t c summary opinion united_states tax_court ana maria rodriguez petitioner v commissioner of internal revenue respondent docket no 9409-04s filed date ana maria rodriguez pro_se thomas m newman for respondent panuthos chief special_trial_judge this case was heard pursuant to the provisions of sec_7463 of the internal_revenue_code in effect at the time the petition was filed the decision to be entered is not reviewable by any other court and this opinion should not be cited as authority unless otherwise indicated all section references are to the internal_revenue_code in effect for the taxable_year in issue and all rule references are to the tax_court rules_of_practice and procedure respondent determined a deficiency in petitioner’s federal_income_tax for the taxable_year of dollar_figure and a penalty pursuant to sec_6662 of dollar_figure after concession sec_1 by the parties the issue for decision is whether respondent abused his discretion in denying petitioner’s request for relief from joint_and_several_liability under sec_6015 background some of the facts have been stipulated and they are so found the stipulation of facts the second stipulation of facts and the attached exhibits are incorporated by this reference at the time of filing the petition petitioner resided in salinas california petitioner and manuel rodriguez2 were married in date and they separated sometime in date petitioner filed for a divorce in however that matter was still pending at the time of trial petitioner was employed as a day care respondent concedes that petitioner is not liable for a sec_6662 penalty of dollar_figure petitioner concedes that she received dollar_figure in interest_income from wells fargo bank in tax_year on date respondent issued to mr rodriguez a notice of filing of petition and right to intervene mr rodriguez did not file a notice of intervention provider and mr rodriquez was employed as a regional sales manager during mr rodriguez participated in gambling activities and had gambling winnings of dollar_figure mr rodriguez was a participant in an individual_retirement_account ira and in he received a distribution of dollar_figure there is no indication in the record that mr rodriguez was years of age or older at the time of the distribution petitioner was not a participant in an ira petitioner was responsible for paying the family’s household finances mr rodriguez was responsible for the joint tax returns mr rodriguez hired lydias one day tax service tax preparer to prepare the tax_return petitioner had limited english proficiency and required an interpreter at trial petitioner and mr rodriguez filed a joint form_1040 u s individual_income_tax_return for the return reported gambling income of dollar_figure petitioner and mr rodriguez also reflected total pension and annuities of dollar_figure on line 16a of the return however the taxable_amount was reported as dollar_figure petitioner signed the tax_return reviewed the amounts relevant to her income and deductions and asked mr rodriguez and the tax preparer questions regarding mr rodriguez’s income on date petitioner submitted a form 8857-sp request for innocent spouse relief seeking relief from joint_and_several_liability on the tax_return on date respondent issued to petitioner and mr rodriguez a deficiency_notice for the taxable_year respondent determined that petitioner and mr rodriguez omitted gambling income in the amount of dollar_figure and income in the amount of dollar_figure from an ira distribution on date petitioner filed a timely petition with this court respondent concedes that petitioner did not have knowledge that mr rodriguez received gambling income in tax_year in excess of dollar_figure accordingly respondent agrees that petitioner is entitled to relief from liability for tax on dollar_figure the difference between the actual income received dollar_figure and the income reported on the tax_return dollar_figure pursuant to sec_6015 petitioner concedes that she had knowledge of a dollar_figure distribution but she did not know that the actual amount of the distribution was dollar_figure respondent concedes that petitioner is entitled to sec_6015 relief from liability for tax on dollar_figure the difference between the actual distribution dollar_figure and the distribution reflected on the tax_return dollar_figure petitioner asserts that she is entitled to relief under sec_6015 because mr rodriguez was responsible for preparing their tax_return and he chose the tax preparer petitioner asserts that she did not know of mr rodriguez’s total gambling winnings or the amount of the distribution from mr rodriguez’s ira account petitioner also asserts that she has no knowledge of the tax laws respondent asserts that petitioner who was granted relief under sec_6015 is not entitled to additional relief under sec_6015 from liability for tax on the dollar_figure gambling income and dollar_figure ira distribution primarily because she had actual knowledge of both amounts at trial respondent asserted that petitioner could not be considered for relief under sec_6015 since she had been granted partial relief under sec_6015 in a supplemental memorandum respondent conceded that petitioner could be considered for relief under such circumstances nevertheless respondent asserts that taking into consideration all the factors under sec_6015 petitioner is not entitled to relief discussion generally married taxpayers may elect to file a joint federal_income_tax return sec_6013 after making the election each spouse is jointly and severally liable for the entire tax due sec_6013 a spouse may seek relief from joint_and_several_liability under sec_6015 a spouse may qualify for relief from liability under sec_6015 or if eligible may allocate liability under sec_6015 in addition if relief is not available under sec_6015 or c an individual may seek equitable relief under sec_6015 to the extent that relief is not available under sec_6015 or c 114_tc_324 114_tc_276 except as otherwise provided in sec_6015 petitioner bears the burden_of_proof rule a 119_tc_306 affd 101_fedappx_34 6th cir a prerequisite to granting relief under sec_6015 or c is the existence of a tax_deficiency sec_6015 and c 120_tc_62 here after an examination of the joint_return respondent determined a deficiency of dollar_figure petitioner sought and was granted partial relief by respondent under sec_6015 as previously indicated petitioner was granted relief from liability for tax on dollar_figure the difference between the gambling income reported of dollar_figure and the gambling income received of dollar_figure and dollar_figure the difference between the ira distribution reflected of dollar_figure and the ira distribution received of dollar_figure petitioner claims that she is entitled to equitable relief under sec_6015 sec_6015 provides sec_6015 equitable relief --under procedures prescribed by the secretary if-- taking into account all the facts and circumstances it is inequitable to hold the individual liable for any unpaid tax or any deficiency or any portion of either and relief is not available to such individual under subsection b or c the secretary may relieve such individual of such liability we have jurisdiction to review respondent’s denial of petitioner’s request for equitable relief under sec_6015 fernandez v commissioner supra pincite we review such denial of relief to decide whether respondent abused his discretion by acting arbitrarily capriciously or without sound basis in fact 118_tc_106 affd 353_f3d_1181 10th cir our review is not limited to respondent’s administrative record 122_tc_32 petitioner is not entitled to relief under sec_6015 as to the gambling income petitioner is entitled to be considered for relief under sec_6015 where there is an unpaid tax or deficiency the dollar_figure of gambling income was reported on the return as income and petitioner and mr rodriguez received a refund based on the fact that withholding exceeded the tax reported on the return thus petitioner cannot be considered for equitable relief as to the gambling income under sec_6015 since there is not an unpaid tax or deficiency with respect to this item petitioner can be considered for relief under sec_6015 as to the amount of the ira distribution omitted from the return resulting in a deficiency the dollar_figure distribution was reflected on the return however only dollar_figure of that amount was reported as the taxable_amount as indicated petitioner was granted relief under sec_6015 as to the difference between the ira distribution reflected on the return dollar_figure and the actual amount of the ira distribution dollar_figure the difference is dollar_figure petitioner now seeks additional relief on the difference between the amount reflected on the return as a distribution dollar_figure and the amount reported on the return as income dollar_figure the difference of dollar_figure the commissioner has prescribed procedures for determining whether a spouse qualifies for relief under subsection f the procedures set forth in revproc_2000_15 2000_1_cb_447 have been superseded by revproc_2003_61 2003_2_cb_296 revproc_2003_61 sec_4 2003_2_cb_297 sets forth seven threshold conditions that must be satisfied respondent agrees that all the threshold conditions have been met revproc_2003_61 2003_2_cb_296 which supersedes revproc_2000_15 2000_1_cb_447 is effective for requests for relief filed on or after date or requests for relief pending on date for which no preliminary determination_letter has been issued as of date the request for relief was submitted on date once the seven threshold conditions are satisfied revproc_2003_61 sec_4 provides factors to consider in determining whether to grant equitable relief petitioner satisfies the threshold provisions therefore we consider the factors in revproc_2003_61 sec_4 a and b to decide whether respondent abused his discretion in denying equitable relief under sec_6015 revproc_2003_61 sec_4 a i marital status this factor weighs in favor of relief if the requesting spouse and the nonrequesting spouse are divorced legally_separated or living apart petitioner and mr rodriguez are married but have maintained separate households since date this factor weighs in favor of granting relief to petitioner ii economic hardship a taxpayer might experience economic hardship if he or she is unable to pay basic reasonable living_expenses sec_301_6343-1 proced admin regs it is the taxpayer’s burden to show both that the expenses qualify and that the expenses are reasonable monsour v commissioner tcmemo_2004_190 petitioner has provided no evidence that she would be unable to pay basic living_expenses if she is held liable for the deficiency there is no evidence that we need not consider revproc_2003_61 sec_4 c b pincite since that section relates to underpayments petitioner would suffer economic hardship upon denial of relief this factor weighs against granting petitioner relief iii knowledge or reason to know in the case of an income_tax_liability that arose from a deficiency the fact that the requesting spouse did not know and had no reason to know of the item giving rise to the deficiency is a factor in favor of granting relief revproc_2003_61 sec_4 a iii b by contrast the fact that the requesting spouse knew or had reason to know of the item giving rise to the deficiency is a factor weighing against relief id this factor is not weighed more heavily than other factors however it is a strong factor weighing against relief petitioner must establish that she did not know and had no reason to know about mr rodriguez’s ira distribution in evaluating whether a spouse had reason to know of an item revproc_2003_61 supra provides that we may consider the spouse’s level of education any deceit or evasiveness the spouse’s degree of involvement in business and household financial matters and her business or financial expertise see also 887_f2d_959 9th cir factors to consider whether a spouse knew or had reason to know of a substantial_understatement include spouse’s level of education spouse’s involvement in family’s business and financial affairs presence of expenditures that appear lavish or unusual when compared to the family’s past levels of income standard of living and spending patterns and culpable spouse’s evasiveness and deceit concerning couple’s finances petitioner’s level of education was not made a part of the record however given her limited english proficiency her understanding of the tax_return was likely somewhat limited petitioner was responsible for paying the household expenses and taking care of her three daughters while mr rodriguez was responsible for preparing the couple’s tax returns we conclude that petitioner was at least somewhat experienced in financial matters and in running a household petitioner also had some control_over financial matters because she asked the tax preparer at lydia’s tax service questions regarding certain items relating to mr rodriguez’s income petitioner also testified that she tried to understand the amounts included on the return the record does not reflect a difference in petitioner’s lifestyle or the presence of expenditures that appear lavish or unusual in comparison to the family’s past levels of income petitioner’s standard of living and spending patterns reflect those of someone attempting to raise three daughters as a single parent on one income while petitioner testified that she was unaware of the amount of the ira distribution we note that she has previously been granted relief to the extent of the amount not reflected on the return the amount of dollar_figure was reflected on the return as a pension distribution it appears that the actual reporting of dollar_figure of income was an error made by the preparer given that the dollar_figure was reflected on the return we conclude that petitioner knew or had reason to know of the pension distribution 992_f2d_1256 2d cir affg tcmemo_1992_228 levin v commissioner tcmemo_1987_67 iv nonrequesting spouse’s legal_obligation there was no legal_obligation pursuant to a divorce decree or agreement this factor is neutral v significant benefit a significant benefit is a benefit in excess of normal support sec_1_6015-2 income_tax regs petitioner did not live with her husband during the year in issue she worked as a nanny and there is no evidence that petitioner received any benefit beyond normal support from mr rodriguez this factor is neutral vi compliance with income_tax laws the question is whether the taxpayer has made a good_faith effort to comply with tax laws in tax years subsequent to the years for which relief is requested this factor is neutral as there is no evidence that petitioner has either failed to comply with or fully complied with tax obligations revproc_2003_61 sec_4 b this subsection lists factors that if present will weigh in favor of equitable relief but if not present will not weigh against relief the factors are i whether the nonrequesting spouse abused the requesting spouse and ii whether the requesting spouse was in poor mental or physical health neither of these factors is present in this case and accordingly they have no effect on the outcome additional factors petitioner argues that she lacked knowledge regarding the tax laws as the basis why she should be granted relief we have held that where a taxpayer relies on a professional tax preparer it is not inequitable to make either spouse liable because the error is based on a misunderstanding of the tax laws 57_tc_732 on the basis of our examination of the facts and circumstances in this case including the factors set forth in revproc_2003_61 sec_4 2003_2_cb_298 we conclude that respondent did not abuse his discretion by acting arbitrarily capriciously or without sound basis in fact in denying petitioner’s request for equitable relief under sec_6105 reviewed and adopted as the report of the small_tax_case division to reflect the foregoing decision will be entered under rule


t c memo united_states tax_court natalia ravelo escandon petitioner v commissioner of internal revenue respondent docket no filed date natalia ravelo escandon pro_se justin l campolieta for respondent memorandum findings_of_fact and opinion vasquez judge respondent determined a deficiency of dollar_figure in petitioner’s federal_income_tax as well as additions to tax of dollar_figure under sec_6651 and dollar_figure under sec_6651 for after concessions the issues for unless otherwise indicated all section references are to continued decision are whether petitioner is liable for income_tax on her wages and unemployment benefits whether petitioner is liable for the addition_to_tax of sec_6651 and whether petitioner is liable for the addition_to_tax of sec_6651 findings_of_fact some of the facts have been stipulated and are so found petitioner resided in miami florida when she filed her petition during petitioner worked as a seamstress for mimi enterprises inc mimi’s a retail bridal gown shop mimi’s paid petitioner dollar_figure for her work there during during mimi’s classified petitioner as an independent_contractor and did not withhold income or employment_taxes from its payments to petitioner petitioner also received unemployment_compensation in the amount of dollar_figure from the florida agency for workforce innovation fawi in petitioner did not file a federal_income_tax return for and petitioner’s only payment toward her income_tax_liability was the dollar_figure that fawi withheld from her unemployment_compensation on or about date respondent filed a continued the internal_revenue_code and all rule references are to the tax_court rules_of_practice and procedure substitute for return sfr with regard to petitioner’s taxes in a notice_of_deficiency dated date respondent determined that petitioner received self-employment_income in the amount of dollar_figure as well as unemployment_compensation of dollar_figure the attached form_4549 income_tax examination changes reveals that respondent allowed petitioner a standard_deduction one personal_exemption and a deduction for one-half of the self- employment_tax assessed respondent determined that petitioner was liable for federal_income_tax self-employment_tax and additions to tax in the amounts delineated supra the parties now agree that petitioner was an employee of mimi’s during and respondent concedes that petitioner is not liable for self-employment_tax for i deficiency opinion petitioner contends that she is not liable for income taxes for because mimi’s failed to withhold taxes from her wages during according to petitioner mimi’s is solely liable for petitioner’s taxes for in support of her contentions petitioner relies on sec_5041 and sec_3509 petitioner has neither claimed nor shown that she satisfied the requirements of sec_7491 to shift the burden_of_proof to respondent with regard to any factual issue affecting her liability for tax accordingly petitioner bears the burden_of_proof rule a sec_5041 imposes a gallonage tax on wines and does not relate to income taxes the gallonage tax of sec_5041 is an alcohol excise_tax under subtitle e of the internal_revenue_code and not an income_tax under subtitle a sec_5041 is therefore wholly irrelevant to the determination of petitioner’s income_tax_liability sec_3509 provides as a general_rule that an employer who fails to withhold income_tax from an employee’s wages by reason of treating such employee as not being an employee for withholding purposes shall be liable for income_tax as if the amount required to be withheld were equal to percent of the wages paid to such employee sec_3509 however sec_3509 provides that the employee’s liability for tax shall not be affected by the assessment or collection of any additional income_tax determined to be owing from the employer sec_3509 therefore mimi’s classification of petitioner as an independent_contractor during cannot discharge or reduce petitioner’s obligation to pay taxes on the wage income she received from mimi’s during see eg lucas v commissioner tcmemo_2000_14 grooms v commissioner tcmemo_1992_291 under such circumstances the employer is also liable for percent of the employee social_security_tax that would have been imposed if the employer had properly classified the taxpayer as an employee sec_3509 because respondent has conceded that petitioner is not liable for self-employment_tax on her income petitioner is not entitled to the deduction provided for in sec_164 which allows an individual taxpayer to deduct one-half of his or her self-employment_tax liability from his or her taxable_income finally we note that gross_income includes unemployment_compensation sec_85 as we have noted in other cases it is unfortunate that petitioner’s employer classified her as an independent_contractor and not as an employee had petitioner been classified as an employee it is possible that mimi’s would have withheld the proper amounts of tax from petitioner’s wages and a deficiency in petitioner’s taxes might not have occurred see eg lucas v commissioner supra but that does not alter the fact that the first principle of income_taxation is that income must be taxed to him who earns it 337_us_733 and cases cited therein petitioner was paid her wages without any reduction for withheld income_tax and petitioner has not yet fully paid the tax_liability on her income for we therefore hold that petitioner is liable for the deficiency in the amount respondent has determined appropriately adjusted to incorporate respondent’s above-mentioned concession ii additions to tax a burdens of proof and production sec_7491 provides that the commissioner shall bear the burden of production with respect to the liability of any individual for additions to tax to meet this burden of production the commissioner must come forward with sufficient evidence indicating that it is appropriate to impose this addition_to_tax 116_tc_438 once the commissioner meets this burden of production the taxpayer must come forward with persuasive evidence that the commissioner’s determination is incorrect rule a see higbee v commissioner supra with respect to the sec_6651 addition_to_tax respondent must introduce evidence that the tax was shown on a federal_income_tax return to satisfy his burden of production under sec_7491 120_tc_163 when a taxpayer has not filed a return the sec_6651 addition_to_tax may not be imposed unless the secretary has prepared a substitute for return sfr that meets the requirements of sec_6020 127_tc_200 at trial the court admitted a certified form_4340 certificate of assessments payments and other specified matters relating to petitioner’s tax_year the form_4340 indicates that respondent prepared an sfr on date the record also includes a form sec_6020 certification pertaining to petitioner’s tax_year and dated date the court has also admitted a copy of the sfr which indicates that it was filed on date and which reports the adjustments contained in the notice_of_deficiency statements from fawi and mimi’s reflecting payments to petitioner in of dollar_figure and dollar_figure respectively are attached to the sfr sec_6020 provides sec_6020 execution of return by secretary -- authority of secretary to execute return --if any person fails to make any return required by any internal revenue law or regulation made thereunder at the time prescribed therefor or makes willfully or otherwise a false_or_fraudulent_return the secretary shall make such return from his own knowledge and from such information as he can obtain through testimony or otherwise status of returns --any return so made and subscribed by the secretary shall be prima facie good and sufficient for all legal purposes the record reveals that respondent generated an sfr for petitioner’s tax_year based on statements provided by mimi’s and fawi petitioner concedes that she received the income reported in the sfr and that she has not paid the tax shown on the sfr the sfr complies with sec_6020 the sfr therefore constitutes a return for the purposes of the sec_6651 addition_to_tax sec_6651 accordingly respondent has satisfied his burden of production with regard to the sec_6651 addition_to_tax b sec_6651 respondent determined that petitioner is liable for an addition_to_tax pursuant to sec_6651 for sec_6651 imposes an addition_to_tax for failure_to_file a return on the date prescribed determined with regard to any extension of time for filing unless the taxpayer can establish that such failure is due to reasonable_cause and not due to willful neglect petitioner concedes that she did not file a return for and petitioner has offered no evidence showing that her failure_to_file was due to reasonable_cause and not due to willful neglect moreover misclassification of an employee does not relieve the employee of his liability for filing a correct_tax return see grooms v commissioner tcmemo_1992_ 742_fsupp_65 e d n y affd without published opinion 930_f2d_911 2d cir accordingly we hold that petitioner is liable for the addition_to_tax under sec_6651 c sec_6651 respondent also determined that petitioner is liable for an addition_to_tax pursuant to sec_6651 for sec_6651 provides for an addition_to_tax where payment of tax shown on a return is not timely unless the taxpayer can establish that such failure is due to reasonable_cause and not due to willful neglect petitioner did not timely pay her taxes for petitioner did not present any evidence indicating that her failure to timely pay her taxes was due to reasonable_cause and not due to willful neglect accordingly we hold that petitioner is liable for the addition_to_tax under sec_6651 to reflect the foregoing decision will be entered under rule


t c no united_states tax_court scott william katz petitioner v commissioner of internal revenue respondent docket no 16718-99l filed date p received a notice_of_deficiency for his tax_year after p petitioned this court to redetermine that deficiency determination the court entered a stipulated decision providing for a tax_deficiency additions to tax and statutory interest r subseguently filed a lien and p in turn requested an appeals hearing from r’s appeals_office pursuant to sec_6320 i r c p refused to appear at the appeals hearing on the grounds that the location of the appeals hearing was inconvenient to p and his witnesses after an appeals officer discussed the collection matter with p via telephone the appeals officer issued to p a notice_of_determination under sec_6330 i r c p subsequently petitioned this court to review the appeals officer’s determination under sec_6330 i r c r now moves for partial summary_judgment with regard to the tax_deficiency additions to tax and interest that are the subject of r’s collection activities -- - held p received an adequate opportunity for an appeals hearing pursuant to sec_6320 i r c in any event the communications between the appeals officer and p constituted an appeals hearing under sec_6320 i r c held further p’s challenge to the merits of r’s assessment of the tax_deficiency and additions to tax fails to state a claim on which relief can be granted held further because the court has jurisdiction under sec_6404 i r c over interest abatement cases the court has jurisdiction to review the appeals officer’s determination with regard to the interest that is the subject of r’s collection activities however the appeals officer did not abuse his discretion in making the determination scott w katz pro_se kenneth a hochman and john t lortie for respondent opinion vasquez judge petitioner filed a petition in response to respondent’s notice_of_determination concerning collection action s under sec_6320 and or notice_of_determination in his petition petitioner alleges that the internal_revenue_service office of appeals appeals_office failed to hold a meaningful hearing as reguired by sec_6320 appeals hearing petitioner further challenges the merits of a tax_deficiency and additions to tax previously unless otherwise indicated all section references are to the internal_revenue_code as amended and all rule references are to the tax_court rules_of_practice and procedure redetermined by the court in a decision entered for his tax_year and interest assessed thereon respondent has moved for partial summary_judgment on the grounds that petitioner has been afforded the opportunity for an appeals hearing that the tax_deficiency and additions to tax are properly due and that the interest has been properly calculated there are no genuine issues of material fact to preclude us from deciding this matter we therefore decide the legal issues before us background at the time the petition was filed petitioner resided in west palm beach florida for the sole purpose of deciding the motion for partial summary_judgment we summarize the relevant facts on date respondent issued a notice_of_deficiency with regard to petitioner’s tax_year on date petitioner filed a petition with this court seeking a redetermination of the tax_deficiency and additions to tax determined by respondent in the notice_of_deficiency original tax dispute on date petitioner moved the u s bankruptcy court for the southern district of florida to reopen his bankruptcy case to settle the dispute with the for purposes of respondent’s motion petitioner does not dispute various factual allegations that are part of the record the summarized facts however are not findings_of_fact for the instant case see rule a fed r civ p a q4e- commissioner regarding his income_tax_liability on date the bankruptcy court denied the request ruling that petitioner’s tax_liabilities were not discharged in the bankruptcy case in re katz no 90-39248-bkc-ram bankr s d fla date on date with regard to the original tax dispute we entered a decision stipulated by the parties setting out the amounts of the tax_deficiency and additions to tax and providing for statutory interest see katz v commissioner docket no date the amounts of the tax_deficiency and additions to tax redetermined in the decision were much lower than the amounts set forth in the notice_of_deficiency subsequently respondent assessed the tax_deficiency additions to tax and interest on date respondent filed a notice_of_federal_tax_lien lien filing with regard to the amounts assessed for the tax_year in the county recorder’s office for palm beach county florida on date respondent transmitted to petitioner a notice_of_federal_tax_lien filing and your right to a hearing under sec_6320 on or about date pursuant to sec_6320 petitioner regquested an appeals hearing from respondent’s appeals_office in his request petitioner contested the entire amount listed in the lien filing the decision provided it is further stipulated that interest will be assessed as provided by law on the deficiency and additions to tax due from the petitioner - petitioner contended that any_tax money allegedly owed for was discharged pursuant to his bankruptcy action and that in any event interest should not have accrued during the bankruptcy proceeding on date an appeals officer assigned to the south florida region mailed petitioner a letter scheduling petitioner’s requested appeals hearing for date at an appeals_office in sunrise florida the appeals officer stated in the letter tf you are unable to attend let me know within the next days and i will arrange another time please try to keep this appointment because conferences are not held in your area often and special arrangements must be made the appeals officer explained that an earlier conference may be possible if held in my office or conducted by telephone the appeals officer further explained to petitioner the procedures of the appeals hearing this conference will be informal you may present facts arguments and legal authority to support your position if you plan to introduce new evidence or information send it to me at least days before the conference statements of fact should be presented as affidavits or signed under penalties of perjury on that same day independent of the letter drafted by the appeals officer petitioner mailed a letter to the appeals officer reasserting his request for an appeals hearing in the the appeals officer was based in miami florida -- - letter petitioner requested that the appeals hearing take place in west palm beach florida since all of the witnesses live and work in west palm beach florida on date after receiving the appeals officer’s letter dated date petitioner again transmitted a letter to the appeals officer requesting that any and all hearings be held in west palm beach florida petitioner further stated that all of my witnesses and people involved with regard to the tax_year are in west palm beach florida in short i will not attend the conference you set up on x again please reset the matter for a conference in west palm beach florida i cannot appear with my witnesses almost an hour away on date petitioner and the appeals officer had a telephone conversation in which they discussed petitioner’s tax_year during the telephone conversation the appeals officer informed petitioner that appeals hearings were not available in west palm beach florida but rather were conducted in sunrise florida on date the appeals officer followed up the telephone conversation with a letter in which he stated that he saw no basis for recommending abatement of the income_tax_liability the appeals officer also informed petitioner that he could petition the tax_court to review the lien filing following the issuance of a notice_of_determination by the - appeals officer or settle with the internal_revenue_service irs on date following inaction by petitioner the appeals officer issued a notice_of_determination deciding ’ in the notice not to withdraw the notice_of_federal_tax_lien of determination the appeals officer explained that petitioner’s tax was not dischargeable pursuant to applicable bankruptcy law and that petitioner had signed a stipulation waiving the restrictions prohibiting assessment and collection of the deficiency and additions to tax plus statutory interest for the taxable_year petitioner thereafter petitioned this court to review respondent’s determination pursuant to sec_6330 in the petition petitioner contends that he has never received or had the opportunity for an appeals hearing the tax_court decision with regard to the tax_deficiency and additions to tax should be vacated because of the previous bankruptcy action and respondent is not entitled to interest for the period during the appeals officer suggested to petitioner the following alternatives for settlement full payment of the liability enter into an installment_agreement submit an offer_in_compromise based on doubt-as- to collectibility ’ there are no indications in the record that after speaking with the appeals officer petitioner requested an appeals hearing to be held at the appeals_office in sunrise florida - - which he was in bankruptcy proceedings discussion sec_6321 provides that if any person liable to pay any_tax neglects or refuses to do so after demand the amount shall be a lien in favor of the united_states upon all property and rights to property whether real or personal belonging to such person pursuant to sec_6323 the commissioner generally is required to file a notice_of_federal_tax_lien with the appropriate state office for the lien to be valid against certain third parties after the commissioner conducts the lien filing sec_6320 requires the commissioner to provide notice to the taxpayer of the lien in addition under sec_6320 a b and b the commissioner must provide the taxpayer with notice of and an opportunity for an administrative review of the lien filing ie an appeals hearing sec_6320 requires that the appeals_office conduct the appeals hearing sec_6320 incorporates sec_6330 and certain parts of sec_6330 which describe the procedural rules that apply to the sdollar_figurein the internal_revenue_service restructuring and reform act of publaw_105_206 112_stat_685 congress enacted sec_6320 pertaining to liens and pertaining to levies to provide new protections for taxpayers with regard to collection matters - appeals hearing and the judicial review thereof ’ at the appeals hearing the taxpayer may raise certain matters set forth in sec_6330 which provides in pertinent part as follows sec c matters considered at hearing --in the case of any hearing conducted under this section-- issues at hearing --- a in general --the person may raise at the hearing any relevant issue relating to the unpaid tax or the proposed levy including-- appropriate spousal defenses challenges to the appropriateness of collection actions and offers of collection alternatives which may include the posting of a bond the substitution of other assets an installment_agreement or an offer-in- compromise b underlying liability --the person may also raise at the hearing challenges to the existence or amount of the underlying tax_liability for any_tax period if the person did not receive any statutory_notice_of_deficiency for such tax_liability or did not otherwise have an opportunity to dispute such tax_liability pursuant to sec_6330 within days of the issuance of sec_6330 and b provides taxpayers with notice and opportunity for an appeals hearing before a levy is made - the notice_of_determination the taxpayer may appeal that determination to this court if we have jurisdiction over the underlying tax_liability if we do not have jurisdiction over the underlying tax_liability then the appeal is to be made to a u s district_court see sec_6330 appeals hearing petitioner asserts that the appeals officer did not afford petitioner an appeals hearing as required under sec_6320 petitioner argues in his objection to respondent’s motion for partial summary_judgment that his reguest for an appeals hearing was never honored that he has never submitted a withdrawal of request for collection_due_process form to the appeals officer and that various telephonic conversations and or letters to the petitioner by the appeals officer do not meet the requirements of sec_6320 for an appeals hearing petitioner therefore argues that respondent’s motion should be denied respondent disagrees and states that the appeals officer afforded petitioner an opportunity to have an in-person hearing at the appeals_office in sunrise florida which petitioner declined sec_6320 provides that if a taxpayer requests a hearing under subsection a b such hearing shall be held by the internal_revenue_service office of appeals sec_6320 does not specify at what location the appeals hearing needs to take place or whether it can occur via telephone furthermore the legislative_history to sec_6320 and sec_6330 does not address this issue see h conf rept pincite respondent asserts that for petitioner’s geographic location appeals hearings are generally held at the appeals_office in sunrise florida petitioner does not dispute this claim from petitioner’s correspondence with the appeals officer we assume that petitioner’s complaint is that under sec_6320 he is entitled to an appeals hearing in west palm beach florida the location of his alleged witnesses and the place of his residence because congress has not specifically addressed the location for an appeals hearing we look to other tax contexts for guidance in the examination context congress has stated that the time and place of an examination shall be such time and place as may be fixed by the secretary and as are reasonable under the circumstances sec_7605 under sec_301_7605-1 proceed admin regs the location of an office examination is based on the taxpayer's residence d place of examination-- office examinations---- i in general an office examination generally will take place at the closest service office within the district encompassing the taxpayer’s residence it generally is not reasonable for the service to require a taxpayer to attend an examination at an office within an assigned district other than the closest service office exception if the office within the assigned district closest to an individual taxpayer’s residence does not have an examination group or the appropriate personnel to conduct the examination it generally is reasonable for the service to require the taxpayer to attend an examination at the closest service office within the assigned district that has an examination group or the appropriate personnel travel considerations in scheduling office examinations the service in appropriate circumstances will take into account the distance a taxpayer would have to travel in sec_301 7605-l1 e proced admin regs the secretary further provides the service will consider on a case-by-case basis written requests by taxpayers or their representatives to change the place that the service has set for an examination in considering these requests the service will take into account the following factors-- the location of the taxpayer’s current residence the location of the taxpayer’s current principal_place_of_business the location at which the taxpayer’s books records and source documents are maintained iv the location at which the service can perform the examination most efficiently v the service resources available at the location to which the taxpayer has requested a transfer and vi other factors that indicate that conducting the examination at a particular location could pose undue inconvenience to the taxpayer ' ' the treasury regulations in the examination context consider the distances taxpayers will have to travel to submit information to the irs and attempt to provide taxpayers with venues at irs offices near their homes at the same time the treasury regulations recognize the limited resources of the irs and under certain circumstances provide for alternate examination locations more favorable to the irs if the irs office closest to the taxpayer’s home lacks the appropriate personnel to conduct the investigation we conclude that a similar framework also applies in the context of an appeals hearing under sec_6320 b from the record it appears that the appeals_office closest to the residence of petitioner is the appeals_office in sunrise florida petitioner has not alleged that there is an appeals_office in west palm beach or one closer to his residence petitioner alleged in one of his letters to the appeals officer only that he could not appear with his witnesses when the sec_301_7605-1 proced admin regs lists the circumstances in which the internal_revenue_service irs will normally permit transfers ‘ sec_6330 which is almost identical to sec_6320 allows a taxpayer to have an appeals hearing with regard to a proposed levy because appeals hearings pursuant to sec_6320 and sec_6330 have the same function and scope the framework we apply to an appeals hearing under sec_6320 also applies to an appeals hearing under sec_6330 hearing location was almost an hour away from west palm beach petitioner did not nor does he now explain why commuting an hour would constitute an undue burden on petitioner or his witnesses on the basis of the record we cannot find support for petitioner’s contention we also note that in davis v commissioner t c we recently addressed a taxpayer’s claim that an appeals officer failed to afford him an appeals hearing as envisioned by congress in sec_6330 the taxpayer in that case argued that any meaningful hearing required that he be able to subpoena witnesses and documents id at __ slip op pincite we stated that the nature of the administrative appeals process does not include the taking of testimony under oath or the compulsory attendance of witnesses id at __ slip op pincite we noted that hearings at the appeals level have historically been conducted in an informal setting and that nothing in sec_6330 or the legislative_history indicated that congress intended to alter this format ’ id at slip op pincite pursuant in davis v commissioner t c slip op pincite we looked at treasury regulations dealing with the functions of the appeals_office we cited sec_601_106 statement of procedural rules which provides c nature of proceedings before appeals proceedings before the appeals are informal testimony under oath is not taken although matters alleged as facts may be required to be submitted in the form of affidavits or declared to be true under the penalties continued -- - to davis v commissioner supra applicable treasury regulations and the historical function of the appeals_office petitioner did not have the right to examine witnesses under oath during the appeals hearing ’ davis v commissioner supra undermines petitioner’s argument that he was entitled to an appeals hearing in west palm beach because traveling to sunrise florida for his appeals hearing would impose a burden on his witnesses on the basis of the entire record and applicable law we conclude that the appeals officer has complied with the requirements of sec_6320 by providing petitioner an opportunity for an appeals hearing because of petitioner’s insistence on an appeals hearing in west palm beach florida the appeals officer attempted to accommodate petitioner by offering to discuss his case over the telephone from the record we conclude that petitioner and the appeals officer did in fact discuss his case over the telephone and that the appeals officer heard and considered petitioner’s arguments we thus further conclude that through the communications between petitioner and the appeals officer in the instant case petitioner received an appeals hearing as provided for in sec_6320 continued of perjury petitioner however could have submitted facts in the form of affidavits or declarations under penalties of perjury -- - the court’s jurisdiction to review respondent’s collection activities is based on jurisdiction over the underlying tax_liability the appeals officer made a determination that the lien should not be removed because the tax_deficiency additions to tax and interest were properly due by way of a timely filed petition petitioner has invoked the jurisdiction of this court to review the determination with regard to each of those amounts the court’s jurisdiction to review an appeals officer’s determination that relief to remove a lien should be denied is set forth in sec_6330 sec_6330 proceeding after hearing --- judicial review of determination ---the person may within days of a determination under this section appeal such determination-- a to the tax_court and the tax_court shall have jurisdiction to hear such matter or b if the tax_court does not have jurisdiction of the underlying tax_liability to a district_court of the united_states if a court determines that the appeal was to an incorrect court a person shall have days after the court determination to file such appeal with the correct court therefore in order to have jurisdiction over matters listed ina petition with regard to a notice_of_determination pursuant to sec_6330 we must decide whether the underlying tax_liability is of a type over which this court normally has jurisdiction see 114_tc_171 although the term underlying tax_liability is defined in neither sec_6320 and sec_6330 nor the legislative_history congress’ intent in ensuring due process to taxpayers when the commissioner seeks to collect taxes by liens or levies suggests that the term includes any amounts owed that are the subject of the commissioner’s collection activities see h conf rept supra pincite we therefore interpret the term underlying tax_liability in sec_6330 to include any amounts owed by a taxpayer pursuant to the tax laws in this case the underlying tax_liability includes the tax_deficiency additions to tax and statutory interest we therefore must decide whether we have jurisdiction over the tax_deficiency additions to tax and interest that are the subject of respondent’s collection activities in order to review the appeals officer’s determination pursuant to sec_6330 and petitioner’s contentions with regard to each of those amounts review of tax_deficiency and additions to tax we generally have deficiency jurisdiction to redetermine deficiencies in income taxes and related additions to tax see sec_6211 sec_6213 sec_6214 see also 114_tc_176 moore v commissioner supra pincite we therefore have jurisdiction to review the appeals officer’s determination in this case insofar as it relates to the assessed references to collection activities are to the commissioner’s attempts to collect unpaid taxes through the filing of a lien or the making of a levy -- - tax_deficiency and additions to tax pursuant to sec_6330 a a taxpayer may raise at the appeals hearing any relevant issue with regard to the commissioner’s collection activities including spousal defenses to collection challenges to the appropriateness of the commissioner’s intended collection activities and possible alternative means of collection see 114_tc_604 goza v commissioner supra pincite if a taxpayer has been issued a notice_of_deficiency or had the opportunity to litigate the underlying tax_liability however the taxpayer is precluded from challenging the existence or amount of the underlying tax_liability see sec_6330 b sego v commissioner supra pincite goza v commissioner supra pincite moreover the taxpayer is precluded from relitigating issues raised and considered in any previous appeals hearing or in any other administrative or judicial proceeding in which the taxpayer participated meaningfully see sec_6330 as to the tax_deficiency and additions to tax for petitioner’s liability is established by the stipulated decision entered by this court ’ the bankruptcy court considered and ' sec_6330 however does not apply in certain limited circumstances see sec_6330 le the doctrine_of res_judicata which applies to a stipulated decision precludes relitigation of the issues involved in that tax litigation see cincinnati transit inc v continued - - rejected his claim that his income_tax_liability for that year was discharged in his bankruptcy case petitioner does not seek relief as permitted under sec_6330 a he is thus precluded from challenging that liability in this proceeding and has at the same time failed to state a cognizable claim see goza v commissioner supra pincite review of statutory interest petitioner makes an additional contention separate from the issues related to the tax_deficiency and additions to tax that he is not liable for the statutory interest he in effect argues that we have jurisdiction to review the appeals officer’s determination with regard to the interest that is the subject of respondent’s collection activities in moore v commissioner supra pincite we interpreted sec_6330 a and b as not expanding the court’s jurisdiction beyond the types of taxes that the court may normally consider such as income estate_and_gift_taxes we concluded that because we did not have jurisdiction to redetermine federal trust_fund_taxes determined by the commissioner under sec_6672 we did not have jurisdiction to review a determination made pursuant to sec_6330 with regard to those taxes see id e continued commissioner 55_tc_879 48_tc_824 hamdan v commissioner tcmemo_2000_19 - - our jurisdiction to redetermine assessments of interest pursuant to sec_6601 is limited sec_7481 provides that if within year after a decision becomes final the taxpayer files a petition to redetermine interest the tax_court has overpayment jurisdiction with regard to the interest ’ further sec_6404 provides the tax_court with jurisdiction to review the commissioner’s refusal to abate interest under sec_6404 in his request for an appeals hearing petitioner contended that interest should not have accrued during his bankruptcy case because we view petitioner’s request as a request for an abatement of interest we hold that we have jurisdiction to review the appeals officer’s determination with regard to the interest that is the subject of respondent’s collection activities under preamendment sec_6404 the commissioner may abate the assessment of interest on any payment of tax to the ‘7 sec_7481 a ii however requires that the taxpayer have paid the entire amount of the deficiency plus interest for the tax_court to have overpayment jurisdiction with regard to the interest in sec_6404 was amended under sec_301 of the taxpayer bill of right sec_2 publaw_104_168 110_stat_1452 to permit the secretary to abate interest with respect to an unreasonable error or delay resulting from managerial and ministerial acts this amendment however applies to interest accruing with respect to deficiencies or payments for tax years beginning after date therefore the amendment is inapplicable to the case at bar see 112_tc_19 n --- - extent that any error or delay in payment is attributable to an officer_or_employee of the irs being erroneous or dilatory in performing a ministerial_act see 113_tc_145 a ministerial_act however does not include a decision concerning the proper application of federal tax law or other federal or state law sec_301_6404-2 proceed admin regs petitioner has not alleged a ministerial error within the meaning of sec_6404 furthermore the evidence does not establish that respondent committed a ministerial error requiring an abatement of interest conclusion for the reasons explained above petitioner’s challenge to his liability for the tax_deficiency and additions to tax fails to state a cognizable claim for relief we hold that none of the other grounds upon which petitioner relies as stated in his submissions to the appeals officer his petition to this court and his arguments in response to respondent’s motion constitutes a basis upon which we can find that the appeals officer’s determination was an abuse_of_discretion because respondent’s motion for partial summary_judgment covers all the remaining issues in the instant case we treat it as a motion for full summary_judgment which we now grant to the extent not herein discussed we have considered petitioner’s other arguments and find them to be without merit to reflect the foregoing an appropriate order and decision will be entered for respondent


internal_revenue_service department of the treasury washington dc person to contact telephone number refer reply to cc psi plr-116446-01 date date number release date index number legend x d1 country shareholders dear this letter responds to your letter dated date and subsequent correspondence on behalf of x requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations for x to file an election to be classified as a partnership for federal tax purposes under sec_301_7701-3 facts according to the information submitted x was formed on d1 as an international business_company pursuant to the international business companies act under the laws of country the owners of x are the shareholders who are all u s citizens the shareholders had intended for x to elect effective d1 under sec_301_7701-3 to be treated as a partnership for federal_income_tax purposes however due to inadvertence x did not make the election law and analysis sec_301_7701-3 provides in part that a business_entity that is not classified as a corporation under sec_301_7701-2 or an eligible_entity can elect its classification for federal tax purposes an eligible_entity with more than one owner can elect to be classified as an association or as a partnership sec_301_7701-3 provides that unless the entity elects otherwise a plr-116446-01 foreign eligible_entity is an association if all members have limited_liability sec_301_7701-3 provides in part that an eligible_entity may elect to be classified other than as provided under sec_301_7701-3 by filing form_8832 entity classification election with the applicable service_center to be valid an election must generally be signed by each member of the electing entity or any officer manager or member of the electing entity who is authorized under local law or the entity's organizational documents to make the election and who represents to having such authorization under penalties of perjury see sec_301_7701-3 sec_301_7701-3 provides in part that an election made under sec_301_7701-3 will be effective on the date specified by the entity on form_8832 or on the date filed if no such date is specified on the election form the effective date specified on form_8832 can not be more than days prior to the date on which the election is filed and can not be more than months after the date on which the election is filed under sec_301_9100-1 the commissioner may grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the code except subtitles e g h and i sec_301_9100-1 defines the term regulatory election as an election whose due_date is prescribed by a regulation published in the federal_register or a revenue_ruling revenue_procedure notice or an announcement published in the internal_revenue_bulletin sec_301_9100-1 and sec_301_9100-3 provide the standards the commissioner will use to determine whether to grant an extension of time to make an election sec_301_9100-2 provides automatic extensions of time for making certain elections sec_301_9100-3 provides extensions of time for making elections that do not meet the requirements of sec_301_9100-2 requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 sec_301_9100-3 provides that a taxpayer is deemed to have acted reasonably and in good_faith if the taxpayer failed to make the election because after exercising reasonable diligence taking into account the taxpayer's experience and the complexity of the return or issue the taxpayer was unaware of the necessity for the election conclusions based solely on the facts and representations submitted we conclude that the requirements of sec_301_9100-1 and sec_301_9100-3 have been satisfied accordingly x is granted an extension of time to make the election to be a partnership for federal tax plr-116446-01 purposes effective d1 until days following the date of this letter the election should be made by following the procedures set forth in form_8832 and a copy of this letter should be attached to the election a copy is enclosed for that purpose 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 pursuant to a power_of_attorney on file with this office we are sending a copy of this letter to the taxpayer sincerely yours paul f kugler associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes


department of the treasury washington dc third party communication none date of communication not applicable_person to contact -------------------- id no ------------- telephone number --------------------- refer reply to cc ita b5 plr-138641-09 date date internal_revenue_service number release date index number ---------------------------- ------------------- ---------------------------- -------------------------- in re ------------------- ---------------------------- -------------------------- ----------------------- 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 change its annual_accounting_period for federal_income_tax purposes from a taxable_year ending ------------------ to a taxable_year ending ---------------- effective for the tax_year beginning ---------------------- and ending ------------------------- 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 a change in accounting_period to a tax_year ending ------------------------- was due on or before ------------------ but was not timely filed however the form and the request for discretionary administrative relief were filed within days of such due_date the information furnished shows that the taxpayer intended to make the change and to file form_1128 on a timely basis due to an error or misunderstanding however the form was not timely filed the error was not due to any lack of due diligence or prompt action on the part of taxpayer sec_1_442-1 of the income_tax regulations provides that in order to secure the commissioner's consent to a change in annual_accounting_period the taxpayer must file an application on form_1128 with the commissioner within such time and in such manner as is provided in administrative procedures published by the commissioner the taxpayer represents that but for a timely filing its form_1128 would be subject_to the automatic consent procedures of revproc_2006_45 2006_45_irb_851 and due on or before the due_date including extensions of the return of tax required for the short_period ------------------ 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 plr-138641-09 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 it is held 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 change to a tax_year ending ---------------- effective for the tax_year beginning ---------------------- and ending ------------------------- is considered timely filed the ruling contained in this letter is based upon facts and representations furnished by the taxpayer and is limited to the filing of form_1128 except as specifically addressed herein no opinion is expressed regarding the tax treatment of the subject transaction under the provisions of any other sections of the code or regulations that may be applicable thereto this office has not verified any of the material submitted in support of the requested ruling verification of factual information representations and other data is within the examination jurisdiction of the taxpayer's irs industry director a copy of this letter_ruling and taxpayer's form_1128 are being forwarded to the service_center where the taxpayer files its federal_income_tax returns with instructions that the form_1128 be considered timely filed and processed in accordance with established procedures under revproc_2006_45 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 in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representatives sincerely yours s william a jackson william a jackson branch chief branch office of associate chief_counsel income_tax accounting enclosures copy of this letter copy for sec_6110 purposes


id office uilc cca_2010031110451138 ---------------------------- number release date from ---------------------- sent thursday date am to ----------------- cc ----------------------- subject re who must sign an amended_return ---------- in general a valid protective claim must identify the contingency affecting the based on the facts and circumstances in this case we think the form 1040x and attached letter are a valid protective informal refund claim for ------------------------------- for tax_year ------- although the form 1040x is missing ------------- social_security_number and was not signed under penalty of perjury by --------- ----- ---- name is listed on the form 1040x as it appeared on the original form_1040 and the original form_1040 was filed jointly claim be sufficiently clear and definite to alert the service as to the essential nature of the claim and identify a specific year or years for which the refund is sought in this case the letter attached to the form 1040x identifies the contingency alerts the service to the nature of the claim and identifies specific years for which a refund is sought the form 1040x was filed shortly before the period of limitations on filing a refund claim for tax_year ------- expired additionally the claim is in writing puts the service on notice that a refund is sought for a particular year or period and contains enough information for the service to begin to examine the claim see 314_us_186 there are no rigid guidelines for informal claims except that they must have a written component and should adequately apprise the internal_revenue_service that a refund is sought and for certain years 783_f2d_190 fed cir irm we agree that the form 1040x and attached letter contain two defects - namely that ------------- social_security_number is not on the form 1040x and ----------- did not sign under penalty of perjury sec_301_6402-2 the irm provides that refund claims that are defective and therefore unprocessable will be returned to the taxpayer with a request to cure any defect such as supplying -------- ------- social_security_number and proper signature here apparently taken on the form 1040x and the letter in this case no action was irm we recommend that the field call or correspond with the taxpayers and advise the taxpayers of the signature and social_security_number defects and encourage correction of those defects so that the service can process the claim according to irm procedures see irm courts have found that while an informal claim serves to toll the statute_of_limitations on a refund claim the informal claim must ultimately be corrected by the taxpayer see 314_f3d_944 8th cir 950_fsupp_1246 s d n y if no reply is received from the taxpayers the service should follow the procedures set forth in the irm see irm please contact me if you have any additional questions sincerely


internal_revenue_service number release date index number -------------------------------------------- ------------------------------------------------------------ --------------------- -------------------------------------- ------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact --------------------- id no ------------ telephone number -------------------- refer reply to cc intl b02 plr-146443-13 date date ty ------- legend shareholder state x country y country z fc1 fc2 a b c d date date date year year year year year tax advisor tax advisor ---------------------------------------------------------------------------------------- ------------------- ------------ ---------------- ------------ ---------------------------------- -------------------------------- - --- ------ ------ ------------------ ----------------------- ----------------------- ------ ------ ------ ------ ------ --------------------------------------- -------------- dear ----------------- this is in response to a letter dated date submitted by your authorized representative that requested the consent of the commissioner of the internal_revenue_service commissioner for shareholder to make a retroactive qualified_electing_fund plr-146443-13 qef election under sec_1295 of the internal_revenue_code and sec_1_1295-3 with respect to shareholder’s investment in fc1 the ruling contained in this letter is based upon information and representations submitted on behalf of shareholder by its authorized representative 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 this request_for_ruling such material is subject_to verification on examination the information submitted in the request is substantially as set forth below facts shareholder is a domestic_partnership organized under the laws of state x in year shareholder acquired an a interest in fc1 an entity organized under the laws of country y that was treated as a corporation for u s federal tax purposes and fc1 acquired a b interest in fc2 an entity organized under the laws of country z that was treated as a corporation for u s federal tax purposes in year fc1 executed an initial_public_offering ipo for fc2 as a result of its initial sale of fc2 stock pursuant to the ipo fc1’s ownership_interest in fc2 declined to c as of date as a result of a second sale of fc2 stock pursuant to the ipo fc1’s ownership_interest in fc2 declined to d as of date in year as a result of a final sale of fc2 stock pursuant to the ipo fc1 disposed of its remaining interest in fc2 as of date fc1’s only asset in year through year was its interest in fc2 fc2 was an active company that derived income that was not passive_income under sec_1297 and owned assets that gave rise to non-passive income sufficient to prevent it from qualifying as a passive_foreign_investment_company pfic as defined in sec_1297 for year through year fc1’s b ownership_interest in fc2 was sufficient to allow fc1 to be treated under sec_1297 as if it held its proportionate share of the assets of fc2 and received directly its proportionate share of the income of fc2 thus fc1 did not qualify as a pfic in year through year as a result of the ipo initiated in year however fc1’s c ownership_interest in fc2 as of date was not sufficient to allow fc1 to look through fc2 under sec_1297 and thus fc1’s ownership_interest in fc2 was a passive_asset therefore fc1 qualified as a pfic in year for year through year shareholder engaged tax advisor to prepare its u s federal partnership returns and its tax filings relating to fc1 and engaged tax advisor to prepare its tax filings relating to fc2 in year through year tax advisor employing experienced tax professionals advised shareholder with respect to u s federal_income_tax matters relating to shareholder’s ownership of fc1 shareholder plr-146443-13 made available to tax advisor the books_and_records of fc1 and any other information requested by tax advisor to provide tax_advice and prepare shareholder’s tax returns including any information relating to fc2 tax advisor held itself out as a qualified_tax professional and shareholder reasonably believed that tax advisor was competent to render tax_advice with respect to the ownership of shares of a foreign_corporation with respect to year tax advisor advised that fc1 was not a pfic based on fc1’s b ownership_interest in fc2 and the sec_1297 look through rule with respect to year tax advisor did not appropriately take into account the sales of fc2 stock pursuant to the ipo and as a result incorrectly calculated the average value of the assets held by fc1 for purposes of the sec_1297 asset test accordingly tax advisor did not inform shareholder that fc1 was a pfic or of the availability of a qef election during the preparation of shareholder’s year tax_return in year tax advisor reviewed the transactions completed by fc1 during year following its conclusion that fc1 did not own a sufficient interest in fc2 during year to be eligible for sec_1297 look through treatment tax advisor reviewed fc1’s year transactions including the date of the initial sale of fc2 stock pursuant to the ipo date tax advisor then realized that a mistake was made with respect to shareholder’s year tax_return and notified shareholder shareholder has submitted an affidavit signed under penalties of perjury describing the events that led to the failure to make the qef election before the election due_date including the role of tax advisor shareholder represents that tax advisor did not identify fc1 as a pfic for year or advise shareholder of the possibility of making a qef election with respect to fc1 for year and thus did not advise shareholder of the consequences of making or failing to make a qef election for year shareholder has also submitted an affidavit from tax advisor signed under penalties of perjury corroborating the statements made by shareholder both year and year are open taxable years that would be affected by shareholder’s retroactive qef election with respect to fc1 for year shareholder will not file amended returns for year and year to redetermine its income_tax_liability despite its ability to do so instead shareholder will enter into a closing_agreement with the commissioner that confirms that there is no prejudice to the interests of the united_states government as a result of shareholder’s failure to make a retroactive qef election with respect to fc1 for year the closing_agreement also will require shareholder to pay an additional_amount of tax and interest that would have been owed by shareholder’s direct and indirect partners as a result of shareholder’s failure to treat fc1 as a pfic for year and year plr-146443-13 shareholder represents that as of the date of this request_for_ruling the pfic status of fc1 has not been raised by the internal_revenue_service irs on audit for any of the taxable years at issue ruling requested shareholder requests the consent of the commissioner to make a retroactive qef election with respect to fc1 for year under sec_1_1295-3 law sec_1295 provides that a pfic will be treated as a qef with respect to a shareholder if an election by the shareholder under sec_1295 applies to the pfic for the taxable_year and the pfic complies with the requirements prescribed by the secretary for purposes of determining the ordinary_earnings and net capital_gains of the company under sec_1295 a qef election may be made for a taxable_year at any time on or before the due_date determined with regard to extensions for filing the return for the taxable_year to the extent provided in regulations the election may be made after the due_date if the shareholder failed to make an election by the due_date because the shareholder reasonably believed the company was not a pfic under sec_1_1295-3 a shareholder may request the consent of the commissioner to make a retroactive qef election for a taxable_year if the shareholder reasonably relied on a qualified_tax professional within the meaning of sec_1_1295-3 granting consent will not prejudice the interests of the united state sec_3 government as provided in sec_1_1295-3 the request is made before a representative of the irs raises upon audit the pfic status of the company for any taxable_year of the shareholder and the shareholder satisfies the procedural requirements of sec_1 f the procedural requirements include filing a request for consent to make a retroactive election with and submitting a user_fee to the office of the associate chief_counsel international sec_1_1295-3 additionally affidavits signed under penalties of perjury must be submitted that describe the events that led to the failure to make a qef election by the election due_date the discovery of the failure the engagement and responsibilities of the qualified_tax professional and plr-146443-13 the extent to which the shareholder relied on the professional sec_1_1295-3 and iii conclusion based on the information submitted and representations made with shareholder’s ruling_request we conclude that shareholder has satisfied sec_1_1295-3 accordingly consent is granted to shareholder to make a retroactive qef election with respect to fc1 for year provided that shareholder complies with the rules under sec_1_1295-3 regarding the time and manner for making the retroactive qef election other than the requirement to file amended returns for all open years subsequent to the year in which the retroactive election is made 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 private_letter_ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter_ruling is being sent to your authorized representatives a copy of this letter_ruling must be attached to any federal_income_tax return to which it is relevant alternatively taxpayers filing their returns electronically may satisfy this requirement by attaching a statement to their return that provides the date and control number of the letter_ruling sincerely barbara e rasch senior technical reviewer branch international cc


office_of_chief_counsel internal_revenue_service memorandum number release date cc tege eoeg et1 postn-165078-04 uilc date date to director submission processing cincinnati oh attn entity unit from office of division counsel associate chief_counsel tax exempt government entities subject railroad_retirement_tax_act status ---------------------------------------------- in accordance with the coordination procedure established between the service and the railroad retirement board rrb the rrb has provided us with its opinion that the following business is not a covered employer the jurisdiction of the railroad retirement act and the railroad unemployment insurance act -------------------------------------------------- ----------------------------------------------------------------------------------------------------- ---------------------------------------------------------------- -------------------------------------------------------------------- ----------------------------------------------- we have reviewed the opinion of the rrb and based upon the information submitted to us by the rrb we also conclude that the -----------------------------------------------is not a covered employer under the jurisdiction of the railroad_retirement_tax_act please take the appropriate action regarding this business _____________________________ janine cook-


department of the treasury _ washington dc contact person telepnone iwusiver inr datet ep ra t2 fec ghee internal_revenue_service ulill attn legend state a employer m group bemployees plan x subsection e proposed ordinance r proposed resolution n dear this is in response to a ruling_request dated date as supplemented by correspondence dated date which was submitted on your behalf by your authorized representative concerning the federal_income_tax treatment under sec_414 of the internal_revenue_code code of certain contributions to plan x the following facts and representations have been submitted plan x is funded through a combination of employer and mandatory employee contributions prior to mandatory_contributions were contributed by employees on an after-tax basis effective in plan x was amended by subsection e to provide that employee mandatory_contributions would be picked up under sec_414 of the code in a letter_ruling dated date the service concluded that amounts picked up by employer m on behalf of those employees who participate in plan x shall be treated as employer contributions and will not be includible in the employee's gross_income in the year in which such amounts are contributed page -2- in plan x was amended by adding sub sec_1 to permit covered employees to purchase up to additional months of credited service ona pre-tax basis there was no provision for the pick-up of the contributions for these special purchases the current ruling_request seeks to extend the application of code sec_414 to the redeposit of contributions previously withdrawn plus interest and the purchase of military service or other permissive_service_credit employer m proposes to adopt proposed ordinance r which includes proposed resolution n pursuant to the terms set forth in proposed ordinance r employees may purchase additional service_credit and purchase service attributable to absences while on military service leave proposed ordinance r which will become effective upon receipt of a favorable ruling from the internal_revenue_service permits members to pay for additional service purchases in a lump sum in cash after-tax or by a combination of a payment in a lump sum in cash and the balance paid_by payroll deduction over a period of five years or less the deferred payments may be either picked-up under code sec_414 or may be paid on an after-tax payroll deduction method as chosen by the member proposed ordinance r prohibits the member from altering the form of payment once made further proposed ordinance r provides that if employment is terminated prior to completion of the original schedule of payments an accelerated after-tax payment or a reduction in the service which is the subject of the purchase will occur the terms of the election to purchase service and the restrictions on the form of payment are described in the service purchase election and payroll authorization form the special election and the payroll deduction authorization agreement is binding and irrevocable and is signed by the employee and employer m proposed resolution n certifies approval of proposed ordinance r proposed resolution n provides that members are permitted to redeposit contributions previously withdrawn plus interest and to purchase military service occurring during employment or other permissive credit purchases proposed resolution n further provides that an employee may enter into a binding irrevocable payroll deduction authorization and such employee will not have the option of choosing to receive the amounts directly instead of having them paid_by employer m directly into plan x and that the amounts specified as picked up through payroll deductions from salary will be paid_by employer m to plan x in order to permit tax_deferral for these elective service based on the aforementioned facts you request the following rulings that contributions picked up by employer m on behalf of the group b employees pursuant to proposed ordinance r proposed resolution n and subsection e satisfy the requirements of sec_414 of the code page -3- that no part of the contributions picked up by employer m pursuant to proposed ordinance r proposed resolution n and subsection e will be includable in the gross_income of the group b employees for federal_income_tax purposes that the contributions whether picked up by payroi deduction offset against future salary increases or both and though designated as employee contributions will be treated as employer contributions for federal_income_tax purposes that no part of the contributions picked up by employer m pursuant to proposed ordinance r proposed resolution n and subsection e will constitute wages from which federal income taxes must be withheld sec_414 of the code provides that contributions otherwise designated as employee contributions shall be treated as employer contributions if such contributions are made to a plan determined to be qualified under sec_401 established by a state government or a political_subdivision thereof and are picked up by the employing unit the federal_income_tax treatment to be accorded contributions which are picked up by the employer within the meaning of sec_414 of the code is specified in revrul_77_462 1977_2_cb_358 in that revenue_ruling the employer school district agreed to assume and pay the amounts employees were required by state law to contribute to a state pension_plan revrul_77_462 concluded that the school district's picked-up contributions to the plan are excluded from the employees’ gross_income until such time as they are distributed to the employees the revenue_ruling held further that under the provisions of sec_3401 of the code the school district's contributions to the plan are excluded from wages for purposes of the collection of income_tax at source on wages therefore no withholding is required from the employees’ salaries with respect to such picked-up contributions the issue of whether contributions have been picked up by an empioyer within the meaning of sec_414 of the code is addressed in revrul_81_35 1981_1_cb_255 and revrul_81_36 1981_1_cb_255 these revenue rulings established that the following two criteria must be met the employer must specify that the contributions although designated as employee contributions are being paid_by the employer in lieu of contributions by the employee and the employee must not be given the option of choosing to receive the contributed amounts directly instead of having them paid_by the employer to the pension_plan for purposes of the application of sec_414 of the code it is immaterial whether an employer picks up contributions through a reduction in salary an offset against future salary increases or a combination of both page -4- in revrul_87_10 1987_1_cb_136 the internal_revenue_service considered whether contributions designated as employee contributions to a governmental pian are excludable from the gross_income of the employee the service concluded that to satisfy the criteria set forth in revenue rulings and with respect to particular contributions the required specification of designated employee contributions must be completed before the period to which such contributions relate in this request proposed ordinance r proposed resolution n and subsection e if adopted as proposed would satisfy the criteria set forth in revrul_81_35 and revrul_81_36 they provide that employer m will make contributions in lieu of contributions by group b employees and that the group b employees may not elect to receive such contributions directly accordingly we conclude that with regard to ruling_request number one proposed ordinance r proposed resolution n and subsection e satisfy the requirements of sec_414 of the code with regard to ruling_request number two we conclude that no part of the contributions picked up by employer m on behalf of the group b employees will be includable as gross_income for federal_income_tax purposes in the year of contribution with respect to such employees with regard to ruling_request number three we conclude that the contributions picked up by employer m on behalf of the group b employees whether by payroll deduction an offset against future salary increases or both and though designated as employee contributions will be treated as employer contributions for federal_income_tax purposes with regard to ruling_request number four since we have determined that the picked-up contributions are to be treated as employer contributions they are excepted from wages as defined in sec_3401 of the code for federal_income_tax withholding purposes therefore no withholding of federal_income_tax is required in the taxable_year in which they are contributed to plan x these rulings apply only if the effective date for the commencement of any proposed pick up is not earlier than the fater of the date proposed ordinance r proposed resolution n and subsection e are signed into law or the date they are put into effect these rulings are based on the assumption that plan x will be qualified under sec_401 of the code at the time of the proposed contributions and distributions - page -5- in addition these rulings are contingent upon the adoption of proposed ordinance r proposed resolution n and subsection e as contained in your correspondence dated date no opinion is expressed as to whether the amounts in question are subject_to tax under the federal_insurance_contributions_act no opinion is expressed as to whether the amounts in question are paid pursuant to a salary reduction agreement within the meaning of sec_3121 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 by others as precedent a copy of this-letter has been sent to your authorized representative in accordance with the power_of_attorney on file with this office sincerely yours aigned joyor b floyd joyce e floyd manager employee_plans technical group tax exempt and government entities enclosures copy of this letter deleted copy notice


internal_revenue_service department of the treasury index no washington dc number info release date dear person to contact john t sapienza jr id no telephone number refer reply to cc dom it a - cor-112249-00 date date commissioner rossotti asked me to respond to your letter concerning obesity and weight-loss programs you asked the internal_revenue_service to issue a revenue_ruling allowing obese individuals to deduct the costs of weight-loss programs as medical_care expenses under sec_213 of the internal_revenue_code the current irs position on weight-loss programs is stated in revrul_79_151 1979_1_cb_116 this ruling holds that if participation in the program was to improve the participant’s appearance general health and sense of well-being the expenses of the program are not for medical_care and therefore are not deductible of course the expenses of a weight-loss program prescribed to treat a specific disease are for medical_care and are deductible we appreciate your suggestion and the references you provided to studies on obesity each year the irs and the department of the treasury review the many suggestions for revenue rulings and other forms of guidance to be published the projects selected are announced in the annual priority guidance plan input such as you have provided is helpful to us in selecting projects for the priority guidance plan i hope this information is helpful please call john t sapienza jr at the number above if you have any questions sincerely associate chief_counsel income_tax accounting by robert a berkovsky chief branch


internal_revenue_service number info release date cc psi 1-genin-157619-01 date uilc this responds to correspondence submitted on your behalf by requesting late s_corporation relief under sec_1362 of the internal_revenue_code the information submitted explains that your corporation is seeking relief in order to make an election effective as of date in revproc_97_48 copy attached the internal_revenue_service provides special procedures that permit taxpayers in certain situations to obtain automatic late s_corporation relief instead of applying for a private_letter_ruling the facts presented in your situation appear to be covered by section dollar_figure of revproc_97_48 to receive relief under the provisions of this revenue_procedure normally one must follow the procedural requirements described in sec_4 however we have intervened on your behalf and asked the ogden service_center to update your account to reflect date as your s_corporation effective date if you fail to receive a letter confirming this action within days from the date of this letter please call our office please keep this letter with your tax records and feel free to provide a copy of it to your authorized representative we hope that the above information proves helpful sincerely yours s dianna k miosi dianna k miosi chief branch office of the assistant chief_counsel passthroughs and special industries attachment revproc_97_48


internal_revenue_service department of the treasury index number washington dc person to contact telephone number refer reply to cc dom p sec_1i - plr-106590-99 date jul i u year dear this letter responds to a letter dated date and subsequent correspondence written on behalf of x by its authorized representative requesting a ruling under sec_1362 b of the internal_revenue_code the information submitted states that x was incorporated on dl a the sole shareholder and president of x represents that a intended to begin operations as an s_corporation beginning in year accountant a's desire for k to be an s_corporation and that a believed the accountant had taken care of filing x's form_2553 election by a small_business_corporation revenue service does not have a record of a form_2553 for xx a represents further that a discussed with x's however the internal sec_1362 of the code provides that if an election under sec_1362 is made for any taxable_year after the date prescribed by sec_1362 for making such election for such taxable_year or no such election is made for any taxable_year and the secretary determines that there was reasonable_cause for the failure to timely make such election the secretary may treat such an election as timely made for such taxable_year b a -- based solely on the facts and the representations submitted we conclude that x has established reasonable_cause for failing to make a timely election to be an s_corporation for x's first jn accordingly provided that x makes an election to taxable_year be an s_corporation by filing a completed form_2553 with the appropriate service_center effective for its year taxable_year within days following the date of this letter then such election will be treated as timely made for x's year taxable_year a copy of this letter should be attached to the form_2553 except as specifically set forth above no opinion is expressed concerning the federal tax consequences of the facts described above under any other provision of the code including whether x was or is a small_business_corporation under sec_1361 of the code this ruling is directed only to the taxpayer who requested sec_6110 of the code provides that it may not be it used or cited as precedent pursuant to a power_of_attorney on file with this office a copy of this letter is being sent to x's authorized representative sincerely yours gigned h grace kim h grace kim assistant to the chief branch office of the assistant chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purpose sec_32