments the taxpayer’s advocate arranged for petitioner to be given audit_reconsideration which included processing the late-filed returns petitioner filed on date abating the amounts previously assessed and assessing the amounts shown on petitioner’s returns - - petitioner filed her petition in the case at hand on date only days after she filed her returns for processing twenty-one days is not a reasonable_time for respondent to have completed the administrative_proceeding initiated by petitioner respondent was required to process petitioner’s returns abate the amounts previously assessed assess the amounts shown by petitioner and credit petitioner’s accounts for the amounts that were assessed pursuant to the returns prepared by respondent by failing to allow a reasonable_time for respondent to process her returns and adjust her accounts before filing a petition petitioner failed to let the administrative_proceeding run its course therefore we hold that petitioner failed to exhaust an administrative remedy that was available til for completeness we address the reasonableness of the litigation costs claimed by petitioner sec_7430 c provides that the term reasonable_litigation_costs includes reasonable court costs and based on prevailing market rates for the kind or quality of services furnished the reasonable expenses for expert witnesses and reasonable fees paid for the services of attorneys petitioner states that she borrowed the dollar_figure from her parents to maintain a location and the ability to litigate it -- - is not clear from that vague statement what costs petitioner incurred and is seeking to recover petitioner has been pro_se throughout the proceedings and has not paid for the services of any attorneys it is well settled that a taxpayer cannot recover attorney’s fees for representing herself even if she happens to be an attorney which petitioner is not 87_tc_838 if it is living_expenses for which petitioner seeks reimbursement living_expenses are not costs for which sec_7430 allows recovery sec_7430 does not provide for the recovery_of a taxpayer’s living_expenses she would have incurred those expenses whether she was contesting her tax_liability or not petitioner’s lack of income from a job to pay living_expenses and the resulting need to borrow from her parents the possible adverse effect of the tax_lien on her credit and ability to obtain employment identify the so-called consequential damages for which neither sec_7430 nor any other relevant statutory provision allows relief see 986_f2d_12 2d cir petitioner has also requested dollar_figure for long-distance calls to respondent’s ogden utah and phoenix arizona offices postage photocopying and typewriter rental costs however petitioner provided no receipts or other substantiation and no allocation of the total cost among the various items had petitioner prevailed on the substantially justified and - - administrative remedies issues we might well have allowed a recovery_of some portion of the dollar_figure bearing heavily upon petitioner for her failure to itemize and substantiate her costs see o’ bryon v commissioner tcmemo_2000_379 applying the doctrine_of 39_f2d_540 2d cir to an award of costs under sec_7430 see also malamed v commissioner tcmemo_1993_1 in any event petitioner has not prevailed and she is not entitled to recover any costs under sec_7430 in light of the foregoing an appropriate order and order of dismissal for lack of jurisdiction will be entered