internal_revenue_service number release date index number ---------------------------- ------------- --------------------------------------------- --------------- -------------------- --------------------------------------- in re --------------------------------------------- --------------- 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 b05 plr-106226-11 date date legend taxpayer a b c -------------------------------------------------------------- -------------------------- ----------------------------------------------------------- ----------------------------------------------------------- ----------------------------------------------------------- dear --------------- this letter responds to taxpayer’s letter requesting an extension of time under sec_301_9100-1 of the procedure and administration regulations to make an election to be treated as a homeowners_association under sec_528 of the internal_revenue_code for its taxable years b and c the information submitted and the representations made are as follows taxpayer is a homeowners_association taxpayer relied on a cpa firm to prepare its federal_income_tax returns for its taxable years a through c the cpa firm properly filed form 1120-h for the taxable_year a but improperly filed forms for the taxable years b and c upon becoming aware of the failure_to_file forms 1120-h for the taxable years b and c taxpayer submitted this request for a letter_ruling plr-106226-11 sec_528 and sec_1_528-1 of the income_tax regulations generally provide that homeowners associations meeting the requirements of sec_528 may be treated as tax- exempt_organizations but only to the extent of their exempt_function_income sec_528 provides in part that the term homeowners_association means an organization that elects at such time and in such manner as the secretary of treasury by regulations prescribes to have sec_528 apply for the taxable_year sec_1_528-8 provides that a separate election to be treated as a homeowners_association under sec_528 must be made for each taxable_year this election must be made by filing a properly completed form 1120-h or such other form as the secretary of treasury may prescribe sec_1_528-8 provides that for taxable years ending after date the election must be made not later than the time including extensions for filing an income_tax return for the year in which the election is to apply sec_301_9100-1 provides that the commissioner of internal revenue in an exercise of discretion may 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 not 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_9100-2 and sec_301_9100-3 provide the standards the commissioner will use to determine whether to grant an extension of time to make the election under sec_301_9100-1 in addition sec_301_9100-2 provides automatic extensions of time for making certain elections and sec_301_9100-3 provides extensions of time for making elections that do not meet the requirements of sec_301_9100-2 requests for relief under sec_301_9100-3 will be granted when the taxpayer provides the evidence to establish that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government based on the facts and representations submitted with taxpayer’s request we have determined that the requirements of sec_301_9100-3 have been satisfied with respect to its taxable years b and c therefore an extension of time is granted until days from the date of this letter for making the elections required on forms 1120-h for taxpayer to be treated as a homeowners_association under sec_528 with respect to its taxable years b and c we note however that the burden is upon taxpayer to produce upon request any records necessary to establish to the satisfaction of the internal_revenue_service that taxpayer meets all of the requirements of sec_528 plr-106226-11 except as expressly ruled 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 or under any other provisions of the code specifically we express no opinion concerning the assessment of interest additions to tax additional_amounts or penalties for failure_to_file an income_tax return with respect to any year in addition we express or imply no opinion on whether taxpayer qualifies as a homeowners_association under sec_528 this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent a copy of this letter should be attached to taxpayer's form 1120-h for each year covered by this letter the rulings contained in this letter are based upon information and representations submitted by taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination sincerely associate chief_counsel passthroughs special industries by _______________________ nicole r cimino senior technician reviewer branch office of associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes


significant index number department of the treasury internal_revenue_service washington d c tax exempt and covernment entities may tp az re taxpayer dear this letter constitutes notice that approval has been granted for your request for a 5-year automatic_extension for amortizing the unfunded liabilities as of date for the above-named plan which are described in sec_431 and sec_431 of the internal_revenue_code code and sec_304 and sec_304 of the employee_retirement_income_security_act_of_1974 erisa this extension is effective with the plan_year beginning date this extension applies to the eligible amortization charge bases as identified in your application submission established as of date the extension of the amortization periods of the unfunded liabilities of the plan was granted in accordance with sec_431 of the code sec_431 of the code requires the secretary to extend the period of time required to amortize any unfunded_liability of a plan for a period of time not in excess of years if the plan submits an application meeting the criteria stated in sec_431 the plan has submitted the required information to meet the criteria in sec_431 including a certification from the plan’s actuary that i absent the extension under subparagraph a the plan would have an accumulated_funding_deficiency in the current plan_year or any of the succeeding plan years ii the plan_sponsor has adopted a plan to improve the plan's funding status iii the plan is projected to have sufficient assets to timely pay expected benefits and anticipated expenditures over the amortization period as extended and iv the notice required under paragraph a has been provided we have sent a copy of this letter to the - _ to the and to your authorized representative pursuant to a power_of_attorney on file in this office 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 by others as precedent if you require further assistance in this matter please contact sincerely yours cg ee david m ziegler manager ep actuarial group


internal_revenue_service number release date index no department of the treasury washington dc person to contact amanda a ehrlich id-50-18395 telephone number refer reply to plr-120559-00 cc intl b1 date date a date b date c year d country e country f g years dear this is in response to your letter dated date requesting a ruling under sec_877 of the internal_revenue_code_of_1986 code that a’s loss of long-term_resident status did not have for one of its principal purposes the avoidance of u s taxes under subtitle a or subtitle b of the code the information submitted for consideration is substantially as set forth below the ruling contained in this letter is based upon information and representations submitted by the taxpayer and accompanied by penalty of perjury statements 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 a is a long-term_resident of the united_states within the meaning of sec_877 who relinquished his u s lawful permanent resident status expatriated on date b a is a citizen of country e by reason of his birth on date c a's spouse and both parents were born in country f a obtained his u s green card in year d for employment purposes a has not lived in the united_states for g years on the date of a’s expatriation his net_worth exceeded the net_worth required under sec_877 a requested a ruling within one year of expatriation sec_877 generally provides that a citizen who loses u s citizenship or a u s long-term_resident who ceases to be taxed as a lawful permanent resident individuals who expatriate within the 10-year period immediately preceding the close of the plr-120559-00 page taxable_year will be taxed under sec_877 and the special rules of sec_877 for such taxable_year unless such loss did not have for one of its principal purposes the avoidance of u s taxes sec_2107 and sec_2501 provide special estate and gift_tax regimes respectively for individuals who expatriate with a principal purpose to avoid u s taxes a former citizen or former long term-resident will be treated as having expatriated with a principal purpose to avoid u s taxes for purposes of sec_877 sec_2107 and sec_2501 if the individual’s average income_tax_liability or the individual’s net_worth on the date of expatriation exceed certain thresholds see sec_877 sec_2107 and sec_2501 a former u s citizen or former long term-resident whose net_worth or average tax_liability exceeds these thresholds however will not be presumed to have a principal purpose of tax_avoidance if that former citizen is described within certain statutory categories and submits a request for a ruling within one year of the date of loss of u s citizenship for the secretary’s determination as to whether such loss had for one of its principal purposes the avoidance of u s taxes see sec_877 sec_2107 and sec_2501 under notice_98_34 1998_2_cb_29 modifying notice_97_19 1997_1_cb_394 a former long-term_resident whose net_worth or average tax_liability exceeds the applicable thresholds will not be presumed to have a principal purpose of tax_avoidance if that former resident is described within certain categories and submits a complete and good_faith request for a ruling as to whether such loss had for one of its principal purposes the avoidance of u s taxes notice_98_34 requires that certain information be submitted with a request for a ruling that an individual’s expatriation did not have for one of its principal purposes the avoidance of u s taxes a is eligible to request a ruling pursuant to notice because on the date of a’s expatriation a was and continues to be a resident fully liable to income_tax in country e the country where a was born a submitted all the information required by notice_98_34 including any additional information requested by the service after review of the submission accordingly based solely on the information submitted and the representations made it is concluded that a has made a complete and good_faith submission in accordance with sec_877 and notice_98_34 and therefore a will not presumed to have expatriated with a principal purpose of tax_avoidance however because the information submitted does not clearly establish the existence or lack of a principal purpose to avoid taxes under subtitle a or b of the code no opinion is expressed as to whether a’s expatriation had for one of its principal plr-120559-00 page purposes the avoidance of such taxes while this ruling rebuts the presumption of tax_avoidance under sec_877 it is not conclusive as to whether a subsequently may be found to have a principal purpose of tax_avoidance under sec_877 sec_2107 and sec_2501 based on all the facts and circumstances see sec_877 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 in addition no opinion is expressed as to a’s u s tax_liability for taxable periods prior to his loss of permanent residence status or for taxable periods after his loss of permanent residence status under sections of the code other than sec_877 sec_2107 and sec_2501 a copy of this letter must be attached to a’s u s income_tax return for the year in which a obtained the ruling whether or not a is otherwise required to file a return 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 in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to a sincerely yours ____________________ w edward williams senior technical reviewer branch office of the associate chief_counsel international cc


internal_revenue_service national_office technical_advice_memorandum date number release date index uil no case mis no tam-113832-00 cc corp b2 lmsb natural_resources taxpayer’s name taxpayer’s address taxpayer’s identification no year involved date of conference legend new parent old parent shareholder state m business a b c d e tam-113832-00 f g h date date date date date year issue whether an sec_301 stock_dividend distributed by old parent to new parent under the facts described is eliminated under sec_1 a conclusion the election under sec_1_1502-76 resulted in new parent being treated as a member of the same consolidated_group as old parent at the time the stock_dividend was distributed accordingly the stock_dividend from old parent to new parent is eliminated under sec_1 a facts the information submitted indicates that during the year in question old parent was a state m corporation engaged in business and the common parent of a consolidated_group the p group old parent was a calender year taxpayer using the accrual_method of accounting as of the end of year old parent had accumulated_earnings_and_profits e_p of dollar_figurea old parent had outstanding a single class of voting common_stock shareholder an individual owned b of old parent’s stock corporation x an unrelated corporation that was the common parent of another consolidated_group all references to sections of the internal_revenue_code and the income_tax regulations are references to the code and regulations in effect for the taxable_year at issue tam-113832-00 owned the remaining c of old parent’s stock on date shareholder incorporated new parent as a state m corporation contributing sufficient cash to satisfy state minimum capitalization requirements the information submitted indicates that shareholder personally provided the funds used to capitalize new parent and did not act as the agent or nominee of old parent in forming new parent on date shareholder transferred all his old parent stock ie representing b of such stock to new parent in exchange for of new parent’s common_stock on date old parent declared a dividend of dollar_figured to the shareholders of record as of date payable at the shareholder’s election in either cash or old parent common_stock on date corporation x elected to receive its share of the dividend in cash receiving a distribution of dollar_figuree in cash on the same day on date new parent elected to receive its share of the dividend in old parent common_stock receiving a distribution of dollar_figuref in old parent common_stock on the same day the stock_dividend had the effect of increasing new parent’s ownership_interest in old parent’s stock to g which amount is greater than and decreasing corporation x’s interest to h for the year taxable_year the p group continued to file a consolidated_return listing new parent as the common parent the year consolidated_return included an election under sec_1_1502-76 the 30-day election for new parent to be treated as a member of the p group as of the first day of new parent’s taxable_year ie date the year return treated the dollar_figuref stock_dividend received by new parent from old parent as eliminated under sec_1 a examination has raised the issue whether the stock_dividend is subject_to elimination under sec_1 a where the distributing and distributee corporations were not members of the same consolidated_group at the time of the distribution examination contends that new parent’s acquisition of more than of old parent’s stock on date terminated the p group under sec_1_1502-75 such that new parent was not eligible to make the 30-day election specifically the p group’s termination would have prevented new parent from becoming a member of such group during the first days of new parent’s taxable_year as required by sec_1_1502-76 examination maintains that absent a valid 30-day election the stock_dividend from old parent to new parent was not a dividend distributed from one member to another during a consolidated_return_year and consequently would not be eliminated under sec_1 a the taxpayer responds that it was entitled to eliminate the dividend based on having made a 30-day election in support of its position taxpayer first asserts that new parent acquired old parent through a reverse_acquisition within the meaning of sec_1_1502-75 such that new parent became a member of the continuing p tam-113832-00 group the taxpayer further asserts that because new parent joined the p group within the first days of new parent’s taxable_year new parent was eligible to make the day election to be treated as a member of the p group as of date the first day of new parent’s taxable_year the taxpayer concludes that the date stock_dividend from old parent to new parent was a dividend distributed from one member to another during a consolidated_return_year that is eliminated under sec_1 a law and analysis the primary issue is whether the stock_dividend from old parent to new parent is eliminated under sec_1 a sec_1 a provides that a dividend distributed by one member to another member during a consolidated_return_year shall be eliminated in the instant case old parent and new parent were not members of the same consolidated_group at the time of the distribution but became affiliated upon new parent’s receipt of the stock_dividend the year consolidated_return included an election pursuant to sec_1 b i the 30-day election permits a corporation that becomes a member of a consolidated_group within the first days of its taxable_year to be considered to have become a member of the group as of the first day of its taxable_year sec_1_1502-76 the threshold question therefore is whether new parent may avail itself of the 30-day election in order to treat itself as a member of the p group prior to the date of the stock_distribution thereby qualifying the dividend for elimination under sec_1 a in this case the validity of the 30-day election depends on whether the p group continued in existence and whether new parent became a member of the p group during the first days of new parent’s taxable_year sec_1 a further provides that the term dividend means a distribution which is described in sec_301 other than a distribution described in sec_243 sec_1_1502-76 provides two elections both of which apply for purposes of the consolidated_return_regulations under sec_1502 the second election which is not at issue in this case allows a corporation that has been a member of a consolidated_group for days or less during a consolidated_return_year to be considered not a member of the group during such year sec_1 b ii the elections which were removed by t d 1994_2_cb_200 effective for corporations becoming or ceasing to be members of consolidated groups on or after date were rules of administrative convenience intended to relieve corporations from the burden of filing two federal_income_tax returns by disregarding the short_year created when a corporation joins or leaves a group during a consolidated_return_year tam-113832-00 sec_1_1502-75 sets forth the general_rule that a consolidated_group remains in existence if the common parent_corporation remains as the common parent and at least one subsidiary remains affiliated with it whether or not such subsidiary was a member of the group in a prior year and whether or not one or more corporations have ceased to be subsidiaries at any time after the group was formed under this general_rule new parent’s acquisition of more than of old parent’s stock on date would have terminated the p group because old parent would have ceased to be the common parent an exception the general_rule of sec_1_1502-75 is provided by sec_1_1502-75 for transactions characterized as reverse acquisitions the reverse_acquisition rule functions in part to identify which group will be subject_to the continued filing requirement of sec_1_1502-75 and to determine which group or corporation’s taxable_year will be used for the filing of the consolidated_return see revrul_72_322 1972_1_cb_287 if new parent acquired old parent through a reverse_acquisition described in sec_1_1502-75 new parent would be treated as joining the p group even though in form new parent obtained more than of old parent’s stock sec_1_1502-75 provides in pertinent part that if a corporation the first_corporation acquires stock of another corporation the second corporation and as a result the second corporation becomes or would become but for the application of this subparagraph a member of a group of which the first_corporation is the common parent in exchange in whole or in part for stock of the first_corporation and the stockholders immediately before the acquisition of the second corporation as a result of owning stock of the second corporation own immediately after the acquisition more than of the fair_market_value of the outstanding_stock of the first_corporation then any group of which the first_corporation was the common parent immediately before the acquisition shall cease to exist as of the date_of_acquisition and any group of which the second corporation was the common parent immediately before the acquisition shall be treated as remaining in existence with the first_corporation becoming the common parent of the group sec_1_1502-75 further provides that for purposes of determining whether the second corporation becomes or would become a member of the group of which the first_corporation is the common parent and for purposes of determining whether the former stockholders of the second corporation own more than of the outstanding_stock of the first_corporation there shall be taken into account any acquisitions or redemptions of the stock of either corporation which are pursuant to a plan of acquisition the taxpayer contends that new parent obtained g of old parent’s stock through a reverse_acquisition thereby making new parent eligible to make the 30-day election tam-113832-00 specifically taxpayer asserts that new parent acquired at least of old parent’s stock in exchange in whole or in part for new parent’s stock and old parent's stockholder immediately before the acquisition ie shareholder as a result of owning old parent stock owned more than of the fair_market_value of new parent's outstanding_stock immediately after the acquisition based upon the information provided we conclude that new parent’s acquisition of old parent was a reverse_acquisition described in sec_1_1502-75 cf revrul_72_30 1972_1_cb_287 transactions by which one corporation acquired of another corporation’s stock followed one day later by the acquisition of an additional were viewed as one transaction constituting a reverse_acquisition consequently the p group remained in existence after new parent’s receipt of the stock_dividend on date and new parent is treated as a subsidiary of the p group for the remainder of the year taxable_year subsequent to the acquisition sec_1 d v a b moreover because new parent is treated as becoming a member of the p group and this change in status occurred within the first days after the beginning of new parent’s taxable_year on date determined without regard to the required change to old parent’s taxable_year new parent was eligible to make the 30-day election sec_1_1502-76 in this case the timely 30-day election causes new parent to be considered a member of the p group as of date thus the date stock_dividend from old parent to new parent was a dividend distributed from one member to another during a consolidated_year that is eliminated under sec_1 a sec_1_1502-75 provides in part that if in a transaction described in sec_1_1502-75 the first_corporation files a consolidated_return for the first taxable_year ending after the date_of_acquisition then the first_corporation shall close its taxable_year as of the date_of_acquisition and shall immediately after the acquisition change to the taxable_year of the second corporation sec_1_1502-76 provides in part that if sec_1_1502-75 applies to a group then for purposes of the application of this paragraph other than to a group which ceases to exist as a result of the application of sec_1_1502-75 the second corporation whether or not it remains in existence shall be treated as the common parent for the entire taxable_year of such corporation in which the acquisition occurs and the first_corporation shall be treated as a subsidiary for the portion of such taxable_year subsequent to the acquisition sec_1_1502-32 requires that new parent make a negative adjustment to its basis in the old parent stock to the extent the dividend is a distribution out of earnings_and_profits accumulated in prior consolidated_return years beginning after date tam-113832-00 caveat s the conclusions expressed in this technical_advice_memorandum are limited to the facts described no opinion is expressed as to whether absent the occurrence of a reverse_acquisition described in sec_1_1502-75 and the making of a valid 30-day election under sec_1_1502-76 the dividend would have been eliminated under sec_1 a this technical_advice_memorandum expresses no opinion about the tax treatment of the above transactions under other provisions of the code and regulations or about the tax treatment of any conditions existing at the time of or effects resulting from the transactions above that are not specifically covered by the above technical_advice_memorandum a copy of this technical_advice_memorandum is to be given to the taxpayer s sec_6110 of the code provides that it may not be used or cited as precedent