internal_revenue_service number release date index number ------------------------- ---------------------------------------- ---------------------------------- ------------------------------- -------------------------- ------------------------------ department of the treasury washington dc third party communication none date of communication not applicable_person to contact ------------------------- id no ------------- telephone number --------------------- refer reply to cc psi b04 plr-103654-07 date december legend grantor spouse son son accountant trust trust company company company lp year date date date a b --------------------------------------------------- --------------------------------------------------- ------------------------- ----------------------- ------------------------ ---------------------------------------------------------------------- --------------------------------------------------------------------- ---------------------------- ------------------------------------ ---------------------------------------------------- --------------------------------- ------- ------------------- ---------------------- ------------------------- ----------- ----- dear ----------------- this is in response to your letter dated date requesting an extension of time under sec_2642 of the internal_revenue_code and sec_301_9100-3 of the procedure and administration regulations to make an allocation of grantor’s generation-skipping_transfer gst_exemption the facts and representations submitted are summarized as follows plr-103654-07 on date grantor established trust for the benefit of son and trust for the benefit of son article first section a of each trust provides in part that during grantor’s life the trustee has discretion to pay or apply so much or all of the net_income if any and principal of the trust to or for a charitable_organization a non-profit organization selected by spouse the named beneficiary the named beneficiary’s descendants and trusts for the primary benefit of any of the above beneficiaries if during grantor’s life the named beneficiary and the named beneficiary’s descendants are not living then grantor’s descendants are also permissible beneficiaries article first section b provides that upon days after grantor’s death the trustees are to distribute to the grantor’s estate any property includible in grantor’s gross_estate for federal estate_tax purposes other than property bequeathed to the trustees under the grantor’s will the balance of each trust’s property including any received by the trustees pursuant to the provisions of the grantor’s will is directed to be held in further trust upon the same terms described above for the same beneficiaries article first section c paragraph provides that the trustee may not transfer pay over or distribute to any person any portion of either an interest in a company entity or an interest in lp a limited_partnership or any successor to lp at any time when lp or its successor holds a direct or indirect interest in a company entity without the prior written consent of the company entity company entity is defined as a company b company or c any entity that holds a direct or indirect majority interest in company company or any successor to company or company article first section c paragraph provides that the trustee shall hold each interest in a company entity or interest in lp that would have been transferred paid over or distributed to any person or entity in trust for the benefit of that beneficiary the trustee shall transfer pay over and distribute to such beneficiary a any income or principal of the trust that does not consist of an interest in a company entity or an interest in lp and that shall not be required for expenses of administration and b any interest in a company entity or interest in lp as to which such company entity has provided consent the trust under this paragraph shall terminate when paragraph of this section shall no longer prohibit the distribution to such beneficiary of any of the assets held in the trust whether by reason of consent of the company entity to the distribution or because the trustee no longer holds any company entity interest or any lp interest or otherwise whereupon the trustee shall transfer pay over and distribute all of the then undistributed_net_income and principal of the trust of such beneficiary or to such beneficiary’s estate or successor upon an individual beneficiary’s death or termination of an entity beneficiary prior to such payment in full plr-103654-07 article second section a provides that the trustee shall hold any property directed to be disposed of pursuant to the provisions of this article in trust shall manage invest and reinvest the same shall collect the income therefrom and the trustee may at any time and subject_to article first section c pay or apply so much or all of the net_income therefrom and the principal thereof to or to the use of such one or more beneficiaries in such amounts and proportions as the trustee shall determine in the trustee’s sole discretion accumulating any net_income not so paid or applied and adding the same to principal article second section b provides that the settlor directs the trustee to consider the trust under this article as a family asset and to be liberal in the exercise of the discretion conferred upon the trustee and to use the principal of such trust even to the entire amount thereof but subject_to article first section c to meet the needs of the beneficiaries including without limitation to provide for their education to purchase or provide a home for any of them and to aid them at the time of marriage or in setting up a business rather than to preserve such principal for the benefit of the persons entitled thereto at the termination thereof article fourth section a provides that the trustee may at any time in the trustee’s discretion terminate any trust under this agreement if in the trusee’s judgment it would be inadvisable to continue to hold it in trust provided however that in no event may the trustee terminate any such trust at a time when it is a limited_partner or member of any company entity or any lp entity or is otherwise a holder or beneficial_owner of any interest in a company entity or lp upon such termination the trustee shall transfer pay over and distribute the then principal of any such trust either to the person eligible to receive the income of such trust or if there is more than one such person among the persons eligible to receive the income of such trust in such amounts and proportions as the trustee shall determine in his sole discretion on date in year grantor transferred dollar_figurea in cash and a limited_partnership_interest in lp valued at dollar_figureb to each trust trust and trust grantor and spouse the taxpayers each filed a form_709 united_states gift and generation-skipping_transfer_tax return gift_tax_return for year grantor and spouse elected to treat the gifts as made one-half by each spouse under sec_2513 grantor hired accountant to prepare the gift_tax returns both gift_tax returns were timely filed however accountant failed to allocate grantor’s gst_exemption to the trusts accountant also failed to allocate spouse’s gst_exemption to the trusts accountant did not discuss this with grantor spouse or their advisors plr-103654-07 you have requested an extension of time under sec_2642 and sec_301_9100-3 to sec_2501 imposes a tax on the transfer of property by gift by an individual allocate grantor’s and spouse’s gst_exemption under sec_2632 to grantor’s and spouse’s transfers to trust and trust in year resident or nonresident sec_2513 provides generally that if the parties consent a gift made by one spouse to any person other than his or her spouse shall for gift_tax purposes be considered as made one-half by donor spouse and on-half by his or her spouse defined in sec_2611 through made after date by a transferor to a skip_person sec_2601 imposes a tax on every generation-skipping_transfer gst as under sec_2652 and sec_26_2652-1 generally the transferor for purposes under sec_2602 the amount of the tax imposed under sec_2601 is equal to the of the gst tax is the individual with respect to whom the property was last subject_to federal estate or gift_tax sec_2652 and sec_26_2652-1 provide that if under sec_2513 one-half of a gift is treated as made by an individual and one-half is treated as made by the spouse of the individual then for purposes of the gst tax each spouse is treated as the transferor of one-half of the entire value of the property transferred by the donor spouse regardless of the interest the electing spouse is actually deemed to have transferred under sec_2513 taxable_amount multiplied by the applicable_rate sec_2641 provides that the applicable_rate with respect to any generation-skipping_transfer is the product of the maximum_federal_estate_tax_rate multiplied by the inclusion_ratio with respect to the transfer under sec_2642 in general the inclusion_ratio with respect to any property transferred in a generation-skipping_transfer is the excess of one over the applicable_fraction determined for the trust from which the transfer is made under sec_2642 the applicable_fraction is a fraction the numerator of which is the amount of gst_exemption allocated to the trust and the denominator of which is the value of the property transferred to the trust with certain specified adjustments sec_2631 as in effect for the years at issue in the present case provided that for purposes of determining the inclusion_ratio every individual shall be allowed a gst_exemption of dollar_figure adjusted for inflation under sec_2631 which may be allocated by such individual or his executor to any property with respect to which such individual is the transferor sec_2631 provides that any allocation under sec_2631 once made shall be irrevocable exemption under sec_2631 may be made at any time on or before the date prescribed sec_2632 provides that any allocation by an individual of his or her gst sec_2642 provides that except as provided in sec_2642 if the plr-103654-07 for filing the estate_tax_return for such individual's estate determined with regard to extensions regardless of whether such a return is required to be filed allocation of the gst_exemption to any transfers of property is made on a gift_tax_return filed on or before the date prescribed by sec_6075 for such transfer or is deemed to be made under sec_2632 or c the value of such property for purposes of sec_2642 shall be its value as finally determined for purposes of chapter within the meaning of sec_2001 or in the case of an allocation deemed to have been made at the close of an estate_tax_inclusion_period its value at the time of the close of the estate_tax_inclusion_period sec_2642 provides generally that the secretary shall by regulation sec_2642 provides that in determining whether to grant relief under prescribe such circumstances and procedures under which extensions of time will be granted to make an allocation of gst_exemption described in sec_2642 or and an election under sec_2632 or c such regulations shall include procedures for requesting comparable relief with respect to transfers made before the date of the enactment of this paragraph this paragraph the secretary shall take into account all relevant circumstances including evidence of intent contained in the trust instrument or instrument of transfer and such other factors as the secretary deems relevant for purposes of determining whether to grant relief under this paragraph the time for making the allocation or election shall be treated as if not expressly prescribed by statute see notice_2001_50 2001_2_cb_189 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 months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301_9100-3 provides the standards used to determine whether to grant an extension of time to make an election whose date is prescribed by a regulation and not expressly provided by statute under sec_301_9100-1 a regulatory election includes an election whose due_date is prescribed by a notice published in the internal_revenue_bulletin in accordance with sec_2642 and notice_2001_50 taxpayers may seek an extension of time to make an allocation described in sec_2642 under the provisions of sec_301_9100-3 provides the evidence to establish to the satisfaction of the commissioner that the requests for relief under sec_301_9100-3 will be granted when the taxpayer sec_301_9100-3 provides that a taxpayer is deemed to have acted based on the facts submitted and the representations made we conclude that plr-103654-07 taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government reasonably and in good_faith if the taxpayer reasonably relied on a qualified_tax professional including a tax professional employed by the taxpayer and the tax professional failed to make or advise the taxpayer to make the election the requirements of sec_301_9100-3 have been satisfied therefore grantor is granted an extension of time of days from the date of this letter to make an allocation of grantor's available gst_exemption with respect to grantor's year transfers to trust and trust in addition spouse is granted an extension of time of days from the date of this letter to make an allocation of spouse's available gst_exemption with respect to spouse's year transfers to trust and trust the allocations will be effective as of date and the inclusion_ratio of trust and trust will be determined based on the value of the transfers to the trusts as determined for federal gift_tax purposes and the amount of exemption allocated to the trusts grantor and spouse should make these allocations on supplemental form sec_709 for year the forms should be filed with the cincinnati service_center at the following address internal_revenue_service center cincinnati oh a copy of this letter should be attached to the supplemental form_709 a copy is enclosed for this purpose letter is being sent to your authorized representatives concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination the rulings contained in this letter are based upon information and in accordance with the power_of_attorney on file with this office a copy of this except as expressly provided herein no opinion is expressed or implied plr-103654-07 this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent sincerely william p o'shea associate chief_counsel passthroughs special industries enclosures copy for sec_6110 purposes copy of this letter


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 c psi b04 plr-139005-12 date date legend ------------------ --------------- ------------------ --------------------- ---------------------- ---------------------- ------------------- ---------------------- -------------------- ---------------------------------------------------------- ---------------------------------------------------------- ------------------------------------------------------------------------ ---------------------------------------- decedent spouse son date date date date date date spouse’s trust no spouse’s trust no family_trust exempt trust --------------------------------------------------------------------- nonexempt trust son’s trust state court -------------------------------------------------------------------------------------------------------------- citation ---------------------------------------------------------------------- ------------------------------------------------- ------------------- ------------------------------------------------------------------------ ------------------------------------------------------- dear -------------- this letter responds to a letter dated date and supplemental correspondence submitted by the authorized representatives of exempt trust requesting rulings regarding the gift estate and generation-skipping_transfer gst tax consequences of proposed distributions from exempt trust to son’s trust plr-139005-12 the facts and representations submitted are summarized as follows decedent executed his will on date and amended his will on date date and date are dates occurring prior to date decedent’s will established three trusts at his death spouse’s trust no spouse’s trust no and family_trust decedent died on date a date occurring after date by order of court entered on date spouse’s trust no was divided into two trusts exempt trust and nonexempt trust decedent’s form_706 united_states estate and generation-skipping_transfer_tax return was timely filed decedent’s estate made an election under sec_2056 of the internal_revenue_code code to treat the property of spouse’s trust no as qualified_terminable_interest_property qtip decedent’s estate also made a reverse_qtip_election under sec_2652 of the code with respect to exempt trust and allocated decedent’s available gst_exemption to exempt trust it is represented that exempt trust has an inclusion_ratio of zero for purposes of chapter of the code clause eleventh paragraph e of decedent’s will provides for the distribution at wife’s death of assets remaining in spouse’s trust no therefore exempt trust and nonexempt trust spouse’s trust no and family_trust clause eleventh subparagraph e provides for the distribution upon wife’s death to a separate trust for the benefit of son son’s trust of assets having a fair_market_value of two hundred fifty thousand dollars or the entire balance of assets remaining after the distribution provided for in e if the balance has a fair_market_value less than two hundred fifty thousand dollars and to son outright of the excess if any clause eleventh subparagraph e of decedent’s will provides if at the death of the survivor of my wife and myself an amount other than two hundred fifty thousand is specified in sec_2613 of the internal_revenue_code as then in effect the amount so specified in the code shall be substituted for the above mentioned sum of two hundred fifty thousand dollars in the first sentence of subparagraph e of this clause eleventh of my will with regard to son’s trust clause eleventh subparagraph e a of decedent’s will provides for the accumulation of trust income or distribution of the current and accumulated income to son and his issue during son’s lifetime as trustees deem wise clause eleventh subparagraph e b provides for distribution of the trust principal as trustees other than son deem wise to son for purposes of purchasing a home starting a business or providing for emergency needs of son or his issue clause eleventh plr-139005-12 subparagraph e c provides that upon son’s death the principal and undistributed_income then remaining in son’s trust shall be distributed to or for the benefit of son’s children as son may appoint in his will provided however that son’s power_of_appointment may be exercised only in such manner as to cause the trust property to be includible in the gross estates of one or more of son’s children wife died on date thereafter exempt trust filed a petition for adjudication with court to resolve an ambiguity in decedent’s will regarding the amount to be distributed from exempt trust to son’s trust after wife’s death court concluded that clause eleventh subparagraph e of decedent’s will is ambiguous because it contains a reference to a provision of the code that has been repealed since the date decedent signed his will after considering the language of decedent’s will decedent’s scheme of distribution the circumstances surrounding decedent at the time he executed his will and other existing facts including code provisions then in effect court concluded that decedent intended to take full advantage of the gst_exemption available at decedent’s death on date court issued an order instructing the trustees of exempt trust to distribute all of the principal and income of exempt trust an amount exceeding dollar_figure to son’s trust to be held under the terms of clause eleventh subparagraph e of decedent’s will exempt trust requests the following rulings the distribution of exempt trust assets to son’s trust will not cause the inclusion_ratio of son’s trust to be greater than zero under sec_2642 the distribution of exempt trust assets to son’s trust will not be deemed to be a transfer by son that will be subject_to federal gift_tax under sec_2501 the distribution of exempt trust assets to son’s trust will not cause any property of exempt trust or son’s trust to be includible in the estate of son under sec_2036 or sec_2038 law and analysis ruling sec_2601 of the code imposes a tax on every generation-skipping_transfer gst made after date a gst is defined under sec_2611 as a taxable_distribution a taxable_termination and a direct_skip plr-139005-12 under a of the tax_reform_act_of_1986 the act and sec_26_2601-1 of the generation-skipping_transfer_tax regulations the gst tax is generally applicable to generation-skipping transfers made after date however under b b of the act and sec_26_2601-1 the tax does not apply to a transfer under a will executed before date if the decedent dies before date sec_26_2601-1 provides rules for determining when a modification judicial construction settlement agreement or trustee action with respect to a_trust that is exempt from the generation-skipping_transfer_tax under sec_26_2601-1 b or b will not cause the trust to lose its exempt status generally unless specifically provided otherwise the rules of sec_26_2601-1 are applicable only for purposes of determining whether an exempt trust retains its exempt status for generation-skipping_transfer_tax purposes the rules do not apply in determining for example whether the transaction results in a gift subject_to gift_tax or may cause the trust to be included in the gross_estate of a beneficiary or may result in the realization of capital_gain for purposes of sec_1001 sec_26_2601-1 provides that a judicial construction of a governing instrument to resolve an ambiguity in the terms of the instrument or to correct a scrivener's error will not cause an exempt trust to be subject_to the provisions of chapter if the judicial action involves a bona_fide issue and the construction is consistent with applicable state law that would be applied by the highest court of the state sec_26_2601-1 example considers a situation where in grantor established an irrevocable_trust for the benefit of grantor's children a and b and their issue the trust is to terminate on the death of the last to die of a and b at which time the principal is to be distributed to their issue however the provision governing the termination of the trust is ambiguous regarding whether the trust principal is to be distributed per stirpes only to the children of a and b or per capita among the children grandchildren and more remote issue of a and b in the trustee files a construction suit with the appropriate local court to resolve the ambiguity the court issues an order construing the instrument to provide for per capita distributions to the children grandchildren and more remote issue of a and b living at the time the trust terminates the court's construction resolves a bona_fide issue regarding the proper interpretation of the instrument and is consistent with applicable state law as it would be interpreted by the highest court of the state therefore the trust will not be subject_to the provisions of chapter in 387_us_456 the court considered whether a state trial court's characterization of property rights conclusively binds a federal court or agency in a federal estate_tax controversy the court concluded that the decision of a state trial_court as to an underlying issue of state law should not be plr-139005-12 controlling when applied to a federal statute rather the highest court of the state is the best authority on the underlying substantive rule_of state law to be applied in the federal matter if there is no decision by that court then the federal authority must apply what it finds to be state law after giving proper regard to the state trial court's determination and to relevant rulings of other courts of the state in this respect the federal_agency may be said in effect to be sitting as a state court the state supreme court stated that i t is now hornbook law that the testator’s intent is the polestar and must prevail and that his intent must be gathered from a consideration of a all language contained in the four corners of his will and b his scheme of distribution and c the circumstances surrounding him at the time he made his will and d the existing facts citation it is represented that the executor of decedent’s estate allocated sufficient gst_exemption to exempt trust to cause exempt trust to have an inclusion_ratio of zero under sec_2642 no guidance has been issued concerning judicial constructions that may affect the status of trusts that are exempt from gst tax because sufficient gst_exemption was allocated to the trust to result in an inclusion_ratio of zero at a minimum a judicial construction that would not affect the gst status of a grandfathered trust should similarly not affect the exempt status of such a_trust in this case the trustees of exempt trust filed a petition for adjudication with court to resolve the ambiguity in decedent’s will regarding the amount to be distributed from exempt trust to son’s trust after wife’s death court issued an order construing decedent’s will to provide for distribution of all of the assets of exempt trust rather than dollar_figure to son’s trust a successor trust established under the terms of decedent’s will court’s construction resolved a bona_fide issue regarding the proper interpretation of decedent’s will in addition court based its construction on decedent’s intent at the time of making his will and court reached its construction after considering the language of decedent’s will his scheme of distribution the circumstances surrounding him at the time he executed his will and other existing facts including the tax consequences of relevant provisions of the code therefore court’s construction is consistent with applicable state law as it would be interpreted by the highest court of state accordingly we conclude that to the extent assets of exempt trust are distributed to son‘s trust the distribution will not cause the inclusion_ratio of son’s trust to be greater than zero under sec_2642 ruling_request sec_2501 imposes a tax for each calendar_year on the transfer of property by gift during such calendar_year by an individual plr-139005-12 sec_2511 provides that subject_to certain limitations the gift_tax applies whether the transfer is in trust or otherwise direct or indirect and whether property transferred is real or personal tangible or intangible sec_2512 provides that if the gift is made in property the value thereof at the date of the gift is considered the amount_of_the_gift sec_2512 provides that where property is transferred for less than adequate_and_full_consideration in money or money’s worth then the amount by which the value of the property exceeded the value of the consideration is deemed to be a gift and is included in computing the amount of gifts made during the calendar_year in this case decedent is the transferor with respect to the assets in spouse’s trust no therefore exempt trust and nonexempt trust the judicial construction providing for the distribution of all of the assets of exempt trust to son’s trust does not result in a transfer by son the beneficiaries of son’s trust will have the same interests after the judicial construction that they had prior to the judicial construction because the beneficial interests of the beneficiaries are substantially the same no transfer of property will be deemed to occur as a result of the judicial construction accordingly based on the facts submitted and the representations made we conclude that the distribution of exempt trust assets to son’s trust will not be deemed to be a transfer by son that will be subject_to federal gift_tax under sec_2501 ruling_request sec_2001 imposes a tax on the transfer of the taxable_estate of every decedent who is a citizen or resident_of_the_united_states sec_2036 provides that the gross_estate shall include the value of all property to the extent of any interest therein of which the decedent has at any time made a transfer except in the case of a bona_fide sale for an adequate_and_full_consideration in money or money’s worth by trust or otherwise under which he has retained for his life or for any period not ascertainable without reference to his death or for any period which does not in fact end before his death - the possession or enjoyment of or the right to the income from the property or the right either alone or in conjunction with any person to designate the persons who shall possess or enjoy the property or the income therefrom sec_2038 provides with respect to transfers made after date that the value of the gross_estate shall include the value of all property to the extent of any interest therein of which the decedent has at any time made a transfer except in the case of a bona_fide sale for an adequate_and_full_consideration in money or money’s worth by trust or otherwise where the enjoyment thereof was subject at the date of his death to any change through the exercise of a power in whatever capacity exercisable plr-139005-12 by the decedent alone or by the decedent in conjunction with any other person without regard to when or from what source the decedent acquired such power to alter amend revoke or terminate or whether any such power is relinquished during the 3-year period ending on the date of the decedent’s death in this case decedent is the transferor with respect to the assets in spouse’s trust no therefore exempt trust and nonexempt trust the judicial construction providing for the distribution of all of the assets of exempt trust to son’s trust does not result in a transfer by son accordingly based on the facts submitted and the representations made we conclude that the distribution of exempt trust assets to son’s trust will not cause any property of exempt trust or son’s trust to be includible in the estate of son under sec_2036 or sec_2038 except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter this ruling is directed only to the taxpayer requesting it sec_6110 of the code provides that it may not be used or cited as precedent the rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination under a power_of_attorney on file with this office we are sending a copy of this letter to your authorized representatives sincerely james f hogan chief 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 index nos number release date cc dom it a plr-121777-98 date ein attn dear this is in reference to a form_1128 application to adopt change or retain a tax_year submitted on behalf of the above- named taxpayer requesting permission to adopt an annual_accounting_period for federal_income_tax purposes of june effective for the tax_year beginning date and ending date the taxpayer has requested that the form_1128 be considered timely filed under the authority contained in sec_301_9100-3 of the procedure and administration regulations the taxpayer's form_1128 requesting permission to adopt an annual_accounting_period of june was due on or before date information furnished indicates that the taxpayer intended to request the change on a timely basis but that due to an error or misunderstanding the form was not timely filed however the form was filed within days of the due_date and the late filing was not due to any lack of due diligence or prompt action on the part of the taxpayer sec_1_442-1 of the income_tax regulations provides that in order to secure the commissioner's consent to a change in accounting_period the taxpayer must file an application on form_1128 a partnership wishing to adopt a tax_year other than its required tax_year must generally file form_1128 on or before the last day of the month following the close of the taxable_year to be adopted sec_301_9100-3 of the regulations provides that requests for extensions of time for regulatory elections that do not meet the requirements of sec_301_9100-2 automatic extensions such as the instant case must be made under the rules of sec_301_9100-3 requests for relief subject_to 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 the granting of relief will not prejudice the interests of the government based on the facts and information submitted and the representations made we have determined that the taxpayer has acted reasonably and in good_faith and that the granting of relief will not prejudice the interests of the government accordingly the requirements of the regulations for the granting of relief have been satisfied in this case and taxpayer’s late filed form_1128 requesting permission to adopt a tax_year ending june effective for the tax_year beginning date is considered timely filed pursuant to revproc_93_23 1993_1_cb_538 a user_fee is required in order to process the form_1128 the user_fee will be requested in a separate correspondence we will begin processing the taxpayer’s application after the user_fee is submitted the ruling contained in this letter is based upon facts and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party this office has not verified any of the material submitted in support of the request for a ruling verification of the factual information representations and other data may be required as part of an examination process this ruling addresses the granting of sec_301_9100-3 relief only no opinion is expressed regarding the tax treatment of the instant transaction under the provisions of any other sections of the code or regulations that may be applicable thereto or regarding the tax treatment of any conditions existing at the time of or effects resulting from the instant transaction specifically no opinion is expressed as to whether the taxpayer is permitted under the code and applicable regulations to change to the tax_year requested in the subject form_1128 copies of this letter are being furnished to the taxpayer’s district_director and authorized representative this ruling is directed only to the taxpayer that requested it sec_6110 of the internal_revenue_code provides that it may not be used or cited as precedent sincerely yours assistant chief_counsel income_tax and accounting s irwin a leib by irwin a leib deputy assistant chief_counsel enclosures copy of this letter copy for sec_6110 purposes


department of the treasury internal_revenue_service washington d c tax exempt and government entities ee u i l dec ep’ la oidiaoohhiaaiioonx xxxkkkkkkkkkakkaaaak xxxxxxxxxxxxxxxxxxax legend taxpayer a xxxxxxxxxxxxxxxxxxxxxxx plan x plan y xxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxx trustee t xxoooxkxxxkaxxxaxaxxxxak employer k xxxxxxxxxxxxaxxxxxxxxxxx company s xxxxxxxxxxxxxxxxxxxxxkx amount d xxxxxxxxxxxxxxxxxxxxxk company c xxxxxxxxxxxxxxxxxxxxxx individual m xxxxxxxxxxxxxxxxxxxxxk date date date date xxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxx xxxxxxxxaxxxxxaxaxkk xxxkakkakaxaxaxkknk dear xxxxxxxxx this is in response to a request you submitted on xxxxxxxx in which you request a waiver of the 60-day rollover requirement contained in sec_402 of the internal_revenue_code the code’ the following facts and representations have been submitted under penalty of perjury in support of the ruling requested taxpayer a asserts that his failure to accomplish a rollover of amount d from plan x within the 60-day period prescribed by sec_402 of the code was due to company c's error in failing to process this rollover request because company c misfiled his rollover papers taxpayer a asserts that his intent was to complete a direct_rollover of amount d to an eligible_retirement_plan of company c taxpayer a age is an employee of employer k a wholly owned subsidiary of company c which is a participating employer in company c's plan y taxpayer a worked for company s before becoming an employee of employer k and participated in plan x taxpayer a represents that following the termination of his employment with employer k he attempted to initiate a direct_rollover of his interest in plan x to plan y taxpayer a further represents that on date the administrator of plan x issued a lump sum distribution of his entire_interest in plan x in the form of a check payable to taxpayer a and mailed the check to individual m a member of the human resources department of company c individual m was unable to transfer the check to trustee t because it was made payable to taxpayer a on date taxpayer a received the check from individual m and on date taxpayer a deposited the check into his personal account and initiated a rollover_contribution to company c by acquiring a cashier's check in the amount of amount d payable to trustee t trustee t returned the check to taxpayer a because it was not accompanied by the necessary paperwork and trustee t was not sure where the contribution was supposed to be deposited on date taxpayer a returned the completed rollover paperwork required by company c and delivered them with a cashier's check payable to trustee t but company c did not process the rollover within the 60-day period because the rollover papers were misfiled by company c’s personnel taxpayer a did every thing necessary to effect the desired rollover_contribution to plan y and assumed that the rollover had been completed taxpayer a did not know about the failed rollover until february of at which time it was finally transmitted to company c’s corporate office for processing based on the above facts and representations you request a ruling that the internal_revenue_service the service waive the 60-day rollover requirement contained in sec_402 of the code with respect to the distribution of amount d sec_402 of the code provides that if any portion of the balance_to_the_credit of an employee in a qualified_trust is paid to the employee in an eligible_rollover_distribution and the distributee transfers any portion of the property received in such distribution to an eligible_retirement_plan and in the case of a distribution_of_property other than money the amount so transferred consists of the property distributed then such distribution to the extent transferred shall not be included in gross_income for the taxable_year in which paid sec_402 states that such rollover must be accomplished within days following the day on which the distributee received the property an individual_retirement_account ira constitutes one form of eligible_retirement_plan sec_402 of the code provides in relevant part that the secretary may waive the 60-day requirement under sec_402 where the 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_402 of the code sec_401 provides the rules for governing direct transfers of eligible rollover distributions sec_1 a of the income_tax regulations question and answer-15 provides in relevant part that an eligible_rollover_distribution that is paid to an eligible_retirement_plan in a direct_rollover is a distribution and rollover and not a transfer of assets and liabilities 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_402 of the code 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 for example in the case of payment by check whether the check was cashed and the time elapsed since the distribution occurred the information presented and documentation submitted is consistent with your assertion that your failure to accomplish a timely rollover of amount d was caused by company c’s error in failing to process your rollover request therefore pursuant to sec_402 of the code the service hereby waives the 60-day rollover requirement with respect to the distribution of amount d you are granted a period of days from the issuance of this ruling letter to contribute amount d into another qualified pian provided all other requirements of sec_402 of the code except the 60-day requirement are met with respect to such contribution amount d will be considered a rollover_contribution within the meaning of sec_402 of the code 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 letter is directed only to the taxpayer who requested it sec_6110 of the code provides that it may not be used or cited as precedent if you wish to inquire about this ruling please contact xxxxxxxxxx xxxx000000k se t ep ra t3 at xxxxxxxxxxxxxx sincerely yours lb wav laura b warshawsky manager employee_plans technical group enclosures deleted copy of letter_ruling notice of intention to disclose