internal_revenue_service number release date index number --------------------------------------------------- ----------------------------- ------------------------- -------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact ----------------------- id no ------------- telephone number --------------------- refer reply to cc psi b01 plr-159490-04 date date -------------------------------------------------- -------------------------------------------------- --------------------- ---------------------- legend x -------------------------------------------------- y -------------------------------------------------- d1 d2 d3 d4 d5 state1 state2 dear ---------------------- ---------------------- --------------------- ---------------- --------- -------------------------- this responds to a letter dated date submitted on behalf of x requesting relief under sec_1362 of the internal_revenue_code facts according to the information submitted y was incorporated on d1 under the laws of state1 effective d2 y elected to be an s_corporation on d3 x was incorporated plr-159490-04 pursuant to the laws of state2 x intended to file an election to be an s_corporation effective d4 but the election was not timely filed on d5 x and y merged with x being the surviving company 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 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 election as timely made for such taxable_year and effective as of the first day of that year x did not file a timely election to be treated as an s_corporation under sec_1362 effective d4 x has however established reasonable_cause for not making a timely election and is entitled to relief under sec_1362 conclusion based solely upon 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 d4 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 expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter this ruling is directed only to the taxpayer s requesting it sec_6110 of the code provides that it may not be used or cited as precedent plr-159490-04 the rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative sincerely s dianna k miosi dianna k miosi chief branch office of the associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes


t c memo united_states tax_court jason christopher bennett and kirsten pauline bennett commissioner of internal revenue respondent petitioners v docket no filed date jason christopher bennett and kirsten pauline bennett pro sese michael w berwind and linette b angelastro for respondent memorandum opinion guy special_trial_judge this case is before the court on respondent’s motion to dismiss for lack of jurisdiction on the ground that no notice_of_deficiency or notice_of_determination has been issued that would permit petitioners to invoke the court’s jurisdiction petitioners husband and wife oppose respondent’s motion as discussed in detail below we will grant respondent’s motion to dismiss for lack of jurisdiction background3 on date petitioners filed a joint form_1040 u s individual_income_tax_return for the taxable_year reporting tax due of dollar_figure they did not remit payment with the tax_return on date the internal_revenue_service irs assessed the following items tax of dollar_figure interest of dollar_figure an addition_to_tax of dollar_figure for failure to pay estimated_tax an addition_to_tax of dollar_figure for failure_to_file a timely tax_return and an addition_to_tax of dollar_figure for failure to timely pay the tax the irs later applied petitioners’ overpayments for the taxable years and totaling dollar_figure to offset a portion of petitioners’ unpaid tax_liability for 1unless otherwise indicated all section references are to the internal_revenue_code as amended monetary amounts are rounded to the nearest dollar 2petitioners resided in california at the time the petition was filed 3the following facts which are not in dispute are drawn from the parties’ pleadings respondent’s motion petitioners’ responses and supporting documents in date petitioners submitted to the irs a form 1040x amended u s individual_income_tax_return for reporting a loss and no tax due the irs did not process the amended_return and instead treated it as petitioners’ claim_for_refund the irs examination_division and the office of appeals reviewed petitioners’ amended_return for in conjunction with an examination of their tax_return for and found that they had realized a net_operating_loss of dollar_figure in that was available for carryback to as a consequence of that adjustment and other findings the irs concluded that petitioners’ correct income and self-employment_tax liability for was dollar_figure the adjustments described above were recorded on form_3610 audit statement dated date and form_5278 statement--income tax changes form_3610 reflected an overassessment of dollar_figure of income_tax on petitioners’ account for and included statements that r estricted interest applies for tax_year and y our claim_for_refund totaling dollar_figure for tax_year ended has been considered and allowed in part by appeals in the preparation of this settlement computation 4there is no clear explanation in the record for the reference to a refund claim totaling dollar_figure form_5278 provided a detailed schedule of various adjustments to petitioners’ income for along with computations of their correct_tax liability form_5278 line which provides a space to identify penalties and additions to tax was left blank on date petitioners signed form_2297 waiver of statutory notification of claim disallowance for the year in issue form_2297 stated that petitioners had claimed a refund of dollar_figure that dollar_figure of the claim had been disallowed and that petitioners had waived the requirement under sec_6532 that the irs send a notice of claim disallowance by certified or registered mail the form_2297 further stated that the two-year period for filing a refund_suit would begin to run immediately accounting for the adjustments described above the irs abated a portion of the previously assessed tax and additions to tax leaving petitioners responsible for tax of dollar_figure additions to tax of dollar_figure and interest of dollar_figure--a total_tax liability of dollar_figure for petitioners’ were credited with total payments of dollar_figure and they received a modest refund in early in date petitioners contacted the taxpayer_advocate_service tas to seek help in obtaining a further refund for in date they received an additional refund of dollar_figure for the year in issue on date petitioners submitted to the irs a form_843 claim_for_refund and request for abatement for seeking a refund or abatement of dollar_figure petitioners attached a statement to the form_843 explaining that they had entered into a settlement agreement with the irs absolving them of any liability for any additions to tax or interest for the year in issue the irs did not issue a notice_of_determination to petitioners or otherwise act on their claim_for_refund or abatement on date petitioners filed a petition with the court as previously indicated respondent maintains that the court lacks jurisdiction in this case discussion the tax_court is a court of limited jurisdiction and we may exercise our jurisdiction only to the extent authorized by congress 85_tc_527 jurisdiction must be shown affirmatively and 5there is no clear explanation in the record for the adjustments underlying this refund petitioners bear the burden of proving that they have properly invoked the court’s jurisdiction see eg 114_tc_268 aff’d 22_fedappx_837 9th cir the court’s jurisdiction to redetermine an income_tax deficiency under sec_6213 depends upon the issuance of a notice_of_deficiency and a timely filed petition see 93_tc_22 90_tc_142 where a taxpayer has properly invoked the court’s jurisdiction to redetermine a deficiency sec_6512 and authorizes the court to determine that a taxpayer has made an overpayment of income_tax and if necessary to order the commissioner to refund the overpayment see green- thapedi v commissioner 126_tc_1 independent of the court’s jurisdiction to redetermine a tax_deficiency sec_6404 authorizes the court to review the secretary’s denial of a taxpayer’s request to abate an assessment of interest see 109_tc_92 for claims for abatement of interest filed with the secretary on or before date sec_6404 vests the court with jurisdiction to determine whether the secretary’s failure to abate interest was an abuse_of_discretion if such action is brought within days after the date of the mailing of the secretary’s final_determination not to abate such interest in the consolidated appropriations act pub_l_no div q protecting americans from tax hikes act path act of sec_421 sec_129 stat pincite congress recently amended sec_6404 to expand the opportunity for judicial review of taxpayer claims for abatement of interest sec_6404 now provides that a taxpayer may file a petition invoking the court’s jurisdiction under that section in the event the secretary fails to issue a notice_of_determination to the taxpayer within days after he or she has filed a request for abatement of interest the path act was enacted on date and congress made the amendment to sec_6404 effective for claims for abatement of interest filed with the secretary after that date path act sec_421 sec_129 stat pincite petitioners offer alternative theories in support of the court’s jurisdiction in this case first while acknowledging that respondent has not issued a notice_of_deficiency to them for petitioners contend that respondent failed to comply with the terms of a settlement agreement and therefore the court should treat 6the taxpayer must also meet the requirements referred to in sec_7430 respondent as having failed to issue a refund in accordance with a final order of the tax_court over which this court would have jurisdiction under code sec_6512 and tax_court rule petitioners’ argument suffers from more than one flaw suffice it to say that inasmuch as respondent has not issued a notice_of_deficiency to petitioners for and they have not properly invoked the court’s jurisdiction to redetermine a deficiency under sec_6213 the court lacks jurisdiction to determine an overpayment of income_tax under sec_6512 at best petitioners’ argument amounts to an appeal to the court to assume jurisdiction upon equitable considerations however as a court of limited jurisdiction we may not apply equitable principles to assume jurisdiction over a matter not authorized by statute see 95_tc_617 and cases cited thereat petitioners assert in the alternative that sec_6404 vests the court with jurisdiction because the secretary failed to issue a notice_of_determination to them within days of the date that they filed form_843 petitioners’ reliance on sec_7121 and sec_7122 prescribe the exclusive means for effecting a settlement or compromise binding on both the taxpayer and the commissioner colebank v commissioner tcmemo_1977_46 aff’d without published opinion 610_f2d_999 d c cir the record does not reflect that the parties entered into a binding settlement agreement for the year in issue sec_6404 is misplaced as discussed above the recent amendment to that provision which expands the opportunity for judicial review in cases in which the secretary fails to act within days after the date of filing of a claim_for_abatement of interest is effective only for claims for abatement of interest filed after date because petitioners filed form_843 with the irs in date they cannot take advantage of the court’s expanded jurisdiction under sec_6404 as amended without a notice_of_deficiency or notice of final_determination not to abate interest petitioners lack a ticket to the tax_court and their attempt to invoke the court’s jurisdiction in this case must fail see banat v commissioner t c pincite consistent with the foregoing we will grant respondent’s motion to dismiss for lack of jurisdiction to reflect the foregoing an order of dismissal for lack of jurisdiction will be entered


internal_revenue_service number release date index number -------------------------- ------------------------------ ------------------- ------------------------------- ------------- -------------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact ----------------------- id no ------------- telephone number --------------------- refer reply to cc psi b04 plr-140633-09 date march re ------------------------------------------------------- ----------------------------------------------------------- ------------------------------------------ ---------------------------------------------------------------------------- legend trust -------------------------------------------------------------------------------- ------------------------- parent ---------------------------- family_member family_member ------------------------------ ---------------------- family_member employees ---------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------- charity a charity b original trustee successor trustee law firm a b corporate trustee state statute child child grandchild and spouse grandchild and spouse grandchild and spouse ------------------------------------------------------- ---------------------------------------------------------------------------- ------------------------ ------------------- ------------------------------- --------------------- --------------------------- -------------------------------------------------- ------------------------------------ ------------------------------ ------------------------------------ ------------------------------------------------------- ----------------------------------------------------- -------------------------------------------------- plr-140633-09 ---------------------------------------------------------------------------- --------------------------------------------------------------------------- ------------------------------------------------------------------- --------------------------------------------------------------------- --------------------------------------------------------------------- --------------------------------------------------- ----------------------- -------------------------- ------------------------------------------------------- grandchild and spouse grandchild great-grandchild charitable subtrust ------------------------------------------------------------------------------- divided trust a --------------------------------------------------------------------- divided trust --------------------------------------------------------------------- divided trust ----------------------------------------------------------------------- divided trust ------------------------------------------------------------------------ divided trust --------------------------------------------------------------------- divided trust -------------------------------------------------------------------- group ------------------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------------------- state court ----------------------------------------------------------------------------------------- primary asset date date date date ---------------------------------------- -------------------------- ------------------- ------------------------- ---------------------- ------------------ --------------------------------------------------------------------- --------------------------------------------------------------------- --------------------------------------------------------------------------- dear ------------------------------------ this responds to the date letter from your authorized representative requesting rulings on the income gift estate and generation-skipping_transfer gst tax consequences of a proposed division of trust and charitable subtrust the facts and representations are as follows parent irrevocably created trust on date plr-140633-09 prior to date it is represented that no additions constructive or otherwise have been made to trust after date the trust agreement includes the following provisions sec_1 provides that the rules of law and the statutes of state are to govern in the validity interpretation and enforcement of the trust agreement and the administration of each trust thereunder paragraph dollar_figure provides that payment of any benefits whether principal income or otherwise shall be made in the sole discretion of the trustees amounts of net_income capital_gains or other_amounts of principal not paid to a beneficiary are to be accumulated and added to principal payments of income or principal determined by the trustees if any except as made to potential charitable beneficiaries shall be made only among the members of the lowest numbered class as defined in sec_3 which at the time of payment has one or more living individual beneficiaries individual beneficiaries the payments among the members of a class of individual beneficiaries and charitable beneficiaries need not be equal and may be to one to all or to any number of members as the trustees determine in their sole discretion paragraph dollar_figure provides that payments of income principal or otherwise may be made to any one or more members of the lowest numbered of the classes of individual beneficiaries described in sec_3 which has one or more members then living and or to any one or more members of the class of charitable beneficiaries described in sec_3 sec_3 defines the potential individual beneficiaries as i ii iii iv class one the issue of parent then living and all spouses of then living or deceased issue of parent or class two the issue of family_member then living and all spouses of then living or deceased issue of family_member class three the issue of family_member and family_member who are then living and all spouses of then living or deceased issue of family_member and family_member or class four the persons who would be the heirs-at-law of the last survivor of all members of class one who leaves heirs then living if there are no such heirs then such heirs of the last survivor of class two who leaves heirs then living if there are no such heirs then such heirs of the survivor of class three who leaves heirs then living or v class five certain employees the employees sec_3 provides that the potential charitable beneficiaries shall include charity a and plr-140633-09 charity b so long as they are organized and operated exclusively for the purposes described in sec_501 of the internal_revenue_code and such of a group consisting only of corporations associations and institutions organized and operated exclusively for religious charitable literary and educational_purposes and described in sec_501 sec_3 provides that the trustees may make a complete distribution of all trust assets at any time in the event final distribution is determined by the trustees or legally required under paragraph dollar_figure or otherwise distribution will be made by the trustees to any or all members of the class of individual beneficiaries and charitable beneficiaries then eligible under the provisions of article as determined by the trustees in their sole discretion paragraph dollar_figure provides that trust if not sooner terminated pursuant to complete distribution is to terminate twenty-one years after the death of the survivor of all persons described as potential individual beneficiaries in classes one to three inclusive determined at the date of the execution of the trust agreement any assets governed by a rule_of law of situs under which termination at the date prescribed would render trust invalid are to be distributed on the last date on which the assets can validly remain in trust it is parent’s intent that trust be permitted to endure in perpetuity paragraph dollar_figure provides that all determinations to make apply withhold or accumulate any discretionary payments or distributions of income or principal shall be made only by the trustees then acting who are not related or subordinate parties as to parent within the meaning of sec_672 or who are not within the definition of individual beneficiaries and charitable beneficiaries eligible at the time of the determination paragraph dollar_figure provides that if original trustee ceases to be trustee he shall be replaced by successor trustee if successor trustee ceases to serve he or his successor shall be replaced by the partner associate or member of law firm as designated by two partners of law firm the power of designation shall be exercised by law firm as often as there may be a vacancy in the trusteeship originally filled by original trustee and successor trustee so that except as specifically provided to the contrary there will always be a partner associate or member of law firm serving with the remaining trustees or trustee paragraph dollar_figure provides that the individual trustee or trustees as distinguished from the corporate trustee may appoint one or more individual trustees or a corporate trustee or one or more individual trustees and a corporate trustee to act with the trustee or trustees then acting and also the further power to determine that any partner associate or member of law firm shall never serve as trustee thus completely nullifying the further service or succession by any member or appointee of law firm in the event no trustee is acting a trustee or trustees of the type which might be appointed by individual trustees shall be appointed by a majority of the adult potential individual beneficiaries in the lowest numbered class which contains any such individual beneficiaries as defined in sec_3 the power_of_appointment shall not be exercised in such manner as to result either i in parent’s becoming a trustee or ii in all of the trustees being related or subordinate parties as to plr-140633-09 parent within the meaning of sec_672 sec_5 provides that the trustees may divide trust determining values and designating particular assets for beneficiaries assign like or unlike properties to different beneficiaries or trusts and make distribution and payments in cash or in_kind or in both a and b are the present trustees of trust corporate trustee is a limited trustee with no power to make discretionary distributions the situs of trust is state under the terms of trust and the law of state trust is to continue until the earlier to occur of i the trustees’ complete distribution of the trust assets or ii years after the death of the last survivor of the persons named in group the trustees of trust requested a private_letter_ruling regarding the creation and funding of a revocable charitable subtrust of trust the private_letter_ruling was issued on date on date pursuant to the letter_ruling the trustees created the revocable charitable subtrust charitable subtrust a and b are the trustees of charitable subtrust currently income and principal of trust may be distributed to the members of class one ie the living issue of parent and the spouses of the living or deceased issue of parent in addition income and principal may be distributed to the charitable beneficiaries parent had two children child and child child is x years old is unmarried and has no issue child is married and has five adult children child 2’s five adult children are grandchild grandchild grandchild grandchild and grandchild four of the adult children are married child has one grandchild great-grandchild the charitable subtrust agreement includes the following provisions paragraphs dollar_figure and the trustee may amend the agreement but it shall not be effective without the consent of the trustee of trust the trustee of trust may at any time revoke charitable subtrust paragraph the trustee may not accept contributions from any person or entity other than the trustee of trust paragraph unless sooner terminated by a complete distribution of the assets charitable subtrust will terminate on the date required for the termination of trust and the remaining charitable subtrust assets will be distributed to trust and added to and disposed of as part of the general trust estate under the trust agreement paragraph the payment or accumulation of any amount is vested in the sole discretion of the trustee payments determined by the trustee shall be made only to charitable beneficiaries sec_3 the potential charitable beneficiaries shall be charity a charity b and such of a group as may be selected by the trustee in the trustee’s sole discretion consisting only of corporations associations and institutions that are organized and operated exclusively for religious charitable literary or educational_purposes described in sec_170 sec_642 and sec_501 and exempt from taxation under sec_501 paragraph the individual trustee as distinguished from a corporate trustee of trust shall have the power to appoint cotrustees or successor trustees of charitable subtrust any cotrustee or successor trustee may be removed by at any time by the trustee of trust plr-140633-09 proposed transaction trust will be divided into six separate shares divided trusts one-half of the trust assets and liabilities will be held as a divided trust for the benefit of the child family line family line the other one-half of the trust assets and liabilities will be divided into five approximately equal divided trusts with a respective divided trust held for a respective family line of a child of child a person’s family line will consist of the person the person’s spouse the person’s issue and the spouses of the person’s issue the distribution to the divided trusts will be on a pro_rata basis to the extent practical for instance the trustees will divide the primary asset primary asset of trust strictly pro_rata the division will be adjusted to account for modest prior distributions made to certain individual beneficiaries in class one the divided trusts will have the same dispositive termination allocation and administrative provisions as trust except that sec_3 i of the divided trust for child 1’s family line will limit the individual beneficiaries of class one to child child 1’s spouse if any child 1’s issue if any and the spouses if any of child 1’s issue likewise sec_3 i of a respective divided trust for the family line of a child of child will limit the individual beneficiaries of class one to the respective child the child’s spouse the child’s issue and spouses of the child’s issue child and child 2’s spouse will also be beneficiaries of the five divided trusts held for the family lines of child 2’s children accordingly trust will be divided into i divided trust a for the child family line ii divided trust for the grandchild family line iii divided trust for the grandchild family line iv divided trust for the grandchild family line v divided trust for the grandchild family line and vi divided trust for the grandchild family line the assets and liabilities of charitable subtrust will be divided into five equal shares divided charitable subtrusts with a respective divided charitable subtrust associated with a respective divided trust created for the family line of a child of child it is not expected that there will be a charitable subtrust relating to divided trust a the divided charitable subtrusts will have the same provisions as charitable subtrust except that the powers to amend revoke etc a particular divided charitable subtrust will be exercisable by the each divided trust will provide that if all the members of a particular family line are deceased the divided trust for that family line will terminate its assets and liabilities will be allocated among grandchild 2’s then living issue per stirpes by distribution to the divided trust held for the benefit of that issue or to a separate trust with the same terms and trustee as the divided trust for that issue if the last surviving member of child 2’s family line dies during the trust term the assets of the divided trusts held for child 2’s family line may be administered for the benefit of the class two individual beneficiaries child 1’s family line or distributed to divided trust a for the benefit of child 1’s family line plr-140633-09 trustees of the divided trust to which it is associated trust is administered under the laws of state under state statute a trustee may divide a_trust into two or more trusts if it is in the best interests of all persons interested and will not substantially impair accomplishment of the purposes of the trust on date pursuant to the trustees’ petition court issued an order authorizing the proposed division the order is subject_to receipt of a favorable private_letter_ruling from the internal_revenue_service you have asked for the following rulings the divided trusts and divided charitable subtrusts will be exempt from the gst tax the division will not cause any of parent’s issue or any member of their respective family lines to be treated as having made a transfer subject_to gift_tax the division will not cause the assets of the divided trusts or divided charitable subtrusts to be includible in the gross_estate of any of parent’s issue or any member of their respective family lines for estate_tax purposes the allocation of assets and liabilities of trust and charitable subtrust will not cause trust the divided trusts charitable subtrust the divided charitable subtrusts parent’s issue or any member of their respective family lines to recognize any ordinary_income or loss or capital_gain or loss for income_tax purposes the adjusted_basis of the assets received by the divided trusts and divided charitable subtrusts will be the same as the respective adjusted_basis of the assets held by trust and charitable subtrust for purposes of sec_1015 the holding periods of the assets received by the divided trusts and divided charitable subtrusts will be the same as the holding periods of the assets in trust and charitable subtrust for purposes of sec_1223 issue sec_2601 imposes a tax on every generation-skipping_transfer gst which is defined under sec_2611 as a taxable_distribution a taxable_termination or a direct_skip section b a of the tax_reform_act_of_1986 the act vol c b and sec_26_2601-1 of the generation-skipping_transfer_tax regulations provide that the generation-skipping_transfer_tax shall not apply to any generation-skipping_transfer under a_trust that was irrevocable on date but only to the extent that the transfer was not made out of corpus added to the trust after date or out of income plr-140633-09 attributable to corpus so added sec_26_2601-1 provides rules for determining when a modification judicial construction settlement agreement or trustee action with respect to a_trust that is exempt from the generation-skipping_transfer_tax under sec_26_2601-1 b or b will not cause the trust to lose its exempt status the rules of sec_26_2601-1 apply only to determine whether an exempt trust retains its exempt status for generation-skipping_transfer_tax purposes they do not apply in determining for example whether the transaction results in a gift subject_to gift_tax or may cause the trust to be included in the gross_estate of a beneficiary or may result in the realization of capital_gain for purposes of sec_1001 sec_26_2601-1 provides that a modification of the governing instrument of an exempt trust by judicial reformation or nonjudicial reformation that is valid under applicable state law will not cause an exempt trust to be subject_to the provisions of chapter but only if the modification does not shift a beneficial_interest in the trust to any beneficiary who occupies a lower generation as defined in sec_2651 than the person or persons who held the beneficial_interest prior to the modification and the modification does not extend the time for vesting of any beneficial_interest in the trust beyond the period provided for in the original trust a modification of an exempt trust will result in a shift in a beneficial_interest to a lower generation beneficiary if the modification can result in either an increase in the amount of a generation-skipping_transfer or the creation of a new generation-skipping_transfer sec_26_2601-1 example illustrates a situation where a_trust that is otherwise exempt from the gst tax is divided into two trusts under the facts presented in the example the division of the trust into eight trusts does not shift any beneficial_interest in the trust to a beneficiary who occupies a lower generation as defined in sec_2651 than the person or persons who held the beneficial interests prior to the division and the division does not extend the time for vesting of any beneficial_interest in the trust beyond the period provided for in the original trust in this case trust was irrevocable on date and it is represented that no additions have been made since date based on the facts presented and the representations made the division of trust into the divided trusts and charitable subtrust into the divided charitable subtrusts as described above will not result in a shift of any beneficial_interest to any beneficiary who occupies a generation lower than the persons holding the beneficial interests prior to the division further the proposed division will not extend the time for the vesting of any beneficial_interest in the new trusts beyond the period provided for under the original trust accordingly the divided trusts and divided charitable subtrusts will not be subject_to the provisions of chapter issue sec_2501 imposes a tax for each calendar_year on the transfer of property by gift during such calendar_year by any individual plr-140633-09 sec_2511 provides that the gift_tax applies whether the transfer is in trust or otherwise direct or indirect and whether the property transferred is real or personal tangible or intangible sec_2512 provides that if the gift is made in property the value thereof at the date of the gift is considered the amount_of_the_gift sec_2512 provides that where property is transferred for less than an adequate_consideration in money_or_money's_worth then the amount by which the value of the property exceeded the value of the consideration is deemed a gift that is included in computing the amount of gifts made during the calendar_year the division of trust and charitable subtrust as described above will not result in any change in the beneficial interests of any of the beneficiaries accordingly based on the facts submitted and representations made the division will not cause any of parent’s issue or any member of their respective family lines to be treated as having made a transfer subject_to gift_tax issue sec_2036 provides generally that the value of the gross_estate shall include the value of all property to the extent of any interest therein of which the decedent has at any time made a transfer except in case of a bona_fide sale for an adequate_and_full_consideration in money_or_money's_worth by trust or otherwise under which he has retained for his life or for any period not ascertainable without reference to his death or for any period which does not in fact end before his death the possession or enjoyment of or the right to the income from the property or the right either alone or in conjunction with any person to designate the persons who shall possess or enjoy the property or the income therefrom sec_2037 provides generally that the value of the gross_estate shall include the value of property to the extent of any interest therein of which the decedent has at any time made a transfer except in case of a bona_fide sale for an adequate_and_full_consideration in money_or_money's_worth if possession or enjoyment of the property can through ownership of such interest be obtained only by surviving the decedent and the decedent has retained a reversionary_interest in the property and the value of the reversionary_interest immediately before the decedent’s death exceeds five percent of the value of the property sec_2038 provides generally that the value of the gross_estate shall include the value of all property to the extent of any interest therein of which the decedent has at any time made a transfer except in case of a bona_fide sale for an adequate_and_full_consideration in money_or_money's_worth by trust or otherwise where the enjoyment thereof was subject at the date of his death to any change through the exercise of a power in whatever capacity by the decedent alone or in conjunction with any other person without plr-140633-09 regard to when or from what source the decedent acquired such power to alter amend revoke or terminate or where any such power is relinquished during the 3-year period ending on the date of the decedent's death sec_2036 and sec_2037 provide for inclusion of property in a decedent’s gross_estate if the decedent gratuitously transferred the property during life and retained certain rights powers or interests with respect to the property under sec_2038 the transferred property is includible in the decedent’s gross_estate if the decedent held certain rights or powers at death thus the estate_tax inclusion provisions of sec_2036 through apply only in the case of property transferred by the decedent during life in this case the division of trust and charitable subtrust will not constitute a transfer of property for purposes of sec_2036 through by any of parent’s issue or a member of their respective family lines the trust beneficiaries will have the same interests after the division as they had prior to the division we therefore conclude that the division of trust into the divided trusts and the division of charitable subtrust into the divided charitable subtrusts will not cause the trust assets to be includible the gross_estate of any of parent’s issue or any member of their respective family lines under sec_2036 through sec_2041 provides that the value of the gross_estate shall include the value of all property to the extent of any property with respect to which the decedent has at the time of death a general_power_of_appointment or with respect to which the decedent has at any time exercised or released such a power_of_appointment by a disposition that is of such nature that if it were a transfer of property owned by the decedent such property would be includible in the decedent's gross_estate under sec_2035 to inclusive sec_2041 provides that a general_power_of_appointment is a power that is exercisable in favor of the decedent the decedent’s estate the decedent's creditors or the creditors of the decedent's_estate however a power to consume invade or appropriate property for the benefit of the decedent that is limited by an ascertainable_standard relating to the health education support or maintenance of the decedent shall not be deemed a general_power_of_appointment sec_20_2041-1 of the estate_tax regulations provides that a power in a decedent to remove or discharge a trustee and appoint himself may be a power_of_appointment for example if under the terms of a_trust the trustee or his successor has the power to appoint the principal of the trust for the benefit of individuals including himself and the decedent has the unrestricted power to remove or discharge the trustee at any time and appoint any other person including himself the decedent is considered as having a power_of_appointment revrul_79_353 1979_2_cb_325 held that the value of property transferred to a_trust is includible in the decedent-grantor's gross_estate under sec_2036 and sec_2038 if the grantor retains the power to remove the corporate trustee without cause and appoint another corporate trustee and the trustee is endowed with broad discretionary powers in plr-140633-09 revrul_81_51 1981_1_cb_458 the service announced that revrul_79_353 would be applied prospectively only specifically revrul_81_51 held that if on or before date the date of publication of rev_rul a grantor transferred property to an irrevocable_trust and retained the power to remove at will and replace the corporate trustee with another corporate trustee no estate_tax consequences will result on account of the retained removal and replacement power the service reconsidered the position on this issue in revrul_95_58 1995_2_cb_191 this ruling revoked revrul_79_353 and revrul_81_51 and holds that a decedent-settlor’s reservation of an unqualified power to remove a trustee and appoint an individual or corporate successor trustee that is not related or subordinate to the decedent within the meaning of sec_672 is not considered a reservation of the trustee’s discretionary power of distribution over the property transferred by the decedent-settlor to the trust although revrul_79_353 and revrul_81_51 were revoked a_trust that was exempt from the application of revrul_79_353 by reason of revrul_81_51 does not lose this exemption even if the trust otherwise fails to meet the standard set forth in revrul_95_58 in this case an individual beneficiary may become a trustee of a divided trust held for his or her family line however under paragraph dollar_figure of trust he or she may not participate in any trustee decisions regarding discretionary distributions or as to the assets making up a distributive_share thus the individual beneficiary would have no power to pay directly or indirectly trust principal or income to himself or herself consequently an individual beneficiary will not be regarded as possessing a general_power_of_appointment solely as a result of his or her serving as a trustee further there are circumstances under paragraph in which an individual beneficiary may possess the power to remove at will and replace the trustees of the divided trust held for his or her family line although paragraph dollar_figure does not include the standards of revrul_95_58 for exercising the replacement power the exemption provided by revrul_81_51 is applicable as trust was created and funded before date therefore an individual beneficiary will not be considered to have a general_power_of_appointment within the meaning of sec_2041 solely by reason of possessing a power to remove and replace the trustees issue sec_61 defines gross_income as all income from whatever source derived under sec_61 gross_income includes g ains derived from dealings in property sec_1001 provides that the gain from the sale_or_other_disposition of property is the excess of the amount_realized over the adjusted_basis provided in sec_1011 for determining gain and the loss is the excess of the adjusted_basis provided in sec_1011 for determining loss over the amount_realized under sec_1001 the entire amount of gain_or_loss must be recognized except as otherwise provided plr-140633-09 sec_1_1001-1 of the income_tax regulations provides that except as otherwise provided in subtitle a of the code the gain_or_loss realized from the exchange of property for other_property differing materially either in_kind or in extent is treated as income or as loss sustained under sec_1_1001-1 the severance of a_trust occurring on or after date is not an exchange of property for other_property differing materially either in_kind or in extent if i an applicable_state_statute or the governing instrument authorizes or directs the trustee to sever the trust and ii any non-pro rata funding of the separate trusts resulting from the severance whether mandatory or in the discretion of the trustee is authorized by an applicable_state_statute or the governing instrument in the present case trust and charitable subtrust will be severed into the divided trusts and the divided charitable subtrusts on a pro_rata basis to the extent practical the dispositive provisions of each divided trust agreement are the same as those of the trust agreement similarly the dispositive provisions of each divided charitable subtrust agreement are the same as those of the charitable subtrust agreement the proposed severance of trust is authorized by the trust agreement the proposed severance of charitable subtrust is authorized by the charitable subtrust agreement in addition applicable_state_statute permits both severance transactions the severance of a_trust occurring on or after date is not an exchange of property for other_property differing materially in_kind or in extent if the severance satisfies the criteria set forth in sec_1_1001-1 the proposed severance of trust and charitable subtrust satisfies those criteria accordingly the severance of trust and charitable subtrust accompanied by the pro_rata or non-pro rata funding of the divided trusts and divided charitable subtrusts resulting from the severance does not constitute an exchange of property for other_property differing materially in_kind or in extent under sec_61 and sec_1001 issue sec_1015 provides that the basis in property acquired by a transfer in trust is the same as it would be in the hands of the grantor with adjustments for gain and loss recognized the basis in the assets in the trusts will be determined under sec_1015 in this case the basis of each trust asset in the hands of the surviving trusts will be the same as the basis of each such asset in the dividing trust prior to the division issue sec_1223 provides that in determining the period for which the taxpayer has held property however acquired there shall be included the period for which the property was held by any plr-140633-09 other person if the property has the same basis in whole or in part in the taxpayer’s hands as it would have in the hands of that other person since the division of trust and charitable subtrust is not a sale_or_other_disposition of property and the property has the same basis in the hands of the resulting divided trusts and divided charitable subtrusts as it would have had in the hands of trust and charitable subtrust the holding periods of the assets in the hands of the divided trusts and divided charitable subtrusts will include the holding periods of the assets in the hands of trust and charitable subtrust pursuant to sec_1223 the rulings in this letter pertaining to the federal estate and or generation-skipping_transfer_tax apply only to the extent that the relevant sections of the code are in effect during the period at issue except as specifically ruled upon above we express no opinion as to the tax consequences of the transaction described above under the cited provisions of the code or under any other provisions of the code the rulings in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination this ruling is directed only to the taxpayers requesting it sec_6110 provides that it may not be used or cited as precedent sincerely yours james f hogan chief branch office of the associate chief_counsel passthroughs and special industries enclosures copy for sec_6110


office_of_chief_counsel internal_revenue_service memorandum number release date cc psi postf-104810-09 third party communication none date of communication not applicable uilc date date to sandra m frost robert l schnuriger domestic_production technical advisors charles t schaffhauser agricultural industry technical advisor large mid-size business from paul f handleman chief branch office of the associate chief_counsel passthroughs and special industries cc psi subject domestic_production_gross_receipts and sec_199 this chief_counsel_advice responds to your request for advice regarding sec_199 of the internal_revenue_code this advice may not be used or cited as precedent legend taxpayer --------------------------- ----------------------- ------------------------ --------------------------------------------------- ------------------------------------------------- w x y z --------------------------------------------------------------------------- ----------------------- ------- -------------- product ---------------------------------------- postf-104810-09 issues whether domestic_production_gross_receipts dpgr as defined in sec_199 includes gross_receipts derived by taxpayer in the scenarios described below conclusions the gross_receipts derived from the sale of taxpayer’s tangible_personal_property in scenario qualify as dpgr under sec_199 taxpayer’s gross_receipts in scenario sec_2 and must be allocated between the gross_receipts derived from the disposition of taxpayer’s tangible_personal_property which qualify as dpgr and gross_receipts derived from the license of taxpayer’s intangible_property which are non- dpgr facts taxpayer is a world-wide corporation within the united_states taxpayer developed x using specific scientific processes x produces desirable characteristics traits in a y such as resistance to z and is created by inserting a specific segment of dna into specific locations within a y’s chromosomal structure until the desired characteristics occur taxpayer uses the product containing x to produce a variety of streams of income your request for advice asks us to review three scenarios in scenario taxpayer produces the product containing x in commercial quantities ie mass quantities within the united_states taxpayer sells the product containing x to customers ie distributors wholesalers in commercial quantities taxpayer’s customers then offer the product containing x for sale to end-users -------------------------- --------------------------------------------------------------------------------------------------------------- taxpayer maintains all rights with respect to reproduction of the product containing x taxpayer’s customers have no right to reproduce the product containing x but sell and distribute taxpayer’s product containing x to end-users the end-users also have no right to reproduce taxpayer’s product containing x in scenario taxpayer enters into a licensing agreement the license grants the licensee the right to reproduce the product containing x in commercial quantities subject_to various quality control restrictions the licensee reproduces the product containing x in commercial quantities and that product containing x is then sold and distributed under taxpayer’s brand-name to end-users the end-users have no right to reproduce taxpayer’s product containing x taxpayer receives royalty and or technology fees from the companies or distributors licensed to sell taxpayer’s branded product containing x in scenario the arrangement between taxpayer and the licensee is similar to scenario the difference is that the licensee’s final product containing x is sold and distributed under a non-taxpayer brand-name taxpayer receives royalty and or postf-104810-09 technology fees from companies or distributors licensed to sell non-branded product containing x in both scenario and the licensee is provided with the product containing x in the same or in a substantially_similar form as taxpayer’s product containing x that is sold to customers in scenario but not in commercial quantities for purposes of our analysis we assume taxpayer’s product containing x is provided to the licensee taxpayer’s product containing x is provided because the process creating x is so random that a licensee effectively could not exercise the licensed right to reproduce the product containing x if only provided with a set of specific instructions as the w and x cannot be transferred without being incorporated into a tangible medium such as the product law and analysis under sec_199 the sec_199 deduction is determined by applying a percentage to the lesser_of the taxpayer's qualified_production_activities_income qpai or taxable_income determined without regard to the sec_199 deduction the applicable_percentage i sec_3 for taxable years beginning in and for taxable years beginning in through and for taxable years beginning after under sec_199 qpai is determined by taking dpgr for the taxable_year less cost_of_goods_sold cgs allocable to such dpgr less other expenses losses or deductions which are properly allocable to such dpgr sec_199 provides that dpgr means the gross_receipts of the taxpayer that are derived from any lease rental license sale exchange or other_disposition of i qualifying_production_property qpp which was manufactured produced grown or extracted mpge by the taxpayer in whole or significant part within the united_states ii any qualifying film produced_by_the_taxpayer or iii electricity natural_gas or potable water produced_by_the_taxpayer in the united_states sec_199 provides that qpp includes tangible_personal_property any computer_software and any property described in sec_168 qualified sound_recordings sec_1_199-3 of the income_tax regulations provides in part that dpgr are the gross_receipts as defined in sec_1_199-3 of the taxpayer that are derived from any lease rental license sale exchange or other_disposition as defined in sec_1_199-3 of qpp as defined in sec_1_199-3 that is manufactured produced grown or extracted mpge as defined in sec_1_199-3 by the taxpayer as defined in sec_1_199-3 in whole or in significant part as defined in sec_1_199-3 within the united_states as defined in sec_1_199-3 sec_1_199-3 provides in part that whether gross_receipts qualify as dpgr on an item-by-item basis and not for example on a division-by-division product line-by- postf-104810-09 product line or transaction-by-transaction basis sec_1_199-3 further provides that the term item means the property offered by the taxpayer in the normal course of the taxpayer’s business for lease rental license sale exchange or other_disposition collectively referred to as disposition to customers if the gross_receipts from the disposition of such property qualify as dpgr sec_1_199-3 provides that if sec_1_199-3 does not apply to the property then any component of the property described in sec_1_199-3 is treated as the item provided that the gross_receipts from the disposition of the property described in sec_1_199-3 that are attributable to such component qualify as dpgr each component that meets the requirements under sec_1_199-3 must be treated as a separate item and a component that meets the requirements under sec_1 d ii may not be combined with a component that does not meet these requirements sec_1_199-3 defines tangible_personal_property as any tangible_property other than land real_property described in sec_1_199-3 and any property described in sec_1_199-3 j k or l and further provides that except as provided in sec_1_199-3 and k i computer_software sound_recordings and qualified films are not treated as tangible_personal_property regardless of whether they are affixed to a tangible medium however the tangible medium to which such property may be affixed for example a videocassette a computer diskette or other similar tangible item is tangible_personal_property sec_1_199-3 provides that tangible_personal_property does not include property in a form other than in a tangible medium for example mass-produced books are tangible_personal_property but neither the rights to the underlying manuscript nor the online version on the book is tangible_personal_property sec_1_199-3 provides in part that the term mpge includes manufacturing producing growing extracting installing developing improving and creating qpp the term mpge also includes storage handling or other processing activities other than transportation activities within the united_states related to the sale exchange or other_disposition of agricultural products provided the products are consumed in connection with or incorporated into the mpge of qpp whether or not by the taxpayer first approach scenario sec_1 and scenario analysis taxpayer’s gross_receipts derived from the sale of the product containing x in scenario qualify as dpgr under sec_199 the property taxpayer offers for sale to customers ie distributors wholesalers in the normal course of business is taxpayer’s product containing x this property that taxpayer offers for sale qualifies as the item postf-104810-09 under sec_1_199-3 because the gross_receipts from the sale of such property qualify as dpgr the gross_receipts derived from the sale of the product containing x qualify as dpgr because the gross_receipts are derived from the sale of tangible_personal_property as defined in sec_1_199-3 j that was mpge as defined in sec_1_199-3 by taxpayer as defined in sec_1_199-3 in whole or significant part as defined in sec_1_199-3 within the united_states as defined in sec_1_199-3 scenario sec_2 and analysis our office analyzed scenario sec_2 and together because the difference between the scenarios does not affect whether the gross_receipts qualify as dpgr for purposes of sec_199 the difference only affects the amount of gross_receipts that taxpayer receives from the license agreements in scenario sec_2 and taxpayer’s gross_receipts that are derived from the license agreements must be allocated between receipts qualifying as dpgr and receipts that are non-dpgr gross_receipts derived from the licensing of the right to reproduce the product containing x are non-dpgr because those gross_receipts are derived from the license of an intangible the right to reproduce the product containing x taxpayer does not transfer x without taxpayer’s product taxpayer’s gross_receipts derived from the value of taxpayer’s product containing x provided to a licensee without the right to reproduce the product containing x are dpgr under sec_199 in your request for advice you question whether taxpayer’s x constitutes tangible_personal_property under sec_199 and sec_1_199-3 and thus constitutes qpp after review we believe this issue is not determinative in scenario sec_2 and under this approach because taxpayer’s x is not the property offered for license by taxpayer to customers in its normal course of business the property taxpayer offers to customers is the intangible right to reproduce the product containing x as part of this licensed right taxpayer also provides non-commercial quantities of taxpayer’s product containing x so that the licensee can exercise the intangible right to reproduce the product containing x in scenario sec_2 and taxpayer licenses to customers in the normal course of business the right to reproduce the product containing x a licensee uses this right to produce the product containing x in commercial quantities the resulting commercial product which is the same as taxpayer’s product or nearly identical offered in scenario is sold to end-users under taxpayer’s brand-name scenario or a non-taxpayer brand- name scenario the licensing of an intangible right is not a disposition that gives rise to dpgr under sec_199 because intangibles are not qpp under sec_199 therefore taxpayer’s gross_receipts derived from the license of the intangible right to reproduce the product postf-104810-09 containing x do not qualify as dpgr and sec_1_199-3 does not apply to the property offered for license by taxpayer because sec_1_199-3 does not apply to the property offered for license by taxpayer under sec_1_199-3 any component of the property offered for license by taxpayer is treated as the item provided the gross_receipts attributable to the component qualify as dpgr the gross_receipts derived from the disposition of taxpayer’s product containing x qualify as dpgr under sec_199 for the same reasons as established in scenario the amount of gross_receipts attributable to taxpayer’s product containing x in scenario sec_2 and that qualify as dpgr should equal the amount that a licensee would pay for taxpayer’s product containing x without the intangible right to reproduce the product containing x in scenario sec_2 and taxpayer’s item under sec_1_199-3 is the product containing x without the right to reproduce the product containing x taxpayer’s situation is unusual because for a licensee to exercise the licensed intangible right to reproduce the product containing x taxpayer must transfer x with taxpayer’s product the fact that taxpayer’s product containing x is provided to the licensee does not change the fact that the gross_receipts in scenario sec_2 and primarily relate to the licensed intangible right to reproduce property rather than to taxpayer’s sale of property as in scenario the dichotomy of what taxpayer is offering in the normal course of business is clear between scenario and scenario sec_2 and in scenario taxpayer offers for sale the product containing x in scenario sec_2 and taxpayer offers for license the right to reproduce the product containing x and provides non-commercial quantities so that the licensee can exercise that right the difference in the amount of taxpayer’s product provided to customers accentuates the difference in what taxpayer offers for sale or license in scenario taxpayer sells commercial quantities of taxpayer’s product containing x in scenario sec_2 and taxpayer only provides non-commercial quantities because taxpayer has licensed the right to reproduce the product containing x either taxpayer branded or non-taxpayer branded depending on whether scenario or scenario further as the typical license agreement involves the license intangible_property rights we question whether tangible_personal_property can be licensed rather than leased rented sold exchanged or otherwise_disposed_of second approach to scenario sec_1 and your request for advice focuses on whether x without the product in scenario sec_2 and is the intangible licensed to customers rather than the right to reproduce the product containing x while we believe that the first approach above analyzing scenario sec_1 and is the better approach we do believe that your approach has merit if x is treated as the licensed property both approaches should reach the same results postf-104810-09 sec_1_199-3 provides that tangible_personal_property does not include property other than in a tangible medium taxpayer’s x is not transferred to customers without a tangible medium which arguably indicates that x itself is not tangible_personal_property for purposes of sec_199 the example of intangible_property in sec_1_199-3 arguably supports the conclusion that x licensed in scenario sec_2 and is intangible_property even though taxpayer’s product containing x sold in scenario is entirely tangible_personal_property under sec_199 to reach this conclusion an evaluation must be made as to whether the property licensed or sold by taxpayer in each scenario is closer to the examples of tangible_property or intangible_property in sec_1_199-3 the example in sec_1_199-3 provides that mass-produced books are tangible_personal_property but neither the rights to the underlying manuscript nor an online version of the book is tangible_personal_property in scenario it appears that taxpayer is selling property that is more similar to the tangible mass-produced books as it is selling commercial quantities of taxpayer’s product containing x therefore in scenario it appears that the gross_receipts derived from the sale of taxpayer’s product containing x to customers should qualify as dpgr under sec_199 in the context of taxpayer’s industry in scenario sec_2 and it appears that taxpayer is licensing property that is more similar to the rights to the underlying manuscript as opposed to tangible mass-produced books because it is providing the product containing x in non-commercial quantities so that it can be produced in mass quantities a line of cases exists that analyzes property for purposes of former sec_48 and sec_1_48-1 and considers film sound_recordings and computer_software to be tangible_personal_property see eg 27_f3d_1142 6th cir master source code computer discs and tapes 675_f2d_1068 9th cir master sound_recording and 549_f2d_576 9th cir master film negatives the line of cases stands for the proposition that if an intangible is useless without a tangible medium then the intangible_property and tangible_property are inextricably connected and together constitute tangible_personal_property sec_3 b of notice_2005_14 2005_2_cb_498 states that the definition of tangible_personal_property is derived primarily from and is generally consistent with the definition of that term under sec_1_48-1 however tangible_personal_property excludes any property that falls within the definition of computer_software a sound_recording or a qualified_film which constitute a majority of the former sec_48 cases reliance on the above line of cases for the determining tangible_personal_property under sec_199 is inconsistent with treating computer_software sound_recordings and qualified films as intangibles postf-104810-09 sec_1_199-3 provides that the tangible medium to which certain intangibles are affixed like a videocassette computer diskette or other tangible item is tangible_personal_property therefore in scenario sec_2 and taxpayer’s product to which x is affixed should likewise be considered tangible_personal_property and because taxpayer meets the other requirements under sec_199 with respect to taxpayer’s product the gross_receipts derived from the disposition of the taxpayer’s product qualify as dpgr in scenario sec_2 and however as discussed above the gross_receipts derived from the license of x are non-dpgr because intangibles do not qualify as tangible_personal_property under sec_199 case development hazards and other considerations --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------- 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--------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- ------------------------------------------------ this writing may contain privileged information any unauthorized disclosure of this writing may undermine our ability to protect the privileged information if disclosure is determined to be necessary please contact this office for our views please call ---------------------------------------------if you have any further questions