internal_revenue_service issued date number release date cc el gl br1 gl-709823-98 uilc memorandum for north central district_counsel from subject alan c levine chief branch general litigation continuous_levy gl-709823-98 we are responding to your date inquiry this document is not to be cited as precedent legend taxpayer a agreement a transit company a period a issue whether payments issued to an independent_contractor who provides both equipment and labor are considered to be continuous payments of salary and wages under sec_6331 facts the taxpayer taxpayer a entered into an agreement a with transit company a to lease his tractor to them taxpayer a agreed to take all precautionary measures to maintain the tractor and to provide the operator of the tractor the contract did not provide that taxpayer a was to be the driver of the tractor however taxpayer a was the sole operator of the tractor for the relevant period of time the contract provided that taxpayer a would be paid in the following manner transit company a paid taxpayer a within period a gl-709823-98 of the receipt of his travel logs taxpayer a was sporadically given advances then after he submitted his travel logs he would receive a settlement payment the contract did not provide for the percentage of payments allocated for the lease and the driving services the internal_revenue_service hereinafter service served two notices of levy on transit company a one levy form 668w was a continuing_levy on the salary and wage portion of the contract that allegedly resulted from taxpayer a driving services and the other levy form 668a was on the portion earned from the lease payments transit company a failed to honor both levies as to the 668a levy transit company a asserted that it did not owe any money to taxpayer a as to the 668w levy transit company a alleged that taxpayer a was not its employee therefore it was not obligated to comply with the levy you requested us to review your position as to whether a suit should be brought against transit company a for its failure to honor the 668w levy law and analysi sec_1 levy 668a sec_6332 provides that any person in possession of property or rights to property subject_to levy upon which a levy has been made shall upon demand of the secretary surrender such property or rights to the secretary except such part of the property or rights as is at the time of such demand subject_to an attachment or execution under any judicial process courts recognize two defenses for the failure to honor a levy the party did not possess any property or rights to property of the taxpayer or the property was subject_to a prior attachment or execution see eg 929_f2d_249 6th cir transit company a raised the former defense in the present case it alleges that it was not in possession of the taxpayer’s property at the time of the levies revrul_55_210 recognizes that while a federal lien for unpaid taxes and the notice_of_levy based on such lien reaches a taxpayer’s unqualified fixed_right to receive periodic_payments or distributions in property the notice_of_levy does not attach to the taxpayer’s right to property if the right is contingent upon the performance of future services see also 617_f2d_1293 8th cir recognizing that an unqualified contractual right to receive property is itself a property right subject_to seizure by levy the treasury regulations further define this position sec_301_6331-1 states e xcept as provided in sec_301_6331-2 with regard to a levy on salary or wages a levy extends only to property possessed and obligations which exist at the time of the levy obligations exist when the liability of the obligor is fixed and determinable although the right to receive payment thereof may be deferred until a later date the service steps into the shoes of the gl-709823-98 taxpayer and can acquire no greater rights to property than the taxpayer has 929_f2d_249 6th cir because the irs ‘steps into the taxpayer’s shoes’ and acquires whatever rights the taxpayer has with respect to the property the irs can succeed to rights no greater than those the taxpayer possesses id pincite if taxpayer a’s right to payment at the time of the levy was not fixed and determinable then transit company a’s defense for failing to honor the 668a levy will prevail in 69_f3d_394 9th cir the service lost a ninth circuit case discussing the concept of fixed and determinable in tull the ninth circuit held that an auctioneer did not have a fixed and determinable obligation to the taxpayer even though there was a signed auction contract id the court reasoned that even though the auctioneer had an obligation to attempt to sell the property the fact that both the buyer and the price were undetermined makes the obligation unfixed and undetermined id pincite however the government prevailed on this issue in another ninth circuit opinion in 51_f3d_883 9th cir a bankruptcy court entered an order allowing the trustee to pay the taxpayer an administrative expense of dollar_figure although it was not to be paid until later the ninth circuit found that the service’s levy on the trustee was fixed and determinable because both the existence of the claim and the amount of the claim had been established in making this conclusion the court differentiated between the words determined and determinable stating that determinable only requires that the sum be capable of precise measurement in the future hemmen f 3d pincite citing accord reiling v united_states u s tax cas cch p9269 n d ind concluding that an obligation is ‘determinable’ when contractual performance has been completed despite continuing litigation over the amount due in hemmen the obligation became determinable when the bankruptcy court approved the proposed distribution the court ruled that the fixed requirement is fulfilled when the underlying performance is completed in the instant case the underlying performance is the contract between transit company a and taxpayer a when the 668a levy was served on transit company a transit company a owed no payments to taxpayer a levy 668w sec_6331 encompasses an exception to the rule that a levy only attaches to obligations that exist at the time the notice_of_levy is served it provides that the effect of a levy on salary or wages payable to or received by the taxpayer shall be continuous from the date such levy is first made until such levy is gl-709823-98 released under sec_6343 in the instant case if part of the payments made to taxpayer a is considered to be salary or wages then the levy would be continuous and would attach to this obligation that transit company a owed taxpayer a in turn transit company a would not have a defense for failing to honor the levy you and transit company a are in agreement that taxpayer a is an independent_contractor we agree with your interpretation of their relationship however this relationship does not prevent the funds paid to taxpayer a from being salary or wages as discussed in your memorandum in the only case examining the applicability of sec_6331 to independent contractors the third circuit held that a levy served on an insurance_company was continuous in nature because the commissions paid to the salesman constituted salary or wages 49_f3d_1020 4th cir the instant case is distinguishable from jefferson-pilot because the treasury regulations specifically provide that commissions are to be considered salary or wages however the regulations do not provide for the situation in the instant case sec_301_6331-1 under the contract any qualified operator could have served the position that taxpayer a did wages is defined as a compensation given to a hired person for his or her services and salary as a reward or recompense for services performed black’s law dictionary 6th ed proceeds taxpayer a would receive from the work done if someone else operated the tractor would not be salary or wages simply because taxpayer a did the work himself rather than hiring another operator does not change the character of the payments he received from lease payments to lease payments and wages also the sole fact that the payments were made periodically does not qualify them as salary or wages see in re 100_br_85 bankr m d fla concluding that there was no correlation between the concept of salary and wages and the concept of disability retirement benefits except that each may be received on a fixed and periodic basis fifty-percent penalty under sec_6332 sec_6332 provides for a penalty for anyone who fails to surrender any property subject_to a levy unless the person failing to honor the levy can show reasonable_cause for his or her failure there is reasonable_cause in refusing to comply with a levy if there is a bona_fide dispute over the service’s legal right to gl-709823-98 levy upon the property in concern 494_f2d_919 2nd cir 538_f2d_1101 5th cir cert_denied 430_us_945 however reasonable_cause does not include a clearly erroneous view of the law stubbornly adhered to after investigation should have disclosed the error 861_f2d_954 reh’g denied u s app lexis 6th cir quoting the dissent in sterling national bank f 2d pincite even if the decision was made to file suit against transit company a for its failure to honor the 668-w levy we strongly agree with you that the penalty under sec_6332 is not appropriate not only is jefferson pilot the sole legal authority applying sec_6331 to independent contractors but as is apparent by our conflicting legal interpretations of the given facts neither view is clearly erroneous if you decide to recommend this penalty when your letter to department of justice comes through this office we will again review the appropriateness of the penalty and perhaps we will find that a proper foundation has been established for the penalty conclusion if you have any further questions please call


department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division apr uniform issue list legend taxpayer a decedent b irac custodian d trust e iraf dear this is in response to your request dated date as supplemented by correspondence dated date submitted on your behalf by your authorized representative in which you request a ruling that ira f formerly ira c will not be treated as an inherited ira within the meaning of sec_408 of the internal_revenue_code the code with respect to you and that you be permitted to roll over the proceeds of ira f into an ira maintained in your own name the following facts and representations have been submitted under penalty of perjury in support of the ruling requested taxpayer a is the surviving_spouse of decedent b who died on date not having attained at his death decedent maintained an individual_retirement_account ira c with custodian d decedent b had executed a beneficiary designation form for ira con date in which he named trust e as the primary beneficiary trust e was established by taxpayer a decedent b's spouse on date pursuant to article one sec_1 of trust e taxpayer a and decedent were the initial trustees of trust e article fifteen sec_3 of trust e provides that upon decedent b's death taxpayer a becomes the sole trustee of trust e taxpayer a represents that she is currently acting as sole trustee of trust e pursuant to article four of trust e during her lifetime taxpayer a as owner of trust e has the express and total power to control and direct payments add or remove trust property and amend or revoke trust e pursuant to article five of trust e taxpayer a has the power to exercise without approval of any trustee or any beneficiary all rights powers options and privileges with respect to any retirement_plan or annuity or any other third-party beneficiary contract made payable to trust e taxpayer a represents that on april16 ira c was transferred via trustee to-trustee transfer to ira f an ira for the benefit of trust e as the owner and sole trustee of trust e it is taxpayer a's intention to roll over ira f into one or more iras set up and maintained in her own name based on the facts and representations you requested the following rulings taxpayer a as decedent b's spouse will be treated as having acquired ira f directly from decedent for purposes of sec_408 of the code and not from trust e ira f will not be treated as an inherited ira within the meaning of sec_408 of the code with respect to taxpayer a taxpayer a is eligible to roll over the distribution from ira f to an ira established and maintained in her own name pursuant to sec_408 of the code provided that the rollover occurs no later than the sixtieth day following the day the proceeds of ira fare distributed taxpayer a will not be required to include in her gross_income for federal_income_tax purposes for the calendar_year in which the distribution and rollover occur the amount distributed from ira f and timely rolled over into an ira established and maintained in taxpayer a's name sec_408 of the code provides that except as otherwise provided in sec_408 any amount_paid or distributed out of an ira shall be included in gross_income by the payee or distributee as the case may be in the manner provided under sec_72 of the code sec_408 of the code defines and provides the rules applicable to ira_rollovers sec_408 of the code provides that sec_408 of the code does not apply to any amount_paid or distributed out of an ira to the individual for whose benefit the ira is maintained if the entire amount received including money and any other i property is paid into an ira for the benefit of such individual not later than the 60th day after the day on which the individual receives the payment or distribution or the entire amount received including money and any other ii property is paid into an eligible_retirement_plan other than an ira for the benefit of such individual not later than the 60th day after the date on which the payment or distribution is received except that the maximum amount which may be paid into such plan may not exceed the portion of the amount received which is includible in gross_income determined without regard to sec_408 sec_408 of the code provides that sec_408 of the code does not apply to any amount described in sec_408 of the code received by an individual from an ira if at any time during the 1-year period ending on the day of such receipt such individual received any other amount described in sec_408 of the code from an ira which was not includible in gross_income because of the application of sec_408 of the code sec_408 of the code provides in summary that the rollover rules of sec_408 do not apply to inherited iras sec_408 of the code provides that the term inherited ira means an ira obtained by an individual other than the ira owner's spouse as a result of the death of the ira owner sec_1_408-8 of the income_tax regulations question and answer q a- provides that a surviving_spouse of an ira owner may elect to treat the spouse's entire_interest as a beneficiary in an individual's ira as the spouse's own ira in order to make this election the spouse must be the sole beneficiary of the ira and have an unlimited right to withdraw amounts from the ira if a_trust is named as beneficiary of the ira this requirement is not satisfied even if the spouse is the sole beneficiary of the trust generally if the proceeds of a decedent's ira are payable to a_trust and are paid to the trustee of the trust who then pays them to the decedent's surviving_spouse as the beneficiary of the trust the surviving_spouse is treated as having received the ira proceeds from the trust and not from the decedent's ira thus generally a surviving_spouse shall not be eligible to roll over the distributed ira proceeds into his or her own ira however the general_rule will not apply in a case where the ira has not yet been distributed and the surviving_spouse as the sole trustee of the decedent's trust has sole authority and discretion under trust language to pay the ira proceeds to him her in such a case when the surviving_spouse actually receives the ira proceeds the surviving_spouse may roll over the amounts into an ira set up and maintained in his her name within days in this case taxpayer a is the owner of trust e furthermore taxpayer a retains the lifetime power_to_revoke trust e and has the power to distribute to herself any portion or all of the property of trust e decedent designated trust e as the beneficiary of ira c upon the death of decedent ira c was transferred to ira f for the benefit of trust e as noted above taxpayer a was decedent 8's surviving_spouse taxpayer a as owner and sole trustee of trust e intends to distribute ira f to herself as owner of trust e and then roll over the distribution to one or more iras set up and maintained in her own name therefore with respect to your ruling requests we conclude as follows taxpayer a as decedent b's spouse will be treated as having acquired ira f from decedent b for purposes of sec_408 of the code and not from trust e ira f will not be treated as an inherited ira within the meaning of sec_408 of the code with respect to taxpayer a taxpayer a is eligible to roll over a distribution of the proceeds of ira f into an ira set up and maintained in her own name as long as the rollover of the distribution occurs no later than the 60th day from the date the distribution is received from ira f for the calendar_year in which the distribution and rollover occur taxpayer a will not be required to include in her gross_income for federal_income_tax purposes the amount distributed from ira f and timely rolled over into one or more iras established and maintained in taxpayer a's name this letter_ruling assumes that ira f formerly ira c met the requirements of sec_408 of the code at all relevant times and that trust e is valid under applicable state law it also assumes that the rollover ira to be set up by taxpayer a will meet the requirements of sec_408 of the code at all relevant times no opinion is expressed as to the tax treatment of the transaction described in this ruling under the provisions of any other section of either the code or regulations which may be applicable this letter is directed only to the taxpayer who requested it sec_6110 of the code provides that it may not be used or cited as precedent - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - a copy of this letter is being sent to your authorized representative pursuant to a power_of_attorney on file in this office if you wish to inquire about this ruling please contact phone at se t ep ra t1 by please address all correspondence to or fax at i d sincerely yours carlton a watkins manager employee_plans technical group enclosures deleted copy of ruling letter notice of intention to disclose cc


department of the treasury internal_revenue_service washington d c ponerwision number release date date date uil contact person identification_number contact number employer_identification_number 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 the letter letter in response to your application that proposed an adverse determination 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 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 you must file federal 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 the instructions in notice further action if you disagree with our proposed deletions you should follow if you agree with our deletions you do not need to take any 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 catalog ci nunber -2005 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 if you have any questions about your federal_income_tax status and responsibilities please contact irs customer service pincite-829-1040 or the irs customer service number for businesses irs customer service number for people with hearing impairments is the sincerely robert choi director exempt_organizations rulings agreements enclosure notice redacted proposed adverse determination_letter redacted final adverse determination_letter tter cg og number department of the treasury internal_revenue_service washington d c contact person identification_number contact number fax number employer_identification_number uil index date date legend b name of the entity c article of the state non-profit corporation act name of entity city state state g name of federal_agency city state name of individual address of website k name of individual l name of individual name of individual m chapter of state statutes code o address dear applicant 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 ‘our conclusion is set forth below the basis for have you met your burden_of_proof that you are formed to serve a public rather than a private interest do you seek recognition of tax exemption under section c of the code in order to obtain public contributions to advance a private purpose does the manner in which your activities have been carried out demonstrate that you are not operated exclusively to further a tax exempt_purpose under sec_501 c of the code issues fact you b were incorporated pursuant to c on date incorporation listed the initial registered agent as d of e article of your articles of incorporation stated that the corporation is organized exclusively for charitable and educational_purposes within the meaning of sec_501 of the internal_revenue_code of as amended these purposes including person homeless criminal justice persons and children the corporation shall engage in all activities necessary to accomplish but not limited to caring and housing battered mothers elderly article of your articles of you did not submit a narrative description of activities with your form_1023 application_for recognition of tax exempt status under sec_501 c of the internal_revenue_code effort to ascertain your specific programs and manner of operation several information letters were sent to you including the letters dated date date date date date and date to request for additional information in your responses you indicated that you had no organizational minutes or bylaws according to alist of your missions and objectives submitted with your response dated date your stated missions are in an to educate adolescence about violence to provide education to the disabled to teach high risk children computer skills reading skills and communication skills to provide youth sports and after-school programs to promote the well-being of teenage pregnant mothers and battered women to provide education on substance abuse and counseling to ex-offenders your stated objectives are ‘ to create andlor develop affiliation with institutions known to have sound educational programs in democratic principles and ethics to educate potential young leaders in america about the values of democracy and its impact on human development and about the interwoven relationship that exists between democracy freedom and free enterprise to develop programs that will mobilize potential young leaders high school college graduates to participate in disseminating democratic principles throughout the continent of america to seek encourage and support credible and qualified democratic clubs and organizations to help the foundation in monitoring and enhancing democratic procedures during electoral politics toencourage solicit and strongly support programs and public policies and government action on matters of local state and national significance that will further strengthen and vertically integrate the basic principles of democracy in the continent of america to seek total support from government private and public entities from all democratic countries in the western hemisphere to develop internship and recruiting programs that will foster the political education and political participation among the people of each country toestablish newsletters with timely information on each country that will address and educate the people about its current economic social and political issues and changes to identify and seek the help of an established network of experts to train young entrepreneurs how to implement economic policies that will encourage economic growth job creation and expanded opportunity for the people to teach courses designed through the organization's leadership training program to emphasize the significance and the continued expansion of freedom democracy and free enterprise in america your list of missions and objectives concluded with a statement that funds would be solicited to support any of the listed activities and that the above listed activities were not all inclusive you also indicated that your activities will be within the realms of your articles of incorporation and the guidelines of sec_501 of the code you further provided that ‘we will acquire persons with training skills that ha ve prior experience and license to invoke what the program requires ijn accordance with the rfp request for proposal and make the necessary tools and man power available programs will cover the requirement of a rfp of the funding facility copy of a plan rfp that we can comply with if an ir sec_501 is issued prior to our submission of a proposal two template samples of request for proposals rfp were included with the response one document was a rfp for independent commissioning provider services another rfp was to apply and qualify as an irrigation consulting firm these consulting contract documents do not appear to have any relevance or connections to the accomplishment of your stated missions or objectives in addition you provided two pages from grants gov which described grant opportunities for approximately three million dollars to fund educational programs in short our we are attaching a when questioned about the undefined nature of your described activities which are dependent on whatever grants you are able to obtain through a request for proposal rfp you presented a new program description which included your goal to provide education on hiv aids this hiviaids program will also be performed in accordance with the rfp furthermore your new program description listed many of the same missions and objectives previously submitted you further explained that our request for an advance_ruling will assist in our acquiring funding if one of the foundations we have sought funds from in fact wants to fund us without the c determination_letter this organization will not be funded regardless of whether our activities will be based on future grants funding and or grant request however you indicated that your board members were k land m revised form_1023 received on date that none of your officers or directors are related to each other through forward on your board members explained that the president and vice president are adjusters for g the compensation_for your president director is dollar_figure per year and for your secretary is dollar_figure per year family or business relationships you provided on page of the additional information put your budgets are as follows _ ee contributions gross_receipts total revenue fundraising expenses compensation- directors salaries occupancy professional fees other expenses total expenses based on your budgets aside from possibly the other expenses category no direct expenditures were allocated for the operation of any educational program you indicated that your gross_receipts included income from the fees for services you provide to other nonprofit your facility is organizations located at o you described your facility as a metal building install on the property you also stated that the property is large enough for basketball courts and a baseball diamond you stated that your service fees are based on a sliding scale you filed a form_1023 application_for recognition of exemption under sec_501 c of the internal_revenue_code on date revenue service under a cover letter from a company by the name of d located in t the ‘owner and sole_proprietor for the company d identified himself on the cover letter as a grant writer commercial broker paralegal specialist some speedily action proceed on your part in acquisition of the proceed with grant request the cover letter also included the d website address j excerpts from this website advertised the d company services as follows t stated on the cover letter that i hope letter so that we may the form_1023 was submitted to the internal h we at d write business and marketing plans for small and large businesses we also submit the same plans to lenders to acquire funding we make applications to the united_states government for free money grants free money it rightfully your applied for in the proper manner do you have a if not your chances are slim to none we will get one for you then we will apply for your free money most of your responses to requests for additional information were sent under the cover letter from t and or t's company d moreover your responses were submitted under the signatures of t and or your president k a business consultant contract between you and t's for-profit company d was presented this contract dated date was for business consultation and fundraising services to be performed by t and t's company d the contract stipulated that t was a business consultant concerning matters relating to the management and organization of your company your financial policies the terms and conditions of employment and generally any matter arising out of the business affairs of your company services in the business consultant contract also included fundraising and grant writing t through d _over a twelve months period plus a percent to was to receive aminimum of dollar_figure percent commission for grants or contributions received to explain your fundraising program the response to request for additional information included copies of letters dated date that were prepared by d these letters solicited donations for you in amounts up to dollar_figure the letters also claimed that donations were needed so that you may keep our doors open to the overrun of hurricane evacuees from louisiana this letter writing fundraising campaign requested a total dollar_figure donations housing for louisiana hurricane victims to keep our doors open however you have no facility or programs that provide in copies of approximately solicitation letters to sell raffle tickets were the content of the letters were identical and were addressed to different in the letters you indicated that you were another fundraising campaign conducted by the business consultant fundraising agent t on your behalf was a raffle submitted by t and k individuals or companies from new york to california designed to serve low-income families and individuals by providing critically needed home repairs and housing assistance for the homeless and to assist in training youths tickets sold for dollar_figure each and only tickets were to be sold was to be held on tuesday date and the raffle prize was a dollar_figure mastercard visa gift card and the proceeds were to benefit you your website allowed individuals to purchase tickets for the same raffle online raffle tickets could be purchased using cash check or credit card in addition to soliciting the sale of raffle tickets by mail the letters stated that a drawing the raffle this website was for the you represented on your website that you were recognized as a tax t your business consultant fundraiser established a website for you purpose of soliciting funds exempt entity under sec_501 of the code your website also included a link which enabled donors to donate directly to the paypal account of t's company d you have not submitted any evidence that any potential funds deposited into the paypal account of d would be remitted to you to fund a charitable program in your response you stated that the d paypal account was provided on the donation link to illustrate to you where the donation button should be reported for the d paypal account were submitted you have supplied a signed statement that as of date t is no longer assisting you k will be handling the organization's business in addition you presented documentation to show t also provided that d did not receive any donations from the website the transactions that d is no longer the registered agent for you despite the change in registered agent no evidence has been submitted to demonstrate that your contract for consulting services with d has been rescinded law sec_501 of the code provides in part for the exemption from federal_income_tax organizations organized and operated exclusively for charitable religious or educational_purposes no part of the net_earnings of which inures to the benefit of any private_shareholder_or_individual sec_1_501_a_-1 of the income_tax regulations provides that an organization described in sec_501 of the code must submit a detailed statement of its proposed activities with its exemption application as well as any additional information deemed necessary for a proper determination of whether it is exempt sec_1_501_c_3_-1 of the income_tax regulations states that in order to qualify under sec_501 of the code an organization must be both organized and operated exclusively for one or more exempt purposes if an organization fails to meet either the organizational or operational_test it is not exempt sec_1_501_c_3_-1 of the income_tax regulations states that an organization will be regarded as operated exclusively for one or more exempt purposes only if in activities which accomplish one or more of such exempt purposes specified in sec_501 of the code of its activities is not in furtherance of an exempt_purpose an organization will not be so regarded if more than an insubstantial part it engages primarily sec_1 c -1 d ii of the income_tax regulations states that an organization is not operated exclusively for one or more exempt purposes unless it serves a public rather than a private interest organization to establish that it is not 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 thus to meet the requirement of this subdivision it is necessary for an exempt status will be recognized in advance of operations if proposed operations can sec_601_201 of the income_tax regulations provides that a ruling or determination_letter will be issued to an organization provided its application and supporting documents establish that it meets the particular requirements of the section under which exemption is claimed be described in sufficient detail to permit a conclusion that the organization will meet the particular requirements of the section under which exemption is claimed a mere restatement of purposes or a statement that proposed activities will be in furtherance of such purposes will not satisfy these requirements the organization must fully describe the activities in which it expects to engage including the standards criteria procedures or other means adopted or planned for carrying out the activities the anticipated sources of receipts and the nature of contemplated expenditures revrul_75_384 1975_2_cb_204 held that a nonprofit organization formed to promote world peace and disarmament by nonviolent direct action and whose primary activity is the sponsoring of antiwar protest demonstrations in which demonstrators are urged to commit violations of local ordinances and breaches of public order does not qualify for exemption under sec_501 or of the code criminal acts increases the burdens of government thus frustrating a well recognized charitable goal which is the relief of the burdens of government this revenue_ruling also noted that the generation of the above revenue_ruling also imparted that as a matter of trust law one of the main sources of the general law of charity no trust can be created for a purpose which is illegal the purpose is illegal if the trust property is to be used for an object which is in violation of the criminal_law or if the trust tends to induce the commission of crime or if the accomplishment of the purpose is otherwise against public policy thus all charitable trusts and by implication all charitable organizations regardless of their form are subject_to the requirement that their purposes may not be illegal or contrary to public policy see revrul_71_447 1971_2_cb_230 restatement second trusts sec comment c iv scott on trusts sec 3d ed inc in harding hospital organization seeking a ruling as to recognition of its tax exempt status has the burden of proving that it satisfies the requirements of the particular exemption statute whether an organization has satisfied the operational_test is a question of fact v united_states 505_f2d_1068 the court held that an such generalizations do not furthermore the courts have repeatedly upheld the service's determination that an organization has failed to establish exemption where the organization fails to provide requested information applicant has for the most part provided only generalizations in response to repeated requests by the service for more detail on prospective activities satisfy us that applicant qualifies for the exemption peoples prize v commissioner t c memo the court in est of hawaii v commissioner t c found that an organization formed to educate people in hawaii in the theory and practice of est was a part of a franchise system which is operated for private benefit and therefore may not be recognized as exempt under sec_501 of the code the applicant for exempt status was not formally controlled by the same individuals controlling the for-profit organization owning the license to the est body of knowledge publications methods etc however the for-profit exerted considerable control_over the applicant's activities by setting pricing the number and frequency of different kinds of seminars and training and providing the trainers and management personnel who are responsible to it in addition to setting the price for the training the court found that the fact that the applicant's rights were dependent upon its tax-exempt status showed the likelihood that the for-profit corporations were trading on that status the question for the court was not whether the payments made to the for-profit were excessive but whether it benefited substantially from the operation of the applicant the court determined that there was a substantial private benefit because the applicant was simply the instrument to subsidize the for-profit corporations and not vice versa and had no life independent of those corporations in intemational postgraduate medical foundation v commissioner tcmemo_1989_36 the tax_court concluded that when a for-profit organization benefits substantially from the manner in which the activities of a related nonprofit organization were carried on the latter organization was not operated exclusively for exempt purposes within the meaning of sec_501 of the code even if it furthers other exempt purposes c inc v united_states 326_us_279 held better business bureau of washington d that activities of the better business bureau were not exclusively educational or charitable as its aim was to promote prosperity and standing of the business community substantial private purpose and precluded exemption under sec_501 of the code court also held that the presence of a single non-exempt purpose if substantial in nature will destroy the exemption regardless of the number or importance of truly exempt purposes n includes the provisions governing charitable raffies in the state of f application of tax la this served a the you have not met your burden_of_proof that you are formed to serve a public rather a private reg c -1 d i states that to be charitable an organization must serve a purpose public rather than a private interest the organization must demonstrate that it is not 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 organization to show that it the burden_of_proof as stated in reg c -1 d i is on the is not organized or operated to serve private interests your list of despite several attempts to ascertain your specific programs and manner of operation you have only provided a broad and open-ended listing of your missions and objectives general activities did not include standards criteria procedures or other means adopted for carrying out those activities or the sources of income and nature of expenses for each of your programs as required in sec_1_501_a_-1 and sec_601_201 of the income_tax regulations your list of missions and objectives concluded with a statement that funds would be solicited to support any of the listed activities and that the listed activities were not all inclusive you described your activities in a template fashion without specific details regarding your manner of operations as affirmed by the court in peoples prize v commissioner supra such generalizations do not satisfy us that applicant qualifies for the exemption although you state that any conduct your organization will be within the realms of your articles of incorporation and the guidelines of sec_501 of the code you have failed to provide details about how you will specifically operate your programs in a way that ensures that exclusively charitable purposes will be accomplished united_states supra and sec_1 c -1 d i the burden is on the applicant to establish that it is operated exclusively to serve one or more exempt purposes thus you have not established the factual basis for your exemption and have not demonstrated that you have met the burden_of_proof you are exclusively operated for tax exempt purposes under sec_501 of the code as maintained in harding hospital inc v the administrative record demonstrates that you are seeking the privilege of tax exemption in order to obtain public contributions to advance a nonexempt private purpose exhibited a keen interest in achieving recognition of tax exempt status in order to solicit public contributions but less of a focus in carrying out the operations of an actual exempt program which is an essential part of tax exempt status when it comes to detailing the manner of your operations you have repeatedly stated that your programs will be operated to comply with the requirements of any successful grant request in lieu of bylaws or operating procedures you stated that you will comply with rfp plans if a determination_letter recognizing you as an organization exempt under sec_501 of the code was to be issued these plans described operating procedures for irrigation consultants and independent commissioning provider services the provision of irrigation consulting services or independent commissioning you have the administrative record indicates that your primary focus is not on the responsibilities provider services are not inherently tax exempt_activities in addition you have provided various federal grant application opportunities as possible activities that you would conduct if the grant request was to be approved these statements and documents demonstrate that your planned activities primarily depend on whatever grants you or your business consultant grant writer can successfully attain hence you are formed to acquire free money grants as advertised on your business consultant's website which may be available to organizations with an sec_501 determination_letter of tax exempt status you are unable to provide the particulars of your operations because your operations are solely dependent on the grants you are able to secure and obligations that come along with free money grants such as operating a charitable program but on receiving tax free money to spend as you wish commissioner supra the court found that the fact that the applicant's rights were dependent upon its tax-exempt status showed the likelihood that the for-profit corporations were trading on that status your programs remain undefined supra in that you have no established mode of operations and are dependent on whatever grants you are able to obtain rather than being formed for a genuine tax exempt_purpose you are formed to capitalize and trade on your possible status as a tax exempt entity under sec_501 c of the code in order to obtain free money grants you are formed to serve a private rather than a public purpose you are similar to the organization described in est of hawaii v commissioner in est of hawaii v sec_1_501_c_3_-1 of the income_tax regulations states that in order to qualify under sec_501 of the code an organization must be both organized and operated exclusively for one or more exempt purposes additionally organizations described under sec_501 of the code must meet other standards the organization must not distribute net_earnings to insiders the prohibition against inurement and it must operate for the benefit of public rather than private interests the prohibition against impermissible private benefit the prohibition of inurement means that a private_shareholder_or_individual cannot pocket the organization's funds except as reasonable payment for goods or services transactions between a tax-exempt_organization and an individual in the nature of an insider the private individual insider to whom the benefit inures has the ability to control or otherwise influence the actions of the tax-exempt_organization so as to cause the benefit rule an insider is referred to as an organization's trustees officers members founders or contributors prohibited inurement refers to as a general although t was not listed as a board member t specifically t's company d was your registered agent and helped to create your organization through its website with the promise of do you have a c if not your chances are slim to none we will get one for you then we will apply for your free money the d company solicited clients ‘free money and stated therefore t was given the ability to control and influence the actions of your you have entered into a business contract agreement for consulting and fundraising services with t the consultation services to be performed included the management of all your business affairs organization he is to receive to percent of grants funds obtained business consultant t advised you in generally any matter arising out of the business affairs of the company the contract also showed t's personal financial interest in your organization since the contract stipulated that as a you have not demonstrated any discretion or control_over the fundraising activities conducted under the terms of to fund a nonexistent charitable program you allowed the business consultant grant writer to solicit for any the facts provided in the administrative record included a series of transactions by t and t's company d and all funds one example was the which intentionally benefited the business consultant fundraising agent letter writing campaign to solicit funds intended for louisiana hurricane victims to be housed in a facility which did not exist each of the letters sent to various foundations and organizations was requesting up to dollar_figure the consulting and fundraising contract if any of these potential donors had approved the request t would have received a commission based on the misrepresentation of a material fact another example was the website that t established for you which permitted donations to be made directly to d there was no evidence that any funds deposited into the paypal account of d would be remitted to you to fund a charitable program like the organization described in est of hawaii v commissioner supra you have ceded effective_control of your operations over to t and enabled your organization to function as an instrument to further the purposes of t and his for-profit company d resulting in impermissible private benefits and or prohibited inurement to your business consultant t as established international postaraduate medical foundation v commissioner supra when a for-profit organization benefits substantially from the manner in which the activities of a related nonprofit organization are carried on the latter organization is not operated exclusively for exempt purposes within the meaning of sec_501 of the code even if it furthers other exempt purposes substantially from the manner in which your activities are conducted you are not operated exclusively for exempt purposes within the meaning of sec_501 of the code as you have permitted d to benefit your raffle fundraiser appears to have violated a number of the provisions under the one of the provisions of n is that in order to conduct a charitable raffle an organization must since you are incorporated and operating in the state of f your raffle fundraiser must comply with the n n meet the definitions of a qualified_nonprofit_organization one form of a qualified nonprofit is an organization exempt under sec_501 of the code recognized as tax exempt from federal_income_tax under sec_501 of the internal_revenue_code and therefore does not appear to be classified as a qualified nonprofit organizatio another provision of n is that the prize may not be money which is defined as coins paper currency or a negotiable instrument that represents and is readily convertible to coins or paper currency equivalent raffle tickets through a mass mailing across the country and on your website may have violated state restrictions on raffle promotion and ticket sales analogous to the organization described in revrul_75_384 but in contravention of a well established charitable goal your conduct of a possible illegal act may have increased rather than decreased the burden of government accordingly you do appear to be operated exclusively for charitable purposes mastercard visa gift card which is a form of a cash moreover ‘raffle tickets may not be advertised state wide hence your sale of your organization was not your raffle prize was adollar_figure you through d have solicited charitable donations for nonexistent charitable programs appeared to operate a raffle in violation of state jaw and has a website which permitted donations to be made directly to the d paypal account with no evidence that the funds would be used to fund charitable programs similar to the organization exclusively for purposes under sec_501 of the code described in better business bureau of washington d v united_states supra the presence of a single non-exempt purpose if substantial in nature will destroy the exemption regardless of the number or importance of truly exempt purposes you have not established the factual basis for your exemption and have not demonstrated that you meet the burden_of_proof you are exclusively operated for tax exempt purposes under sec_501 of the code in these examples showed that you are not operated inc c fact you are operated for a substantial non-exempt private purpose exempt status under sec_501 of the code principally to solicit any and all forms grants rather than being formed for any genuine tax exempt_purpose you and public contributions are formed to capitalize and trade on your possible status as a tax exempt entity under sec_501 of the code in order to obtain free money grants you have permitted the for-profit consulting firm d to substantially benefit from the manner in which your activities are carried out qualifications for recognition of tax exemption under sec_501 of the code as you are formed to serve a private rather than a public interest you do not meet the you seek to obtain tax applicant's position in reference your open-ended activities you submitted a new program description to provide education on hiv aids ‘with the rfp hence no specific details regarding the program were provided your new program description listed many of the same missions and objectives previously submitted however this hiv aids program will also be performed in accordance furthermore in regards your donations and funds from raffle sale being deposited directly the paypal account of d you claimed that your website was not launched account was provided on the donation link to illustrate to you where the donation button should be t also asserted that d did not receive any donations from the website reported for the d paypal account were submitted believe that it was operated within the guidelines of f state law the transactions with respect to the raffle fundraiser you t stated that the d paypal finally you presented a signed statement that as of date t is no longer assisting you k will be handling the organization's business show that d in addition you submitted documentation to is no longer the registered agent for you service response to applicant's position similar to the prior listing of your missions and objectives your new activity to provide education on hiv aids will also be conducted in accordance with whatever grant request you are able to obtain therefore we maintain our position that the organization's planned activities primarily depend on whatever grants you are able to attain grants which may be available to organizations with an sec_501 determination_letter recognizing its tax exempt status c of the code not to further a true charitable purpose but to obtain free money grants’ for a substantial non-exempt private purpose you seek recognition of tax exemption under section you are formed to acquire free money your position that the website was not launched is not valid ordinary search engines and its content was validated in writing by both the organization's president and the business consultant in addition the website was actively selling raffle tickets and soliciting for donations the website was discovered using ‘a two page brochure released by the attorney general's office of f helps to interpret the provisions governing charitable raffles a copy of this brochure was sent to you by the letter dated date to illustrate the possible violations this brochure stated that qualified organizations permitted to hold charitable raffles must have existed for at least three years and be exempt from federal_income_tax under sec_501 of the internal_revenue_code as you are not an organization exempt under sec_501 of the code you do not appear to be a qualified_organization permitted to hold charitable raffies in the state of f may not be money which is defined as coins paper currency or a negotiable instrument that your raffte prize was a dollar_figure represents and is readily convertible to coins or paper currency mastercard visa gift card which is a form of a cash_equivalent moreover raffle tickets may not be advertised state wide or through paid advertisements the sale of raffle tickets online and by the letter writing campaign appeared to violate the state wide promotion and sale of raffle tickets provisions in addition the prize your claim that t is no longer acting as your business consultant grant writer does not excuse the fact you have operated to provide substantial benefits to t or t's for-profit consulting company d been made null and void your fundraising activities have been carried out charitable purposes and do not meet the operational_test required to qualify for tax exemption under sec_501 of the code moreover there is no evidence that your consulting services contract with d has t through d stood to substantially benefit from the manner in which you have failed to operate exclusively for conclusion you have not established the you are unable to define the programs that you will operate as you have not demonstrated that you have met the burden_of_proof you are exclusively operated for tax exempt purposes under sec_501 of the code factual basis for your exemption your programs are dependent on whatever grants you are able to obtain operated for a substantial non-exempt private purpose that you solicited donations and grants for a nonexistent charitable program your fundraising raffle may have violated certain provisions of state law you seek to obtain tax exempt status under sec_501 of the code principally to solicit any and all forms of grants and public contributions formed to take advantage of and trade on your possible status as a tax exempt entity under sec_501 of the code and to receive free money grants you have permitted the for- profit consulting firm d to substantially benefit from the manner in which your activities are cartied out do not meet the qualifications for recognition of tax exemption under sec_501 c of the code therefore since you are formed to serve a private rather than a public interest you rather than being formed for a true charitable purpose you are the administrative record demonstrates moreover you are it appears that you have the right to file a protest if you believe this determination is incorrect must submit a statement of your views and fully explain your reasoning 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 statement does not provide a basis to reconsider our determination we will forward your case to our appeals_office publication exempt_organization appeal procedures for unagreed issues you can find more information about the role of the appeals_office in to protest you you must submit the if your types of information that should be included in your appeal can be found on page of publication under the heading regional_office appeal’ these items include the organization's name address and employer_identification_number astatement that the organization wants to appeal the determination the date and symbols on the determination_letter statement of facts supporting the organization’s position in any contested factual issue a statement outlining the law or other authority the organization is relying on and a statement as to whether a hearing is desired the statement of facts item must be declared true under penalties of perjury done by adding to the appeal the following signed declaration this may be 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 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 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 if you want representation revenue service may represent you during the appeal process 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 information about representation in publication practice_before_the_irs and power_of_attorney and publications all forms and publications mentioned in this letter can be found at www irs qov forms you can find more 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 we do not hear from you within days we will issue a final adverse determination_letter letter will provide information about filing tax returns and other matters if that please send your protest statement form_2848 and any supporting documents to the applicable address mail to internal_revenue_service eo determinations quality assurance room p o box cincinnati oh attn deliver to’ internal_revenue_service eo determinations quality assurance main street room cincinnati oh attn you may 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 robert choi director exempt_organizations rulings agreements enclosure publication


internal_revenue_service department of the treasury number release date index number washington dc person to contact telephone number refer reply to cc psi b01-plr-128468-00 date date legend x state date this letter responds to a letter dated date written on behalf of x requesting a ruling that x be granted an extension of time pursuant to sec_301_9100-3 of the procedure and administration regulations to file an election to be treated as a corporation for federal tax purposes under sec_301_7701-3 facts according to the information submitted on date a predecessor s_corporation converted to x a state limited_partnership x intended to elect to be treated as an association_taxable_as_a_corporation for federal tax purposes as of date however x failed to file the election timely law and analysis sec_301_7701-3 provides in part that a business_entity that is not classified as a corporation under sec_301_7701-2 or an eligible_entity can elect its classification for federal tax purposes as provided in this section 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 in part that unless a domestic eligible_entity elects otherwise it is a partnership if it has two or more members plr-128468-00 sec_301_7701-3 provides in part that an eligible_entity may elect to be classified other than as provided under sec_301_7701-3 by filing form_8832 entity classification election with the applicable service_center sec_301_7701-3 provides in part that an election made under sec_301_7701-3 will be effective on the date specified by the entity on form_8832 or on the date filed if no such date is specified on the election form the effective date specified on form_8832 can not be more than days prior to the date on which the election is filed and can not be more than months after the date on which the election is filed under sec_301_9100-1 the commissioner may grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the code except subtitles e g h and i if the taxpayer demonstrates to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that granting the relief will not prejudice the interests of the government sec_301_9100-2 and sec_301_9100-3 provide the standards the commissioner will use to determine whether to grant an extension of time to make an election sec_301_9100-2 provides automatic extensions of time for making certain elections sec_301_9100-3 provides extensions of time for making elections that do not meet the requirements of sec_301_9100-2 requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government conclusions based solely on the facts and representations submitted we conclude that the requirements of section and have been satisfied accordingly x is granted an extension of time of days from the date of this letter to file form_8832 effective on date with the appropriate service_center a copy of this letter should be attached to the election a copy is enclosed for that purpose except as specifically set forth above we express no opinion concerning the federal_income_tax consequences of the facts described above under any other provision of the code specifically we express no opinion as to whether or not x would qualify as a small_business_corporation as defined in sec_1361 this ruling is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent pursuant to the power_of_attorney on file with this office a copy of this letter is plr-128468-00 being sent to your authorized representative s paul f kugler sincerely yours associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes


internal_revenue_service number release date u i l department of the treasury p o box ben franklin station washington dc person to contact telephone number refer reply to cc psi -- plr-126595-03 date aug legend taxpayer year director dear this letter responds to a letter dated date submitted on behalf of taxpayer requesting an extension of time pursuant to sec_301_9100-1 of the procedure and administration regulations to post a surety bond under sec_42 of the internal_revenue_code in order to avoid recapture of the low-income_housing_credit under sec_42 according to the information submitted taxpayer intended to file form_8693 low-income_housing_credit disposition bond and to post surety bonds for various properties disposed of during year however taxpayer inadvertently failed to file form_8693 or post the surety bonds sec_42 provides that if a building or an interest therein is disposed of during any year for which the low-income_housing_credit under sec_42 is allowable the credit for the year must be allocated between the parties in any such case proper adjustments must be made on the application of sec_42 sec_42 provides that if a as of the close of any taxable_year in the compliance_period the amount of the qualified_basis on any building with respect to the plr-126595-03 taxpayer is less than b the amount of the basis as of the close of the preceding_taxable_year then the taxpayer’s tax for the taxable_year must be increased by the credit recapture_amount however under sec_42 the taxpayer will be discharged from liability for any additional tax if a the taxpayer furnishes to the secretary a bond for a satisfactory amount and period and b it is reasonably expected that the building will continue to be operated as a low-income credit building for the remainder of its compliance_period guidance on the amount of bond considered satisfactory by the secretary and the period of the bond required is provided in revrul_90_60 1990_2_cb_3 this revenue_ruling specifies that if a taxpayer furnishes a bond under sec_42 with respect to the disposition of an interest in a qualified_low-income_building the taxpayer will be treated solely for purposes of applying sec_42 with respect to the disposition as if the taxpayer had not disposed of the interest instead the taxpayer’s recapture if any with respect to the disposed-of interest will be determined under the rules of sec_42 by deeming the taxpayer to continue to own the disposed-of interest and by determining the qualified_basis for the deemed interest in accordance with the rules of sec_42 the taxpayer will not however be treated as claiming any additional low-income_housing_credit with respect to the disposed of interest for any period following the disposition the bond must be provided for the remainder of the 15-year compliance_period after the disposition plus an additional months sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make an election sec_301_9100-1 provides that the term regulatory election means 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 announcement 1994_31_irb_87 notified the public of form_8693 and specified that form_8693 should be submitted to the internal_revenue_service within days of a disposition of a low-income_housing_credit building or interest therein on which the taxpayer wants to avoid recapture of the credit under sec_301_9100-1 the commissioner has discretion to grant a reasonable extension of time under the rules set forth in sec_301_9100-2 and sec_301_9100-3 for a taxpayer to make a regulatory or statutory election sec_301_9100-2 provides automatic extensions of time for making certain elections sec_301_9100-3 provides extensions of time for making elections that do not meet the requirements of sec_301_9100-2 requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good_faith and the granting of relief will not prejudice the interests of the government plr-126595-03 in the instant case based solely on the facts submitted and the representations made we conclude that the requirements of sec_301_9100-1 and sec_301_9100-3 have been met accordingly taxpayer is granted an extension of time to make the election under sec_42 for the dispositions by filing forms within days from the date of this letter the forms along with a copy of this letter are to be filed with the internal_revenue_service examination branch attn lihtc unit-dp p o box bensalem pa a copy of this letter is enclosed for this purpose in addition if and when taxpayer receives a copy of the approved forms back from the lihtc unit a copy of this letter along with a copy of each approved form_8693 should be sent to director nothing in this ruling shall be construed to relieve taxpayer from the obligation of having the bonds approved by the irs bond-approving official this ruling merely grants taxpayer an extension of time to make the election to post bonds which must be for the period of time remaining in the 15-year compliance_period after the date of disposition plus an additional months the determination of whether to approve the bonds rests within the sole discretion of the bond-approving official also although taxpayer will be deemed to continue to own the disposed-of interest for purposes of sec_42 upon approval of the bonds taxpayer is not allowed low-income_housing credits with respect of the disposed-of interest for any period following the disposition no opinion is expressed or implied regarding the application of any other provisions of the code or regulations specifically we express no opinion on whether the low-income_housing projects qualified or continue to qualify for the low-income_housing_credit under sec_42 this ruling is directed only at the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file a copy of this letter is being sent to taxpayer’s authorized representative sincerely heather c maloy associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes cc


internal_revenue_service department of the treasury index number number release date washington dc person to contact telephone number refer reply to cc dom p si br 1-plr-120479-98 date date legend x d1 d2 this responds to your letter dated date submitted on behalf of x requesting relief under sec_1362 of the internal_revenue_code facts x was incorporated on d1 sole shareholder of x desired that x make an election to be treated as an s_corporation effective on d2 but the election to be treated as an s_corporation was not timely filed law and analysis sec_1362 provides that a small_business_corporation may elect to be an s_corporation sec_1362 provides the rule on when an s election will be effective if an s election is made within the first two and one-half months of a corporation’s taxable_year then the corporation will be treated as an s_corporation for the year in which the election is made if the election is made after the first two and one-half months of a corporation’s taxable_year then the corporation will not be treated as an s_corporation until the taxable_year after the year in which the s election is made cc dom p si br 1-plr-120479-98 sec_1362 provides that if no election is made pursuant to sec_1362 or if made the election is made after the date prescribed for making such an election and the secretary determines there was reasonable_cause for the failure to timely make the election then the secretary may treat such an election as timely made for such taxable_year and effective as of the first day of that tax_year x did not file a timely election to be treated as an s_corporation under sec_1362 effective on d2 x has however established reasonable_cause for not making a timely s election and is entitled to relief under sec_1362 conclusion based solely on the facts submitted and representations made and provided that x otherwise qualifies as a subchapter_s_corporation we conclude that x will be recognized as an s_corporation effective for the tax_year beginning on d2 within days from the date of this letter x should submit a properly completed form_2553 with a copy of this letter attached to the relevant service_center except as specifically set forth above no opinion is expressed as to the federal tax consequences of the transaction described above under any other provision of the internal_revenue_code this ruling is directed only to the taxpayer who requested it sec_6110 of the code provides that it may not be used or cited as precedent sincerely signed daniel j coburn daniel j coburn assistant to the branch chief branch office of the assistant chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes


internal_revenue_service number info 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 b01 genin-133630-04 date date legend taxpayer dear ------------- ----------------------------- we are responding to a letter dated date submitted on behalf of the taxpayer requesting a late s_corporation_election although we are unable to respond to the request as submitted this letter provides useful information relating to the request from its inception on date however due to a misunderstanding by a prior accountant taxpayer was set up as a c_corporation to obtain relief the taxpayer may request a private_letter_ruling according to the information provided taxpayer intended to be an s_corporation announcement copy enclosed provides guidance on seeking relief for late s_corporation elections and inadvertent invalid s_corporation elections generally to request relief for a late or invalid s_corporation_election you must request a private_letter_ruling from the national_office the procedures for requesting a private_letter_ruling are set out in revproc_2004_1 copy enclosed in addition revproc_2004_1 requires taxpayers to submit a user_fee along with their ruling_request the standard user_fee for a private_letter_ruling is dollar_figure however taxpayers with gross_income of less than dollar_figure million on their last-filed tax_return qualify for a reduced user_fee in the amount of dollar_figure if you are eligible to use the reduced fee provision you must include the statement described in ' b b of appendix a with your request please review appendix b for a sample format for requesting a private_letter_ruling if you decide to submit a formal request for a private_letter_ruling please include the proper user_fee if applying under the reduced fee provisions send a statement genin-133630-04 certifying gross_income and refer your request to our office by adding the following to the address attn cc pa lpd du p o box ben franklin station washington dc direct to cc psi room by way of introduction the irs has a small_business website which provides information and various useful links visit this special site at www irs gov smallbiz additionally you can order a single free copy of the small_business resource guide cd-rom by calling the cd-rom provides critical tax information including forms instructions and publications as well as valuable information from a variety of government agencies non-profit organizations and educational institutions we hope that the above information proves helpful sincerely s dianna k miosi dianna k miosi chief branch associate chief_counsel passthroughs and special industries enclosures announcement revproc_2004_1


internal_revenue_service number release date index number --------------------- -------------------------- ----------------------------------------------------- -------------------------------------- ------------------------- ------------------------ in re ----------------------------------------- ------------------------------------------- legend department of the treasury washington dc third party communication none date of communication not applicable_person to contact ----------------------- id no ------------------- --------------------------------------------------- telephone number ---------------------- refer reply to cc corp b02 plr-144040-13 date date parent --------------------------------------------------------------------------------- --------------------------------------------------------------------- ------------------------------------------------ bank --------------------------------------------------------------------------------- --------------------------------------------------------------------- --------------------------- agency date date date date date x agency tax professional ----------------------------------------------------- --------------------------- ---------------------------- --------------------------- ---------------------------- --------------------- -- ----------------------------------- ------------------------------------------------------------------------ ------------------------------------------------------------------------ ------------------------ plr-144040-13 dear ------------ this letter responds to a letter dated date submitted by agency as agent of the consolidated_group of which parent is the common parent the parent group requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations to file an election in particular agency is requesting an extension of time for the parent group to elect an extended carryback period the election for a consolidated_net_operating_loss cnol the material information submitted for consideration is summarized below parent is the common parent of the parent group of which bank is a member on date bank was closed and agency was appointed receiver on date pursuant to sec_301_6402-7 agency was authorized by the internal_revenue_service to act as an agent of the parent group for federal tax purposes relating to the years in which losses occurred and for the years to which claims for refunds or carryback adjustments may relate the parent group incurred a cnol in the taxable_year ending date the year cnol agency on behalf of the parent group seeks to carry back the year cnol x years to the parent group’s taxable_year ending on date under sec_172 of the internal_revenue_code the parent group was required to file the election in order to carry back the year cnol to its taxable_year ending on date and to obtain the benefit of sec_56 the election was due on date but for various reasons a valid election was not filed after the due_date for the election it was discovered that the election had not been filed subsequently this request was submitted under sec_301_9100-3 for an extension of time to file the election agency has represented that the parent group is not seeking to alter a return position for which an accuracy related penalty has been or could be imposed under sec_6662 sec_172 generally permits a taxpayer to carry back a net_operating_loss nol to each of the taxable years preceding the taxable_year of the nol sec_172 permits a taxpayer to elect to carry back an applicable net_operating_loss applicable nol to each of the or taxable years preceding the taxable_year of the applicable nol in lieu of the 2-year period provided by sec_172 sec_172 provides that an applicable nol is the taxpayer’s nol for a taxable_year ending after date and beginning before date plr-144040-13 sec_172 provides that the election under sec_172 shall be made by the due_date including extension of time for filing the return for the taxpayer’s last taxable_year beginning in the election is irrevocable and in general may be made only with respect to one taxable_year sec_1502 provides that the secretary shall prescribe such regulations as he may deem necessary in order that the tax_liability of any affiliated_group_of_corporations making a consolidated_return and of each corporation in the group both during and after the period of affiliation may be returned determined computed assessed collected and adjusted in such manner as clearly to reflect the income_tax_liability and the various factors necessary for the determination of such liability and in order to prevent avoidance of such tax_liability in carrying out the preceding sentence the secretary may prescribe rules that are different from the provisions of chapter that would apply if such corporations filed separate returns sec_1_1502-21 of the income_tax regulations provides that losses taken into account in determining a cnol may be carried to other taxable years whether consolidated or separate only under paragraph b of sec_1_1502-21 sec_1_1502-21 provides that nol carryovers and carrybacks to a taxable_year are determined under the principles of sec_172 and sec_1_1502-21 sec_1_1502-21t provides that a consolidated_group may elect an extended carryback period pursuant to sec_172 with regard to a cnol arising in a taxable_year ending after date and beginning before date revproc_2009_52 2009_49_irb_744 provides when and how a taxpayer may make an election under sec_172 sec_4 of revproc_2009_52 provides that the common parent of a consolidated_group makes the election for the group sec_4 and of revproc_2009_52 permit the election to be made for consolidated taxpayers by attaching a statement to the original or amended consolidated_return for the taxable_year of the applicable cnol by attaching a statement to the taxpayer’s amended consolidated_return applying the applicable cnol to the carryback_year or by attaching a statement to a claim for a tentative_carryback_adjustment on form_1139 corporation application_for tentative refund sec_4 b and b of revproc_2009_52 require the election regardless of the manner in which made to be filed no later than the due_date including extensions for filing the return for the taxpayer’s last taxable_year beginning in under sec_301_9100-1 the commissioner has discretion to grant a reasonable extension of time to make a regulatory election or a statutory election but no more than plr-144040-13 six months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make a regulatory election sec_301_9100-1 requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 the election by a consolidated_group to extend the carryback period under sec_172 for a cnol is a regulatory election therefore the commissioner has discretionary authority under sec_301_9100-3 to grant an extension of time for the parent group to file the election provided the parent group establishes to the satisfaction of the commissioner that it acted reasonably and in good_faith the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and granting relief will not prejudice the interests of the government information affidavits and representations submitted by agency and agency tax professional explain the circumstances that resulted in the failure to timely file a valid election the information establishes that the request for relief was filed before the failure to timely make the election was discovered by the internal_revenue_service see sec_301_9100-3 and v based on the facts and information submitted including the affidavits submitted and the representations made we conclude that the parent group acted reasonably and in good_faith that the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and that granting relief will not prejudice the interests of the government accordingly provided that and to the extent that the parent group qualifies substantively to file the election we grant an extension of time under sec_301_9100-3 until sixty days from the date on this letter for the parent group to file the election this letter does not extend the period of time described in sec_6511 by which a taxpayer is required to file a claim for credit or refund of an overpayment_of_tax the parent group may file the election under sec_172 to carry back the year cnol to its taxable_year ending on date on form 1120x amended u s_corporation income_tax return for the taxable_year ending either date or date according to the procedures set forth in revproc_2009_52 a copy of this letter must be attached to the form 1120x if the parent group files form 1120x electronically the parent group may satisfy the requirement of attaching a copy of this letter by attaching a statement to the parent group’s amended_return that provides the date and control number plr-144040-13 of this letter_ruling plr-144040-13 the above extension of time is conditioned on the parent group’s tax_liability if any not being lower in the aggregate for all years to which the election applies than it would have been if the election had been timely made taking into account the time_value_of_money we express no opinion as to the parent group’s tax_liability for the years involved a determination thereof will be made by the director’s office upon audit of the income_tax returns involved except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any item discussed or referenced in this letter in particular we express no opinion with respect to whether the parent group qualifies substantively to make the election in addition we express no opinion as to the tax effects or consequences of filing the election late under the provisions of any other section of the internal_revenue_code or regulations or as to the tax treatment of any conditions existing at the time of or resulting from filing the election late that are not specifically set forth in this letter for purposes of granting relief under sec_301_9100-3 we relied on certain statements and representations made under penalty of perjury by agency and agency tax professional the director however should verify all essential facts in addition notwithstanding that an extension is granted under sec_301_9100-3 to file the election any penalties and interest that would otherwise be applicable continue to apply this letter_ruling is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent pursuant to the power_of_attorney on file in this office a copy of this letter is being sent to your authorized representative sincerely ken cohen acting chief branch office of associate chief_counsel corporate


internal_revenue_service department of the treasury washington dc person to contact telephone number refer reply to cc corp 4-plr-105635-00 date date number release date index number merger llc d llc u llc v j assets k assets l assets this letter responds to your date request that we further supplement our letter_ruling dated date plr-121425-98 the original letter_ruling as supplemented by our letter rulings dated date plr-107269-99 date plr-102442-00 date plr-102440-00 and date plr- together the prior letter rulings capitalized terms not defined in this letter retain the meanings assigned them in the original letter_ruling the prior letter rulings address certain federal_income_tax consequences of the distributions by distributing of the stock of controlled a and controlled b and related transactions facts distributing owns all of the interests in merger llc d merger llc d owns an interest in llc v and unrelated parties own the remaining interests llc v is classified as a partnership for federal_income_tax purposes merger llc d owns the l assets various entities that are owned directly or indirectly by distributing the contributing entities own j assets and k assets proposed transactions i the contributing entities will contribute j assets and k assets to newly formed limited_liability companies and state law partnerships the operating entities plr-105635-00 certain of the operating entities that do not own j assets may be classified as partnerships or corporations for federal tax purposes all other operating entities will be treated for federal tax purposes as having a single owner and will not elect under sec_301_7701-3 of the procedure and administration regulations to be treated as an entity that is not disregarded as an entity separate from its owner ii the contributing entities will distribute their interests in the operating entities to distributing through intervening entities where necessary iii distributing will contribute all of the interests in the operating entities to newly formed llc u iv certain other parties will contribute other assets to llc u or will purchase interests in llc u from distributing on the admission of a party in addition to distributing as a member in llc u llc u will be classified as a partnership for federal tax purposes v merger llc d will contribute the l assets to llc v llc v will a lease part of the l assets to a newly formed joint_venture that will be treated for federal tax purposes as a partnership among merger llc d and certain other parties and b lease the remaining l assets to merger llc d ruling based solely on the information submitted in the original and supplemental ruling requests we rule that the transactions described in steps i through v above do not adversely affect any of the rulings contained in the prior letter rulings and the prior letter rulings retain full force and effect caveats we express no opinion about the tax treatment of the transactions described above under any provisions of the code or regulations or the tax treatment of any conditions existing at the time of or effects resulting from the transactions that are not specifically covered by the above ruling procedural matters this supplemental ruling is directed only to the taxpayers who requested it sec_6110 provides that it may not be used or cited as precedent each taxpayer affected by the prior letter rulings should attach copies of those letters and this supplemental letter to the taxpayer’s federal_income_tax return for the taxable_year in which the transactions covered by these letters are completed plr-105635-00 under a power_of_attorney on file in this office a copy of this supplemental letter will be forwarded to each of your authorized representatives associate chief_counsel corporate by wayne t murray senior technician reviewer sincerely branch