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 fip b02 plr-152744-11 date date legend ---------------- taxpayer ----------------------------------------------------------------------- state a state b state c state law state regulations properties a b date communities operating companies company x company y company z services facility residence year agency ------------- ------------- ---------- -------------------------------------- ----------------------------------------------------------- --------------------------------------------------------- -- --- ---------------------- --------------------------------------- -------------------------------------------- ----------------------------------- -------------------------------- ---------------------------------------- --------------------------------------------- ------------------------ ----------------------------------- ------- ---------------------------- dear ------------- this is in reply to a letter dated date requesting a ruling on behalf of taxpayer you have requested a ruling regarding a proposed restructuring to comply with the requirements of state law and state regulations plr-152744-11 facts taxpayer a state a corporation is a publicly traded real_estate_investment_trust reit that elected to be taxed as a reit effective for its tax_year beginning date taxpayer has intended to qualify as a reit at all times since taxpayer owns a geographically diverse portfolio of properties in the united_states and canada company x is a publicly-traded company currently taxpayer’s wholly-owned taxable_reit_subsidiary trs owns a communities in state b the company x communities that are operated and managed by subsidiaries of company x company x subsidiary each of the company x communities is held by a special purpose limited_liability_company that is disregarded for federal_income_tax purposes taxpayer received a private_letter_ruling concluding that taxpayer’s ownership of the trs and the special purpose limited_liability companies and activities with respect to the company x communities would not cause taxpayer’s trs to be treated as directly or indirectly operating or managing properties and that taxpayer’s trs would not fail to qualify as a trs under sec_856 of the internal_revenue_code taxpayer represents that company x subsidiary is an independent_contractor ik as defined in sec_856 company y is a services company that is privately held by investors that are not related to or employed by taxpayer taxpayer owns b communities in state b the company y communities that are currently licensed by state b and operated and managed by a subsidiary of company y company y subsidiary in year taxpayer acquired company z’s portfolio including the company y communities the company z acquisition and leased it to a trs of taxpayer pursuant to the provisions of sec_856 under the typical ownership structure for a non-state b community operated and managed by company y subsidiary taxpayer owns the community through a disregarded subsidiary propco propco then leases the community to a disregarded_entity each wholly-owned disregarded_entity an opco wholly-owned by taxpayer’s trs each opco enters into a long-term management_contract with company y subsidiary prior to the company z acquisition taxpayer received a private_letter_ruling concluding among other things that company y subsidiary qualifies as an eligible_independent_contractor eik under sec_856 with respect to the communities it manages or operates for taxpayer’s trs in connection with the company z acquisition taxpayer inherited the structure that company z had created to facilitate licensure of the company y communities the current license holder entities are owned by a director of the former company z who plr-152744-11 became a member of taxpayer’s board_of directors following the company z acquisition under the current structure for the company y communities the applicable opco contracts with the license holder either pursuant to a lease or an operating_agreement and the license holder contracts with company y subsidiary to operate and manage the community because the leases operating agreements and management agreements involving the current license holding entities create rights and responsibilities relative to the company y communities that differ economically and otherwise from the rights and responsibilities that currently exist with respect to the other non-state b communities that company y subsidiary operates and manages for taxpayer’s trs taxpayer’s trs and certain of its affiliates and company y and certain of its affiliates have entered into an agreement the taxpayer company y agreement under this agreement the parties agreed to make true-up payments to each other to ensure that the economic arrangements for the company y communities are the same as the economic arrangements that exist with respect to non-state b communities that company y subsidiary operates and manages for taxpayer’s trs the agreement also provides that to the extent practical and consistent with state law the company y communities will be operated and managed by company y subsidiary in the same manner as non- state b communities that company y subsidiary operates and manages for taxpayer’s trs state b regulatory regime state law imposes unique requirements on the owners and license holders of communities located in state b the major requirements that differ from other state requirements are the license holder may not be owned by a business corporation whose shares are traded on a national securities exchange or are regularly quoted on a national over-the-counter market a subsidiary of such corporation or a corporation any of the stock of which is owned by another corporation and the license holder is required to retain certain power and authority that in other states applicable law would allow to be delegated to a manager under the terms of a management agreement the existing management agreements for the non-state b communities operated and managed by company x subsidiary and company y subsidiary for taxpayer’s trss delegate to company x subsidiary and company y subsidiary substantially_all authority to operate and manage the communities on a day-to-day basis including among other things employee matters provision of care regulatory compliance collection of revenue payment of expenses and food service the existing management agreements with respect to the company y communities between the license holders and company y subsidiary to be assumed by the new license holder and the management agreements to be entered into by the new license holder and company x subsidiary with respect to the company x communities collectively the state b management agreements will contain substantially the same delegation of plr-152744-11 authority to company x subsidiary and company y subsidiary as the non-state b management agreements contain however state law requires that the license holder retain certain independent authority over operations at the communities the existing management agreements for the company y communities and the management agreements for the company x communities will contain a provision stating that the responsibilities of the license holder for a community are not lessened by entering into the management agreement the license holder retains full legal authority over operation and any powers not specifically delegated to the manager remain with the license holder as required by state law the management agreements contain provisions regarding the license holder’s retention of among other things independent control of accounts and books_and_records independent authority over hiring disposition of assets and adoption of policies and independent approval of budget and facility contracts proposed restructuring one result of state b’s requirements is that public companies such as taxpayer and its trss that own communities in state b must contract with third-party license holders that meet the requirements who in turn contract with managers of communities the company x communities are currently unlicensed and care is provided through an agency that is a subsidiary of company x recently state b has indicated that company x must become licensed accordingly taxpayer and company x have agreed on a proposed structure described below taxpayer intends to take the following steps creation of a new state c non-stock corporation company x license holder to act as the license holder for the company x communities appointment of taxpayer employees as the officers and directors of company x license holder taxpayer’s trs and company x license holder enter into leases that conform to the leases that are currently in place with respect the company y communities company x license holder and company x subsidiary enter into long-term management agreements plr-152744-11 because the leases and management agreements discussed above create rights and responsibilities relative to the company x communities that differ economically and otherwise from the rights and responsibilities that currently exist with respect to the company x communities and with respect to the other non-state b communities that company x subsidiary operates and manages for taxpayer’s trs company x and taxpayer’s trs enter into a letter agreement to make true-up payments to each other as necessary so that in the end the economic arrangements that exist between them prior to the implementation of the above steps are unchanged and to the extent practical consistent with state law cause company x communities to be operated and managed by company x subsidiary in the same manner as the other communities that company x subsidiary operates and manages for taxpayer’s trs as part of the company y acquisition taxpayer agreed to facilitate the replacement of the owner of the current license holder entities for the company y communities to fulfill that commitment taxpayer intends to take the following steps creation of a new state c non-stock corporation company y license holder to act as the license holder for the company y communities appointment of taxpayer employees as the officers and directors of company y license holder company y license holder assumes from the current license holders the existing leases and operating agreements with the opcos and thereby becomes a party to such leases and operating agreements company y license holder assumes from the current license holders the existing management agreements with company y subsidiary the taxpayer company y agreement remains in place and unchanged by the implementation of the above steps taxpayer represents that it will have no direct or indirect current or residual equity_interest in either the company x license holder or the company y license holder collectively the license holders upon the dissolution or liquidation of the license holders none of the remaining assets will be distributed to taxpayer its affiliates its officer or its directors although officers and employees of taxpayer will be appointed as officers and directors of the license holders such officers and directors will have independent fiduciary duties to the license holders in such capacities and taxpayer will have no contractual or other right to control the decisions or behavior of such officers and directors in such capacities plr-152744-11 furthermore taxpayer will insure and indemnify the officers and directors of the license holders against any personal liability to which they may be exposed by acting in such capacities each license holder will be licensed by state b and accountable for regulatory compliance to state b penalties can be imposed by state b on the license holders for noncompliance with state b rules and regulations and financial reports must be periodically submitted by license holders to state b in addition taxpayer represents that the proposed arrangements between the license holders and the opcos taxpayer’s trss company x subsidiary and company y subsidiary are necessary and appropriate to enable the license holders to comply with state law and are designed to ensure that each license holder will be financially able to perform its activities in accordance with state law requirements the arrangements enable the license holders to secure the proper facilities management services and funding necessary to operate the communities furthermore taxpayer represents that the license holders will not manage or operate the company x communities or the company y communities on a daily basis the daily activities are the responsibility of company x subsidiary and company y subsidiary respectively taxpayer also represents that it may from time to time make loans to the license holders if the applicable license holder’s revenue is inadequate to pay its obligations as they come due the loans if made will constitute straight_debt under sec_856 law and analysis sec_856 provides that at least percent of a reit's gross_income must be derived from among other sources rents_from_real_property sec_856 provides that at least percent of a reit's gross_income must be derived from among other sources rents_from_real_property sec_856 provides that rents_from_real_property include subject_to exclusions provided in sec_856 a rents from interests_in_real_property b charges for services customarily furnished or rendered in connection with the rental of real_property whether or not such charges are separately_stated and c rent attributable to personal_property leased under or in connection with a lease of real_property but only if the rent attributable to the personal_property for the taxable_year does not exceed percent of the total rent for the tax_year attributable to both the real and personal_property leased under or in connection with the lease sec_856 provides that rents_from_real_property does not include any amount received or accrued directly or indirectly from any person if the reit owns directly or indirectly in the case of a corporation stock possessing percent or plr-152744-11 more of the total combined voting power of all classes of stock entitled to vote or percent or more of the total value of shares of all classes of stock of the corporation or in the case of any person that is not a corporation an interest of percent or more in the assets or net profits of the person sec_856 provides that amounts paid to a reit by a trs shall not be excluded from rents_from_real_property by reason of sec_856 when a reit leases a qualified_lodging_facility or qualified health_care_facility to a trs and the facility or property is operated on behalf of the trs by a person who is an eligible_independent_contractor a trs is not considered to be operating or managing a qualified_health_care_property solely because it possesses a license to do so sec_856 defines an independent_contractor as any person who does not own directly or indirectly more than percent of the reit’s shares and if such person is a corporation not more than percent of the total combined voting power of whose stock or percent of the total shares of all classes of whose stock is owned directly or indirectly by one or more persons owning percent or more of the shares of the reit sec_856 provides that the term eligible_independent_contractor means with respect to any qualified_lodging_facility or qualified_health_care_property any independent_contractor if at the time such contractor enters into a management agreement or similar service_contract with the trs to operate the facility or property the contractor or any related_person is actively engaged in the trade_or_business of operating qualified lodging_facilities or qualified health care properties for any person who is not a related_person with respect to the reit or the trs sec_856 provides that a reit and a corporation other than a reit may treat such corporation as a trs if the reit directly or indirectly owns stock in the corporation and the reit and the corporation jointly elect such treatment sec_856 provides that any corporation in which a trs owns directly or indirectly more than percent of the total voting power or value of the outstanding securities shall be treated as a trs sec_856 provides that a trs cannot directly or indirectly operate or manage a lodging_facility or a health_care_facility sec_856 provides that a trs cannot directly or indirectly provide to any other person under a franchise license or otherwise rights to any brand name under which any lodging_facility or health_care_facility is operated except in such case where such rights are provided to an eligible_independent_contractor to operate or manage a lodging_facility or a health_care_facility and such rights are held by the trs as a franchisee licensee or in a similar capacity and such lodging_facility or health_care_facility is either owned by the trs or is leased to the trs from the reit plr-152744-11 taxpayer has represented that the management contracts between taxpayer and its affiliates and company x subsidiary and company y subsidiary contain many of the same rights as those required by state law to be retained by the license holders furthermore the proposed restructuring does not change the day to day operation and management of the communities the daily activities remain the responsibility of company x subsidiary and company y subsidiary respectively sec_856 indicates that mere possession of a license should not lead to a conclusion that the trs is operating a property this provision illustrates congress’ intent that merely holding a license does not cause an entity to be engaged in operating or managing in a case where the structure is compelled by state law the analysis must look to the party that is actually performing the day to day management of the property to determine if a reit or a trs is actually managing or operating the property accordingly based on the information received and representations made we conclude that the proposed restructuring to comply with the requirements of state law will not result in any entity other than company x subsidiary and company y subsidiary being treated as managing and operating the communities within the meaning of sec_856 will not cause the rent paid_by taxpayer’s trs to taxpayer through its disregarded entities to fail to qualify for the sec_856 exception for related_party rents received from a trs and the rent will be qualifying_income for purposes of the reit gross_income tests under sec_856 and c and will not result in taxpayer being considered to own any securities for purposes of sec_856 or stock for purposes of sec_856 of the license holders except as specifically ruled upon above no opinion is expressed concerning any federal_income_tax consequences relating to the facts herein under any other provision of the code specifically we do not rule whether taxpayer otherwise qualifies as a reit under part ii of subchapter_m of chapter of the code this ruling is directed only to the taxpayer requesting it taxpayer should attach a copy of this ruling to each tax_return to which it applies sec_6110 of the code provides that this ruling may not be used or cited as precedent sincerely jonathan d silver______________ jonathan d silver assistant branch chief branch office of associate chief_counsel financial institutions products


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-140073-05 date date --------------------------- -------------- legend x --------------------------------------------------- y ---------------------------------------------------- country date date dear ------------- ------------------------ ------------------------ ---------- this is in response to a letter dated date requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations to file an election to treat y as an entity disregarded as separate from its owner for federal tax purposes under sec_301_7701-3 facts according to the information submitted and representations made within the request x is the ultimate owner of an affiliated_group of entities among this affiliated_group is y which is an entity that was formed under the laws of country on date x acquired y x timely made a sec_338 election relating to its acquisition of y due to inadvertence a form_8832 entity classification election to treat y as an entity disregarded as separate from its owner effective date was not filed plr-140073-05 law and analysis sec_301_7701-3 provides guidance on the classification of a foreign eligible_entity for federal tax purposes generally unless the entity makes an election to be treated otherwise a foreign eligible_entity is treated as an association_taxable_as_a_corporation if all members have limited_liability if a foreign eligible_entity has only one owner it may elect to be treated as a disregarded_entity pursuant to the rules in sec_301_7701-3 if a foreign eligible_entity has more than one owner it may elect to be treated as a partnership pursuant to the rules in sec_301_7701-3 sec_301_7701-3 further provides that an entity classification election must be filed on form_8832 entity classification election and can be effective up to days prior to the date the form is filed or up to months after the date on which the form is filed sec_301_7701-3 provides that an election made under sec_301_7701-3 will be effective on the date specified by the entity on form_8832 or on the date filed if no 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 if a purchasing_corporation makes an election under sec_338 regarding an acquired subsidiary an election under sec_301_7701-3 for the acquired subsidiary can be effective no earlier than the day after the acquisition_date within the meaning of sec_338 under sec_301_9100-1 the commissioner may grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the code except subtitles e g h and i sec_301_9100-1 defines the term regulatory election as including an election with a deadline prescribed by a regulation published in the federal_register sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make an election sec_301_9100-2 provides automatic extensions of time for making certain elections sec_301_9100-3 provides extensions of time for making elections that do not meet the requirements of sec_301_9100-2 requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 plr-140073-05 conclusion based solely upon the information submitted we conclude that the requirements of sec_301_9100-1 and sec_301_9100-3 have been satisfied as a result an extension of days from the date of this letter is granted to elect to treat y as disregarded as an entity separate from its owner for federal tax purposes effective date the entity classification election should be made by filing form_8832 with the appropriate service_center a copy of this letter should be attached to the form_8832 a copy is enclosed for that purpose concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter except as expressly provided herein no opinion is expressed or implied this ruling is directed only to the taxpayer s requesting it sec_6110 of the internal_revenue_code provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this sincerely letter will be sent to your authorized representative enclosures copy of this letter copy for sec_6110 purposes william p o’shea associate chief_counsel passthroughs and special industries


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-104013-02 date date company shareholders state date date dear this letter responds to your letter dated date as well as subsequent correspondence requesting a ruling under sec_1362 of the internal_revenue_code regarding company's late s_corporation_election facts company owned by the shareholders was incorporated in state on date company represents that it intended to be an s_corporation from inception however form_2553 election by a small_business_corporation was not timely filed with the internal_revenue_service company has timely filed forms 1120s u s income_tax return for an s_corporation since inception and the shareholders have filed their plr-104013-02 individual income_tax returns for these same years consistent with company’s intended status as an s_corporation law and analysis sec_1362 provides that in general that an election by a small_business_corporation under sec_1362 to be an s_corporation may be made for any_tax year- a at any time during the preceding tax_year or b at any time during the tax_year and on or before the 15th day of the 3d month of the tax_year sec_1362 provides that if-- a a small_business_corporation makes an election under sec_1362 for any_tax year and b that election is made after the 15th day of the 3d month of the tax_year and on or before the 15th day of the 3d month of the following tax_year then that election shall be treated as made for the following tax_year sec_1362 provides that if-- a an election under sec_1362 is made for any_tax year determined without regard to sec_1362 after the date prescribed by this subsection for making the election for that tax_year or no such election is made for any_tax year and b the secretary determines that there was reasonable_cause for the failure to timely make the election the secretary may treat such election as timely made for that tax_year and sec_1362 shall not apply based solely on the facts and representations submitted by company we conclude that there was reasonable_cause for company’s failure to make a timely s_corporation_election therefore we conclude that company's late election under sec_1362 is to be treated under sec_1362 as filed timely for its tax_year beginning date this ruling is contingent however on company filing form_2553 to be effective on date with the appropriate service_center no later than days from the date of this letter a copy of this letter should be attached to the form_2553 plr-104013-02 except for the specific ruling above we express or imply no opinion concerning the federal tax consequences of the facts of this case under any other provision of the code specifically we express or imply no opinion on whether company otherwise is eligible to be an s_corporation under a power_of_attorney on file with this office we are sending a copy of this letter to your authorized representative this ruling is directed only to the taxpayer who requested it according to sec_6110 this ruling may not be used or cited as precedent sincerely jeanne sullivan senior technician reviewer branch office of associate chief_counsel passthroughs and special industries enclosure copy of this letter copy for sec_6110 purposes


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 ita b07 plr-118536-16 date december re request for an extension of time to make the election not to apply sec_168 to round extension property and request to revoke election to apply sec_168 to round extension property legend taxpayer ------------------------------------------------------- date --------------------------- date ---------------------- date ---------------------------- a ------- b ------- c -------- d ------- e ------- f --------------------- g ----------------------------------------- i ------- plr-118536-16 dear ---------------- this letter responds to a letter dated date and supplemental correspondence requesting i an extension of time pursuant to sec_301_9100-3 of the procedure and administration regulations to make the election under sec_168 of the internal_revenue_code not to apply sec_168 to round extension property and ii to revoke the election under sec_168 to apply sec_168 to round extension property all references in this letter_ruling to sec_168 are treated as a reference to sec_168 as in effect on the day before the date of the enactment of the protecting americans from tax hikes act of path act enacted as part of the consolidated appropriations act division q publaw_114_113 129_stat_2242 date facts taxpayer represents that the facts are as follows taxpayer is the common parent of an affiliated_group_of_corporations as defined under sec_1504 the affiliated_group_of_corporations files a consolidated federal_income_tax return on a calendar-year basis taxpayer made the election to apply sec_168 the sec_168 election on its timely filed consolidated federal_income_tax return for its first taxable_year ending after date which is the taxable_year ended date the a taxable_year on its timely filed consolidated federal_income_tax returns for the subsequent taxable years through the d taxable_year taxpayer applied the sec_168 election to eligible qualified_property extension property round extension property and round extension property round extension property was placed_in_service during the b and c taxable years and round extension property was placed_in_service during the d taxable_year taxpayer’s former director of tax the former tax director was responsible for the preparation of the a through d returns including preparing the analyses associated with the application of sec_168 no outside tax professional was engaged by taxpayer for the preparation of its a through d returns the former tax director departed taxpayer in f after such departure taxpayer engaged g to provide tax_advice and assistance with the irs examination of the consolidated federal_income_tax returns for the e b c and d taxable years in reviewing taxpayer’s consolidated federal_income_tax returns with respect to sec_168 g if it had been asked to provide advice with respect to sec_168 would have advised taxpayer not to apply sec_168 for the b c and d plr-118536-16 taxable years instead g would have advised taxpayer to claim the additional first year depreciation for those years g informed taxpayer that throughout the years taxpayer applied sec_168 sec_168 would not have resulted in greater tax savings for taxpayer in comparison to deducting additional first year depreciation based upon facts known when each return was timely filed applying sec_168 was not an economically prudent decision for taxpayer for the b c and d taxable years further no facts have occurred subsequent to the due_date of the consolidated federal_income_tax return for the b taxable_year that now makes it more advantageous for taxpayer not to apply sec_168 to round extension property and round extension property because the former tax director was no longer employed by taxpayer during g’s analysis of sec_168 current employees of taxpayer reviewed existing company documentation and conducted discussions with members of the current and former executive management concerning the decision to make the sec_168 election as a result it was determined that the former tax director did an incomplete analysis associated with the application of sec_168 if a complete analysis was presented to the executive management team they would have instructed the former tax director not to make the sec_168 election the period of limitation on assessment for taxpayer’s e b and c taxable years has been extended by agreement under sec_6501 to date and the period of limitation on assessment for taxpayer’s d taxable_year is open under sec_6501 to date both of these dates are after the date of this letter_ruling rulings requested taxpayer requests i an extension of time pursuant to sec_301_9100-3 to make the election under sec_168 not to apply sec_168 to round extension property and ii to revoke the election under sec_168 to apply sec_168 to round extension property law and analysis prior to amendment by the tax relief unemployment insurance reauthorization and job creation act of pub_l_no 124_stat_3296 date truirjca sec_168 allowed a corporation or an s_corporation to elect not to claim the additional first year depreciation deduction allowable under sec_168 for eligible qualified_property or extension property and instead increase the business_credit limitation under sec_38 and the alternative_minimum_tax amt credit limitation under sec_53 as a result a corporation or s_corporation was able to claim unused credits from taxable years beginning before date that were allocable to research expenditures or amt liabilities and accelerate such credits as either refundable credits in the case of a c_corporation or credits against the plr-118536-16 a tax in the case of an s_corporation with the exception of revised dates eligible qualified_property or extension property is property eligible for the additional first year depreciation deduction under sec_168 sec_401 of truirjca amended sec_168 by adding sec_168 to the code sec_168 applied to property placed_in_service generally after and before round extension property sec_331 of the american taxpayer relief act of pub_l_no 126_stat_2313 date atra amended sec_168 by adding sec_168 to the code sec_168 applied to property placed_in_service generally after and before round extension property with the exception of revised dates round extension property and round extension property is property eligible for the additional first year depreciation deduction under sec_168 pursuant to sec_168 and j i sec_168 increased only the amt credit limitation under sec_53 for round extension property and round extension property as a result sec_168 allowed a c_corporation or an s_corporation to elect not to claim the additional first year depreciation deduction allowable under sec_168 for round extension property and round extension property and instead increase the amt credit limitation under sec_53 accordingly a c_corporation or s_corporation was able to claim unused credits from taxable years beginning before date that were allocable to amt liabilities and accelerate such credits as either refundable credits in the case of a c_corporation or credits against the sec_1374 tax in the case of an s_corporation under sec_168 a sec_168 election applies to a corporation’s first taxable_year ending after date and to any subsequent taxable_year however under sec_168 a corporation that made the sec_168 election for its first taxable_year ending after date or that made the sec_168 election under sec_168 for extension property for its first taxable_year ending after date may elect not to have the sec_168 election apply to round extension property if a corporation does not have an election in effect under sec_168 for round extension property sec_168 allows the corporation to elect to apply sec_168 to round extension property sec_168 provides that any election under sec_168 including any allocation under sec_168 may be revoked only with the consent of the secretary pursuant to section dollar_figure of revproc_2008_65 2008_2_cb_1082 the election to apply sec_168 once made may be revoked only with the written consent of the commissioner of internal revenue and to seek the commissioner’s consent the taxpayer must submit a request for a letter_ruling sec_168 provides that all corporations that are treated as a single employer under sec_52 generally any controlled_group_of_corporations within the meaning of sec_1563 determined by substituting more than percent for more than plr-118536-16 percent each place it appears in sec_1563 shall be treated as one taxpayer for purposes of sec_168 and as having elected the application of sec_168 if any such corporation so elects hereinafter such group of corporations is referred to as a controlled_group see section dollar_figure of revproc_2009_16 2009_6_irb_449 section dollar_figure of revproc_2009_16 provides guidance regarding the election to apply sec_168 by a controlled_group sec_3 b of revproc_2009_16 provides that if all members of a controlled_group are members of an affiliated_group_of_corporations that file a consolidated_return a consolidated_group the common parent within the meaning of sec_1_1502-77 of the income_tax regulations of the consolidated_group makes the sec_168 election on behalf of all members of the consolidated_group the common parent makes this election within the time and in the manner provided in sec_3 or dollar_figure of revproc_2009_16 as applicable under sec_301_9100-1 the commissioner of internal revenue 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 sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make an election sec_301_9100-2 provides automatic extensions of time for making certain elections sec_301_9100-3 provides extensions of time for making elections that do not meet the requirements of sec_301_9100-2 sec_301_9100-3 provides that requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and the grant of relief will not prejudice the interests of the government in this case taxpayer is the common parent of an affiliated_group_of_corporations that timely filed a consolidated federal_income_tax return for the taxable_year ended date on that return taxpayer made the sec_168 election further taxpayer’s consolidated_group on date was not a member of any other controlled_group on that date thus this election is binding on all members of taxpayer’s consolidated_group on date and applies to taxpayer’s consolidated_group for the taxable_year ended date and any subsequent taxable_year but see sec_3 d of revproc_2009_16 for guidance regarding members entering or leaving a controlled_group however if we grant taxpayer an extension of time to make the election under sec_168 not to apply sec_168 to round extension property taxpayer will no longer have a sec_168 election in effect for round extension property and will have to make an election under sec_168 to apply sec_168 to round extension property by taxpayer applying sec_168 to round extension property we conclude that taxpayer is treated as making the election under sec_168 to apply sec_168 to round extension property plr-118536-16 conclusions based solely on the facts and representations submitted and the law and analysis as set forth above we conclude that the requirements of sec_301_9100-1 and sec_301_9100-3 have been satisfied with respect to round extension property accordingly taxpayer is granted calendar days from the date of this letter to make the election under sec_168 not to apply sec_168 to round extension property this election must be made by taxpayer i filing an amended consolidated federal_income_tax return for the b taxable_year with a written_statement indicating that taxpayer is making the election under sec_168 not to apply sec_168 to round extension property ii filing an amended consolidated federal_income_tax return for the c taxable_year iii filing an amended consolidated federal_income_tax return for the d taxable_year if taxpayer or any member of taxpayer’s consolidated_group placed_in_service round extension property in the d taxable_year and iv providing written notification to any partnership in which taxpayer or any member of taxpayer’s consolidated_group is a partner that taxpayer is making the election under sec_168 not to apply sec_168 to round extension property the amended consolidated federal_income_tax returns for the b c and d taxable years must include the adjustment to tax_liability the adjustment to taxable_income for the amount of depreciation allowed_or_allowable for that taxable_year for round extension property and any collateral adjustments to taxable_income or tax_liability and a revocation of taxpayer’s election under sec_168 to apply sec_168 to round extension property is permitted under sec_168 accordingly taxpayer is granted calendar days from the date of this letter to revoke the election under sec_168 to apply sec_168 to round extension property this revocation must be made by taxpayer i filing an amended consolidated federal_income_tax return for the d taxable_year with a written_statement indicating that taxpayer is revoking the election under sec_168 to apply sec_168 to round extension property ii filing an amended consolidated federal_income_tax return for the i taxable_year which is the taxable_year subsequent to the d taxable_year if taxpayer or any member of taxpayer’s consolidated_group placed_in_service round extension property in the i taxable_year and iii providing written notification to any partnership in which taxpayer or any member of taxpayer’s consolidated_group is a partner that taxpayer is revoking the election under sec_168 to apply sec_168 to round extension property the amended consolidated federal_income_tax returns for the d and i taxable years must include the adjustment to tax_liability the adjustment to taxable_income for the amount of depreciation allowed_or_allowable for that taxable_year for round extension property and any collateral adjustments to taxable_income or tax_liability plr-118536-16 a copy of this letter_ruling must be attached to any federal_income_tax return to which it is relevant a copy is enclosed for that purpose alternatively a taxpayer filing its federal_income_tax return electronically may satisfy this requirement by attaching a statement to the return that provides the date and control number of the letter_ruling except as specifically ruled upon above no opinion is expressed or implied concerning the tax consequences of the facts described above under any other provisions of the code including other subsections of sec_168 specifically no opinion is expressed or implied on whether i any item of depreciable_property placed_in_service by taxpayer or any member of taxpayer’s consolidated_group in the a through i taxable years is eligible for the additional first year depreciation deduction provided by sec_168 or ii any item of depreciable_property placed_in_service by taxpayer or any member of taxpayer’s consolidated_group in the a through i taxable years is under sec_168 eligible qualified_property extension property round extension property or round extension property as applicable or iii taxpayer properly determined the bonus_depreciation amount under sec_168 for the a through i taxable years the rulings contained in this letter are based upon information and representations submitted by 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 taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent in accordance with the power_of_attorney we are sending a copy of this letter to taxpayer’s authorized representatives we are also sending a copy of this letter to the appropriate operating division director enclosures copy of this letter copy for sec_6110 purposes sincerely kathleen reed kathleen reed chief branch office of associate chief_counsel income_tax and accounting


department of the treasury p o box cincinnati ohio employer_identification_number person to contact - id contact telephone number uil code internal_revenue_service director exempt_organizations release number release date date legend q secondary schools y elementary schools z dollar_figure amounts dear we have considered your request for advance approval of your grant-making program under sec_4945 of the internal_revenue_code dated date our records indicate that you are recognized as exempt from federal_income_tax under sec_501 of the code and are classified as a private_foundation as defined in sec_509 of the code your letter indicates that you will operate a grant-making program that will be awarding four-year q scholarships to students enrolled in y who demonstrate academic potential strong character and a commitment to community service you will notify the principals of y of the scholarships’ availability the principal or a committee designated by the principal consisting of the principal teachers and or other disinterested individuals affiliated with the school annually shall nominate students based on the criteria provided below nominated students meeting this criteria shall submit completed application forms to the board_of directors of the foundation all applicants will be considered as potential recipients receipt of a scholarship will be contingent on admission to q scholarships will include the cost of tuition fees and books required scholarships will be a one time award for four years of attendance in the amount of z depending on the cost of q the selection criteria include e e e academic standing and demonstrated ability to complete courses of study may include submission of transcripts and recommendations by applicant’s teachers character and motivation to obtain an education and to work hard and seriously to continue and complete an education and the support of parents s or guardian s in these endeavors demonstrated need for financial assistance commitment to community service each individual involved in the selection process is obligated to disclose any personal knowledge of and relationship with any potential recipient under consideration and refrain from participation in the selection process all scholarships will be paid_by the board_of directors directly to q q must be described in sec_170ci of the internal_revenue_code and must agree in writing to use the granted funds to defray the recipients’ expenses or to pay the funds to the recipient only if the recipient is enrolled at q and standing at q is consistent with the purposes and conditions of the scholarship if applicable the board will investigate any suspected diversions of scholarships from their intended purpose and take all reasonable steps to recover the diverted funds ensure other scholarships are used for their intended purpose and withhold further payments to an individual who has diverted funds files will be maintained for all selected recipients these will contain each recipient’s application including their essays and reference letters the amount and purpose of each scholarship proof of enrollment and any applicable investigation of diverted funds sec_4945 and b of the code impose certain excise_taxes on taxable_expenditures made by a private_foundation sec_4945 of the code provides that the term taxable_expenditure means any amount_paid or incurred by a private_foundation as a grant to an individual for travel study or other similar purposes by such individual unless such grant satisfies the requirements of subsection g sec_4945 of the code provides that sec_4945 shall not apply to individual grants awarded on an objective and nondiscriminatory basis pursuant to a procedure approved in advance if it is demonstrated that the grant constitutes a scholarship or fellowship_grant which is subject_to the provisions of sec_117 and is to be used for study at an educational_organization described in sec_170cii the grant constitutes a prize or award which is subject_to the provisions of sec_74 if the recipient of such prize or award is selected from the general_public or the purpose of the grant is to achieve a specific objective produce a report or similar product or improve or enhance a literary artistic musical scientific teaching or other similar capacity skill or talent of the grantee sec_53_4945-4 of the regulations provides that to secure approval a private_foundation must demonstrate that i il iii its grant procedure includes an objective and nondiscriminatory selection process such procedure is reasonably calculated to result in performance by grantees of the activities that the grants are intended to finance and the foundation plans to obtain reports to determine whether the grantees performed activities that the grants are intended to finance based on the information submitted and assuming your award programs will be conducted as proposed with a view to provide objectivity and nondiscrimination in making the awards we have determined that effective date your procedures for granting the awards comply with the requirements contained in sec_4945 of the code and that awards granted in accordance with such procedures will not constitute taxable_expenditures within the meaning of sec_4945 in addition we have determined that awards made under your procedures as of date are excludable from the gross_income of the recipients subject_to the limitations provided by sec_117 of the code this determination is conditioned on the understanding that there will be no material_change in the facts upon which it is further conditioned on the premise that no grants will be awarded to foundation managers or members of the selection committee or for a purpose that is inconsistent with the purpose described in sec_170 of the code is based it the approval of your award program procedures herein date constitutes a one-time approval of your system standards and procedures designed to result in awards which meet the requirements of sec_4945 of the code this determination only covers the grant programs described above thus approval shall apply to subsequent award programs only as long as the standards and procedures under which they are conducted do not differ materially from those described in your request any funds you distribute to individuals must be made on a true charitable basis in furtherance of the purposes for which you are organized therefore you should maintain adequate_records and case histories so that any or all award distributions can be substantiated upon request by the internal_revenue_service this determination is directed only to the organization that requested it sec_6110 of the code provides that it may not be used or cited as a precedent you must report any future changes in your grant making procedures please keep a copy of this letter in your permanent records we have sent a copy of this letter to your representative as indicated in your power_of_attorney if you have any questions please contact the person whose name and telephone number are shown above sincerely yours robert choi director exempt_organizations rulings and agreements


number release date id office uilc cca_2009021216482148 ----- ---------- from ------------------ sent thursday date pm to ------------------------------- cc subject re memorandum am2008-013 hi --------- that is correct here is an example if it helps taxpayer a professional gambler has dollar_figure of wagering gains dollar_figure of wagering losses and dollar_figure of business_expenses the taxpayer must report the dollar_figure of wagering gains as gross_receipts the taxpayer then may subtract only dollar_figure of his dollar_figure of wagering losses from gross_receipts completely offsetting his dollar_figure of wagering gains the taxpayer may not carry over the excess dollar_figure of unused wagering losses to offset wagering gains or other non-wagering income in another taxable_year the taxpayer may then also deduct the dollar_figure of business_expenses hope this helps ------------------ ----------------------------------- --------------------


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 intl b2 plr-141152-10 date date ty --------------------- ty --------------------- ------------------------------ ----------------- ------------------------ ----------------- ------------- --------------------------- ------- ------- ------- ------ legend taxpayer taxpayer fc country a year year year p accounting firm r --------------- dear ------------------------------------------------------------- this is in response to a letter dated date submitted by your authorized representative that requested the consent of the commissioner of the internal_revenue_service commissioner for taxpayer and taxpayer collectively taxpayers to make a retroactive qualified_electing_fund qef election under sec_1295 of the plr-141152-10 internal_revenue_code code and sec_1_1295-3 with respect to taxpayer’s investment in fc the ruling contained in this letter is based upon information and representations submitted on behalf of taxpayers by their authorized representatives and accompanied by a penalties of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of this request_for_ruling such material is subject_to verification on examination the information submitted in the request is substantially as set forth below facts taxpayer and taxpayer are married individuals who file a joint federal_income_tax return taxpayers hold a stock investment of p in fc a country a corporation constituting a passive_foreign_investment_company pfic this stock investment in fc was made on behalf of taxpayer in year without the knowledge of the taxpayers by trustees of two u s irrevocable trusts of which taxpayer is a beneficiary since before year taxpayers have relied on accounting firm r for tax_advice as well as the accurate preparation of tax returns accounting firm r became aware of the investment in fc during the preparation of the year trust returns however accounting firm r failed to ascertain the nature of the investment as well as the classification of fc as a foreign_entity consequently accounting firm r failed to properly advise the taxpayers of the availability of electing to treat stock owned by the taxpayers in fc as stock in a qualified_electing_fund for the tax_year ended in year and subsequent tax years however upon discovery of the nature and entity classification of the investment in year accounting firm r advised taxpayers of the need to take corrective action taxpayers have submitted an affidavit under penalties of perjury describing the events that led to the failure to make the qef election by the election due_date including the role of accounting firm r taxpayers represent that they provided information regarding the investment of fc to accounting firm r in year taxpayers represent that in year and subsequent years fc was not identified as a pfic and taxpayer did not receive any advice regarding the availability of a qef election with respect to the trust’s investment in fc in addition taxpayers submitted an affidavit from accounting firm r corroborating the representations made by taxpayers with respect to the discovery of fc’s pfic status taxpayers represent that as of the date of this request_for_ruling the pfic status of fc has not been raised by the irs on audit for any of the taxable years at issue ruling requested plr-141152-10 taxpayers request the consent of the commissioner to make a retroactive qef election with respect to fc for year under sec_1_1295-3 law code sec_1295 provides that a pfic will be treated as a qef with respect to a taxpayer if an election by the taxpayer under code sec_1295 applies to such pfic for the taxable_year and the pfic complies with such requirements as the secretary may prescribe for purposes of determining the ordinary_earnings and net capital_gains of such company under code sec_1295 a qef election may be made for any taxable_year at any time on or before the due_date determined with regard to extensions for filing the return for such taxable_year to the extent provided in regulations such an election may be made after such due_date if the taxpayer failed to make an election by the due_date because the taxpayer reasonably believed the company was not a pfic under sec_1_1295-3 a shareholder may request the consent of the commissioner to make a retroactive qef election for a taxable_year if the shareholder reasonably relied on a qualified_tax professional within the meaning of sec_1_1295-3 granting consent will not prejudice the interests of the united state sec_3 government as provided in sec_1_1295-3 the request is made before a representative of the internal_revenue_service raises upon audit the pfic status of the corporation for any taxable_year of the shareholder and the shareholder satisfies the procedural requirements of sec_1 f the procedural requirements include filing a request for consent to make a retroactive election with and submitting a user_fee to the office of the associate chief_counsel international sec_1_1295-3 additionally affidavits signed under penalties of perjury must be submitted that describe the events that led to the failure to make a qef election by the election due_date the discovery of such failure the engagement and responsibilities of the qualified_tax professional and the extent to which the shareholder relied on such professional sec_1_1295-3 and iii plr-141152-10 conclusion based on the information submitted and representations made with taxpayers’ ruling_request we conclude that taxpayers have satisfied sec_1_1295-3 accordingly consent is granted to taxpayers to make a retroactive qef election with respect to fc for year provided that taxpayers comply with the rules under sec_1_1295-3 regarding the time and manner for making the retroactive qef election except as specifically set forth above no opinion is expressed or implied concerning the u s federal tax consequences of the facts described above under any other provision of the code this private_letter_ruling is directed only to the taxpayer who requested it code sec_6110 provides that it may not be used or cited as precedent a copy of this letter_ruling must be attached to any federal_income_tax return to which it is relevant alternatively taxpayers filing their returns electronically may satisfy this requirement by attaching a statement to their return that provides the date and control number of the letter_ruling 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 jeffery g mitchell chief branch international cc


t c memo united_states tax_court isidra elizabeth espinoza petitioner v commissioner of internal revenue respondent docket no filed date isidra elizabeth espinoza pro_se brooke s laurie for respondent memorandum findings_of_fact and opinion cohen judge respondent determined a deficiency of dollar_figure in petitioner’s federal_income_tax and an accuracy-related_penalty of dollar_figure under sec_6662 the issues for decision are whether petitioner may pursuant to sec_104 exclude settlement proceeds from her gross_income and whether petitioner is liable for an accuracy-related_penalty under sec_6662 all section references are to the internal_revenue_code for the year in issue and all rule references are to the tax_court rules_of_practice and procedure findings_of_fact some of the facts have been stipulated and the stipulated facts are incorporated in our findings by this reference petitioner resided in texas at the time she filed her petition petitioner worked for the texas department of human services from to during the course of her employment petitioner suffered from emotional distress and incurred various medical_expenses petitioner commenced a suit against the texas department of human services in the district_court of hidalgo county texas alleging that she was subject_to illegal discrimination based on her gender religion and national origin as well as retaliation as the suit dragged on petitioner’s husband manuel espinoza discussed with petitioner’s counsel jesus villalobos a personal injury attorney the possibility of settling with the texas health and human services commission the successor agency to the texas department of human services mr espinoza calculated the total cost of petitioner’s medical bills to be dollar_figure and offered to settle with the texas health and human services commission for that amount villalobos represented to mr espinoza that the settlement amount would not be taxable so there was no need to increase the settlement amount to account for federal_income_tax between date and date petitioner and the texas health and human services commission executed a release and settlement agreement the agreement stated this agreement or any_action taken pursuant to this agreement shall not constitute an admission of liability by any party and all liability is expressly denied this agreement is entered into to resolve and settle all differences disputes and controversies between the parties to compromise and settle doubtful and disputed claims to avoid further litigation and to facilitate peace this agreement specifically does not represent an admission by any party of the merit or lack of merit of the claims made by the plaintiff against the defendant nor shall this agreement or any actions taken pursuant to this agreement be admissible in any proceeding for the purpose of showing the merit or lack of merit of those claims in full and final settlement and compromise of all claims but without admitting liability therefore sic defendant agrees to pay espinoza a total amount of fifty thousand dollars dollar_figure the parties will pay their own costs the settlement agreement does not identify any reasons for the settlement payment other than those listed in the first paragraph nor does the settlement agreement dictate how the money is to be spent notwithstanding petitioner believed that the settlement proceeds were reimbursement for all of her medical costs incurred as a result of the discrimination petitioner received the dollar_figure settlement in along with a form 1099-misc miscellaneous income from the health and human services commission on date the internal_revenue_service received petitioner’s form_1040 u s individual_income_tax_return for which petitioner submitted using the status of married_filing_separately petitioner’s form_1040 was prepared by a paid return preparer petitioner and her husband told the return preparer that the settlement proceeds were paid to compensate petitioner for medical costs as a result of her medical_condition the return preparer did not include the settlement proceeds in petitioner’s gross_income the settlement proceeds opinion the definition of gross_income under sec_61 broadly encompasses any accession to a taxpayer’s wealth 515_us_323 504_us_229 absent an exception by another statutory provision settlement proceeds must be included in gross_income commissioner v schleier supra united_states v burke supra sec_104 excepts from gross_income the amount of any damages other than punitive_damages received whether by suit or agreement and whether as lump sums or as periodic_payments on account of personal physical injuries or physical sickness although emotional distress is not treated as a physical injury or physical sickness the cost of medical_care attributable to emotional distress is sec_104 flush language see stadnyk v commissioner tcmemo_2008_289 affd without published opinion no 6th cir date to justify exclusion from income under sec_104 petitioner must show that her settlement proceeds were in lieu of damages for physical injuries or physical sickness see 507_f3d_857 5th cir affg tcmemo_2005_250 105_tc_396 affd 121_f3d_393 8th cir sec_1_104-1 income_tax regs the nature of the settlement is a question of fact green v commissioner supra pincite ultimately the character of the payment hinges on the payor’s dominant reason for making the payment id pincite we first look to the language of the agreement itself for indicia of purpose id pincite where the agreement does not mention purpose the court may look at other facts that reveal the payor’s intent such as the amount_paid the evidence adduced at trial and the factual circumstances that led to the agreement id we recognize that green and bagley were decided under sec_104 before it was amended in however their holding regarding the characterization of settlement proceeds in lieu of damages remains good law see save v commissioner tcmemo_2009_209 the settlement agreement between petitioner and the texas health and human services commission does not allocate petitioner’s proceeds to a claim of personal physical injury or physical sickness the agreement does not specify any particular claim motivating the settlement it therefore fails to allocate between claims that qualify and claims that do not qualify under sec_104 petitioner argues that the texas department of human services the texas health and human services commission and the texas attorney general’s office were well aware of her physical injuries however petitioner has failed to present objective and credible_evidence that the texas health and human services commission intended that any part of petitioner’s settlement proceeds be allocated to her medical_expenses and therefore has not shifted the burden_of_proof to respondent under sec_7491 in any event the preponderance_of_the_evidence is that the settlement was unallocated among multiple claims many of which were not for physical injuries or physical sickness we must conclude on the evidence that the settlement proceeds are includable in petitioner’s income for the accuracy-related_penalty sec_6662 and b and imposes a 20-percent accuracy-related_penalty on any underpayment of federal_income_tax attributable to a taxpayer’s negligence or disregard of rules or regulations or substantial_understatement_of_income_tax sec_6662 defines substantial_understatement_of_income_tax as an amount exceeding the greater of percent of the tax required to be shown on the return or dollar_figure under sec_7491 the commissioner bears the burden of production with regard to penalties and must come forward with sufficient evidence indicating that it is appropriate to impose penalties see 116_tc_438 however once the commissioner has met the burden of production the burden_of_proof remains with the taxpayer including the burden of proving that the penalties are inappropriate because of reasonable_cause or substantial_authority see rule a higbee v commissioner supra pincite respondent has satisfied the burden of production by showing that there is a substantial_understatement because the amount of the understatement dollar_figure exceeds percent of the tax required to be shown on the return and is greater than dollar_figure the accuracy-related_penalty under sec_6662 is not imposed with respect to any portion of the underpayment as to which the taxpayer acted with reasonable_cause and in good_faith sec_6664 higbee v commissioner supra pincite the decision as to whether a taxpayer acted with reasonable_cause and in good_faith is made on a case-by-case basis taking into account all of the pertinent facts and circumstances see sec_1_6664-4 income_tax regs circumstances that may indicate reasonable_cause and good_faith include an honest misunderstanding of fact or law that is reasonable in light of all of the facts and circumstances including the experience knowledge and education of the taxpayer id reliance on professional advice may constitute reasonable_cause and good_faith if under all the circumstances such reliance was reasonable and the taxpayer acted in good_faith 89_tc_849 affd 904_f2d_1011 5th cir affd 501_us_868 sec_1_6664-4 income_tax regs petitioner has convinced us that she acted with reasonable_cause and in good_faith petitioner has no experience or education in tax law she relied upon the advice of villalobos who told her that the settlement would not be taxable although villalobos does not have tax experience he is a personal injury attorney and it is reasonable for petitioner to assume that he would be familiar with the federal_income_tax consequences of personal injury settlements see stadnyk v commissioner supra furthermore petitioner believed that the settlement was to compensate her for her physical injuries this belief was reinforced by the numerous medical_expenses petitioner incurred we find that petitioner’s mistaken belief that the settlement proceeds were compensation_for physical injuries was reasonable in the light of the circumstances petitioner acted reasonably and in good_faith when she told her return preparer that the settlement proceeds were paid on account of physical injury see shelton v commissioner tcmemo_2009_116 pettit v commissioner tcmemo_2008_87 we therefore conclude that petitioner has demonstrated reasonable_cause for failing to report the settlement proceeds as income and that she acted in good_faith she is therefore not liable for the accuracy-related_penalty in reaching our decision we have considered all arguments made by the parties to the extent not mentioned or addressed they are irrelevant or without merit for the reasons explained above decision will be entered under rule


number release date id office uilc cca_2009040814001550 -------------------------- from -------------------- sent wednesday april pm to ---------------------- cc -------------------- subject re t exceptions ----------- there have not been any regulations issued regarding sec_72 a distribution qualifies under sec_72 if it was made from an individual_retirement_plan to an individual after separation from employment if such individual has received unemployment_compensation for consecutive weeks under any federal or state unemployment_compensation law by reason of such separation sec_72 if such distribution was made during any taxable_year during which such unemployment_compensation is paid or the succeeding taxable_year sec_72 and to the extent such distribution does not exceed the amount_paid during the taxable_year for insurance sec_72 a self-employed_individual shall be treated as having satisfied the requirement of sec_72 number above if under federal or state law the individual would have received unemployment_compensation but for the fact that the individual was self-employed sec_72 thus if the taxpayer is self-employed the taxpayer has to present evidence that he would have been eligible to receive any federal or state unemployment_compensation but for the fact that the taxpayer was self employed although not able to cite as precedence see the attached tax_court summary opinion and how the tax_court handled a s_case dealing with sec_72


significant index nos and department of the treasury internal_revenue_service washington d c jun se lp atm tax_exempt_and_government_entities_division in re company - dear this letter constitutes notice that our ruling letter dated date which granted a conditional waiver of the minimum_funding_standard for the above-named pension_plan for the plan_year ended september i and granted conditional waivers of the percent excise_taxes that would otherwise apply with respect to the plan years ended september september ei september mb and september jmmis hereby modified to replace the conditions in that letter with the new conditions stated below the contributions required to plan_year ending september sec_412 of the code without a waiver being granted for that year the minimum_funding_standard for the are to be timely made as defined in the company either pays or makes arrangements with the appropriate irs office within days of the date of the ruling letter to pay the excise_taxes applicable under sec_4971 of the internal_revenue_code associated with the funding deficiencies for the four plan years ended september a through september the company pays within days of the date of the ruling letter the excise_tax applicable under sec_4971 of the internal_revenue_code associated with the funding deficiency for the plan_year ended september you agreed to these conditions in a letter dated date your attention is called to sec_412 of the code and sec_304 of erisa which describe the consequences that would result in the event the plan is amended to increase benefits change the rate in the accrual_of_benefits or to change the rate of vesting while any portion of the waived_funding_deficiency remains unamortized please note that any amendment to a profit sharing plan or any other retirement plans covering employees covered by this plan maintained by the company to increase the liabilities of those plans would be considered an amendment for purposes of sec_412 of the code and sec_304 of erisa establishment of a new profit sharing plan or any other retirement_plan by the company covering employees covered by this plan would be considered an amendment for purposes of sec_412 of the code and sec_304 of erisa similarly the this ruling is directed only to the taxpayer that requested it sec_6110 of the code provides that it may not be used or cited by others as precedent when filing form_5500 for the plan_year ended september mm the date of this letter should be entered on schedule b actuarial information a copy of this letter is being sent to the manager employee_plans classification in a copy of this letter is being sent to the manager empioyee plans compliance unit in a copy of this letter is being sent to the sb_se revenue_officer in actuary for the plan a copy of this letter should be furnished to the enrolled if you have any questions on this ruling letter please contact sincerely uy at donna prestia manager employee_plans actuarial group