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 corp b05 plr-101437-16 date may legend parent ----------------------------------------------------------- ------------------------------- date date x --------------------- --------------------------- -- company official ------------------------------------------------------------------- -------------------------------------------------------------------------------- tax professional ------------------------------------------------------------------- --------------------------------- dear -------------- this letter responds to a letter dated date submitted on behalf of parent requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations to file an election parent is requesting an extension of time for the consolidated_group of which parent is the common parent to elect an extended carryback period the election for a consolidated_net_operating_loss cnol additional information was submitted in a letter dated date the material information submitted for consideration is summarized below plr-101437-16 parent is the common parent of a consolidated_group parent group parent group incurred a cnol in the taxable_year ending date the year cnol parent group seeks to carry back the year cnol x years under sec_172 of the internal_revenue_code parent was required to file the election in order to carry back the year cnol x years to obtain the benefit of sec_56 the election was due on date but for various reasons a valid election was not filed after the due_date for the election it was discovered that the election had not been filed subsequently this request was submitted under sec_301_9100-3 for an extension of time to file the election parent has represented that it is not seeking to alter a return position for which an accuracy-related_penalty has been or could be imposed under sec_6662 sec_172 generally permits a taxpayer to carry back a net_operating_loss nol to each of the taxable years preceding the taxable_year of the nol sec_172 permits a taxpayer to elect to carry back an applicable net_operating_loss applicable nol to each of the or taxable years preceding the taxable_year of the applicable nol in lieu of the 2-year period provided by sec_172 sec_172 provides that an applicable nol is the taxpayer’s nol for a taxable_year ending after date and beginning before date sec_172 provides that the election under sec_172 shall be made by the due_date including extension of time for filing the return for the taxpayer’s last taxable_year beginning in the election is irrevocable and in general may be made only with respect to one taxable_year sec_1502 provides that the secretary shall prescribe such regulations as he may deem necessary in order that the tax_liability of any affiliated_group_of_corporations making a consolidated_return and of each corporation in the group both during and after the period of affiliation may be returned determined computed assessed collected and adjusted in such manner as clearly to reflect the income_tax_liability and the various factors necessary for the determination of such liability and in order to prevent avoidance of such tax_liability in carrying out the preceding sentence the secretary may prescribe rules that are different from the provisions of chapter that would apply if such corporations filed separate returns sec_1_1502-21 of the income_tax regulations provides that losses taken into account in determining a cnol may be carried to other taxable years whether consolidated or separate only under paragraph b of sec_1_1502-21 sec_1_1502-21 provides that nol carryovers and carrybacks to a taxable_year are determined under the principles of sec_172 and sec_1_1502-21 plr-101437-16 sec_1_1502-21t as in effect for the year at issue provided that a consolidated_group could elect an extended carryback period pursuant to sec_172 with regard to a cnol arising in a taxable_year ending after date and beginning before date revproc_2009_52 2009_49_irb_744 provides when and how a taxpayer may make an election under sec_172 sec_4 of revproc_2009_52 provides that the common parent of a consolidated_group makes the election for the group sec_4 and of revproc_2009_52 permit the election to be made for consolidated taxpayers by attaching a statement to the original or amended consolidated_return for the taxable_year of the applicable cnol by attaching a statement to the taxpayer’s amended consolidated_return applying the applicable cnol to the carryback_year or by attaching a statement to a claim for a tentative_carryback_adjustment on form_1139 corporation application_for tentative refund sec_4 b and b of revproc_2009_52 require the election regardless of the manner in which made to be filed no later than the due_date including extensions for filing the return for the taxpayer’s last taxable_year beginning in under sec_301_9100-1 the commissioner has discretion to grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make a regulatory election sec_301_9100-1 requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 the election by a consolidated_group to extend the carryback period under sec_172 for a cnol is a regulatory election therefore the commissioner has discretionary authority under sec_301_9100-3 to grant an extension of time for parent to file the election provided parent establishes to the satisfaction of the commissioner that it acted reasonably and in good_faith the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and granting relief will not prejudice the interests of the government information affidavits and representations submitted by parent company official and tax professional explain the circumstances that resulted in the failure to timely file a valid election the information establishes that parent reasonably relied on a qualified_tax professional who failed to make or advise parent to make the election plr-101437-16 and that the request for relief was filed before the failure to timely make the election was discovered by the internal_revenue_service see sec_301_9100-3 and v based on the facts and information submitted including the affidavits submitted and the representations made we conclude that parent has shown it acted reasonably and in good_faith that the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and that granting relief will not prejudice the interests of the government accordingly provided that and to the extent that parent group qualifies substantively to file the election we grant an extension of time under sec_301_9100-3 until sixty days from the date on this letter for parent to file the election this letter does not extend the period of time described in sec_6511 by which a taxpayer is required to file a claim for credit or refund of an overpayment_of_tax parent may file the election under sec_172 to carry back the year cnol x years by filing on form 1120x amended u s_corporation income_tax return for the taxable_year ending date according to the procedures set forth in revproc_2009_52 a copy of this letter must be attached to the form 1120x if parent files form 1120x electronically parent may satisfy the requirement of attaching a copy of this letter by attaching a statement to parent group’s amended_return that provides the date and control number plr-101437-16 of this letter_ruling the above extension of time is conditioned on parent group’s tax_liability if any not being lower in the aggregate for all years to which the election applies than it would have been if the election had been timely made taking into account the time_value_of_money we express no opinion as to parent group’s tax_liability for the years involved a determination thereof will be made by the director’s office upon audit of the income_tax returns involved except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any item discussed or referenced in this letter in particular we express no opinion with respect to whether parent qualifies substantively to make the election in addition we express no opinion as to the tax effects or consequences of filing the election late under the provisions of any other section of the internal_revenue_code or regulations or as to the tax treatment of any conditions existing at the time of or resulting from filing the election late that are not specifically set forth in this letter for purposes of granting relief under sec_301_9100-3 we relied on certain statements and representations made under penalty of perjury by parent company official and tax professional the director however should verify all essential facts in addition notwithstanding that an extension is granted under sec_301_9100-3 to file the election any penalties and interest that would otherwise be applicable continue to apply plr-101437-16 this letter_ruling is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent pursuant to the power_of_attorney on file in this office copies of this letter are being sent to your authorized representatives sincerely _ken cohen ken cohen senior technician reviewer branch office of associate chief_counsel corporate cc


internal_revenue_service department of the treasury number release date index number washington dc person to contact telephone number refer reply to cc corp b06-plr100582-02 date date legend distributing controlled_corporation a corporation b corporation c business a business b shareholder shareholder date date date date date date date plr-100582-02 date a b c d e f dear this letter responds to your request for rulings regarding certain federal_income_tax consequences of a proposed transaction the information submitted in that request and in later correspondence is summarized below summary of facts distributing is a domestic_corporation that is the common parent of an affiliated_group_of_corporations that files a consolidated federal_income_tax return distributing has two classes of stock issued and outstanding one class of distributing stock is publicly traded distributing is indirectly engaged in business a through its wholly owned subsidiary_corporation a corporation a is indirectly engaged in business a through its wholly owned subsidiaries corporation b and corporation c_corporation b and corporation c respectively each are directly engaged in business a in addition distributing is indirectly engaged in business b through its subsidiary controlled by agreement dated date and amended as of date distributing and corporation a agreed to engage in a tax-free merger transaction the merger the taxpayer has represented that the merger which became effective on date qualified as a tax-free reorganization in the merger a wholly owned subsidiary of distributing merged with and into corporation a with corporation a surviving as a wholly owned subsidiary of distributing the shareholders of corporation a stock exchanged their corporation a stock for shares of distributing stock that represented less than a percent by vote and value of the outstanding_stock of distributing immediately after the merger controlled was formed by distributing on date as a wholly owned subsidiary on date distributing transferred to controlled the assets constituting business b and plr-100582-02 controlled assumed the liabilities relating thereto in a transaction that the taxpayer has represented qualified for nonrecognition_of_gain_or_loss on date controlled sold b shares of its common_stock to the public in a partial initial_public_offering the ipo subsequent to the ipo distributing owned and continues to own c shares of controlled common_stock - the sole class of issued and outstanding controlled stock - representing approximately d percent of the e shares of controlled common_stock outstanding as of date controlled stock is publicly traded distributing and controlled will have entered into a tax_sharing_agreement tax_sharing_agreement that will be in effect at the time of and subsequent to the distribution as defined herein financial information has been received which indicates that distributing’s business a and controlled’s business b each has had gross_receipts and operating_expenses representative of the active_conduct_of_a_trade_or_business for each of the past five years business a and business b are substantially different incompatible businesses and their present coexistence within the same affiliated_group creates management systematic and other problems that can only be resolved through a complete separation of the two businesses distributing has presented documentation including internal reports and reasoned analyses of an outside financial advisor and independent analysts as well as other materials to substantiate the corporate business_purpose for the complete separation of business a from business b proposed transaction accordingly to enhance the success of business a and business b by enabling distributing and controlled to resolve the management and systematic and other problems that arise by the operation of the two businesses within a single affiliated_group the following transaction is proposed distributing will distribute all of the shares of controlled common_stock held by distributing representing at least percent of the sole class of issued and outstanding shares of controlled stock to the holders of distributing’s common_stock pro_rata in proportion to their ownership of distributing the distribution and cash will be distributed in lieu of fractional shares on the effective date of the distribution the distribution date the distribution will take place on or after date before the distribution controlled may redeem up to approximately f percent of its stock that is held by distributing representations distributing has made the following representations regarding the proposed transaction a the indebtedness if any owed by controlled to distributing after the distribution will not constitute stock_or_securities plr-100582-02 b c d e f g h i j k no part of the consideration to be distributed by distributing will be received by a shareholder as a creditor employee or in any capacity other than that of a shareholder of the corporation the five years of financial information submitted on behalf of distributing_corporation a corporation b and corporation c is representative of each corporation’s present operation and with regard to each such corporation there have been no substantial operational changes since the date of the last financial statements submitted immediately after the distribution at least percent of the fair_market_value of the gross assets of distributing will consist of the stock of its controlled subsidiary_corporation a immediately after the distribution at least percent of the fair_market_value of the gross assets of corporation a will consist of the stock of corporation a’s controlled_subsidiaries corporation b and corporation c each of which is a corporation that is engaged in the active_conduct_of_a_trade_or_business as defined in sec_355 the business a assets directly held by corporation b have a fair_market_value that is at least percent of the total fair_market_value of corporation b’s gross assets the business a assets directly held by corporation c have a fair_market_value that is at least percent of the total fair_market_value of corporation c’s gross assets the five years of financial information submitted on behalf of controlled is representative of the corporation’s present operation and with regard to such corporation there have been no substantial operational changes since the date of the last financial statements submitted the business b assets directly held by controlled have a fair_market_value that is at least percent of the total fair_market_value of controlled’s gross assets following the distribution distributing through corporation a corporation b and corporation c and controlled will each continue the active_conduct of its business independently and with its separate employees the distribution is being carried out for the following corporate business_purpose to effect fit and focus the distribution is motivated in whole or substantial part by the foregoing corporate business_purpose plr-100582-02 l m n o p there is no plan or intention by any shareholder who own sec_5 percent or more of the stock of distributing and the management of distributing to its best knowledge is not aware of any plan or intention on the part of any particular remaining shareholder or security holder of distributing to sell exchange transfer by gift or otherwise dispose_of any stock in or securities of either distributing or controlled after the distribution notwithstanding the foregoing shareholder and shareholder may in the future determine to dispose_of or purchase any such stock in the normal course of their respective businesses as investment advisors based upon decisions as to existing market conditions and the needs of investors they represent there is no plan or intention by either distributing or controlled directly or through any subsidiary_corporation to purchase any of its outstanding_stock after the distribution other than through stock purchases meeting the requirements of sec_4 b of revproc_96_30 there is no plan or intention to liquidate either distributing or controlled to merge either corporation with any other corporation or to sell or otherwise dispose_of the assets of either corporation after the distribution except in the ordinary course of business for purposes of sec_355 immediately after the distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of distributing stock entitled to vote or percent or more of the total value of shares of all classes of distributing stock that was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the distribution date for purposes of sec_355 immediately after the distribution no person determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of controlled stock entitled to vote or percent or more of the total value of shares of all classes of controlled stock that either i was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the distribution date or ii is attributable to distributions on distributing stock that was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the distribution date q the distribution is not part of a plan or series of related transactions within the meaning of sec_355 pursuant to which one or more persons has acquired or will acquire directly or indirectly stock plr-100582-02 r s t u possessing percent or more of the total combined voting power of all classes of stock of either distributing or controlled entitled to vote or stock possessing percent or more of the total value of all classes of stock of either distributing or controlled there was no agreement understanding arrangement or substantial negotiations concerning the distribution at the time of the merger or within six months thereafter or at the time of the ipo or within six months thereafter distributing neither accumulated its receivables nor made extraordinary payment of its payables in anticipation of the distribution except with respect to obligations arising out of certain disclosed continuing relationships no intercorporate debt will exist between distributing and controlled at the time of or subsequent to the distribution immediately before the distribution items of income gain loss deduction and credit will be taken into account as required by applicable intercompany_transaction regulations see sec_1_1502-13 and sec_1 as in effect before the publication of t d 1995_2_cb_147 and as currently in effect sec_1_1502-13 as published by t d further distributing’s excess_loss_account if any with respect to controlled stock will be included in income immediately before the distribution see sec_1_1502-19 v payments made in connection with all continuing transactions if any between distributing and controlled will be for fair_market_value based on terms and conditions arrived at by the parties bargaining at arm’s length rulings no gain_or_loss will be recognized by and no amount will be included in the income of distributing’s shareholders upon the receipt of controlled common_stock from distributing pursuant to the distribution sec_355 no gain_or_loss will be recognized by distributing upon the distribution of controlled common_stock to distributing’s shareholders pursuant to the distribution sec_355 the aggregate basis of the distributing stock and the controlled common_stock in the hands of distributing’s shareholders after the distribution will be the same as the aggregate basis of the distributing stock in the hands of distributing’s shareholders immediately before the distribution plr-100582-02 allocated between the distributing stock and the controlled common_stock in proportion to the fair market values of each in accordance with sec_1_358-2 a see also sec_358 b - c the holding_period of the controlled common_stock to be received by the distributing shareholders will include the holding_period of their distributing stock provided that the distributing stock is held as a capital_asset on the distribution date sec_1223 the payment of cash in lieu of fractional shares in controlled will be treated as if the fractional shares were distributed and then redeemed by controlled the cash payment will be treated as having been received as a distribution in full payment in exchange for the stock considered redeemed as provided in sec_302 see revrul_66_365 1966_2_cb_116 revproc_77_41 1977_2_cb_574 earnings_and_profits will be allocated between distributing and controlled in accordance with sec_312 sec_1_312-10 and sec_1_1502-33 payments made by distributing to controlled or by controlled to distributing under the tax_sharing_agreement that i have arisen or will arise for a taxable_period ending before the distribution or for a taxable_period beginning on or before and ending after the distribution and ii will not become fixed or ascertainable until after the distribution will be treated as occurring immediately before the distribution caveats no opinion is expressed about the tax treatment of the transaction under any other provision of the code or regulations or the tax treatment of any conditions existing at the time of or effects resulting from the transaction that are not specifically covered by the above rulings in particular no opinion is expressed concerning the tax consequences associated with a b c the merger that distributing and corporation a entered into on date pursuant to an agreement dated date and which was amended on date distributing’s transfer to controlled on date of the assets constituting business b and controlled’s assumption of the liabilities relating thereto or the proposed redemption of controlled stock which may occur before the distribution procedural statements plr-100582-02 the rulings contained in this letter are predicated upon the facts and representations submitted by the taxpayer and accompanied by a penalties of perjury statement executed by an appropriate party this office has not verified any of the materials submitted in support of the request for a ruling verification of the information representations and other data may be required as part of the audit process this ruling is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent a copy of this letter must be attached to the federal_income_tax return of each taxpayer involved for the taxable_year in which the transaction is consummated in accordance with the power_of_attorney on file with this office the original of this letter is being sent to the taxpayer’s authorized representative sincerely yours alfred c bishop jr branch chief branch associate chief_counsel corporate


department of the treasury internal_revenue_service p o box irs cincinnati oh number release date uil code dear date date employer id number contact person id number contact telephone number form you must file tax years this letter is our final_determination that you don’t qualify for tax-exempt status under sec_501 of the internal_revenue_code the code recently we sent you a proposed adverse determination in response to your application the proposed adverse determination explained the facts law and basis for our conclusion and it gave you days to file a protest because we didn’t receive a protest within the required days the proposed determination is now final because you don’t qualify as a tax-exempt_organization under sec_501 of the code donors can’t deduct contributions to you under sec_170 of the code you must file federal_income_tax returns for the tax years listed at the top of this letter using the required form also listed at the top of this letter within days of this letter unless you request an extension of time to file we'll make this final adverse determination_letter and the proposed adverse determination_letter available for public inspection as required under sec_6110 of the code after deleting certain identifying information please read the enclosed notice notice of intention to disclose and review the two attached letters that show our proposed deletions if you disagree with our proposed deletions follow the instructions in the notice on how to notify us if you agree with our deletions you don’t need to take any further action we'll also notify the appropriate state officials of our determination by sending them a copy of this final letter and the proposed determination_letter under sec_6104 of the code you should contact your state officials if you have questions about how this determination will affect your state responsibilities and requirements letter rev catalog number 47632s if you have questions about this letter you can contact the person listed at the top of this letter if you have questions about your federal_income_tax status and responsibilities call our customer service number pincite-829-1040 tty for deaf or hard of hearing or customer service for businesses pincite-829-4933 sincerely stephen a martin director exempt_organizations rulings and agreements enclosures notice redacted letter proposed adverse determination under sec_501 redacted letter final adverse determination under sec_501 - no protest letter rev catalog number 47632s department of the treasury internal_revenue_service cincinnati oh legend b date c state dear date date employer id number contact person id number contact telephone number contact fax number vil we considered your application_for recognition of exemption from federal_income_tax under sec_501 of the internal_revenue_code the code based on the information provided we determined that you don’t qualify for exemption under sec_501 of the code this letter explains the basis for our conclusion please keep it for your records issues do you qualify for exemption under sec_501 of the code no for the reasons stated below facts you formed as a nonprofit corporation on b incorporation articles rather you submitted a copy of your bylaws your bylaws state that you are established within the meaning of irs publication sec_501 subsection omitted and that you shall not participate in any activities which are not permitted to be carried by an organization exempt under sec_501 of the internal_revenue_code we asked you for a copy of your articles and you responded by submitting another copy of your bylaws in the state of c you did not submit a copy of your articles of because you are a corporation in c we were able to download and send to you a copy of your articles from the secretary of state’s website your articles are silent regarding your purpose and how your assets will be distributed upon your dissolution we recommended that in order to qualify for exemption you amend your articles to state that you are operated exclusively for sec_501 purposes and that upon dissolution your assets will be distributed for sec_501 purposes despite multiple attempts to secure an amendment from you you failed to provide one law sec_501 of the code provides for the recognition of exemption of organizations that are organized and operated exclusively for religious charitable or other purposes as specified in the statute no part of the net_earnings may inure to the benefit of any private_shareholder_or_individual sec_1_501_c_3_-1 states that in order to be exempt as an organization described in sec_501 of the code an organization must be both organized and operated exclusively for one or more of the purposes specified in such section if an organization fails to meet either the organizational_test or the operational_test it is not exempt sec_1_501_c_3_-1 provides that an organization is organized exclusively for one or more exempt purposes only if its articles of organization a limit the purposes of such organization to one or more exempt purposes and b do not expressly empower the organization to engage otherwise than as an insubstantial part of its activities in activities which in themselves are not in furtherance of one or more exempt purposes sec_1_501_c_3_-1 holds that an organization is not organized exclusively for one or more exempt purposes unless its assets are dedicated to an exempt_purpose an organization’s assets will be considered dedicated to an exempt_purpose for example if upon dissolution such assets would by reason of a provision in the organization’s articles or operation of law be distributed for one or more exempt purposes revproc_2018_5 2018_1_irb_233 sec_3 states that a determination_letter or ruling on exempt status is issued based solely upon the facts and representations contained in the administrative record the applicant is responsible for the accuracy of any factual representations contained in the application section and its predecessors provides that a favorable determination_letter or ruling will be issued to an organization only if its application and supporting documents establish that it meets the particular requirements of the section under which exemption from federal_income_tax is claimed in 372_fsupp_770 e d cal the court concluded that one seeking a tax exemption has the burden of establishing his right to a tax-exempt status 70_fedclaims_782 was an action for declaratory_judgment that the petitioner brought to challenge the denial of his application_for exempt status the court in finding that the actual purposes displayed in the administrative record supported the service’s denial stated it is well- accepted that in initial qualification cases such as this gaps in the administrative record are resolved against the applicant the court noted that if the petitioner had evidence that contradicted these findings it should have submitted it as part of the administrative process the court also highlighted the principle that exemptions from income_tax are matters of legislative grace application of law a ruling on exempt status is based solely on facts and representations in the administrative file you have not provided supporting documentation to establish you meet the requirements of sec_501 of the code as stated in sec_1_501_c_3_-1 an organization must be both organized and operated exclusively for purposes described in sec_501 of the code to qualify for exemption your articles of incorporation do not limit your purposes to those described in sec_501 or dedicate your assets to an exempt_purpose upon your dissolution as a result you have not satisfied the organizational_test described in sec_1_501_c_3_-1 and sec_1_501_c_3_-1 letter rev catalog number 47630w as explained in revproc_2018_5 a ruling on exempt status is issued based solely upon the facts and representations contained in the administrative record despite our requests you failed to amend your articles to include the provisions required under sec_501 of the code regarding your purpose and the disposition of your assets upon your dissolution as in universal life church you have the burden of establishing that you qualify for tax exemption as indicated in new dynamics foundation an organization must establish through its administrative record that it meets the requirements for exemption because you failed to provide sufficient details in your initial application and the additional documentation you provided did not meet the statutory and regulatory requirements for exemption you have not established that you meet the requirements for exemption under sec_501 of the code as provided in new dynamics foundation any gaps in the administrative record will be resolved against the applicant you did not provide supplemental information therefore we are unable to determine that you qualify for exemption conclusion based on the information submitted you have failed to establish that you are organized for exempt purposes within the meaning of sec_501 of the code and the related_income tax regulations therefore based on the administrative record you fail to qualify for exemption under sec_501 if you don’t agree you have a right to file a protest if you don’t agree with our proposed adverse determination to do so you must send a statement to us within days of the date of this letter the statement must include e e e e e your name address employer_identification_number ein and a daytime phone number acopy of this letter highlighting the findings you disagree with anexplanation of why you disagree including any supporting documents the law or authority if any you are relying on the signature of an officer director trustee or other official who is authorized to sign for the organization or your authorized representative e one of the following declarations for an officer director trustee or other official who is authorized to sign for the organization under penalties of perjury i declare that i examined this protest statement including accompanying documents and to the best of my knowledge and belief the statement contains all relevant facts and such facts are true correct and complete for authorized representatives under penalties of perjury i declare that i prepared this protest statement including accompanying documents and to the best of my knowledge and belief the statement contains all relevant facts and such facts are true correct and complete letter rev catalog number 47630w your representative attorney certified_public_accountant or other individual enrolled to practice_before_the_irs must file a form_2848 power_of_attorney and declaration of representative with us if he or she hasn’t already done so you can find more information about representation in publication practice_before_the_irs and power_of_attorney we’ll review your protest statement and decide if you provided a basis for us to reconsider our determination if so we'll continue to process your case considering the information you provided if you haven’t provided a basis for reconsideration we’ll forward your case to the office of appeals and notify you you can find more information about the role of the appeals_office in publication how to appeal an irs decision on tax- exempt status if you don’t file a protest within days you can’t seek a declaratory_judgment in court at a later date because the law requires that you use the irs administrative process first sec_7428 of the code where to send your protest please send your protest statement form_2848 if needed and any supporting documents to the applicable address u s mail internal_revenue_service eo determinations quality assurance room p o box cincinnati oh street address for delivery service internal_revenue_service eo determinations quality assurance main street room cincinnati oh you can also fax your statement and supporting documents to the fax number listed at the top of this letter if you fax your statement please contact the person listed at the top of this letter to confirm that he or she received it if you agree if you agree with our proposed adverse determination you don’t need to do anything if we don’t hear from you within days we’ll issue a final adverse determination_letter that letter will provide information on your income_tax filing_requirements you can find all forms and publications mentioned in this letter on our website at www irs gov formspubs if you have questions you can contact the person listed at the top of this letter enclosure publication sincerely stephen a martin director exempt_organizations rulings and agreements letter rev catalog number 47630w


internal_revenue_service index no number release date cc dom p si - plr-116451-98 dec a x y1 y2 y3 y4 date date date dear this responds to a letter dated date and subsequent correspondence submitted on x’s behalf by x’s authorized representative requesting that x be given an extension of time in which to elect to treat each of y1 y2 y3 and y4 as a qualified_subchapter_s_subsidiary qsss under sec_1361 of the internal_revenue_code the information submitted states that prior to date x and its subsidiaries y1 y2 y3 and y4 joined in filing a consolidated_return on or about date x filed a form_2553 election by a small_business_corporation effective for date on or about date a form_2553 was filed for y1 y2 y3 and y4 effective for date a x’s controller represents that x intended to treat each of y1 y2 y3 and y4 as a qsss effective on date however a mistakenly filed a form_2553 for each of y1 y2 y3 and y4 rather than a form_966 corporate dissolution or liquidation sec_1361 of the code defines the term qualified_subchapter_s_subsidiary qsss as a domestic_corporation which is not an ineligible_corporation if percent of the stock of the corporation is owned by an s_corporation and the s_corporation elects to treat the corporation as a qsss the statutory provision does not however provide guidance on the manner in which the qsss election is made or the effective date of the election on date the service published notice_97_4 1997_1_cb_351 providing a temporary procedure for the making of a qsss election under notice_97_4 a taxpayer makes a qsss election with respect to a subsidiary by filing a form_966 corporate dissolution or liquidation subject_to certain modifications with the appropriate service_center the election may be effective on the date the form_966 is filed or up to days prior to the filing of the form provided that date is not before the parent’s first taxable_year beginning after date and that the subsidiary otherwise qualifies as a qsss for the entire period for which the retroactive election is in effect sec_301_9100-1 of the procedure and administration regulations provides that the commissioner has the discretion to grant a reasonable extension of the 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 defines regulatory election as an election whose due_date is prescribed by a regulation published in the federal_register or a revenue_ruling revenue_procedure notice or announcement published in the internal_revenue_bulletin sec_301_9100-2 provides the rules governing automatic extensions of time for making certain elections sec_301_9100-3 provides the standards the commissioner will use to determine whether to grant an extension of time for regulatory elections that do not meet the requirements of sec_301_9100-2 under sec_301_9100-3 a request for relief 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 granting relief will not prejudice the interests of the government in the present situation the requirements of sec_301_9100-3 have been satisfied as a result x is granted an extension of time to make elections to treat y1 y2 y3 and y4 as qssss effective date until days following the date of this letter the elections should be made by following the procedure set forth in notice_97_4 a copy of this letter should be attached except as specifically ruled upon above no opinion is expressed concerning the federal tax consequences of the facts described above under any other provisions of the code including whether x was or is a small_business_corporation under sec_1361 of the code and whether y1 y2 y3 and y4 otherwise qualify as qssss for federal tax purposes this ruling is directed only to the taxpayer who requested it sec_6110 of the code provides that it may not be used or cited as precedent pursuant to the power_of_attorney on file with this office a copy of this letter is being sent to x sincerely yours assistant chief_counsel passthroughs and special industries paul f kugler enclosures copy of this letter copy for sec_6110 purposes


office_of_chief_counsel internal_revenue_service memorandum number release date cc ita b05 mfschmit files-135502-10 uilc date date to division counsel acting cc wi attn joanne b minsky from associate chief_counsel income_tax accounting cc ita attn william a jackson s w a jackson subject tax treatment of payments made pursuant to programs m and n ------------------------------------------------------------------------------------------------------------------ ------------------------------- this chief_counsel_advice responds to your date request for assistance regarding the above matter this advice may not be used or cited as precedent legend state a ------------------ program m ------------------------------------------------------------------------------ ----------- program n --------------------------------------------------------------------------------- ----------------------------------------- issue whether certain payments received by health care professionals taxpayers pursuant to state a’s programs m and n are excludable from the taxpayers’ gross incomes files-135502-10 under sec_108 of the internal_revenue_code the code as amended by section of the patient protection and affordable_care_act of conclusion payments received by taxpayers under state a’s programs m and n as currently structured are includable in their gross incomes under sec_61 of the code as compensation_for services and are not excludable from gross_income under sec_108 as amended facts state a has in effect a number of programs designed to attract health care professionals including physicians physician assistants dentists nurse practitioners etc to perform services in health care shortage rural low-income and other underserved areas of the state among these programs is program m a health professionals tuition reimbursement program which provides participants with a payment in return for a service commitment of a certain number of years of practice in an eligible community practice area the amount of the payment described as a tuition reimbursement is equal to a certain multiple of the state medical school’s recent resident tuition cost additionally state a maintains a health professionals recruitment incentive program program n under this program participants are paid a certain incentive in return for their agreement to perform a period_of_service in a designated eligible service area of state a participants need not have outstanding student or other types of loans or indebtedness to participate in programs m or n and information available indicates that recipients may spend the incentives received under these programs as they wish state a also maintains a state loan repayment program providing for the repayment of qualifying educational loans for health care professionals in return for service commitments in eligible underserved or shortage areas of state a this program described in sec_108 is not at issue in this advice law and analysis sec_61 of the internal_revenue_code provides that except as otherwise provided by law gross_income means all income from whatever source derived including income from compensation_for services and income from the discharge_of_indebtedness files-135502-10 under sec_61 congress intends to tax all gains or undeniable accessions to wealth clearly realized over which taxpayers have complete dominion 348_us_426 1955_1_cb_207 sec_108 prior to its recent amendment by the patient protection and affordable_care_act of the act provided for the exclusion from income and employment_taxes of payments received under the national health service corps loan repayment program and certain state loan repayment programs qualifying under sec_338i of the public health service act section of the act amended sec_108 to expand the exclusion to include amounts received by individuals under any other state loan repayment or loan forgiveness program that is intended to provide for the increased availability of health care services in underserved or health professional shortage areas as determined by such state this provision is effective for amounts received by individuals in taxable years beginning on or after date sec_108 of the code addresses generally the tax treatment of student loans in circumstances encompassing loan discharges forgivenesses refinancings and discharges and certain repayments sec_108 as presently structured the programs considered here programs m and n are not loan repayment or forgiveness programs individuals participating in these programs need have neither student nor any loans to receive payments thereunder and participants having loans need not use the proceeds to discharge or repay such loans rather benefits paid to enrollees in these two programs represent employment incentives or compensation_for agreeing to perform services for or as directed by the payor as such amounts received under these programs are not amounts received under a state loan repayment or loan forgiveness program but rather represent income includable under sec_61 of the code accordingly we conclude that the payments made to taxpayers participating in state a’s programs m and n as presently structured are not within the exclusion described in sec_108 as amended were the programs modified to provide for the repayment of existing educational loans future payments under the programs might be eligible for exclusion we would be pleased to work with the programs to achieve such a result this writing may contain privileged information any unauthorized disclosure of this writing may undermine our ability to protect the privileged information if disclosure is determined to be necessary please contact this office for our views files-135502-10 thank you for soliciting our views in this matter if you have any questions concerning this advice please contact michael schmit or william jackson at attachment copy of this memorandum associate chief_counsel income_tax and accounting s william a jackson by__________________________ william a jackson chief branch income_tax and accounting


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 corp b04 plr-116730-13 date date legend parent ------------------------------------------------------------------- --------------------------------------------------------------- ------------------------------------------ date date date x --------------------------- --------------------------- --------------------------- -- company official -------------------------------------------------------------- ---------------------------------------------------------------------------- ----------------- tax professional ------------------------------------------------------------------------------------------- ------------------------------------------ dear ------------- this letter responds to a letter dated date submitted on behalf of parent requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations to file an election in particular parent is requesting an extension of time for the consolidated_group of which parent is the common parent to plr-116730-13 elect an extended carryback period the election for a consolidated_net_operating_loss cnol additional information was submitted in letters dated date and date the material information submitted for consideration is summarized below parent is the common parent of a consolidated_group the parent group parent group incurred a cnol in the taxable_year ending date the year cnol parent seeks to carry back the year cnol x years to its taxable_year ending on date under sec_172 of the internal_revenue_code parent was required to file the election in order to carry back the year cnol to its taxable_year ending on date and to obtain the benefit of sec_56 the election was due on date for various reasons a valid election was not filed after the due_date for the election it was discovered that the election had not been filed subsequently this request was submitted under sec_301_9100-3 for an extension of time to file the election parent has represented that the parent group is not seeking to alter a return position for which an accuracy related penalty has been or could be imposed under sec_6662 sec_172 generally permits a taxpayer to carry back a net_operating_loss nol to each of the taxable years preceding the taxable_year of the nol sec_172 permits a taxpayer to elect to carry back an applicable net_operating_loss applicable nol to each of the or taxable years preceding the taxable_year of the applicable nol in lieu of the 2-year period provided by sec_172 sec_172 provides that an applicable nol is the taxpayer’s nol for a taxable_year ending after date and beginning before date sec_172 provides that the election under sec_172 shall be made by the due_date including extension of time for filing the return for the taxpayer’s last taxable_year beginning in the election is irrevocable and in general may be made only with respect to one taxable_year sec_1502 provides that the secretary shall prescribe such regulations as he may deem necessary in order that the tax_liability of any affiliated_group_of_corporations making a consolidated_return and of each corporation in the group both during and after the period of affiliation may be returned determined computed assessed collected and adjusted in such manner as clearly to reflect the income_tax_liability and the various factors necessary for the determination of such liability and in order to prevent avoidance of such tax_liability in carrying out the preceding sentence the secretary may prescribe rules that are different from the provisions of chapter that would apply if such corporations filed separate returns plr-116730-13 sec_1_1502-21 of the income_tax regulations provides that losses taken into account in determining a cnol may be carried to other taxable years whether consolidated or separate only under paragraph b of sec_1_1502-21 sec_1_1502-21 provides that nol carryovers and carrybacks to a taxable_year are determined under the principles of sec_172 and sec_1_1502-21 sec_1_1502-21t provides that a consolidated_group may elect an extended carryback period pursuant to sec_172 with regard to a cnol arising in a taxable_year ending after date and beginning before date revproc_2009_52 2009_49_irb_744 provides when and how a taxpayer may make an election under sec_172 sec_4 of revproc_2009_52 provides that the common parent of a consolidated_group makes the election for the group sec_4 and of revproc_2009_52 permit the election to be made for consolidated taxpayers by attaching a statement to the original or amended consolidated_return for the taxable_year of the applicable cnol by attaching a statement to the taxpayer’s amended consolidated_return applying the applicable cnol to the carryback_year or by attaching a statement to a claim for a tentative_carryback_adjustment on form_1139 corporation application_for tentative refund sec_4 b and b of revproc_2009_52 require the election regardless of the manner in which made to be filed no later than the due_date including extensions for filing the return for the taxpayer’s last taxable_year beginning in under sec_301_9100-1 the commissioner has discretion to grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make a regulatory election sec_301_9100-1 requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 the election by a consolidated_group to extend the carryback period under sec_172 for a cnol is a regulatory election therefore the commissioner has discretionary authority under sec_301_9100-3 to grant an extension of time for parent to file the election provided parent establishes to the satisfaction of the commissioner that it acted reasonably and in good_faith the requirements of sec_301_9100-1 and plr-116730-13 are satisfied and granting relief will not prejudice the interests of the government information affidavits and representations submitted by parent company official and tax professional explain the circumstances that resulted in the failure to timely file a valid election the information establishes that parent reasonably relied on a qualified_tax professional who failed to make or advise parent to make the election and that the request for relief was filed before the failure to timely make the election was discovered by the internal_revenue_service see sec_301_9100-3 and v based on the facts and information submitted including the affidavits submitted and the representations made we conclude that parent has shown it acted reasonably and in good_faith that the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and that granting relief will not prejudice the interests of the government accordingly provided that and to the extent that the parent group qualifies substantively to file the election we grant an extension of time under sec_301_9100-3 until sixty days from the date on this letter for parent to file the election this letter does not extend the period of time described in sec_6511 by which a taxpayer is required to file a claim for credit or refund of an overpayment_of_tax the time in which parent may file a form_1139 for the year cnol has expired however parent may file the election under sec_172 to carry back the year cnol to its taxable_year ending on date on form 1120x amended u s_corporation tax_return for the taxable_year ending date according to the procedures set forth in revproc_2009_52 a copy of this letter must be attached to the form 1120x if parent files form 1120x electronically parent may satisfy the requirement of attaching a copy of this letter by attaching a statement to the parent group’s amended_return that provides the date and control number plr-116730-13 of this letter_ruling the above extension of time is conditioned on the parent group’s tax_liability if any not being lower in the aggregate for all years to which the election applies than it would have been if the election had been timely made taking into account the time_value_of_money we express no opinion as to the parent group’s tax_liability for the years involved a determination thereof will be made by the director’s office upon audit of the income_tax returns involved except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any item discussed or referenced in this letter in particular we express no opinion with respect to whether parent qualifies substantively to make the election in addition we express no opinion as to the tax effects or consequences of filing the election late under the provisions of any other section of the internal_revenue_code or regulations or as to the tax treatment of any conditions existing at the time of or resulting from filing the election late that are not specifically set forth in this letter plr-116730-13 for purposes of granting relief under sec_301_9100-3 we relied on certain statements and representations made under penalty of perjury by parent company official and tax professional the director however should verify all essential facts in addition notwithstanding that an extension is granted under sec_301_9100-3 to file the election any penalties and interest that would otherwise be applicable continue to apply this letter_ruling is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent pursuant to the power_of_attorney on file in this office a copy of this letter is being sent to your authorized representative sincerely ___________________________ ken cohen senior technician reviewer branch office of associate chief_counsel corporate cc