department of the treasury person to contact employee id number tek ce reply to ap-fe-fll grp in re year s uil internal_revenue_service appeals_office attn royal paim one suite south pine island road plantation fl number release dats date febdollar_figure ae to we have considered your appeal of the revocation your tax-exempt status under sec_501 c of the internal_revenue_code for the your exemption from federal_income_tax under sec_501 of the internal_revenue_code is hereby revoked this is a final adverse determination jeter you are required to file federal_income_tax returns on form_1120 for any years which are still open under the statute_of_limitations consideration was given to whether you qualify for exemption under other subsections of sec_501 of the code however we have concluded that you do not qualify under another subsection we will notify the appropriate state officials of this action as required by code sec_6104 if you have any questions please contact the person whose name and telephone number are shown above sincerely thal ph charles f fisher appeals team manager covennment entties org address department of the treasury internal_revenue_service te_ge eo examination sec_1400 commerce st dallas texas date taxpayer_identification_number form tax_year s ended person to contactid number contact numbers telephone fax certified mail - return receipt requested dear we have enclosed a copy of our report of examination explaining why we believe an adjustment of your organization's exempt status is necessary i you do not agree with our position you may appeal your case the enclosed publication the examination process explains how to appeal an internal_revenue_service irs decision rights as a taxpayer and the irs collection process publication also includes information on your if you request a conference we will forward your written_statement of protest to the appeals_office and they will contact you for your convenience an envelope is enclosed ifyou and appeals do not agree on some or ail of the issues after your appeals_conference or if you do not request an appeals_conference you may file sult in united_states tax_court the united_states court of federal claims or united_states district_court after satisfying procedural and jurisdictional requirements as described in publication letter catalog number mb01y you may also request that we refer this matter for technical_advice as explained in publication exempt_organization appeal procedures for unagreed issues if a determination_letter is issued to you based on technical_advice no further administrative appeal is available to you within the irs on the issue that was the subject of the technical_advice if we do not hear from you within days from the date of this letter we if you accept our findings please sign and return the enclosed form_6018 consent fo proposed adverse action we will then send you a final letter modifying or revoking exempt status will process your case on the basis of the recommendations shown in the report of examnination and this letter will become final in that event you will be required to file federal_income_tax returns for the tax period s shown above file these returns with the ogden service_center within days from the date of this letter unless a request for an extension of time is granted file returns for later tax years with the appropriate service_center indicated in the instructions for those retums ‘you have the right to contact the office_of_the_taxpayer_advocate taxpayer_advocate assistance is not a substitute for established irs procedures such as the formal appeals process determination or extend the time fixed by law that you have to file a petition in a united_states court the taxpayer_advocate can however see that a tax matter that may not have been resolved through normal channels gets prompt and proper handling may call toll-free and ask for taxpayer_advocate assistance prefer you may contact your local taxpayer_advocate at the taxpayer_advocate cannot reverse a legally correct_tax you if you if you have any questions please call the contact person at the telephone number shown in the heading of this letter if you write please provide a telephone number and the most convenient time to call if we need to contact you letter catnog number thank you for your cooperation enclosures publication publication form_6048 report of examination envelope sincerely marsha a ramirez director eo examinations letter ‘catlog number form 686a name of taxpayer ‘departnent of the trasiy- tntemal revenue serva explanation of items december 20xx org schedule no or exhibit year period ended legend org organization name ‘xx date motto motto issues under consideration issue whether an organization that receives more than an insubstantial amount of their income from nonmember sources qualifies for exeraption under internal_revenue_code sec_501 issue whether the receipts from motto inure to the benefit of the members facts the org was incorporated in 19xx and was granted tax exemption under internal_revenue_code section dollar_figure c as a social_club in a letter from the internal_revenue_service dated october 19xx the purpose of the org is to operate a social_club for the benefit of the members and to support by all reasonable and necessary means the raising of funds for charitable endeavors the organization achieves its purpose by conducting gaming activities and providing a restaurant to its members the activities for this organization are providing a venue for its members to play various card games the org operates gaming activities motto that are being conducted with members of the general_public the breakdown of income from unrelated sources and the corresponding percentage of total revenue is as follows nonmember use of facilities investment_income total unrelated_business_income total revenue ubi percentage of total revenue percentage of nonmember use of facilities tax_year ended 12bv20xx _ 20xx_12b1v 20xx_12 20xx tax_year ended tax_year ended tax_year ended _ form 886-atrev ‘department of the treasury internal_revenue_service page form 886a ‘name of taxpayer schedule no or exhibit ‘yeat peviod ended ‘iepacient ofthe tiesury- insel revenue seve explanation of items december 20xx org percentage of investment_income the amounts for the tax_year ended december 20xx are significantly larger than the prior and subsequent two years as a result of the examination the examination revealed that the organization reported the net motto receipts on form 990-t and the revenue in the table above lists gross_receipts as determined during the examination for the tax_year ended december 20xx the figures for the prior and subsequent two years are based upon the information on the organization's forms and 990-t which were not examined the organization uses percent of gross_receipts for motto as the non-member amount reported on form 990-t as unrelated_business_income the organization dees not currently keep records of the non-member activity but uses the percentage based on the amount of non-members at the motto games when records were kept on this activity the motto receipts from the gaming activities are used to fund activities for the social_club the organization uses proceeds from the motto receipts to fund other activities for members of the club law and argument intemal revenue code c describes as exempt as provided under sec_501 a clubs organized for pleasure recreation and other nonprofitable purposes substantially_all of the activities of which are for such purposes and no part of the net_earnings of which inures to the benefit of any private shareholder an organization which engages in business such as making its social and recreational facilities available to the general_public operated for pleasure recreation and other non-profitable purposes and is not exempt under sec_501 a solicitation by advertisement or otherwise for public patronage of its facilities is prima facie evidence that the organization is engaging in business and is not being operated exclusively for pleasure recreation or social purposes is not organized and ‘the tax treatment of social clubs is designed to allow individuals to join together to provide themselves with recreational or social facilities on a mutual basis without tax consequences it operates properly only when the club's sources of income are limited to its membership so the member is in substantially the same position as if he had spent his after-tax_income on pleasure or recreation without the intervening organization sec_501 was amended in to provide that social clubs could receive some income trom sources outside the membership without losing their exempt status the legislative_history indicates that congress intended to liberalize prior irs limitations on the portion of income a social_club may receive from nonmember use of its facilities and investment_income however he senate committee report states the intent is not that these organizations should be permitted form dollar_figure-acnev s8 page -2- department of the treasury internal_revenue_service fonn 886a name of taxpayer schedule no or exhibic ‘year period ended depart of ie ery tal raven sen explanation of items december 20x org to reccive within permitted allowances income from the active_conduct of businesses not traditionally carried on by these organizations the committee reports for public law senate report no 2d session c b states that it is intended that social clubs should be permitted to receive up to percent of their gross reccipts including investment_income from sources outside of their memberships without losing their exempt status a within thi sec_35 percent amount not more than percent of the gross_receipts should be dcrived from the use of a social club's facilities or services by the general_public this means that an exempt social_club may receive up to percent of its gross_receipts from a combination of investment_income and receipts from non-members so long as the latter do not represent more than percent of total receipts b thus a social_club may receive investment_income up to the full percent amount of its gross_receipts where a social_club receives no income from non-members’ use of club facilities c in addition the committee reports state that where a club receives unusual amounts of income such as from the sale of its clubhouse or similar facilities that income is not to be included in the percent formula internal_revenue_code irc sec_512 a states that unrelated_business_taxable_income is the gross_income derived by any organization from any unrelated_trade_or_business regularly carried on by it less the deductions allowed which are directly connected with the carrying on of sueh trade_or_business sec_512 a a states that in the case of an organization described in sec_501 the term unrelated_business_taxable_income means the gross_income excluding any exempt_function_income less the deductions allowed which are directly connect with the production of the gross_income excluding exempt_function_income internal_revenue_code a b exempts social clubs only to the extent of their exempt_function_income which is defined as the gross_income from dues fees charges and other income generated by club members pursuant to the organizations’ nonprofitable purposes income received from the general_public or from investments is treated as unrelated_business_taxable_income and is taxed at general corporate rates exatoples of taxable_income include investment_income or income generated from nonmembers through traditional activities ie those activities that if conducted with members further a social purpose revproc_71_17 details public law and sets forth the guidelines for form acres sss page -3- ‘department of the treasury - internal revenne service form 886a ‘name of taxpayer schedule no or exhibit ‘year period ended dipancce fe tsay tver revere sen explanation of items december 20xx org determining the effect gross_receipts derived from use of social club's facilities by the general_public has on the club's exemption from federal_income_tax under sec_501 of the internal_revenue_code these guidelincs will be used in connection with the examination of annual retums on forms and 990-t filed by social clubs this revenue_procedure also describes the records required when nonmembers use a club's facilities and the circumstances under which a host-guest relationship will be assumed which are relevant both for purposes of determining adherence to the exemption requirements and for computing exempt_function_income under sec_512 of the code section dollar_figure of revproc_71_17 describes the minimum gross_receipts standard and states in part as follows a significant factor reflecting the existence of a nonexempt purpose is the amount of gross_receipts derived from use of an organization's facilities by the general_public as an audit_standard this factor alone will not be relied upon by the service if annual gross_receipts froma the general_public for such use is dollar_figure big_number or less or if more than dollar_figure big_number where gross_receipts from the general_public for such use is five percent or less of total gross_receipts of the organization prior to the enactment of public law an organization was required to be organized and operated exclusively for pleasure recreation and other non-profitable purposes the committee reports show that the wording change was intended to make it clear that social clubs may receive up to percent of their gross_receipts including investment_income from sources outside their membership without losing their exempt status within thi sec_35 percent limitation no more than percent of gross_receipts may be derived from non-member use of the otganization's facilities and or services sec_4 of revproc_71_17 provides the recordkeeping requirements section dollar_figure of revproc_71_17 states that the occasions involving use by non-members the club must maintain books_and_records of each such use and the amount derived therefrom this requirement applies even though the member pays initially for such use in each instance the record must contain the following information the date the total number in the party the number of non-members in the party the total charges form acres s6s department of the treasury - internal_revenue_service page - form 886a ‘name of taxpayer ‘departonent af the treasury tmemal revenve service explanation of items org the charges attributable to non-members december 20xx ‘schedule no or exhibit ‘year period ended the charges paid_by nonmembers and where a member pays all or part of the charges attributable to non-members a statement signed by the member indicating whether the payment has been or will be reimbursed for such non-member use and if so the amount of the reimbursement section dollar_figure of revproc_71_17 provides that if a club fails to maintain or make available the records required by that revenue_procedure the percentage guidelines may nat be used in the determination of whether the club has a non-exemtpt purpose in addition the statute prohibits exemption under sec_501 if any part of the organization's net eamings inures to the benefit of any private shareholder traditionally inurement has been found to be present where an organization derives ineome from non-member sources and uses it to reduce the cost of providing services to members revrul_58_589 published in cumulative bulletin page states in part as follows net eamings may inure to members in such forms as an increase in secvices offered by the organization without a corresponding increase in dues or other fees paid for organization support of as an increase in the organization's assets which would be distributable to members upon the dissolution of the organization revrul_79_145 published in cumulative bulletin on page states that amounts paid to a social_club by visiting members of another social_club are amounts paid_by nonmembers even though both clubs are of like nature and the amounts paid are for goods facilities ot services provided by such social_club under a reciprocal arrangement with such other social_club government's position issue a social club’s exemption does not operate properly when it receives income from sources outside its membership because the members will receive a benefit not contemplated by the statute in that untaxed dollars are used by the organization to provide pleasure or recreation to its membership to prevent club members from receiving benefits not contemplated by sec_50i c the receipt of nonmember income and investment_income is permitted up to certain limits without jeopardizing exemption but the net_income from these sources is made taxable by form 886-ajres s s depattment of the treasury - intemal revenue service page fom 886a name of taxpayer schedule no of exhibit year period ended depaeat oe treary teel revenue sone explanation of items december 20xx org the clubs by sec_512 a nonmember is considered to be a person from the general_public who is provided recreational and social services by the organization and pays for these services a paying nonmember is a purchaser of the goods or services provided by the organization and is a direct recipient of those goods or services from the organization such a nonmember is not considered to be entertained by a member even when accompanied by a member but is instead considered to be a principal in a business transaction with the organization the host-guest relationship is missing when the nonmember pays a social_club may derive up to of its gross_receipts from nonmember use of club facilities and or services without jeopardizing its exempt status it is important to distinguish nonmember use from member use of the facilities and services an issue that arises is whether an individual or a group is a true guest of a member this is important because income ftom bona-fide guests is treated as member income the amendment to sec_501 c by p l does not affect what constitutes public use of club facilities and prior precedent on this question should still be followed where goods or services are furnished to nonmembers who provide payment for such goods or services their furnishing is outside the scope of sec_1_501_c_7_-1 of the regulations generally if an organization has not kept adequate books_and_records concerning its financial transactions with nonmembers and more than percent of its gross_receipts are derived from sales transactions to non-members the presumption will be that the organization's exempt status should be revoked because it is not primarily engaged in sec_501 c activities all income of an organization that is otherwise organized and operated within the meaning of sec_501 should be considered as income from unrelated business if no records are maintained to detennine if such income is related to exempt_activities purposes note sec_512 provides modifications to the definition of unrelated_business_taxable_income therefore income from sources not related to exempt_activities purposes might not be considered as unrelated_business_taxable_income for example hall rental income would not be unrelated_business_taxable_income ubty unless services are rendered or the property is debt-financed_income that an organization claims is related or partially related to exempt_activities purposes of the organization must be substantiated by the maintenance of records by the organization in sufficient detail to determine whether the income js related to the exempt_activities purposes of the organization and whether the income is derived from memibers or nonmembers based on completing a four-year income analysis during tax periods ending december 20xx to december 20xx it has been determined that the organization has been unable to provide an accurate account of nonmember income as outlined in public law bulletin furthermore the organization has failed to maintain books_and_records regarding member and form 886-acrev -8 ‘department of the treasury - internal_revenue_service page -6- form 886a ‘name of taxpayer dain fe tsuna revd se schedule no or exhibit explanation of items year period ended december 20xx org nonmember income in addition using the organization's estimate of percent of motto activities as non-member the organization fails to meet the income allowed in pl as income from sources outside of a social club’s membership issue the motto receipts from the gaming activities are used to fund activities for the social_club the organization uses proceeds from the motto receipts to fund other activities for members of the club by funding other activities the organization is reducing club expenditures which in turn reduces membership dues a reduction of membership dues due to income from nonmembers constitutes inurement to the members of this organization sec_501 of the internal_revenue_code prohibits inurement to members of organization exempt under this section conclusion during the examination it was determined that the gross_receipts that were attributed to nonmembers usc of the organization's facilities were approximately for the period ending december 20xx for the period ending december 20xx for the petiod ending december 20xx and for the period ending december 20xx therefore nonmember income is substantial and is not within the or limited established under public law the net receipts from the gaming activities inure to the benefit of the members the expenses of the social_club are reduced due to the fact the gross_receipts from the gaming activities are being used to bring more funds into the club sec_501 states that no part of the net_earnings shall inure o the benefit of any private_shareholder_or_individual based upon the information noted above it is proposed the exempt status of the organization be tevoked as of the fiscal_year december 20xx form 886-aiteve deparenentof de treasury intl revenue service page


number release date internal_revenue_service index numbers - ---------------------------------------- ----------------------------------- ------------------------- ------------------------- --------------------- department of the treasury washington dc person to contact ----------------------------------------------------- -------- telephone number -------------------- refer reply to cc psi - plr-100321-06 date date legend x ----------------------------------- --------- ---------------- ------------------ ---------- d1 country dear -------------------- this letter responds to a letter dated date and subsequent correspondence submitted 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 treated as a disregarded_entity under the laws of country was acquired by a single owner with limited_liability on d1 x intended to be treated as a disregarded_entity for federal tax purposes effective d1 however x did not timely file a form_8832 entity classification election according to the information submitted all of the interest in x an entity formed sec_301_7701-3 provides 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 as provided in sec_301_7701-3 sec_301_7701-3 provides guidance on the classification of a foreign eligible_entity for federal tax purposes under sec_301_7701-3 except as provided in sec_301 b unless it elects otherwise a foreign eligible_entity is classified as an association if all members have limited_liability sec_301_7701-3 provides that for purposes of sec_301_7701-3 a sec_301_7701-3 provides that an election under sec_301_7701-3 member of a foreign eligible_entity has limited_liability if the member has no personal liability for the debts of or claims against the entity by reason of being a member will be effective on the date specified on form_8832 or on the date filed if no such date is specified on the form the effective date specified on form_8832 cannot be more than days prior to the date the form is filed and cannot be more than months after the date on which the form is filed sec_301_9100-1 provides that the commissioner has discretion to grant a reasonable extension of time under the rules set forth in sec_301_9100-2 and sec_301_9100-3 to make a regulatory election or a statutory election but no more than 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 a regulatory election to include an election whose due_date is prescribed by a regulation published in the federal_register sec_301_9100-2 provides the rules governing automatic extensions of time for making certain elections sec_301_9100-3 sets forth the standards the commissioner will use to based on the facts submitted and representations made we conclude that the determine whether to grant an extension of time for regulatory elections that do not meet the requirements of sec_301_9100-2 under sec_301_9100-3 a request for relief will be granted when the taxpayer provides evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and granting relief will not prejudice the interests of the government requirements of sec_301_9100-3 have been satisfied as a result x is granted an extension of time of days from the date of this letter to file form_8832 and elect to be treated as a disregarded_entity for federal tax purposes effective d1 a copy of this letter should be attached to the form_8832 the federal tax consequences of the transaction described above under any other provision of the code except as specifically set forth above no opinion is expressed or implied as to sec_6110 provides that it may not be used or cited as precedent this ruling is directed only to the taxpayer on whose behalf it was requested in accordance with the power_of_attorney on file with this office a copy of this sincerely letter is being sent to x’s authorized representative enclosures copy of this letter copy for sec_6110 purposes heather c maloy associate chief_counsel passthroughs and special industries


internal_revenue_service number release date index number ------------------------------- -------------------------- ------------------------------------- ------------------------- -------------- department of the treasury washington dc person to contact ------------------------- id no ------------- telephone number -------------------- refer reply to cc psi b05 - plr-130673-05 date date legend - taxpayer director location year ------------------------------- -------------------------- ------------------------------------- ------------------------- ----------------------------------------------------------------------------- ---------------------- ------------------- --------------------------------- ---------------------------- -------------------------- ------------------------------------- ------- dear ------------ this letter responds to a letter dated date and subsequent correspondence from taxpayer’s authorized representative requesting an extension of time pursuant to ' of the procedure and administration regulations to post a surety bond under ' j of the internal_revenue_code in order to avoid recapture of the low-income_housing_credit under ' a plr-130673-05 according to the information submitted taxpayer intended to file a completed form_8693 low-income_housing_credit disposition bond for low-income_housing property at location that had been disposed of during year however taxpayer inadvertently failed to file the completed form_8693 sec_42 provides that if a building or an interest therein is disposed of during any year for which the low-income_housing_credit under ' a is allowable the credit for the year must be allocated between the parties in any such case proper adjustments must be made on the application of ' j sec_42 provides that if a as of the close of any taxable_year in the compliance_period the amount of the qualified_basis on any building with respect to the taxpayer is less than b the amount of the basis as of the close of the preceding_taxable_year then the taxpayer s tax for the taxable_year must be increased by the credit recapture_amount however under ' j the taxpayer will be discharged from liability for any additional tax if a the taxpayer furnishes to the secretary a bond for a satisfactory amount and period and b it is reasonably expected that the building will continue to be operated as a low-income credit building for the remainder of its compliance_period guidance on the amount of bond considered satisfactory by the secretary and the period of the bond required is provided in revrul_90_60 1990_2_cb_3 this revenue_ruling specifies that if a taxpayer furnishes a bond under ' j with respect to the disposition of an interest in a qualified_low-income_building the taxpayer will be treated solely for purposes of applying ' j with respect to the disposition as if the taxpayer had not disposed of the interest instead the taxpayer s recapture if any with respect to the disposed-of interest will be determined under the rules of ' j by deeming the taxpayer to continue to own the disposed-of interest and by determining the qualified_basis for the deemed interest in accordance with the rules of ' c the taxpayer will not however be treated as claiming any additional low-income_housing_credit with respect to the disposed of interest for any period following the disposition the bond must be provided for the remainder of the 15-year compliance_period after the disposition plus an additional months sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make an election sec_301_9100-1 provides that the term regulatory election means an election whose due_date is prescribed by a regulation published in the federal_register or a revenue_ruling revenue_procedure notice or announcement published in the internal_revenue_bulletin announcement 1994_31_irb_87 notified the public of form_8693 and specified that form_8693 should be submitted to the internal_revenue_service within days of a disposition of a low-income_housing_credit building or interest therein on which the taxpayer wants to avoid recapture of the credit plr-130673-05 under ' c the commissioner has discretion to grant a reasonable extension of time under the rules set forth in and for a taxpayer to make a regulatory or statutory 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 ' requests for relief under ' a will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good_faith and the granting of relief will not prejudice the interests of the government in the instant case based solely on the facts submitted and the representations made we conclude that the requirements of and have been met accordingly taxpayer is granted an extension of time to make the election under ' j for the disposition by filing a completed form_8693 within days from the date of this letter the form_8693 along with a copy of this letter is to be filed with the internal_revenue_service small_business self employed division post office box bensalem pa attn sam alloy dp south a copy of this letter is enclosed for this purpose in addition if and when taxpayer receives a copy of the approved form_8693 back from the lihtc unit a copy of this letter along with a copy of the approved form_8693 should be sent to director nothing in this ruling shall be construed to relieve taxpayer from the obligation of having the bond approved by the irs bond-approving official this ruling merely grants taxpayer an extension of time to make the election to post the bond which must be for the period of time remaining in the 15-year compliance_period after the date of disposition plus an additional months the determination of whether to approve the bond rests within the sole discretion of the bond-approving official also although taxpayer will be deemed to continue to own its interest in the disposed-of property for purposes of ' j upon approval of the bonds taxpayer is not allowed low-income_housing credits for its interest in the disposed-of property for any period following the disposition no opinion is expressed or implied regarding the application of any other provisions of the code or regulations specifically we express no opinion on whether the low-income_housing property qualified or continues to qualify for the low-income_housing_credit under ' this ruling is directed only at the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent plr-130673-05 in accordance with the power_of_attorney on file a copy of this letter is being sent to taxpayer s authorized representative sincerely s heather c maloy heather c maloy associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for ' purposes


id office uilc cca-511435-09 ---------- number release date from -------------------- sent to -------------------- cc subject fw irs lien recording fees and fms tops offset hi ----- according to ------ in her email below the notice the county recorder receives has the phone number of the federal government agency to which some agency of the county owes the debt it could be hhs hud etc offset is for non-tax debts once a debt has been delinquent for days it is turned over to the secretary_of_the_treasury for appropriate action to collect or terminate collection on the debt or claim usc g a b before collection via offset the agency must give the debtor county written notice of the basis and amount of claim the intention of the agency to collect via administrative offset and an explanation of the debtor's rights under the dcia an oppportunity to inspect and copy the agency's relevant records an opportunity for an in-agency review of the agency's decision and an opportunity to execute a written_agreement with the agency to repay the debt after that the debt is submitted for offset the county can dispute further in court since offset is an administrative remedy a court judgment is not needed prior to offset surely the county's attorney or legal department will also have some knowledge of these types of debts i hope this helps ------------------------------------------------------ ------------------------------------------------------ ----------


office_of_chief_counsel internal_revenue_service memorandum number release date cc tege eoeg et1 postn-160706-04 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 ---------- -----------------------ceased to be an employer under the railroad retirement act and the railroad unemployment insurance act the acts effective ---------------------------and that ------------------------- became an employer under the acts effective ------------------------------ ----------------------------------------------------------------------------------------------------------------- effective -------------------------------------------------changed its name to --------------------- ------ ------------------ the rrb further concludes that ----------------------------------------is the successor employer of ---------------------------for contribution rate purposes ----------------------------------------- ------------------------------------------- ----------------------------------------- --------------------------------------------------------- ----------------------------------------- ------------------------------------------------------------------ ---------------------------------------------------------------------- -------------------------------------------------- ------------------------------------------ -------------------------------- postn-160706-04 we have reviewed the opinion of the rrb and based upon the information submitted to us by the rrb we also conclude that --------------------------------ceased to be an employer under the railroad_retirement_tax_act rrta effective ---------------------------- ------------------------------------------------------------------------------------------------------------------ assuming it paid no further compensation after such date and that ---------------------------- became an employer under the rrta effective -------------------------- the rrb’s successor employer determination for contribution rate purposes does not affect the application of rrta however we do not have enough information to determine with certainty that ------------------------- renamed ---------------------------------------- is the successor employer of --------------------------------for rrta purposes please take the appropriate action regarding these businesses cc _____________________________ janine cook


office_of_chief_counsel internal_revenue_service memorandum number release date cc tege eoeg et1 postn-114912-05 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 became an employer under the railroad retirement act and the railroad unemployment insurance act effective ---------------------- ------------------------------------------ ----------------------------------------------------------- --------------------------------------------- ------------------------------------------------------- we have reviewed the opinion of the rrb and based upon the information submitted to us by the rrb we also conclude that -----------------------became an employer under the railroad_retirement_tax_act effective ---------------------- please take the appropriate action regarding this business _____________________________ janine cook


a fs department of the treasury internal_revenue_service washington d c see eae division nov _ se y ep ra ‘ uniform issue list legend date date date date date companyb company c i companye amount a plan x ira x dear this is in response to your request dated date as supplemented by correspondence dated date in which you request a waiver of the 60-day rollover requirement contained in sec_402 of the internal_revenue_code the code’ the following facts and representations have been submitted under penalty of perjury in support of the ruling requested you are years old you were a participant in plan x a retirement_plan that was intended to be qualified under sec_401 a of the code on date company b the administrator of plan x issued you a distribution check from plan x for amount a your intent was to roll over amount a into an individual_retirement_arrangement ira you represent that your failure to accomplish a rollover within the 60-day period prescribed by sec_402 was due to an gf page error caused by a financial advisor of company c you assert that amount a has not been used for any other purpose amount a was distributed to you on date on date within the 60-day rollover period you met with a financial advisor of company c to discuss investment options for amount a the same day you deposited amount a with company c you have provided paperwork completed on that day by company c that indicates amount a was to be placed into a traditional_ira however unknown to you amount a was placed into a non-ira account by company c on date you met with the same financial advisor from company c to discuss investment options for your ira funds at that time you became aware that amount a had been deposited into a non-ira account on that day date you requested amount a be returned to you because you were dissatisfied with the investment options available to you through company c you received a check from company c for amount a on date with another advisor on what to do with amount a because you were aware that you were outside of the 60-day statutory window at that time you consulted one week later on date shortly after the expiration of the 60-day rollover period you deposited amount a into an ira ira x with company e based on the facts and representations you request a ruling that the internal_revenue_service waive the day rollover requirement with respect to the distribution of amount a contained in sec_402of the code in this instance sec_402 of the code provides that if any portion of the balance_to_the_credit of an employee in a qualified_trust is paid to the employee in an eligible_rollover_distribution and the distributee transfers any portion of the property received in such distribution to an eligible_retirement_plan and in the case of a distribution_of_property other than money the amount so transferred consists of the property distributed then such distribution to the extent transferred shall not be includible in gross_income for the taxable_year in which paid sec_402 states that such rollover must be accomplished within days following the day on which the distributee received the property an individual_retirement_account ira constitutes one form of eligible_retirement_plan sec_402 of the code provides in relevant part that the secretary may waive the 60-day requirement under sec_402 where the failure to waive such requirement would be against equity or good conscience including casualty disaster or other events beyond the reasonable control of the individual subject_to such requirement only distributions that occurred after date are eligible for the waiver under sec_402 of the code revproc_2003_16 r b date provides that in determining whether to grant a waiver of the 60-day rollover requirement pursuant to sec_402 of the code the service will consider all relevant facts and circumstances including errors committed by a financial_institution inability to complete a rollover due to death disability hospitalization incarceration restrictions imposed by a foreign_country or postal error the use of the amount distributed for example in the case of payment by check whether the check was cashed and the time elapsed since the distribution occurred a page the information presented and documentation submitted is consistent with your assertion that the failure to accomplish a timely rollover was caused by an error of a financial advisor of company c therefore pursuant to sec_402 of the code the service hereby waives the 60-day rollover requirement with respect to the distribution of amount a from plan x provided all other requirements of sec_402 of the code except the 60-day requirement are met with respect to such contribution the contribution of amount a to ira x will be considered a rollover_contribution within the meaning of sec_402 of the code no opinion is expressed as to the tax treatment of the transaction described herein under the provisions of any other section of either the code or regulations which may be applicable thereto this letter is directed only to the taxpayer who requested it sec_61 k 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 a copy of this letter_ruling is being sent to vour authorized representative if voi wish to inquire about this ruling please contac’ se t ep ra t3 please address all correspondence to _at sincerely wind re-nuew b frances v sloan manager employee_plans technical group lo vee cg -- enclosures deleted copy of ruling letter notice of intention to disclose cc


t c summary opinion united_states tax_court cynthia s al-murshidi petitioner v commissioner of internal revenue respondent docket no 4230-o0s filed date cynthia s al-murshidi pro_se dustin m starbuck for respondent powell 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 subsequent section references are to the internal_revenue_code in effect for the year in issue and rule references are to the tax_court rules_of_practice and procedure - - respondent determined a deficiency of dollar_figure in petitioner’s federal_income_tax after a concession by petitioner ’ the issue is whether sec_213 relating to the disallowance of certain surgical expenses precludes a deduction for medical_expenses paid_by petitioner petitioner resided in roanoke virginia at the time the petition was filed background the applicable facts may be summarized as follows petitioner suffered from severe obesity for a period of years prior to without the aid of surgical intervention petitioner lost over pounds as a result of the weight loss petitioner developed a mass of loose-hanging skin which spanned the width of her abdomen and spilled over onto her upper thighs petitioner was employed as a registered nurse at the carilion roanoke community hospital where she worked in the emergency room her duties called for frequent bending running and other physical activities the skin mass prevented petitioner from comfortably performing her emergency room duties additionally the mass was prone to skin breakdowns sores infections pain and irritation after the weight loss petitioner underwent three surgeries to remove this skin mass the first procedure utilized petitioner concedes that dollar_figure of the amount claimed as medical_expenses represents pretax payments for medical insurance and is therefore not deductible liposuction to remove pounds of fat from the mass the second procedure removed the excess skin of the mass the final procedure was conducted to remove excess fluid which had collected between the skin and the abdominal muscles the statements submitted by the plastic surgeon who performed the surgery described the procedures as cosmetic in nature the procedures were not covered by petitioner’s health insurance petitioner paid for the surgeries and deducted the costs as medical_expenses on her federal_income_tax return respondent determined that the expenses related to these surgical procedures were for cosmetic_surgery of a type not considered medical_care and therefore were not deductible under sec_213 the medical deductions as claimed and as allowed are as follows expense amount claimed amount allowed medicine drugs dollar_figure dollar_figure optical expenses dental expense sec_150 pre-tax insurance -q- doctors hospitals big_number --o- surgical expenses big_number --q- the doctors hospitals and surgical expenses disallowed by respondent both relate to the procedures discussed above although these claimed expenses total dollar_figure petitioner only substantiated that she paid dollar_figure for the disputed procedures at trial petitioner introduced no evidence from - - which it could be determined that she incurred greater expenses than those substantiated discussion in general sec_213 allows as an itemized_deduction the expenses paid during the taxable_year not_compensated_for_by_insurance_or_otherwise for medical_care of the taxpayer to the extent that such expenses exceed percent of adjusted_gross_income prior to it would appear that the expenses of the surgeries petitioner had would have been allowed under sec_213 see mattes v commissioner t c see also revrul_82_111 1982_1_cb_48 in however congress enacted section a of the omnibus budget reconciliation act of publaw_101_508 stat that added paragraph to sec_213 sec_213 provides a in general --the term medical_care does not include cosmetic_surgery or other similar procedures unless the surgery or procedure is necessary to ameliorate a deformity arising from or directly related to a congenital abnormality a personal injury resulting from an accident or trauma or disfiguring disease b cosmetic_surgery defined --for purposes of this paragraph the term cosmetic_surgery means any procedure which is directed at improving the patient’s appearance and does not meaningfully promote the proper function of the body or prevent or treat illness or disease the senate_finance_committee report’ provides inter alia there was no formal report printed separately rather the report of the senate_finance_committee was printed directly in the congressional record see cong rec s15629 --- - the bill provides that expenses paid for cosmetic_surgery or other similar procedures are not deductible medical_expenses unless the surgery or procedure is necessary to ameliorate a deformity arising from or directly related to a disfiguring disease cosmetic_surgery is defined as any procedure which is directed at improving the patient’s appearance and does not meaningfully promote the proper function of the body or prevent or treat illness or disease thus under the provision procedures such as hair removal electrolysis hair transplants lyposuction and face lift operations generally are not deductible in contrast expenses for procedures that are medically necessary to promote the proper function of the body and only incidentally affect the patient’s appearance or expenses for treatment of a disfiguring condition arising from a disease such as reconstructive surgery following removal of a malignancy continue to be deductible cong rec sdollar_figure s15711 it is clear from the senate_finance_committee report that congress did not intend that the expenses of all so-called cosmetic surgeries would be nondeductible respondent contends that since the procedures were classified as cosmetic by petitioner’s surgeon they were cosmetic for purposes of applying sec_213 respondent argues that petitioner’s skin mass is not a deformity arising from or directly related to a congenital abnormality a personal injury resulting from an accident or trauma or disfiguring disease and therefore treatment for her condition respondent also notes that petitioner’s health insurance did not cover the surgical procedures there may be many reasons for this such as the policy exempted treatment for obesity thus we do not find the lack of insurance coverage to be elucidating -- - does not fall within the exception for deductible cosmetic procedures see sec_213 a we disagree petitioner was pounds overweight and suffered from morbid obesity obesity is well recognized in the medical community as a serious disease see national heart lung and blood inst natl inst of health clinical guidelines on the identification evaluation and treatment of overweight and obesity in adults nih pub no furthermore petitioner continued to suffer from the effects of this disease in the form of the above-described skin mass that was a deformity this mass was not merely unsightly it was prone to infection and disease and interfered with petitioner’s daily life the procedures that petitioner underwent meaningfully promoted the proper function of her body and treated her disease despite the classification given to the procedures by the surgeon we find that these procedures are not cosmetic_surgery for purposes of sec_213 sec_213 b petitioner’s deduction however is limited to the amount of expenses that she substantiated reviewed and adopted as the report of the small_tax_case division decision will be entered under rule


number release date id office uilc cca_2012021413540620 -------------- from -------------------- sent tuesday date pm to ------------------ cc subject form_2270 as you noted requests to exhibit books_and_records made under sec_6333 are a procedure authorized by and contained in the code and therefore exempt from the rfpa and that is also true in the 10th circuit where neece continues to generally apply as confirmed by --------


internal_revenue_service index no number release date nov cc dom p si - plr-111601-99 a b c x y1 y2 y3 y4 y5 y6 y7 y8 y9 y10 y11 x1 date date date dear this responds to a letter dated date and subsequent correspondence submitted on x’s behalf requesting that x be given an extension of time in which to elect to treat each of y1 y2 y3 y4 y5 y6 y7 y8 y9 y10 and y11 as a qualified_subchapter_s_subsidiary qsub under sec_1361 of the internal_revenue_code the information submitted states that x incorporated on date x filed its s_corporation_election effective for date the shareholders of y1 y2 y3 y4 y5 y6 y7 y8 y9 y10 and y11 transferred their stock in those corporations to x in exchange for stock in x on date you as the co-chairman on x’s board represent that x intended to treat each of y1 y2 y3 y4 y5 y6 y7 y8 y9 y10 and y11 as a qsub effective on date x relied on a tax professional to make the qsub elections however no forms corporate dissolution or liquidation were filed x1 acquired all the stock of x on date sec_1361 of the code defines the term qualified_subchapter_s_subsidiary qsub as a domestic_corporation which is not an ineligible_corporation if percent of the stock of the corporation is owned by an s_corporation and the s_corporation elects to treat the corporation as a qsub the statutory provision does not however provide guidance on the manner in which the qsub election is made or the effective date of the election on date the service published notice_97_4 1997_1_cb_351 providing a temporary procedure for the making of a qsub election under notice_97_4 a taxpayer makes a qsub election with respect to a subsidiary by filing a form_966 corporate dissolution or liquidation subject_to certain modifications with the appropriate service_center the election may be effective on the date the form_966 is filed or up to days prior to the filing of the form provided that the date is not before the parent’s first taxable_year beginning after date and that the subsidiary otherwise qualifies as a qsub for the entire period for which the retroactive election is in effect sec_301_9100-1 of the procedure and administration regulations provides that the commissioner has the discretion to grant a reasonable extension of the time under the rules set forth in sec_301_9100-2 and sec_301_9100-3 to make a regulatory election sec_301_9100-1 defines regulatory election as an election whose due_date is prescribed by a regulation published in the federal_register or a revenue_ruling revenue_procedure notice or announcement published in the internal_revenue_bulletin sec_301_9100-2 provides the rules governing automatic extensions of time for making certain elections sec_301_9100-3 provides the standards the commissioner will use to determine whether to grant an extension of time for regulatory elections that do not meet the requirements of sec_301_9100-2 under sec_301_9100-3 a request for relief will be granted when the taxpayer provides evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and granting relief will not prejudice the interests of the government in the present situation the requirements of sec_301_9100-3 have been satisfied as a result x is granted an extension of time to make elections to treat y1 y2 y3 y4 y5 y6 y7 y8 y9 y10 and y11 as qsubs effective date until days following the date of this letter the elections should be made by following the procedure set forth in notice_97_4 a copy of this letter should be attached except as specifically ruled upon above no opinion is expressed concerning the federal tax consequences of the facts described above under any other provisions of the code including whether x was a small_business_corporation under sec_1361 of the code and whether y1 y2 y3 y4 y5 y6 y7 y8 y9 y10 or y11 otherwise qualify as qsubs for federal tax purposes this ruling is directed only to the taxpayer who requested it sec_6110 of the code provides that it may not be used or cited as precedent pursuant to the power_of_attorney on file with this office a copy of this letter is being sent to x’s authorized representative sincerely yours assistant chief_counsel passthroughs and special industries paul f kugler enclosures copy of this letter copy for sec_6110 purposes


internal_revenue_service department of the treasury index number washington dc number release date person to contact telephone number refer reply to cc dom corp 1-plr-117942-99 date date legend purchaser target company official tax professional date a date b date c date d country this letter responds to your authorized representative’s letter dated date on behalf of the above taxpayers requesting an extension of time under sec_301_9100-1 through of the procedure and administration regulations to file an election the extension is being requested for purchaser to file an election under sec_338 of the internal_revenue_code and sec_1_338-1 and sec_1_338-1 of the income_tax regulations additional information was submitted in letters dated date and date all citations in this letter to regulations under sec_338 are to the regulations as in effect for date a purchaser is the common parent of a consolidated_group that has a calendar taxable_year and uses the accrual_method of accounting target is a country corporation on date a purchaser acquired solely for cash in a fully taxable_acquisition plr-117942-99 of the stock of target from two individual residents of country the stock acquisition of target was made with the intention of electing to characterize the acquisition as an asset acquisition under sec_338 the election it is represented that the acquisition of target constituted a qualified_stock_purchase within the meaning of sec_338 and that purchaser was not related to the sellers within the meaning of sec_338 the period of limitations on assessments under sec_6501 has not expired for purchaser's taxable_year s in which the acquisition occurred the taxable_year in which the election should have been filed or any taxable years that would have been affected by the election had they been timely filed additionally purchaser has made the following representations with respect to this transaction a target is a foreign_corporation within the meaning of sec_7701 and and does not does not intend to file an election under sec_301_7701-3 to be treated as either a disregarded_entity or a partnership for u s federal_income_tax purposes b target did not own a u s real_property interest within the meaning of sec_897 immediately prior to purchaser’s acquisition of all of the outstanding common_stock of target c target will not be required under sec_1_6012-2 to file a u s income_tax return for its date d short_year in connection with the deemed sale of all of its assets at the close of the acquisition_date under sec_338 d foreign_income_taxes attributable to the foreign taxable_income earned by target during the foreign taxable_year will be allocated to old target and new target in accordance with the principles of sec_1_338-5 e neither of the sellers are united_states persons within the meaning of sec_7701 for u s tax purposes nor are they subject_to tax on the sale of such individuals’ stock under sec_871 the election was due on date b however for various reasons the election was not made on date c which is shortly after the due_date for the election company official and tax professional discovered that the election had not been filed subsequently this request was submitted under sec_301_9100-1 for an extension of time to file the election sec_338 permits certain stock purchases to be treated as asset purchases if the purchasing_corporation makes or is treated as having made a sec_338 election under sec_338 and the acquisition is a qualified_stock_purchase sec_338 defines a qualified_stock_purchase as any transaction or series of transactions in which stock meeting the requirements of sec_1504 of one plr-117942-99 corporation is acquired by another corporation by purchase during the month acquisition period sec_338 provides that the term purchase means any acquisition of stock but only if i the basis of the stock in the hands of the purchasing_corporation is not determined in whole or in part by reference to the adjusted_basis of such stock in the hands of the person from whom acquired or under sec_1014 relating to property_acquired_from_a_decedent ii the stock is not acquired in an exchange to which sec_351 sec_354 sec_355 or sec_356 applies and is not acquired in any other transaction described in regulations in which the transferor does not recognize the entire amount of the gain_or_loss realized on the transaction and iii the stock is not acquired from a person the ownership of whose stock would under sec_318 be attributed to the person acquiring such stock sec_1_338-1 provides that a purchasing_corporation makes a sec_338 election for target by filing a statement of sec_338 election on form_8023 in accordance with the instructions on the form the sec_338 election must be filed not later than the 15th day of the ninth month beginning after the month in which the acquisition_date occurs a sec_338 election is irrevocable sec_1_338-2 provides that if an election under sec_338 is made for target old target is deemed to sell target’s assets and new target is deemed to acquire those assets under sec_301_9100-1 the commissioner has discretion to grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301_9100-1 defines the term regulatory election as including an election whose due_date is prescribed by a regulation revenue_ruling revenue_procedure notice or announcement sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make a regulatory election see sec_301_9100-1 sec_301_9100-2 provides automatic extensions of time for making certain elections sec_301_9100-3 provides extensions of time for making regulatory 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 see sec_301_9100-3 in this case the time for filing the election was fixed by the regulations ie sec_1_338-1 therefore the commissioner has discretionary authority under sec_301_9100-1 to grant an extension of time for purchaser to file the election provided plr-117942-99 purchaser shows it acted reasonably and in good_faith the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and granting relief will not prejudice the interests of the government information affidavits and representations submitted by company official and tax professional explain the circumstances that resulted in the failure_to_file the election the information establishes that purchaser reasonably relied on a qualified_tax professional and that relief was requested before the failure to make the election was discovered by the service see sec_301_9100-3 and v based on the facts and information submitted including the representations that have been made we conclude that purchaser acted reasonably and in good_faith in failing to timely file the election the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and granting relief will not prejudice the interests of the government accordingly subject_to the below conditions we grant an extension of time under sec_301_9100-1 until days from the date_of_issuance of this letter for purchaser to file the election with respect to the acquisition of the stock of target as described above the above extension of time to file the election is conditioned on the taxpayer’s purchaser and its subsidiaries and target and the sellers’ to the extent they have any u s tax_liability tax_liability not being lower in the aggregate for all years to which the election applies than it would have been if the election had been timely made taking into account the time_value_of_money no opinion is expressed as to the taxpayers’ tax_liability for the years involved a determination thereof will be made by the district director's office upon audit of the federal_income_tax returns involved further no opinion is expressed as to the federal_income_tax effect if any if it is determined that the taxpayer’s liability is lower sec_301_9100-3 purchaser should file the election in accordance with sec_1_338-1 and sec_1 g that is a new election on form_8023 must be executed on or after the date of this letter which grants an extension and filed in accordance with the instructions on the election form a copy of this letter should be attached to the election form purchaser must file and amend its return and target must file a final return if and as applicable to report the stock acquisition sale as a sec_338 transaction and attach thereto a copy of this letter and a copy of the election form also see sec_1 g and that is the old target must file a separate final return if and as applicable and the new target must be included in purchaser’s return by being listed on form for the first year following the acquisition see sec_1_338-1 and1 g and announcement 1998_1_cb_282 no opinion is expressed as to whether the acquisition of target’s stock qualifies as a qualified_stock_purchase whether the acquisition of target’s stock qualifies for sec_338 treatment if the acquisition of target’s stock qualifies for sec_338 treatment as to the amount of gain_or_loss recognized if any by target on the plr-117942-99 deemed asset sale no opinion is expressed about the tax treatment of any conditions existing at the time of or effects resulting from the purchase of the stock of target not specifically covered by the above rulings no opinion is expressed as to the tax effects or consequences of filing the election late under the provisions of any other section of the code and regulations or as to the tax treatment of any conditions existing at the time of or resulting from filing the election late that are not specifically set forth in the above ruling for purposes of granting relief under sec_301_9100-1 we relied on certain statements and representations made by the taxpayer its employees and representatives however the district_director should verify all essential facts in addition notwithstanding that an extension is granted under sec_301_9100-1 to file the election penalties and interest that would otherwise be applicable if any continue to apply a copy of this letter is being sent to the authorized representatives designated on your power_of_attorney this letter is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent sincerely yours philip j levine assistant chief_counsel corporate


internal_revenue_service department of the treasury index number washington dc number release date person to contact telephone number refer reply to plr-122163-98 cc dom p si date date legend company d1 d2 dear this letter responds to a letter dated date and subsequent correspondence submitted by your authorized representative requesting a ruling under sec_1362 of the internal_revenue_code facts according to the information submitted company was incorporated on d1 with the intention that it would be an s_corporation effective d2 however company's form_2553 election by a small_business_corporation was not timely filed company requests a ruling that it will be recognized as a subchapter_s_corporation effective d2 pursuant to sec_1362 of the internal_revenue_code law sec_1362 provides that a small_business_corporation may elect to be an s_corporation sec_1362 provides the rule on when an s election will be effective if an s election is made within the first two and one-half months of a corporation's taxable_year then the corporation will be treated as an s_corporation for the year in which the election is made if an s election is made after the first two and one-half months of a corporation's taxable_year then the corporation will not be treated as an s_corporation until the taxable_year after the year in which the s election is made sec_1362 provides that if no election is made under sec_1362 for plr-122163-98 any taxable_year and the secretary determines that there was reasonable_cause for the failure to timely make the election then the secretary may treat the election as timely made for the taxable_year and effective as of the first day of the corporation’s taxable_year conclusions after applying the relevant law to the facts submitted and representations made we conclude that company has established reasonable_cause for not making a timely election and is eligible for relief under sec_1362 accordingly if company makes an election to be an s_corporation by filing with the appropriate service_center a completed form_2553 containing an effective date of d2 for the election within days following the date of this letter then the election will be treated as timely made a copy of this letter should be attached to the form_2553 filed with the appropriate service_center a copy is enclosed for that purpose 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 specifically no opinion is expressed concerning whether company is an s_corporation for federal tax purposes under a power_of_attorney on file in this office a copy of this letter will be sent to your authorized representative this ruling is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent sincerely yours jeff erickson assistant to the branch chief branch office of the assistant chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes


aste enp wn sess department of the treasury internal_revenue_service washington d c contact person identification_number telephone number employer_identification_number tax_exempt_and_government_entities_division release number release date date date uil dear we have considered your ruling_request dated date as to whether amendments to your organizational documents will affect your exempt status under sec_501 of the internal_revenue_code code facts you were created on date1 and the service recognized you as an organization exempt under sec_501 of the code and classified you as a public charity described in sec_509 you were one of three charitable organizations created to provide services and support for persons with neurological impairment the other two organizations x and y were also recognized as exempt under sec_501 your organizational documents stated that you were organized and operated exclusively for the charitable purpose of supporting and assisting x and y a few years later based on information that you submitted the service modified your public charity status to sec_509 and sec_170 on date2 y reorganized the group and amended your organizational documents the amendments e removed y as your sole member e provided that you shall have no members e placed your governance under a self-perpetuating board e changed your purpose to providing support and assistance solely to x an exempt_organization and e upon dissolution required the distribution of your assets to x ruling requested that the changes in your certificate of incorporation and bylaws pertaining to your purposes governance and the distribution of your assets upon dissolution specifically that your purposes will no longer include providing support and assistance to y that you will no longer have y as your sole member and will be governed by a self-perpetuating board_of directors and that upon dissolution your assets will be distributed to x provided it is then recognized by the internal_revenue_service as an organization described in sec_501 and sec_170 of the internal_revenue_code and not to y will not have any effect on your status as an organization_exempt_from_taxation under sec_501 of the code law sec_501 of the code provides for the exemption from federal_income_tax of organizations organized and operated exclusively for charitable educational and other purposes provided that no part of the net_earnings inure to the benefit of any private_shareholder_or_individual sec_509 of the code states that the term private_foundation means a domestic or foreign organization described in sec_501 other than an organization described in sec_170 sec_1_501_c_3_-1 of the treasury regulations states that an organization is organized exclusively for one or more exempt purposes only if its articles of organization a limit the purposes of such organization to one or more exempt purposes and b do not expressly empower the organization to engage otherwise than as an insubstantial part of its activities in activities which in themselves are not in furtherance of one or more exempt purposes analysis to establish exemption from tax under sec_501 an organization must pass the organizational_test set out in sec_1_501_c_3_-1 of the regulations under this test an applicant’s articles of organization must limit the organization’s purposes to one or more exempt purposes specified in sec_501 your amended certificate of incorporation specifically states that you are organized exclusively for the charitable purpose of supporting and assisting x an exempt_organization since your certificate of incorporation continues to meet the requirements of the organizational_test the amendments will not adversely affect your qualification for exempt status under sec_501 conclusion accordingly based on the foregoing we rule as follows the changes in your certificate of incorporation and bylaws pertaining to your purposes governance and the distribution of your assets upon dissolution specifically that your purposes will no longer include providing support and assistance to y that you will no longer have y as your sole member and will be governed by a self-perpetuating board_of directors and that upon dissolution your assets will be distributed to x provided it is then recognized by the internal_revenue_service as an organization described in sec_501 and sec_170 of the internal_revenue_code and not to y will not have any effect on your status as an organization_exempt_from_taxation under sec_501 of the code this ruling is limited in scope to the organizational_test under sec_1_501_c_3_-1 of the regulations it does not consider or make any determination with regard to your activities or the operational_test under sec_1_501_c_3_-1 this ruling will be made available for public inspection under sec_6110 of the code after certain deletions of identifying information are made for details see enclosed notice notice of intention to disclose a copy of this ruling with deletions that we intend to make available for public inspection is attached to notice if you disagree with our proposed deletions you should follow the instructions in notice this ruling is directed only to the organization that requested it sec_6110 of the code provides that it may not be used or cited by others as precedent this ruling is based on the facts as they were presented and on the understanding that there will be no material changes in these facts this ruling does not address the applicability of any section of the code or regulations to the facts submitted other than with respect to the sections described because it could help resolved questions concerning your federal_income_tax status this ruling should be kept in your permanent records if you have any questions about this ruling please contact the person whose name and telephone number are shown in the heading of this letter in accordance with the power_of_attorney currently on file with the internal_revenue_service we are sending a copy of this letter to your authorized representative sincerely ronald shoemaker manager exempt_organizations technical group enclosure notice


department of the treasury internal_revenue_service washington d c date number release date cc dom fs p si uilc 01-00r86 internal_revenue_service national_office field_service_advice memorandum for district_counsel portland from associate chief_counsel passthroughs special industries cc psi subject capitalization of taxes and interest under sec_189 this field_service_advice responds to your memorandum dated date field_service_advice is not binding on examination or appeals and is not a final case determination this document is not to be cited as precedent disclosure statement field_service_advice is chief_counsel_advice and is open to public inspection pursuant to the provisions of sec_6110 the provisions of sec_6110 require the service to remove taxpayer identifying information and provide the taxpayer with notice of intention to disclose before it is made available for public inspection sec_6110 and i sec_6110 also authorizes the service to delete information from field_service_advice that is protected from disclosure under u s c sec_552 b and c before the document is provided to the taxpayer with notice of intention to disclose only the national_office function issuing the field_service_advice is authorized to make such deletions and to make the redacted document available for public inspection accordingly the examination appeals or counsel recipient of this document may not provide a copy of this unredacted document to the taxpayer or their representative the recipient of this document may share this unredacted document only with those persons whose official tax_administration duties with respect to the case and the issues discussed in the document require inspection or disclosure of the field_service_advice legend taxpayer a b c issues whether machinery and equipment affixed to improved real_property constitutes real_property for purposes of sec_189 of internal_revenue_code of conclusions virtually all the property in issue will constitute real_property given its inherently permanent status for purposes of former sec_189 of the internal_revenue_code of facts the service disallowed deductions for interest and taxes incurred during construction of certain of taxpayer’s facilities on the grounds that sec_189 which requires capitalization of real_property_taxes and interest incurred during construction required these items to be capitalized and amortized the facilities in question are an a unit a b plant which produces power for the a unit and a c unit which assists in production of the taxpayer’s manufacturing activities the focus of this request is the a unit the facts concerning this facility are fully developed the legal questions concerning the interpretation and application of sec_189 are essentially the same for all three facilities the a unit is a maze of pipes valves pumps and meters whose purpose is to aid in the production of taxpayer’s manufacturing activities the unit takes up more than a city block and at its highest point extends about feet into the air the labyrinth of pipes and vessels is located on a concrete platform to which the components are bolted taxpayer contends that for purposes of analysis under sec_189 its facilities must be broken down into their constituent parts taxpayer argues that sec_189 must be separately and independently applied to the countless nuts bolts switches belts etc which comprise its facilities because all of these parts can be disassembled moved or replaced law and analysis sec_189 prior to its repeal in provided in pertinent part that no deduction shall be allowed for real_property_construction_period_interest_and_taxes the present issue is the scope of the term real_property for the purposes of this provision this term is not specifically defined in the statute and regulations were never promulgated thus the common_law meaning of real_property together with the legislative_history to sec_189 should be utilized in determining whether taxpayer’s self-constructed machinery and equipment are subject_to the interest and tax capitalization requirement in general all property rights are classified in accordance with the nature of the object concerning which the rights are claimed thus immovables land and those things permanently attached to land are generally classified as real_property and movables commonly designated in the law as chattels are classified as personal_property t he distinction drawn in the common_law between real and personal_property is that between rights in land and rights in chattels t hese words real and personal in their origin denoted not the difference between the objects of property rights but between the forms of action by which rights were vindicated brown the law of personal_property sec_1 3rd ed the internal_revenue_code utilizes the concepts of real and personal_property in sec_1250 and sec_1245 without defining those terms with more specificity in addition sec_1245 introduces the term other_property which relates loosely to the common_law concept of fixtures ie a movable chattel that by reason of affixation to or association with use with land is treated in law as realty brown the law of personal_property the legislative_history of sec_189 clearly demonstrates that use of the term real_property included both buildings and other permanent improvements to land as well as machinery and equipment permanently affixed thereto thus when originally enacted in the joint_committee summary indicated that the capitalization requirements applied with respect to the construction of a building or other improvement summary of the tax reform act of joint_committee staff date c b part i pincite in when sec_189 was extended to all corporations the conference committee report h rept no 97th cong 2nd sess date 1982_2_cb_600 in discussing transition_rules clearly indicated that the term real_property included both real_property improvements and permanently affixed machinery and equipment i f a taxpayer plans to construct a facility to produce sheet metal from iron ore then both the blast furnace and the rolling mill are part of the same integrated facility because both properties are necessary to produce sheet metal from iron ore although improvements such as parking lots access roads and utility hook-ups may be part of an integrated facility the start of construction of such property which can be used in connection with any type of facility is not considered the start of construction for purposes of the effective date of amended sec_189 emphasis supplied colloquies between senators on the senate floor also indicate that fixtures such as oil pipelines including the alaska pipeline were subject_to the interest and tax capitalization requirements of sec_189 for this reason the effective date provision previously referred to specifically excluded the alaska pipeline from sec_189 notably the exclusion of the alaska pipeline extended to related facilities eg compressor stations and conditioning plants 1982_2_cb_600 additionally the general explanation for an unrelated amendment in states that for purposes of sec_189 real_property includes certain property that is treated as personal_property for purposes of the investment_tax_credit and depreciation general explanation h_r 98th cong p l p n to the same effect the senate_finance_committee report related to the provision states that real_property includes certain sec_1245 property and certain ‘ sec_38 property’ described in sec_48 deficit_reduction_act_of_1984 as approved by the senate_finance_committee on date sec_72 sen print vol i date pp 1although a treasury official testified that the statute only applied to buildings and not to structures affixed to the ground such as farm implement sheds and pipelines cong rec s8977 daily ed date later colloquies between senators dole and bentsen and metzenbaum and dole indicated that this was an error and that pipelines were in fact governed by sec_189 id s8981-82 with the enactment of sec_263a of the internal_revenue_code_of_1986 the less comprehensive interest and tax capitalization_rules of sec_189 were repealed the background memorandum accompanying the proposed_regulations to sec_263a states that t he legislative_history under former sec_189 suggests an expansive definition of real_property encompassing both buildings and improvements similarly when congress extended the scope of former sec_189 to c corporations it was apparent that congress contemplated that former sec_189 applied to pipelines and other land improvements 1991_2_cb_1000 the background memorandum to the final regulations also makes clear that congress did not intend to adopt a definition of real_property any less comprehensive than the definition appropriate fro sec_189 purposes see background memorandum accompanying the final regulations under sec_263a 1995_1_cb_24 - accordingly the regulatory definitions promulgated for sec_263a purposes are useful in establishing the types of assets subject_to the interest and tax capitalization_rules of sec_189 thus sec_1_263a-8 defines real_property in part as land buildings and inherently permanent structures real_property includes the structural_components of both buildings and inherently permanent structures such as walls partitions doors wiring plumbing central air conditioning and heating systems pipes and ducts elevators and escalators and other similar_property emphasis supplied sec_1_263a-8 in turn defines inherently permanent structures as including property that is affixed to real_property and that will ordinarily remain affixed for an indefinite period of time giving as examples among other things special foundations fences inherently permanent outdoor lighting facilities power generation facilities and transmission facilities oil_and_gas pipelines broadcasting towers derricks and storage equipment grain storage bins and silos property falling within the definition of other tangible_property for purposes of a b and trea reg sec_1_48-1 also is treated as an inherently_permanent_structure and thus real_property for the purposes of this section finally sec_1_263a-8 provides that although machinery by itself is not an inherently_permanent_structure property in the nature of machinery is real_property if it is a building or part of a structural_component that is part of a building or inherently_permanent_structure case development hazards and other consideration sec_3 please call if you have any further questions associate chief_counsel by patrick putzi special counsel natural_resources branch