department of the treasury internal_revenue_service washington d c date number info release date cc tege eoeg et1 - genin-126853-03 uilc memorandum for director internal_revenue_service center cincinnati oh attn technical unit from subject office of division counsel associate chief_counsel tax exempt and government entities cc tege eoeg et1 - genin-126853-03 railroad retirement act tax status in accordance with the coordination procedure established between the service and the railroad retirement board rrb the rrb has provided us with its opinion that the following business is not an employer under the railroad retirement act and the railroad unemployment insurance act we have reviewed the opinion of the rrb and based upon the information submitted to the rrb we also conclude that is not an employer under the railroad_retirement_tax_act please take the appropriate action regarding this business will e mcleod cc


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-141583-08 date date x --------------------------------------------------- --------------------------------------------------------------------- country d1 --------------------------- ------------------------- dear ---------- this letter responds to a letter dated date and subsequent correspondence submitted on behalf of x by its authorized representatives requesting a ruling under sec_301_9100-1 and sec_301_9100-3 of the procedure and administration regulations that x be granted an extension of time to file an election to be classified as a disregarded_entity under sec_301_7701-3 effective d1 facts the information submitted states that x was formed on d1 as a company under the laws of country x intended to be treated as a disregarded_entity for federal tax purposes effective d1 however due to inadvertence x failed to file a timely form_8832 entity classification election law and analysis sec_301_7701-3 provides that a business_entity that is not classified as a corporation under sec_301_7701-2 or an eligible_entity can elect its classification for federal tax purposes as provided in sec_301_7701-3 plr-141583-08 sec_301_7701-3 provides that unless it elects otherwise a foreign eligible_entity is a a partnership if it has two or more members and at least one member does not have limited_liability b an association if all members have limited_liability or c disregarded as an entity separate from its owner if it has a single owner that does not have limited_liability sec_301_7701-3 provides that an eligible_entity may elect to be classified other than as provided in sec_301_7701-3 or to change its classification by filing form_8832 with the service_center designated on form_8832 sec_301_7701-3 provides that an election made under sec_301 c i will be effective on the date specified by the entity on form_8832 or on the date filed if no date is specified on the election form the effective date specified on form_8832 cannot be more than days prior to the date on which the election is filed and cannot be more than months after the date on which the election is filed sec_301_9100-1 provides that 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 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 sec_301_9100-1 defines a regulatory election to include an election whose due_date is prescribed by a regulation published in the federal_register sec_301_9100-2 provides the rules governing automatic extensions of time for making certain elections sec_301_9100-3 sets forth the standards the commissioner will use to determine whether to grant an extension of time for regulatory elections that do not meet the requirements of sec_301_9100-2 sec_301_9100-3 provides that requests for relief subject_to sec_301_9100-3 will be granted when the taxpayer provides evidence including affidavits described in sec_301_9100-3 to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and granting relief will not prejudice the interests of the government conclusion based 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 satisfied as a result x is granted an extension of time of days from the date of this letter to file form_8832 with the appropriate service_center and to elect to be classified as a disregarded_entity for federal tax purposes effective d1 a copy of this letter should be attached to the form_8832 a copy is enclosed for that purpose plr-141583-08 except as expressly set forth above we express or imply no opinion concerning the federal tax consequences of the facts discussed above under any other provision of the code this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent in accordance with a power_of_attorney on file with this office we are sending copies of this letter to x’s authorized representatives sincerely curtis g wilson curtis g wilson associate chief_counsel office of the associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes cc


t c memo united_states tax_court barry and debra bulakites petitioners v commissioner of internal revenue respondent docket no filed date carolyn j jackson for petitioners robert e marum and richard fultz for respondent memorandum opinion dawson judge this case was assigned to special_trial_judge robert n armen jr pursuant to the provisions of sec_7443a and rule sec_180 sec_181 and sec_183 the court agrees with all section references are to the internal_revenue_code as amended and all rule references are to the tax_court rules of continued and adopts the opinion of the special_trial_judge which is set forth below opinion of the special_trial_judge armen special_trial_judge this matter is before the court on respondent's motion to dismiss for lack of jurisdiction although respondent contends that this case should be dismissed on the ground that barry and debra bulakites petitioners failed to file their petition within the time prescribed by sec_6213 and sec_7502 petitioners argue that dismissal should be based on respondent's failure to issue a valid notice_of_deficiency under sec_6212 because there is no dispute that we lack jurisdiction over the petition filed herein we must resolve the parties' dispute regarding the proper ground for dismissal see 92_tc_729 affd without published opinion 935_f2d_1282 3d cir background on date petitioners filed joint federal_income_tax returns for the taxable years and on each of those returns petitioners listed their address a sec_53 christopher lane guilford connecticut the guilford address continued practice and procedure on date respondent mailed a 30-day_letter to petitioners at the guilford address in the 30-day_letter respondent notified petitioners of proposed changes to their tax_liability for on date petitioners' accountant edward e pratesi mr pratesi wrote a letter to respondent's agent apparently in response to the 30-day_letter mr pratesi's letter stated as follows because our client barry bulakites has relocated to michigan the enclosed letter was not received until recently in accordance with my client's wishes we request an appeal of the tax and related penalties the reason for the appeal is that certain documentation supporting a disallowed deduction must be located upon mr bulakites' return to connecticut mr pratesi's letter made no mention of mr bulakites' address in michigan in the interim on date petitioners executed a form_2848 power_of_attorney and declaration of representative appointing mr pratesi as their attorney-in-fact regarding their federal_income_tax liabilities for the taxable years and petitioners listed the guilford address as their address on the form_2848 line of the form_2848 provides in pertinent part as follows notices and communications original notices and other written communications will be sent to you and a copy to the first representative listed on line unless you check one or more of the boxes below although the first of three boxes referred to in line provided an election under which all original notices would be sent to petitioners' attorney-in-fact petitioners did not check the box respondent received petitioners' form_2848 on date on date respondent's agent left a recorded telephone message for mr pratesi reminding him of the need to respond further to the 30-day_letter mr pratesi did not respond to the message nor did he respond further to the 30-day_letter on date respondent mailed a notice_of_deficiency to petitioners in the notice respondent determined a deficiency in petitioners' federal_income_tax for in the amount of dollar_figure as well as an addition_to_tax under sec_6651 in the amount of dollar_figure and an accuracy-related_penalty under sec_6662 in the amount of dollar_figure the notice_of_deficiency was mailed to petitioners at the guilford address ie the address listed by petitioners on their income_tax returns for and respondent did not mail a copy of the notice_of_deficiency to mr pratesi it appears that petitioners' income_tax return for was not filed before the notice_of_deficiency was mailed the notice_of_deficiency was apparently forwarded by the u s postal service to petitioners in michigan in any event petitioners received the notice_of_deficiency no later than the latter part of date on date a date days after the notice_of_deficiency was mailed the court received and filed a petition for redetermination contesting respondent's deficiency determination the petition arrived at the court in an envelope bearing a u s postal service postmark date of date a date days after the notice_of_deficiency was mailed the petition which is dated date was signed on petitioners' behalf by their counsel carolyn j jackson esq ms jackson at the time that the petition was filed petitioners resided in east lansing michigan as indicated respondent filed a motion to dismiss for lack of jurisdiction on the ground that the petition was not timely filed petitioners filed an objection to respondent's motion to which respondent filed a response this matter was called for hearing at the court's motions session in washington d c on date counsel for both parties appeared at the hearing and presented argument with respect to the pending motion the petition consisting of a preamble five numbered paragraphs and a prayer for relief is less than three pages in length discussion the court's jurisdiction to redetermine a deficiency depends upon the issuance of a valid notice_of_deficiency and a timely filed petition rule a c 93_tc_22 90_tc_142 sec_6212 expressly authorizes the commissioner after determining a deficiency to send a notice_of_deficiency to the taxpayer by certified or registered mail it is sufficient for jurisdictional purposes if the commissioner mails the notice_of_deficiency to the taxpayer at the taxpayer's last_known_address sec_6212 81_tc_42 the taxpayer in turn ha sec_90 days or days if the notice is addressed to a person outside of the united_states from the date that the notice_of_deficiency is mailed to file a petition in this court for a redetermination of the deficiency sec_6213 see sec_7502 see also sec_301_7502-1 proced admin regs respondent mailed the notice_of_deficiency in question to petitioners at the guilford address on date the petition which arrived at the court in an envelope postmarked date was filed by the court on the date of receipt ie on date because the petition was neither mailed nor filed prior to the expiration of the 90-day statutory period for filing a timely petition it follows that we lack jurisdiction sec_6213 sec_7502 rule a c see normac inc v commissioner supra the question presented is whether dismissal of this case should be premised on petitioners' failure_to_file a timely petition under sec_6213 or on respondent's failure to issue a valid notice_of_deficiency under sec_6212 petitioners contend that the notice is invalid because respondent did not use due diligence in attempting to determine their last_known_address prior to mailing the notice although the phrase last_known_address is not defined in the internal_revenue_code or in the regulations thereunder we have held that a taxpayer's last_known_address is the address shown on the taxpayer's most recently filed return absent clear and concise notice of a change_of address 91_tc_1019 see 857_f2d_676 9th cir affg 88_tc_1042 the burden of proving that a notice_of_deficiency was not sent to the taxpayer at the taxpayer's last known petitioners do not complain that respondent failed to send a copy of the notice_of_deficiency to mr pratesi it should be recalled that petitioners' income_tax returns for and were filed on date and that the notice_of_deficiency was mailed to petitioners on date as previously noted it appears that petitioners' income_tax return for was not filed before the notice_of_deficiency was mailed address is on the taxpayer 89_tc_806 petitioners do not dispute that they did not provide respondent with clear and concise notice of a change_of address however petitioners contend that mr pratesi's letter dated date put respondent's agent on notice that mr bulakites was in the process of relocating to michigan and therefore that respondent knew or should have known that the guilford address was not petitioners' correct address considering all of the facts and circumstances including the fact that petitioners listed the guilford address as their address on the form_2848 submitted to respondent on date we are not persuaded that respondent in the exercise of reasonable diligence knew or should have known that the guilford address was not petitioners' correct address thus we find that the deficiency_notice was mailed to their last_known_address in addition petitioners actually received the notice_of_deficiency no later than the latter part of date it is well settled that a notice_of_deficiency is not invalid merely because it is not sent to a taxpayer at the taxpayer's last_known_address in particular an otherwise erroneously addressed notice_of_deficiency remains valid under sec_6212 if it is actually received in sufficient time to permit the taxpayer without prejudice to file a timely petition for redetermination see 81_tc_65 erroneously addressed notice held valid in light of actual receipt by the taxpayer days after it was mailed see also 55_f3d_216 6th cir affg tcmemo_1993_143 the notice_of_deficiency was mailed to petitioners on date the record as developed at the hearing shows that petitioners actually received the notice_of_deficiency no later than the latter part of date consequently petitioners had no less than days in which to file a timely petition for redetermination with the court the court has held that receipt of a notice_of_deficiency with as few a sec_30 days remaining in the 90-day filing period was not prejudicial to the taxpayer see bowers v commissioner tcmemo_1991_609 days remaining fileff v commissioner tcmemo_1990_452 days remaining george v commissioner tcmemo_1990_147 days remaining manos v commissioner tcmemo_1989_442 at least days remaining loftin v commissioner tcmemo_1986_322 days remaining but see 815_f2d_1400 11th cir receipt of notice with days remaining in the filing period is not ample time in which to prepare a petition 73_tc_690 receipt of notice with days remaining in the filing period is prejudicial to the taxpayer consistent with mulvania v commissioner supra we hold that petitioners received the notice_of_deficiency with sufficient time to file a timely petition for redetermination that petitioners suffered no prejudice and that the notice_of_deficiency in question is valid because petitioners failed to file their petition in a timely manner we will grant respondent's motion to dismiss for lack of jurisdiction to reflect the foregoing an order will be entered granting respondent's motion to dismiss for lack of jurisdiction although petitioners cannot pursue their case in this court they are not without a remedy in short petitioners may pay the tax file a claim for a refund with the internal_revenue_service and if the claim is denied sue for a refund in the federal district_court or the u s court of federal claims see 55_tc_138


tax_exempt_and_government_entities_division department of the treasury internal_revenue_service te_ge eo examinations commerce st mail stop dal dallas texas date release number release date legend org -- organization name xx - date address - address org address certified mail dear taxpayer_identification_number person to contact employee identification_number contact numbers phone fax this is a final adverse determination regarding your exempt status under sec_501 of the internal_revenue_code the code our favorable determination_letter to you dated september 20xx is hereby revoked and you are no longer exempt under sec_501 of the code effective june 20xx the revocation of your exempt status was made for the following reason you have failed to produce documents to establish that you are operated exclusively for exempt purposes within the meaning of internal_revenue_code sec_501 and that no part of your net_earnings inure to the benefit of private shareholders or individuals contributions to your organization are no longer deductible you are required to file income_tax returns on form_1120 if you have not already filed these returns and the examiner has not provided you instructions for converting your previously filed forms 990-n electronic postcard to forms you should file these income_tax returns with the appropriate service_center for the tax years ending december 20xx and for all tax years thereafter in accordance with the instructions of the return processing of income_tax returns and assessments of any taxes due will not be delayed should a petition for declaratory_judgment be filed under sec_7428 of the internal_revenue_code if you decide to contest this determination you may file an action for declaratory_judgment under the provisions of sec_7428 of the code in one of the following three venues united_states tax_court the united_states court of federal claims or the united_states district_court for the district of columbia a petition or complaint in one of these three courts must be filed before the day after the date this determination was mailed to you if you wish to seek review of our determination please contact the clerk of the respective court for rules and the appropriate forms regarding filing petitions for declaratory_judgment by referring to the enclosed publication please note that the united_states tax_court is the only one of these courts where a declaratory_judgment action can be pursued without the services of a lawyer you may write to the courts at the following addresses you also have the right to contact the office_of_the_taxpayer_advocate taxpayer_advocate assistance is not a substitute for established irs procedures such as the formal appeals process the taxpayer_advocate cannot reverse a legally correct_tax determination or extend the time fixed by law that you have to file a petition in a united_states court the taxpayer_advocate can however see that a tax matter that may not have been resolved through normal channels gets prompt and proper handling you may call toll-free and ask for taxpayer_advocate assistance if you prefer you may contact your local taxpayer_advocate at if you have any questions please contact the person whose name and telephone number are shown in the heading of this letter sincerely yours nanette m downing director eo examinations enclosures publication exempt_organization appeal procedures for unagreed issues form_6018 consent to proposed action - sec_7428 return envelope department of the treasury internal_revenue_service tax_exempt_and_government_entities_division capitol street fresno ca irs org address date date taxpayer_identification_number form tax_year s ended person to contact 1d number contact numbers manager's name id number manager's contact number response due_date certified maii - return receipt requested dear why you are receiving this letter we propose to revoke your status as an organization described in sec_501 of the internal_revenue_code code enclosed is our report of examination explaining the proposed action what you need to do if you agree if you agree with our proposal please sign the enclosed form_6018 consent to proposed action - sec_7428 and return it to the contact person at the address listed above unless you have already provided us a signed form we'll issue a final revocation letter determining that you aren't an organization described in sec_501 after we issue the final revocation letter we’ll announce that your organization is no longer eligible for contributions deductible under sec_170 of the code frend if we don't hear from you if you don't respond to this proposal within calendar days from the date of this letter we'll issue a final revocation letter failing to respond to this proposal will adversely impact your legal standing to seek a declaratory_judgment because you failed to exhaust your administrative remedies effect of revocation status if you receive a final revocation letter you'll be required to file federal_income_tax returns for the tax_year s shown above as well as for subsequent tax years what you need to do if you disagree with the proposed revocation if you disagree with our proposed revocation you may request a meeting or telephone conference with the supervisor of the irs contact identified in the heading of this letter you also may file a protest with the letter rev catalog number 34809f irs appeals_office by submitting a written request to the contact person at the address listed above within calendar days from the date of this letter the appeals_office is independent of the exempt_organizations division and resolves most disputes informally for your protest to be valid it must contain certain specific information including a statement of the facts the applicable law and arguments in support of your position for specific information needed for a valid protest please refer to page one of the enclosed publication how to appeal an irs decision on tax-exempt status and page six of the enclosed publication the examination process publication also includes information on your rights as a taxpayer and the irs collection process please note that fast track mediation referred to in publication generally doesn’t apply after we issue this letter you also may request that we refer this matter for technical_advice as explained in publication please contact the individual identified on the first page of this letter if you are considering requesting technical_advice if we issue a determination_letter to you based on a technical_advice_memorandum issued by the exempt_organizations rulings and agreements office no further irs administrative appeal will be available to you contacting the taxpayer_advocate office is a taxpayer right you have the right to contact the office_of_the_taxpayer_advocate their assistance isn’t a substitute for established irs procedures such as the formal appeals process the taxpayer_advocate can't reverse a legally correct_tax determination or extend the time you have fixed by law to file a petition in a united_states court they can however see that a tax matter that hasn't been resolved through normal channels gets prompt and proper handling you may call toll-free and ask for taxpayer_advocate assistance if you prefer you may contact your local taxpayer_advocate at internal_revenue_service office_of_the_taxpayer_advocate for additional information if you have any questions please call the contact person at the telephone number shown in the heading of this letter if you write please provide a telephone number and the most convenient time to call if we need to contact you thank you for your cooperation sincerely nanette m downing director eo examinations enclosures report of examination form_6018 publication publication letter rev catalog number 34809f department of the treasury - internal_revenue_service schedule no or exhibit form_886 a explanation of items name of taxpayer org _ - year period ended 20xx12 20xx12 legend org organization name president secretary secretary - secretary treasurer - treasurer secretary-1 - xx - date country - country president - treasurer-1 - treasurer issues issue - does org continue to qualify for exemption under internal_revenue_code sec_501 issue - is retroactive revocation of org warranted under code sec_7805 facts org eo was founded as an association by president and treasurer on june 20xx article of the articles of association show the organization’s name as org article il states in part said organization is exclusively for charitable religious educational and or scientific purposes including for such purposes the making of distributions to organizations that qualify as exempt_organization under sec_501 of any future federal tax code the eo submitted form_1023 application_for recognition of exemption under sec_501 of the internal_revenue_code to the internal_revenue_service irs on april 20xx form_1023 listed president as president secretary as secretary and treasurer as treasurer form_1023 provided a narrative description of the eo’s activities and stated the organization is involved in training people for working in the community as volunteers people will be trained in the care and education of children on a full-time basis the major project is scheduled to begin operations in early 20xx the project is currently housed in a private home and will be overseen by the executive director and the board_of directors during the application process the irs requested detailed information about the eo’s intended operations in a letter dated june 20xx and asked the eo where the activities form 886-a rev department of the treasury - internal_revenue_service page of department of the treasury - internal_revenue_service schedule no or exhibit form_886 a name of taxpayer explanation of items year period ended 20xx12 20xx12 org were to be conducted in its response dated july 20xx the eo makes no mention that it plans to conduct any of its activities outside of the united_states the irs issued a determination_letter dated september 20xx the determination_letter recognized the eo as an organization exempt from federal_income_tax under internal_revenue_code code sec_501 the determination_letter also recognized the eo as a public charity as described in code sec_170 during the interview portion of the examination president president stated that the eo’s primary exempt_purpose is to train volunteers in country to teach them how to help orphans the eo accomplishes its goal by sending the president to visit different countries the president said she has visited country country country country country country country country country country and country to feed orphans since 20xx the president could not provide any details of the training provided to volunteers the examination revealed that the eo did not incur any type of training expenses and training material does not exist the president stated that the major project that was scheduled to begin in early 20xx referred to the eo’s inception and start_up operations the president did not know why there was not mention on form_1023 or subsequent correspondence of the eo’s intention to carry on activities outside of the united_states the examination revealed the president signed form_1023 and the letter dated july 20xx the examination also revealed that the eo carries on all its activities outside of the united_states the eo is operated from the president’s residence and an office in country country the eo’s board_of directors is comprised of two other individuals secretary-1 is the secretary and treasurer-1 is the treasurer secretary-1 and treasurer-1 reside in country the office in country is rented year round and according to the president is used by the secretary and treasurer to carry out eo business but the president could not provide support to show what business that was the president stated that she travels to country at least twice a year and stays for two or three months at a time in 20xx the president made two trips one to country and the other to country to provide assistance to orphans the president visited country from june to august she met the secretary and the treasurer and together provided the assistance to orphans the president stated that because the secretary and the treasurer live in country they know first hand where the orphans congregate the three traveled to a shelter the shelter does not have a name located next to a market called orphans congregate at the rear of the market because the market throws out spoiled the form 886-a rev department of the treasury - internal_revenue_service page of form_886 a name of taxpayer org year period ended 20xx12 20xx12 explanation of items department of the treasury - internal_revenue_service schedule no or exhibit food in a dumpster the orphans scavenge for food in the dumpster and on that particular day about orphans loitered the immediate area the three officers spoke to the children some adults and determined that the children needed food the president took a taxi from the market to a nearby warehouse to purchase food to feed orphans she purchased chicken rice bread cream corn and water and returned to the shelter at the shelter the officers cut the chicken and provide each child a piece of chicken to cook the children used a discarded grill to cook the food themselves once all the children were fed the officers left the site the total cost for this type of event to feed children is approximately dollar_figure to dollar_figure the president said that they provided approximately similar meals during her visit the president visited country from june to june the president said she saw something on television about an earthquake or a severe storm that struck country and decided to provide assistance to the affected children the president's coworker proviced contact information for a person who lived in country the president contacted president the president did not recall president’s the last name and began to discuss the needs of children impacted by the earthquake or the storm the president flew to country met president and began to visit the areas affected by the earthquake or storm to determine what assistance to provide to the children the president purchased books crayons pencils and soccer balls for the children she said she spent approximately dollar_figure to dollar_figure on the donated items president was not connected to a relief organization but operated a day care center during the president's visit her lodging and meals were paid_by the eo the eo does not work in conjunction with any other organization to provide the assistance to the orphans the president said the trips in 20xx are indicative of all the trips she has taken the president was asked to provide support to demonstrate that the trips served a bona_fide charitable purpose and were not a personal vacation but she was unable the books_and_records show that the president is the eo’s only donor the president stated that other individuals have offered donations but she was unsure if accepting the donations would be problematic to the eo and declined the offers the books_and_records show that the president is the only person making deposits writing and signing checks the books_and_records show numerous purchases that appear to be of a personal nature the president provided verbal explanation for the purchases but was unable to provide support to substantiate the charitable purpose of the expenses law form 886-a rrev page of - internal_revenue_service department of the treasury ou ry p form_8 a department of the treasury - internal_revenue_service schedule no or exhibit name of taxpayer explanation of items year period ended 20xx12 20xx12 org code sec_501 exempts from federal_income_tax organizations organized and operated exclusively for charitable educational and other exempt purposes provided that no part of the organization's net_earnings inures to the benefit of any private_shareholder_or_individual code sec_509 defines a private_foundation as a domestic or foreign organization described in code sec_501 other than an organization described in code sec_170 other than in clauses vii and viil code sec_7805 state in part that that any regulation may take effect or apply retroactively to prevent abuse treasury regulations regulations sec_1_501_c_3_-1 provides that in order to be exempt as an organization described in code sec_501 the organization must be one that is both organized and operated exclusively for one or more of the purposes specified in that section regulations sec_1_501_c_3_-1 provides that an organization will not be regarded as operated exclusively for exempt purposes if more than an insubstantial part of its activities is not in furtherance of exempt purposes regulations sec_1 c -1 d ii provides that an organization is not organized or operated exclusively for one or more exempt purposes unless it serves a public rather than a private interest thus it is necessary for an 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 regulation sec_1 c -1 d ii provides that an organization must establish that it serves a public rather than a private interest and 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 revproc_98_1 r b provides that except in rare or unusual circumstances the revocation or modification of a letter_ruling will not be applied retroactively to the taxpayer for whom the letter_ruling was issued or to a taxpayer whose tax_liability was directly involved in the letter_ruling provided that there has been no misstatement or omission of material facts the facts at the time of the transaction are not materially different from the facts on which the letter_ruling was based there has been no form 886-a crev department of the treasury - internal_revenue_service page of department of the treasury - internal_revenue_service schedule no or exhibit form_886 a explanation of items name of taxpayer org year period ended 20xx12 20xx12 change in the applicable law the letter_ruling was originally issued for a proposed transaction and the taxpayer directly involved in the letter_ruling acted in good_faith in relying on the letter_ruling and revoking or modifying the letter_ruling retroactively would be to the taxpayer's detriment taxpayer’s position after being informed of the operational requirements of an organization exempt under code sec_501 and the public support requirements of a public charity the president agreed to the proposed retroactive revocation government’s position conclusion issue - the eo’s tax exempt status should be revoked because the eo did not demonstrate that it is operated for an exempt_purpose the eo did not demonstrate that it is carrying on the activities it proposed on form_1023 and the eo was unable to demonstrate that its current activities are charitable the eo was unable to demonstrate that the purchases furthered an exempt_purpose and without corroborating support the purchases must be considered to have served a personal benefit and constitute private_inurement to the president issue - the eo is not entitled to code sec_7805 relief because it did not provide accurate description of its intended activities or method of operation the retroactive revocation is warranted because the eo never carried out its stated proposed activities the eo did not disclose the fact that it intended to operate outside of the united_states nor the actual method of operation operating outside of the united_states is not necessarily an issue but if the irs was advised of foreign operations it may have triggered a solicitation of operational details to ensure oversight if the eo provided an accurate description of how it actually intended to operate tax exempt recognition would have been denied form 886-a crev department of the treasury - internal_revenue_service page of


tax_exempt_and_government_entities_division department of the treasury internal_revenue_service washington d c apr uniform issue list legend taxpayer a taxpayer b amount d trust t date date date date date ira x ira y company m company n state n t i dear taxpayer b this is in response to the date request for letter rulings under sec_408 of the internal_revenue_code as supplemented by correspondence dated date requesting that we waive the 60-day rollover requirement of sec_408 of the code in order to permit taxpayer b to roll over amounts distributed from individual_retirement_arrangement x ira x to the trustee of trust t submitted on your behalf by your authorized representative the request for letter rulings is based on the following facts and representations taxpayer a whose date of birth was date died on date at age as of his date of death taxpayer a was the owner of ira x maintained with company m on date taxpayer a signed and adopted trust t for the benefit of his children and spouse taxpayer b taxpayer b is the trustee of trust t taxpayer b was alive as of the date of this ruling_request and had attained age prior to the provisions of trust t provide in relevant part that upon taxpayer a's death taxpayer b becomes the sole trustee thereof trust t further provides for the division of the trust into the subtrust b part being a by-pass trust and the subtrust a part being a marital trust stocks and cash in trust t have been allocated by the trustee to the by- pass trust and the proceeds of ira x along with other assets have been allocated by the trustee to the marital trust the marital trust provides that taxpayer b shall receive all the income therefrom no less frequently than quarterly and that the trustee can invade the corpus for taxpayer b only and during the lifetime of taxpayer b taxpayer b has the power by written instrument at any time and from time to time to appoint all or any part of subtrust a corpus to herself on date company m issued a check for amount d to taxpayer b as trustee of trust t as a total_distribution from ira x the check is still being held and has not been deposited or cashed an agent for taxpayer b mailed the above check on date to company n to be deposited into ira y an ira set up and maintained in the name of taxpayer b later the agent was notified of a refusal by company n to accept the check for deposit to ira y the agent began contacting company n's ira department manager and his superior in attempt to have check accepted after various conversations with company n the agent was informed that company n would check with legal counsel and respond company n's legal department determined that company n could not accept the funds back without a letter_ruling from the internal_revenue_service date is less than days from date your authorized representative has asserted that trust t and the separate trusts created under its terms are valid under the laws of state n based on the above facts and representations you through your authorized representative request the following letter rulings that taxpayer b as taxpayer a's surviving_spouse will be treated as having been eligible to receive the entire distribution from ira x directly from taxpayer a’s ira x with company m and not from trust t thus taxpayer b will be treated as having been eligible to roll over her ira x interest into an ira set up and maintained in her name the grant by the internal_revenue_service of a waiver of the 60-day rollover requirement of section’ d of the code for taxpayer b to roll over amounts distributed from ira x to trust t to an ra with respect to your ruling requests sec_408 of the code provides that except as otherwise provided in this subsection any amount_paid or distributed out of an individual_retirement_plan shall be included in gross_income by the payee or distributee as the case may be in the manner provided under sec_72 code sec_408 provides that sec_408 does not apply to a rollover_contribution if such contribution satisfies the requirements of sec_408 and d b code sec_408 provides that sec_408 does not apply to any amount_paid or distributed out of an ira to the individual for whose benefit the account is maintained if the entire amount received including money and any other_property is paid into an ira other than an endowment_contract for the benefit of such individual not later than the 60th day after the day on which he receives the payment or distribution code sec_408 provides in pertinent part that in the case of an inherited ira sec_408 shail not apply to any amount received by an individual from such account and no amount transferred from such account to another ira shall be excluded from income by reason of such transfer and such inherited account shall not be treated as an ira for purposes of determining whether any other amount is a rollover_contribution code sec_408 provides that an jra shall be treated as inherited if the individual for whose benefit the account is maintained acquired such account by reason of the death of another individual and such individual was not the surviving_spouse of such other individual thus pursuant to code sec_408 c ii a surviving_spouse who acquires ira proceeds from and by reason of the death of her husband may elect to treat those ira proceeds as her own and roll them over into her own ira code sec_408 provides in relevant part that under regulations prescribed by the secretary rules similar to the rules of sec_401 shall apply to the distribution of the entire_interest of an individual for whose benefit the trust is maintained code sec_408 provides that this paragraph shall not apply to any amount to the extent such amount is required to be distributed under subsection a on date final income_tax regulations were published in the federal_register with respect to sec_401 and sec_408 of the code see also r b date sec_1_408-8 of the final regulations question and answer provides that a surviving_spouse of ari 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 beneficiary of the ira this requirement is not satisfied even if the spouse is the sole beneficiary of the trust ifa trust is named as sec_1_408-8 of the final regulations q a-5 a further provides in relevant part that an electing surviving_spouse must first take the required_distribution for the calendar_year that contains the ira holder's date of death determined with respect to the deceased ira owner prior to making the election to treat the deceased's ira as her own this requirement also applies to a surviving_spouse who elects to rollover an ira of a decedent into her own ira the preamble to the final regulations provides in relevant part that a surviving_spouse who actually receives a distribution from an ira is permitted to roll that distribution over into his her own ira even if the spouse is not the sole beneficiary of the deceased's ira as long as the rollover is accomplished within the requisite day period a rollover may be accomplished even if ira assets pass through either a_trust or an estate with respect to your first ruling_request generally if a decedent's qualified_plan assets pass through a third party eg an estate or a_trust and then are distributed to the decedent's surviving_spouse said spouse will be treated as acquiring them from the third party and not from the decedent thus generally said surviving_spouse will not be eligible to roll over the qualified_plan proceeds into her own ira the initial issue raised in this ruling_request is whether the general_rule above applies where ira_distributions are made directly to a subtrust created under the terms of a_trust which subtrust contains the provisions referenced above in this case trust t was the sole named beneficiary of taxpayer a’s interest in ira x after taxpayer a’s death taxpayer b became the sole trustee of trust t with the authority to allocate trust t assets in any way in which she deemed appropriate as trustee taxpayer b could have demanded that trust w's interest in ira x be distributed to trust t in a lump sum then such amount could have been allocated under trust t to subtrust a if she had done so taxpayer b could then have demanded in writing that trust t's interest in ira x be paid to her as beneficiary of subtrust a if she had done so taxpayer b as the individual who would have made every decision leading up to trust w’s interest in ira x being paid to her would have been treated as having acquired said ira x interest from taxpayer a and not from trust w thus with respect to your first ruling_request we conclude as follows that taxpayer b as taxpayer a's surviving_spouse will be treated as having been eligible to receive the entire ira x distribution directly from taxpayer a's ira x with company m and not from trust t thus taxpayer b will be treated as having been eligible to roll over her ira x interest to the extent not required to be distributed pursuant to sec_408 of the code into an ira set up and maintained in her name with respect to your second ruling_request sec_408 of the code provides that sec_408 does not apply to any amount described in sec_408 i 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 from an ira which was not includible in gross_income because of the application of sec_408 code sec_408 provides a similar 60-day rollover period for partial rollovers code sec_408 provides that the secretary may waive the 60-day requirement under sec_408 and sec_408 where failure to waive such requirement would be against equity or good conscience including casualty disaster or other events beyond the reasonable control of the individual subject_to such requirement only distributions that occurred after date are eligible for the waiver under sec_408 revproc_2003_16 2003_4_irb_359 date provides that in determining whether to grant a waiver of the 60-day rollover requirement pursuant to sec_408 the service will consider all relevant facts and circumstances including errors committed by a financial_institution inability to complete a rollover due to death disability hospitalization incarceration restrictions imposed by a foreign_country or postal error the use of the amount distributed and the time elapsed since the distribution occurred with respect to your second ruling_request the information presented in support of this ruling_request indicates that taxpayer b and her agent attempted to roll over amount d distributed from ira x into ira y an ira set up and maintained in her name within days of the date amount d had been distributed from ira x as noted above in our response to ruling_request taxpayer b was eligible to accomplish such a rollover however because of a misunderstanding of the rollover rules of sec_408 of the code on the part of company n the custodian of ira y company n refused to accept ‘ the check for amount d as a result of company n's action taxpayer b could not reasonably satisfy the requirement that amount d be deposited in an ira within days of the distribution from ira x thus the failure to deposit amount d into an ira within the 60-day period was beyond the reasonable control of individual a based on the specific facts and representations surrounding this ruling_request we conclude as follows with respect to your second ruling_request pursuant to sec_408 of the code the service hereby waives the 60-day rollover requirement with respect to amount d and described below taxpayer b granted a period of days from the date_of_issuance of this ruling letter to contribute amount d in cash less the required distributions for and described below to an ira set up and maintained by taxpayer b provided all other requirements of sec_408 are otherwise satisfied except the 60-day requirement if these conditions are satisfied amount d less the required distributions for and described below will be considered a rollover with the meaning of sec_408 for the taxable_year less the required distributions for it has been represented that taxpayer a had attained age prior to his death during calendar_year thus taxpayer a had a code sec_401 required_distribution for calendar_year if said required_distribution had not been taken prior to taxpayer a's death it must be taken and may not be rolled over into taxpayer b's ira with respect to calendar_year taxpayer b had attained age prior to that calendar_year thus she would have had a required_distribution for said year if her attempt to roll over in had been successful said required_distribution may not be rolled over and is not included within our response to your second ruling_request also note that a required_minimum_distribution for the calendar_year will be due on or before date no opinion is expressed as to the tax treatment of the transaction described herein under the provisions of any other section of either the code or regulations which may be applicable thereto this ruling letter is based on the assumption that ira x either has met is meeting or will meet the requirements of sec_408 at all times relevant thereto it also assumes that trust t and the subtrusts created thereunder are valid under the laws of state n as represented pursuant to a power_of_attorney on file with this office the original of this letter_ruling is being sent to your authorized representative this letter is directed only to the taxpayer that requested it and is based solely on the representations made with respect thereto sec_6110 of the code provides that it may not be used or cited as precedent if you have any questions please contact sincerely yours darga fe fcttlegehn donzel h littlejohn manager employee_plans technical group enclosures deleted copy of this letter notice of intention to disclose notice


internal_revenue_service national_office technical_advice_memorandum date index uil number number release date case mis number tam-110047-98 taxpayer’s name taxpayer’s address taxpayer’s identification no years involved date of conference legend tribe year a year b issues whether amounts paid to tribal council members for services performed as tribal council members are wages for purposes of the federal_insurance_contributions_act fica the federal_unemployment_tax_act futa and collection of income_tax at source on wages whether tribal council members are employees when providing services as tribal council members for all purposes of the internal_revenue_code including code sec_105 amounts received under accident and health_plans code sec_132 certain fringe_benefits as well as the sections tam-110047-98 found in subchapter_d of chapter of subtitle a deferred_compensation facts tribe is a federally recognized native american tribe the members of tribe and the affairs of tribe are governed by the tribal council which consists of seven members including a tribal chairperson and vice-chairperson the tribal council members are elected by the eligible voting members of the tribe their duties include generating tribal resolutions and signing all legal documents on behalf of the tribe the facts indicate that the tribal council members are common-law employees of the tribe the tribe issues a form_w-2 to each tribal council member reporting remuneration received for their services as tribal council members in year a the year at issue the tribe paid the employer’s share of fica and withheld the employee’s share of fica from some but not all of the tribal council members the tribe withheld federal_income_tax on all amounts paid to the tribal council members for their service as tribal council members in year b tribe began paying the employer portion of fica and withholding the employee the portion of fica on all salary payments made to the tribal council members law and analysis sec_3101 of the code imposes fica tax on the income of every individual equal to a certain percentage of wages received with respect to employment sec_3102 requires employer withholding of the tax imposed by sec_3101 sec_3111 imposes an excise_tax on employers calculated as percentages of wages paid with respect to employment sec_3121 of the code defines wages for fica purposes in pertinent part as all remuneration for employment sec_3121 defines employment in pertinent part as any service of whatever nature performed by an employee for the person employing the employee sec_3301 of the code imposes futa_tax on every employer with respect to wages paid_by him with respect to employment sec_3306 defines wages in pertinent part as all remuneration for employment sec_3306 defines employment in pertinent part as any service of whatever nature performed by an employee for the person employing the employee tam-110047-98 sec_3402 of the code provides in pertinent part that every employer making payment of wages is required to deduct and withhold upon those wages an income_tax determined in accordance with tables or computational procedures prescribed by the secretary sec_3401 defines wages in pertinent part as all remuneration for services performed by an employee for his employer sec_3402 of the code provides that the secretary is authorized by regulations to provide for withholding from remuneration for services performed by an employee for the employee’s employer which without regard to this paragraph does not constitute wages sec_31_3402_p_-1 of the employment_tax regulations provides that an employee and the employer may enter into an agreement to provide for the withholding of income_tax upon the payment of amounts described in sec_31_3401_a_-3 of the regulations these amounts include with certain exceptions any remuneration for services performed by an employee for an employer which without regard to sec_31_3401_a_-3 of the regulations does not constitute wages under sec_3401 sec_31_3402_p_-1 of the regulations sets forth the method by which an employee and employer may enter into an agreement under sec_3402 revrul_59_354 1959_2_cb_24 sets forth a limited employment_tax exception for amounts paid to tribal council members for services performed by them as council members revrul_59_354 holds that while these amounts are includible in the council member's gross_income they do not constitute wages for purposes of fica futa and federal_income_tax withholding based on the facts as stated in accordance with revrul_59_354 we conclude that remuneration paid to the tribal council members for their services as tribal council members is not be subject_to fica futa or federal_income_tax withholding pursuant to the provisions of sec_3402 of the code and the regulations thereunder individual tribal council members may enter into voluntary withholding agreements with the tribe conclusions amounts paid to tribal council members for services performed as tribal council members are not wages for purposes of fica futa and federal_income_tax withholding members of the tribal council of tribe are common-law employees to the extent other sections of the code utilize the same definition of employee tribal council members will be employees for purposes of those code sections tam-110047-98 caveats except as specifically ruled on above no opinion is express or implied concerning the application of any other section of the code to this transaction a copy of this technical_advice_memorandum is to be given to the tribe sec_6110 of the code provides that it may not be used or cited as precedent


department of the treasury internal_revenue_service p o box irs cincinnati oh release number release date uil code date date employer id number contact persone numeer contact telephone number form you must file tax years dear this letter is our final_determination that you don’t qualify for tax-exempt status under sec_501 of the internal_revenue_code the code recently we sent you a proposed adverse determination in response to your application the proposed adverse determination explained the facts law and basis for our conclusion and it gave you days to file a protest because we didn’t receive a protest within the required days the proposed determination is now final because you don’t qualify as a tax-exempt_organization under sec_501 of the code donors can’t deduct contributions to you under sec_170 of the code you must file federal_income_tax returns for the tax years listed at the top of this letter using the required form also listed at the top of this letter within days of this letter unless you request an extension of time to file we'll make this final adverse determination_letter and the proposed adverse determination_letter available for public inspection as required under sec_6110 of the code after deleting certain identifying information please read the enclosed notice notice of intention to disclose and review the two attached letters that show our proposed deletions if you disagree with our proposed deletions follow the instructions in the notice on how to notify us if you agree with our deletions you don’t need to take any further action we'll also notify the appropriate state officials of our determination by sending them a copy of this final letter and the proposed determination_letter under sec_6104 of the code you should contact your state officials if you have questions about how this determination will affect your state responsibilities and requirements letter rev catalog number 47632s if you have questions about this letter you can contact the person listed at the top of this letter if you have questions about your federal_income_tax status and responsibilities call our customer service number pincite-829-1040 tty for deaf or hard of hearing or customer service for businesses pincite-829-4933 sincerely jeffrey i cooper director exempt_organizations rulings and agreements enclosures notice redacted letter proposed adverse determination under sec_501 c redacted letter final adverse determination under sec_501 - no protest letter rev catalog number 47632s department of the treasury internal_revenue_service rs p o box i cincinnati oh legend p state q organization x date dear date date employer id number contact person id number contact telephone number contact fax number uil issues do you qualify for exemption under sec_501 of the code no for the reasons stated below we considered your application_for recognition of exemption from federal_income_tax under sec_501 of the internal_revenue_code the code based on the information provided we determined that you don’t qualify for exemption under sec_501 of the code this letter explains the basis for our conclusion please keep it for your records facts you were formed as a corporation on date x in the state of p your articles of incorporation state your specific purpose is to provide at-risk youth the resources to intern in the entertainment industry your application_for exemption states your purpose is to provide resources and outlets for musical and artistic creations you are a membership_organization that will provide entertainment employment the basic fundamentals of your membership are to provide public awareness and creativity your membership requirements state that artists must promote given the authority the record label bring public awareness and most of all be their creative selves the responsibilities of membership are for members to give back to the community by creating their own non-profit organizations or donating in support of a non-profit of your time is spent on operating the record label your record label activities include technical engineering and vocal recording put towards creating an artist’s music and sound some projects may include photo shoots for the artist that are either promotional or for a portfolio you provide the opportunity to intern in letter rev catalog number 47630w the entertainment industry as well as give advisement you will own rights to any intellectual_property that pertains to your projects whether it will be assisting conducting or promoting you select artists by looking for passionate artists that love their craft and work hard to make it in the industry you also select artists according to their mind set and what goals they have regarding their music and the industry there are no recent artists signed to the label at this time when there are artists signed they will receive compensation from a percentage of their work sold when we asked for samples of contracts you only submitted a photograph and video release form records will be sold under contract to big or small businesses in any city stores or shops this will be handled by your marketing department and sales department prices for any materials eg cds will be determined by the sales department you will hold monthly themed photo shoots where the artists have to dress up and practice age appropriate poses this is extremely important for the industry there will also be red carpet events training for those and over individuals will be introduced to red carpet events and will be trained to host network and coordinate with entities also exposure to the entertainment industry through you includes attending local events and being introduced as a nonprofit youth program you will introduce youth to the option of formulating a nonprofit for themselves so they may succeed in life versus working for industries at a minimum rate you will seek out local churches schools or charities to assist in volunteering their time to help a cause you work with another non-profit organization on charitable events for the youth of the community charitable events may include a showcase of musicians with live entertainment educational speeches for the underprivileged or a program in preventing cruelty or bullying the live entertainment might provide education and awareness for the community to prevent bullying in schools or teen centers the events also enable you reach out to those that may value the opportunity to intern in the entertainment industry or reach those seeking free advisement the events may include food for homeless or low income families as well as clothes or donations the participants of these events are either assigned or volunteered by musicians artists bands dj’s or equipment stage crew they also include motivational educational or awareness speakers are open to volunteers and the community participants must be years old or older you did not indicate the percentage of time or funds spent on your charitable activities but you did indicate that you plan to have monthly events these events law sec_501 of the code describes corporations organized and operated exclusively for charitable purposes no part of the net_earnings of which inures to the benefit of any private_shareholder_or_individual sec_1_501_c_3_-1 of the income_tax regulations regulations provides that in order to be exempt as an organization described in sec_501 an organization must be both organized and operated exclusively for one or more purposes specified in such section if an organization fails to meet either the organizational_test or the operational_test it is not exempt sec_1_501_c_3_-1 of the regulations provides that an organization will be regarded as operated exclusively for one or more exempt purposes only if it engages primarily in activities which accomplish one or more of such exempt purposes specified in sec_501 of the code an organization will not be so regarded if more than an insubstantial part of its activities is not in furtherance of an exempt_purpose letter rev catalog number 47630w sec_1_501_c_3_-1 of the regulations provides that an exempt_organization must serve a public rather than a private interest the organization must demonstrate that it is not organized or operated to benefit 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 if an organization is operated to benefit private interests rather than for public purposes or is operated so that there is prohibited inurement of earnings to the benefit of private shareholders or individuals it may not retain its exempt status revrul_66_178 1966_1_cb_138 states a nonprofit organization created to foster and develop the arts by sponsoring a public art exhibit at which the works of unknown but promising artists are selected by a panel of qualified judges for viewing and are gratuitously displayed is exempt from federal_income_tax under sec_501 of the code revrul_67_392 held that a nonprofit organization which encourages and promotes the advancement of young musical artists by conducting weekly work-shops sponsoring public concerts by the artists and securing paid engagements for the artists to improve their professional standing may be exempt from federal_income_tax under sec_501 of the internal_revenue_code of revrul_76_152 c b states a nonprofit organization formed by art patrons to promote community understanding of modern art trends by selecting for exhibit exhibiting and selling art works of local artists retaining a commission on sales less than customary commercial charges and not sufficient to cover the cost of operating the gallery does not qualify for exemption under sec_501 of the code in better business bureau of washington d c inc v united_states 326_us_179 the supreme court held that the presence of a single non-exempt purpose if substantial in nature will destroy a claim for exemption regardless of the number or importance of truly exempt purposes application of law you are not as described in sec_501 of the code because you are not organized and operated exclusively for exempt purposes you fail the operational_test as you are not operated exclusively for exempt purposes as described in sec_1_501_c_3_-1 of the regulations you spend of your time on the record label activities as explained in sec_1_501_c_3_-1 of the regulations you will not be regarded as operated exclusively for one or more exempt purposes because more than an insubstantial amount of your activities further nonexempt purposes in 263_fsupp_924 the government retroactively revoked the taxpayer's exempt status concluding that for the previous five years the taxpayer was engaged primarily if not solely in publishing activities the court noted that to qualify for sec_501 exemption the taxpayer must be organized and operated exclusively for an exempt_purpose the court rejected the taxpayer's argument that rather than its primary activity the court should focus on the end to which that activity was taken namely religious education the court pointed out that the taxpayer's sole activity and purpose was the carrying on of the publishing trade and held that the taxpayer's purpose rather than its goals were the focus of sec_501 you are unlike the organization described in revrul_67_392 which promoted the advancement of young musical artists by conducting weekly workshops sponsoring public concerts by the artists and securing paid engagements you are looking for promising artists to create records and then sell them in a commercial letter rev catalog number 47630w manner any educational or charitable activities you conduct are incidental to your commercial purpose of operating a record label you are very similar to the organization described in better business bureau of washington d c inc because the presence of a single non-exempt purpose if substantial in nature will destroy a claim for exemption regardless of the number or importance of truly exempt purposes although you may have opportunities for students to learn about the recording industry any educational_purposes are overshadowed by the commercial nature of your activities you are similar to the organization in fides publishers assn which printed published and sold products to promote religious culture the organization argued that rather than focusing on its primary activity the court should focus on the end to which that activity was taken namely religious education you have indicated your purpose is to advance the education of the artists through the production and distribution of their music much like the organization in this case you mark up and sell your products to stores the end result of your distributions includes some education of the artists but your purpose is to purchase and distribute records not advance education for this reason your record label activity is furthering a commercial rather than an exempt_purpose under c additionally you are not as defined in sec_1_501_c_3_-1gi of the regulations because you are operating for the private interest of your members whose music you produce and sell moreover the education of the students or the charitable activities you may conduct is secondary to record label activities you are not like the organization in revrul_66_178 because you are a membership_organization consisting of musical artists for whom you produce records and sell the artist members also earn money for the records sold thus you are operating for the private benefit of your members you are like the organization in revrul_76_152 because the artists whose musical works are promoted and sold are directly benefiting from your operations therefore you have a more than insubstantial non-exempt purpose conclusion based on the information provided you do not qualify for exemption under sec_501 of the code you are not organized and operated exclusively for charitable or educational_purposes within the meaning of sec_501 of the code because you operate in a commercial manner for the private interests of your members if you don’t agree you have a right to file a protest if you don’t agree with our proposed adverse determination to do so you must send a statement to us within days of the date of this letter the statement must include e e e e your name address employer_identification_number ein and a daytime phone number acopy of this letter highlighting the findings you disagree with an explanation of why you disagree including any supporting documents the law or authority if any you are relying on letter rev catalog number 47630w e the signature of an officer director trustee or other official who is authorized to sign for the organization or your authorized representative e one of the following declarations for an officer director trustee or other official who is authorized to sign for the organization under penalties of perjury i declare that i examined this protest statement including accompanying documents and to the best of my knowledge and belief the statement contains all relevant facts and such facts are true correct and complete for authorized representatives under penalties of perjury i declare that i prepared this protest statement including accompanying documents and to the best of my knowledge and belief the statement contains all relevant facts and such facts are true correct and complete your representative attorney certified_public_accountant or other individual enrolled to practice_before_the_irs must file a form_2848 power_of_attorney and declaration of representative with us if he or she hasn’t already done so you can find more information about representation in publication practice_before_the_irs and power_of_attorney we'll review your protest statement and decide if you provided a basis for us to reconsider our determination if so we’ll continue to process your case considering the information you provided if you haven’t provided a basis for reconsideration we’ll forward your case to the office of appeals and notify you you can find more information about the role of the appeals_office in publication how to appeal an irs decision on tax- exempt status if you don’t file a protest within days you can’t seek a declaratory_judgment in court at a later date because the law requires that you use the irs administrative process first sec_7428 of the code where to send your protest please send your protest statement form_2848 if needed and any supporting documents to the applicable address u s mail internal_revenue_service eo determinations quality assurance room p o box cincinnati oh if you agree street address for delivery service internal_revenue_service eo determinations quality assurance main street room cincinnati oh you can also fax your statement and supporting documents to the fax number listed at the top of this letter if you fax your statement please contact the person listed at the top of this letter to confirm that he or she received it letter rev catalog number 47630w if you agree with our proposed adverse determination you don’t need to do anything if we don’t hear from you within days we’ll issue a final adverse determination_letter that letter will provide information on your income_tax filing_requirements you can find all forms and publications mentioned in this letter on our website at www irs gov formspubs if you have questions you can contact the person listed at the top of this letter sincerely director exempt_organizations enclosure publication letter rev catalog number 47630w


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-121709-09 date date legend x --------------------------------------------------- ------------------------------------- state -------- a ------------------------ ----------------------------------------------------- d1 ------------------- dear ---------------- this letter responds to a letter dated date written on behalf of x requesting a ruling under sec_1362 of the internal_revenue_code facts according to the information submitted x was incorporated under state law on d1 a x’s sole shareholder intended for x to be an s_corporation as of d1 however x’s form_2553 election by a small_business_corporation was not timely filed x requests a ruling that it will be recognized as an s_corporation effective d1 law and analysis plr-121709-09 sec_1362 provides that except as provided in sec_1362 a small_business_corporation may elect in accordance with the provisions of sec_1362 to be an s_corporation sec_1362 provides that an election under sec_1362 may be made by a small_business_corporation for any taxable_year at any time during the preceding_taxable_year or at any time during the taxable_year and on or before the 15th day of the third month of the taxable_year sec_1362 provides that if a a small_business_corporation makes an election under sec_1362 for any taxable_year and b such election is made after the 15th day of the third month of the taxable_year and on or before the 15th day of the third month of the following taxable_year then such election shall be treated as made for the following taxable_year sec_1362 provides that if a an election under sec_1362 is made for any taxable_year determined without regard to sec_1362 after the date prescribed by sec_1362 for making the election for the taxable_year or no such election is made for any taxable_year and b the secretary determines that there was reasonable_cause for the failure to timely make the election the secretary may treat the election as timely made for the taxable_year and sec_1362 shall not apply x did not file a timely election to be treated as an s_corporation under sec_1362 effective d1 x has however established reasonable_cause for not making a timely 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 d1 within days from the date of this letter x must submit a properly completed form_2553 with a copy of this letter attached to the appropriate service_center except as expressly provided herein we express or imply no opinion concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter specifically we express or imply no opinion concerning whether x otherwise qualifies as an s_corporation for federal tax purposes in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to x’s authorized representatives plr-121709-09 this ruling is directed only to the taxpayer requesting it sec_6110 of the code provides that it may not be used or cited as precedent sincerely faith p colson faith p colson senior counsel branch office of the associate chief_counsel passthroughs special industries enclosures a copy of this letter a copy for sec_6110 purposes


internal_revenue_service department of the treasury number release date index number washington dc person to contact telephone number refer reply to cc psi plr-132825-03 date date legend x a b d1 state dear this letter responds to a letter dated date and subsequent correspondence written on behalf of x by x's authorized representative requesting a ruling under sec_1362 of the internal_revenue_code facts according to the information submitted x was incorporated under state law on d1 x's shareholders a and b intended for x to be an s_corporation as of d1 however x's form_2553 election by a small_business_corporation was not filed timely plr-132825-03 x requests a ruling under sec_1362 that its sec_1362 election will be treated as timely made for its taxable_year that began on d1 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 generally 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 sec_1362 provides that if an s 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 an election under sec_1362 is made for any taxable_year after the date prescribed by sec_1362 for making the election for the taxable_year or no sec_1362 election is made for any taxable_year and the secretary determines that there was reasonable_cause for the failure to timely make the election then the secretary may treat the election as timely made for such taxable_year and sec_1362 shall not apply conclusion based on the facts submitted and representations made we conclude that x has established reasonable_cause for its failing to make a timely s_corporation_election and that x is eligible for relief under sec_1362 accordingly if x makes an election to be an s_corporation by filing with the appropriate service_center a completed form_2553 effective d1 within days following the date of this letter then such election will be treated as timely made a copy of this letter should be attached to the form_2553 filed with the service_center except as expressly provided herein we express or imply no opinion concerning the federal tax consequences of any aspect of any transaction or item discussed or referenced in this letter specifically we express or imply no opinion concerning whether x is otherwise eligible to be an s_corporation for federal tax purposes pursuant to a power_of_attorney on file with this office we are sending a copy of this letter to your authorized representative plr-132825-03 this ruling is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent sincerely yours mary beth collins senior technician reviewer branch office of the associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes cc


internal_revenue_service number release date index number ------------------------ ----------------------------- ------------------------------------------ --------------------------------- department of the treasury washington dc person to contact -------------------- id no ------------- telephone number --------------------- refer reply to cc psi b01 plr-101989-08 date april legend x ------------------------------------------------------------ ------------------------ trust a ------------------------------------------------------------ -------------------------------------------------- trust b -------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------ ----------------------------------------------------------------------------------------- trust c ----------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------- ------------------------------------------------------------ ------------- trust d --------------------------------------------------------------------------------------------------------- ------------------------------------------------------------ ----------------------------------------------------------------------------------------- state date date date -------- ------------------- ---------------- ---------------------- plr-101989-08 dear --------------- this responds to a letter dated date submitted on behalf of x by x’s authorized representative requesting inadvertent invalid election relief pursuant to sec_1362 of the internal_revenue_code facts the information submitted states that x was incorporated under the laws of state on date x represents that it timely filed an s_corporation_election which was intended to be effective on date on date trust a’s assets included shares of x stock trust a provided that trust a’s assets were to be divided into three separate trusts trust b_trust c and trust d collectively trusts the trustee of trust a failed to divide trust a the trustee of trust a filed an electing_small_business_trust esbt election for trust a effective date x represents that each of trust b_trust c and trust d was eligible to be an electing_small_business_trust effective date and thereafter however no elections to be electing small_business trusts were filed on behalf of trust b_trust c and trust d therefore the trusts were not permissible shareholders and x’s s_corporation_election was ineffective x represents that the circumstances resulting in the invalidity of x's s_corporation_election were inadvertent and were not motivated by tax_avoidance or retroactive tax planning additionally x represents that x and its shareholders have filed their federal_income_tax returns consistent with having a valid s_corporation in effect for x x and its shareholders have agreed to make such adjustments consistent with the treatment of x as an s_corporation as may be required by the secretary law and analysis sec_1362 provides that except as provided in sec_1362 a small_business_corporation may elect in accordance with the provisions of sec_1362 to be an s_corporation sec_1361 provides that the term s_corporation means with respect to any taxable_year a small_business_corporation for which an election under sec_1362 is in effect for such year sec_1361 provides in part that the term small_business_corporation means a domestic_corporation which is not an ineligible_corporation and which does not have as a shareholder a person other than an estate a_trust described in sec_1361 or an organization described in sec_1361 who is not an individual plr-101989-08 sec_1361 provides that for purposes of sec_1361 an electing_small_business_trust may be a shareholder sec_1361 provides that except as provided in sec_1361 the term electing_small_business_trust means any trust if i such trust does not have as a beneficiary any person other than i an individual ii an estate or iii an organization described in paragraph or of sec_170 or iv an organization described in sec_170 which holds a contingent_interest in such trust and is not a potential_current_beneficiary ii no interest in such trust was acquired by purchase and iii an election under sec_1361 applies to such trust sec_1361 provides that an election under sec_1361 shall be made by the trustee any such election shall apply to the taxable_year of the trust for which made and all subsequent taxable years of such trust unless revoked with the consent of the secretary sec_1_1361-1 provides that the trustee of the trust must make the esbt election by signing and filing with the service_center where the s_corporation files its income_tax return a statement that meets the requirements of sec_1_1361-1 sec_1362 provides that if an election under sec_1362 by any corporation a was not effective for the taxable_year for which made determined without regard to sec_1362 by reason of a failure to meet the requirements of sec_1361 or to obtain shareholder consents or b was terminated under paragraph or of sec_1362 the secretary determines that the circumstances resulting in such ineffectiveness or termination were inadvertent no later than a reasonable period of time after discovery of the circumstances resulting in such ineffectiveness or termination steps were taken a so that the corporation for which the election was made or the termination occurred is a small_business_corporation or b to acquire the required shareholder consents and the corporation for which the election was made or the termination occurred and each person who was a shareholder in such corporation at any time during the period specified pursuant to sec_1362 agrees to make such adjustments consistent with the treatment of such corporation as an s_corporation as may be required by the secretary with respect to such period then notwithstanding the circumstances resulting in such ineffectiveness or termination such corporation shall be treated as an s_corporation during the period specified by the secretary conclusion based solely on the representations made and the information submitted we conclude that x's s_corporation_election was ineffective on date because x had ineligible shareholders we also conclude that the election was inadvertently invalid under sec_1362 therefore pursuant to the provisions of sec_1362 x will be treated as plr-101989-08 an s_corporation from date and thereafter provided that the trustee of each of trust b_trust c and trust d files an esbt election pursuant to the procedures set forth in sec_1_1361-1 effective date with the appropriate service_center within days of the date of this letter and provided that x's election to be an s_corporation was not otherwise invalid and was not terminated under sec_1362 a copy of this letter should be attached to the esbt elections except as specifically ruled above we express or imply no opinion concerning the federal tax consequences of any aspect of the transactions described above under any other provision of the code specifically no opinion is expressed concerning whether x was or is otherwise eligible to be an s_corporation or whether the trusts are otherwise eligible to be esbts this ruling letter is directed only to the taxpayer requesting it sec_6110 of the code provides that it may not be used or cited as precedent in accordance with a power_of_attorney on file with this office a copy of this letter is being sent to x's authorized representative sincerely audrey w ellis audrey w ellis senior counsel branch office of the associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes cc