t c memo united_states tax_court william elias rosenberg petitioner v commissioner of internal revenue respondent docket no filed date william elias rosenberg pro_se caitlin a homewood for respondent memorandum findings_of_fact and opinion pugh judge in a notice_of_deficiency dated date respondent determined a deficiency in petitioner’s federal_income_tax of dollar_figure for unless otherwise indicated section references are to the internal_revenue_code_of_1986 as amended in effect for the year at issue rule references are to the tax_court rules_of_practice and procedure all monetary amounts are rounded to the nearest dollar the issues for decision are whether petitioner’s withdrawal from his individual_retirement_account ira is included in gross_income and subject_to the additional tax on early distributions from qualified_retirement_plans imposed by sec_72 findings_of_fact some of the facts have been stipulated and are so found the stipulated facts are incorporated in our findings by this reference petitioner resided in california when he timely filed his petition on date a judgment and property order attachment to judgment property order was entered that dissolved petitioner’s marriage to his former spouse it provided that his former spouse must pay him the sum of dollar_figure to be p aid from the proceeds of his former spouse’s retirement account as reimbursement to petitioner for his payment to her of liquidated retirement proceeds during marriage in petitioner’s former spouse transferred retirement_funds to him instead of withdrawing the funds from her retirement account at merrill lynch and making a cash payment to him she arranged for those funds to be transferred from her retirement account to an ira that petitioner opened at merrill lynch within seven days of this transfer he withdrew the funds and closed the account in merrill lynch issued a form 1099-r distribution from pensions annuities retirement or profit-sharing_plans iras insurance contracts etc to petitioner reflecting a withdrawal of dollar_figure dollar_figure reduced by a dollar_figure withdrawal fee petitioner also withdrew dollar_figure from an ira he held at fidelity investments fidelity and received a form 1099-r in from fidelity reflecting this withdrawal he had not yet turned at the time of the withdrawals on hi sec_2015 form_1040 u s individual_income_tax_return petitioner reported the fidelity withdrawal as income but not the merrill lynch withdrawal he did not report or pay the additional tax for early distributions for either withdrawal respondent’s notice_of_deficiency added the merrill lynch withdrawal to petitioner’s gross_income determined the sec_72 additional tax for both withdrawals and made corresponding computational adjustments i burden_of_proof opinion ordinarily the burden_of_proof in cases before the court is on the taxpayer rule a 290_us_111 in certain circumstances the burden_of_proof on factual issues may shift to the commissioner see sec_7491 rule a the record establishes and petitioner concedes that he received withdrawals from retirement accounts he held at fidelity and merrill lynch and he does not dispute the amounts reported on the forms 1099-r he also does not dispute respondent’s determination as to the fidelity withdrawal rather he disputes the characterization of the merrill lynch withdrawal as income because petitioner raises only a legal issue we decide whether he is liable for the deficiency without regard to the burden_of_proof ii analysis gross_income generally includes distributions from an ira under the provisions of sec_72 sec_408 see sears v commissioner tcmemo_2010_146 sec_72 imposes a additional tax on early distributions from a qualified_retirement_plan including an ira subject_to certain exceptions in sec_72 see sec_4974 the statutory scheme expressly addresses transfers as part of property_settlements incident_to_divorce_or_separation providing an exception for a distribution made to an alternative payee pursuant to a qualified_domestic_relations_order sec_72 petitioner’s withdrawal does not fit that exception see eg hartley v commissioner tcmemo_2012_ petitioner does not argue that the merrill lynch withdrawal is not income or that any statutory exception in sec_72 applies he argues rather that the court should disregard entirely the merrill lynch account and the intermediate steps of the transfers from his former spouse’s retirement account to his ira and his immediate withdrawal from that account and treat the transaction instead in substance as a payment of cash from his former spouse to him as prescribed by the property order he reasons that his former spouse interposed the intermediate steps over his objection and he did not think the temporary account would convert his property settlement into a retirement distribution includable in his gross_income or subject_to the additional tax under sec_72 petitioner credibly testified regarding the intent of the property order but his understanding that his former spouse would withdraw the funds from her retirement account and transfer them directly to him cannot overcome the fact that the funds were transferred from her retirement account to his and he then withdrew them we will not use common_law doctrines to fashion an equitable exception to the statutory scheme in sec_72 see summers v commissioner t c memo petitioner did not argue nor does the evidence support our concluding that his former spouse withdrew the funds from her retirement account in a taxable transaction and then contributed these after-tax funds into his ira we therefore will not consider the tax treatment of this hypothetical alternative at upholding a additional tax on a distribution in connection with a property settlement and observing that we are not at liberty to add equitable exceptions to the statutory scheme that congress enacted we therefore sustain respondent’s determination that the merrill lynch withdrawal is includable in petitioner’s gross_income and subject_to the additional tax any contentions we have not addressed we deem irrelevant moot or meritless to reflect the foregoing decision will be entered for respondent


date internal_revenue_service number info release date cor-117005-00 the honorable bob kerrey united_states senate washington d c attention matthew thornblad dear senator kerrey this letter is in response to your inquiry dated date on behalf of your constituent internal_revenue_service for raising the business standard mileage rate to reflect rising gasoline prices asked for information about policies of the gasoline prices we realize increased gasoline prices are an economic burden however the cost of gasoline is only one part of the business standard mileage rate which includes fixed and operating automobile costs these costs include depreciation or lease payments maintenance and repairs insurance and license and registration fees in addition to gasoline and oil less than one-third of the cents per mile rate comes from the cost of gasoline and oil thus an immediate adjustment in the rate taking into account the recent increase in gasoline prices might not be significant setting the business standard mileage rate the rate is a national average amount determined by an annual study performed by an independent_contractor who is an expert in the cost analysis of business use of automobiles the contractor uses recent data from each state on the component costs of operating the most popular automobiles the contractor then combines this data to achieve a national composite cents-per-mile rate advantages of using the business standard mileage rate reducing a taxpayer’s record-keeping burden is the principal advantage of using the rate gasoline prices rise and fall during the year but taxpayers may continue to use the same rate without having to keep records of actual expenses although rising gasoline prices can be a disadvantage for taxpayers who use the rate falling prices can work to their advantage for example although gasoline prices fell in for all of and through date taxpayers were able to use the rate that reflected the earlier higher prices taxpayer’s options to deduct the ordinary and necessary expenses of using an automobile for business purposes a taxpayer must substantiate the cost date place and business_purpose of each use of the automobile by adequate_records for the cost the taxpayer has two options substantiate actual cost by keeping records or by other_sufficient_evidence use the business standard mileage rate using the rate gives approximate not actual costs taxpayers can deduct the actual business_expenses of using a personally-owned automobile and this may be advantageous when automobile costs are rising publication travel entertainment gift and car expenses contains further information on how taxpayers should substantiate expenses i have enclosed the relevant pages from that publication i hope this information is helpful please call elliot m rogers identification_number at if you have any questions sincerely heather c maloy associate chief_counsel income_tax accounting enclosure


department of the treasury internal_revenue_service washington d c number release date cc intl br sca-148501-01 uil memorandum for henry murphy manager from subject collection branch sec_1 asfr unit phyllis e marcus branch chief cc intl br accepting a prior form_2555 filed in as it would affect the sec_911 election on form_2555 for a subsequent year this memorandum responds to your brief e-mail dated date requesting clarification of accepting a taxpayer’s prior form_2555 filed for tax_year as it would affect his sec_911 election for in your case the taxpayer made a sec_911 election on form_2555 for tax_year it is unclear whether that election was timely filed under sec_1_911-7 however since the philadelphia service_center did not issue an automated substitute for return asfr prior to taxpayer’s filing of his tax_return the service_center accepted taxpayer’s form_2555 ie taxpayer made a valid sec_911 election subsequently the same taxpayer filed his tax_return with form_2555 attached after the due_date of the return however prior to his filing of this return the philadelphia service_center had issued an asfr to the taxpayer because the service_center discovered that taxpayer failed to elect the exclusion and he owed federal_income_tax after taking into account the sec_911 exclusion the service_center denied his claim for the sec_911 exclusion pursuant to sec_1_911-7 it is unclear whether taxpayer continued to work outside the united_states between and you are requesting clarification about whether the taxpayer’s sec_911 election made in is valid for all subsequent years including making irrelevant the fact that the sec_911 election for was untimely based on the facts that you provided we cannot make a determination concerning the validity of the sec_911 election as it pertains to the tax_year cases of this nature always involve an examination of all facts and circumstances however we are providing the following general information on the sec_911 election and recommend that you make further factual development sca-148501-01 sec_911 of the code allows a qualified_individual as defined in sec_911 to exclude foreign_earned_income and housing cost amounts from gross_income sec_911 provides that the election applies to the taxable_year for which made and to all subsequent taxable years unless revoked by the taxpayer in addition the legislative_history of sec_911 supports the position that the sec_911 election is a one-time election if a taxpayer who elects to exclude foreign_earned_income becomes a resident_of_the_united_states and then a number of years later moves abroad again the election remains in effect accordingly that individual would not have to reelect the exclusion for that later year s rep no pincite the regulations thereunder provide that such an election must be made on a form_2555 filed with an income_tax return or with an amended_return sec_1_911-7 thus the sec_911 election to exclude foreign_earned_income is a one-time election that is effective for the taxable_year for which it is made and remains in effect for all subsequent taxable years unless revoked by the taxpayer sec_1_911-7 sets forth a procedure for revoking a sec_911 election an election may be revoked by filing a statement with the income_tax return or amended income_tax return for the taxable_year for which the revocation is to take effect the revocation is effective for that year and all subsequent years although the regulations under sec_911 of the code prescribe a method by which a taxpayer may revoke an election to exclude foreign_earned_income they do not purport to provide the exclusive method for revoking such an election for example an election may also be revoked by claiming a foreign_tax_credit for foreign taxes paid on foreign_earned_income see revrul_90_77 1990_2_cb_183 date from your e-mail we are unable to determine whether the taxpayer made any valid revocation of his prior sec_911 exclusion during the years between and also in your case it is possible that the taxpayer lost his status as a qualified_individual for tax_year under sec_911 by returning to the united_states under sec_911 of the code the term qualified_individual is an individual whose tax_home is in a foreign_country and who is a a citizen_of_the_united_states and establishes to the satisfaction of the secretary_of_the_treasury that the individual has been a bona_fide_resident of a foreign_country or countries for an uninterrupted period that includes an entire taxable_year or b a citizen or resident_of_the_united_states who during any period of consecutive months is present in a foreign_country or countries during at least full days sca-148501-01 while returning to the united_states for work or vacation does not automatically revoke a taxpayer’s sec_911 election it is possible for the taxpayer to fail the bona_fide residency and the physical presence requirements for example if a taxpayer had been employed in fc from september to april when he returned to the united_states in may he went back to fc where he worked for the rest of the year he was not a bona_fide_resident of a foreign_country for the entire tax_year of if you have any questions please call kate y hwa at phyllis e marcus chief branch office of associate chief_counsel international


t c memo united_states tax_court meda smith petitioner v commissioner of internal revenue respondent docket no filed date neil deininger for petitioner ann l darnold and michael j o’brien for respondent memorandum findings_of_fact and opinion thornton judge on date respondent issued a notice of final_determination denying petitioner’s claim_for_abatement of interest petitioner timely filed a petition pursuant to sec_6404 and rule the issue for unless otherwise stated 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 - - decision is whether respondent abused his discretion in denying petitioner’s request for abatement of interest findings_of_fact the parties have stipulated some of the facts which we incorporate in our findings by this reference when she filed her petition petitioner resided in greenfield california after their marriage in petitioner and her then- husband frank smith frank owned and operated a farm in arkansas in their farm was in financial straits and petitioner went to work ina laundry in date petitioner separated from frank and moved to greenfield california where she worked as a live-in caregiver for the elderly sometime in or petitioner and frank divorced tax_return petitioner and frank filed a joint federal_income_tax return for on the return they reported dollar_figure of farm income and dollar_figure of wage income paid to petitioner the return shows a tax_liability of dollar_figure with credit claimed for dollar_figure of federal income taxes withheld from petitioner’s wages resulting in dollar_figure of tax owed the liability no payment was included with the return in date respondent contacted petitioner and frank in writing regarding the liability in response petitioner - - wrote respondent a letter dated date and signed by frank stating we just don’t have the money to pay our taxes x we would like to make some kind of payment agreements in date after petitioner had moved to california respondent determined that frank’s income was insufficient to fund a payment arrangement respondent classified the liability as uncollectible collection action on the liability after petitioner filed her federal_income_tax returns using a greenfield california address on her return petitioner claimed a dollar_figure refund on her return she claimed a dollar_figure refund in each instance respondent applied the claimed refund to the unpaid liability in each instance petitioner received notification from respondent shortly after filing her return that the refund had been applied the record is unclear as to whether respondent considered petitioner’s wage income or other assets in denying the request for a payment arrangement for and petitioner claimed a filing_status of married_filing_separately for subseguent years she claimed a filing_status of single on her federal_income_tax returns for and petitioner reported tax_liabilities which she paid when she filed the returns q4e- to the liability in neither instance did the notification state the outstanding balance of the liability on her return petitioner reported taxable wages of dollar_figure on the basis of this information on date respondent determined that the liability should no longer be classified as uncollectible on date respondent assigned petitioner’s case to revenue_officer garrie ollie ollie for collection action on date ollie issued to petitioner’s employer in salinas california a notice_of_levy on petitioner’s wages with respect to the liability the notice shows an unpaid balance on the liability of dollar_figure plus statutory additions late-payment penalties and interest of dollar_figure fora total amount due of dollar_figure petitioner then contacted ollie and entered into an installment_agreement to pay the liability in date petitioner began making monthly payments on date petitioner made a lump-sum payment of dollar_figure in satisfaction of the remaining balance on the liability the text within each notification describes the liability as being under frank’s social_security_number each notification however shows petitioner’s taxpayer_identification_number ie her social_security_number at the top and bears the caption overpaid tax applied to other federal taxes owed on secondary social_security_number e on petitioner’s social_security_number --- - petitioner’s requests for abatement of interest and penalties in date petitioner filed a form_843 claim_for_refund and request for abatement requesting abatement of dollar_figure of late-payment penalties with respect to the liability by letter dated date respondent denied her claim petitioner made no appeal on date petitioner’s representative an enrolled_agent sent respondent a letter informally requesting abatement of interest and penalties with respect to the liability respondent disallowed petitioner’s claim_for_abatement of interest and declined to reconsider his prior denial of petitioner’s claim_for_abatement of penalties petitioner appealed this determination to the internal_revenue_service irs office of appeals appeals on date appeals abated percent of the late-payment penalties and related interest resulting in a refund to petitioner on date respondent issued a notice of final_determination denying petitioner’s request for abatement of interest opinion under sec_6404 the commissioner may abate interest on any deficiency or payment of income gift estate and certain excise_taxes to the extent that the deficiency or any error or delay in payment is attributable to erroneous or dilatory performance of a ministerial_act by an officer or - - employee of the commissioner such an error or delay in performing a ministerial_act is taken into account only if it is in no significant aspect attributable to the taxpayer and only if sec_6404 provides assessments of interest attributable to errors and delays by internal_revenue_service --- in general --in the case of any assessment of interest on-- a any deficiency attributable in whole or in part to any error or delay by an officer_or_employee of the internal_revenue_service acting in his official capacity in performing a ministerial_act or b any payment of any_tax described in sec_6212 to the extent that any error or delay in such payment is attributable to such officer_or_employee being erroneous or dilatory in performing a ministerial_act the secretary may abate the assessment of all or any part of such interest for any period for purposes of the preceding sentence an error or delay shall be taken into account only if no significant aspect of such error or delay can be attributed to the taxpayer involved and after the internal_revenue_service has contacted the taxpayer in writing with respect to such deficiency or payment in sec_6404 e was amended to permit abatement of interest for unreasonable error or delay resulting from the performance of ministerial or managerial acts taxpayer bill of right sec_2 publaw_104_168 and 110_stat_1452 the amendment applies to tax years beginning after date id sec_301 110_stat_1457 therefore the amendment is inapplicable to the instant case we intend no inference that we would reach a different result in this case if the amendment were applicable - it occurs after the irs has contacted the taxpayer in writing regarding the deficiency or payment sec_6404 is not intended to be used routinely to avoid payment of interest but rather is to be utilized in instances where failure to abate interest would be widely perceived as grossly unfair h rept pincite 1986_3_cb_1 s rept pincite 1986_3_cb_1 for interest abatement claims made after date the tax_court has jurisdiction to determine whether the commissioner’s failure to abate interest under sec_6404 e was an abuse_of_discretion see sec_6404 woodral v commissioner t cc where the taxpayer has already paid the interest that is the subject of the request for abatement this court has jurisdiction to determine the amount of any overpayment to be refunded or credited to the taxpayer see sec_6404 b b petitioner contends that respondent failed to reguest financial information from her and to take other steps prescribed by the internal_revenue_manual before classifying the liability as uncollectible without notifying her of the unpaid balance on brief petitioner contends that respondent’s failure to take these steps left her with the reasonable belief she didn’t owe the tax and thus caused her to delay paying off the - - liability petitioner seeks abatement and refund of all interest that accrued after date when respondent classified the liability as uncollectible because respondent has determined no deficiency sec_6404 e a is inapplicable we construe petitioner’s claim as arising under sec_6404 to be entitled to relief under that section petitioner must show that her delay in paying the liability was attributable to an irs officer_or_employee being erroneous or dilatory in performing a ministerial_act and that no significant aspect of the delay can be attributed to her petitioner has failed to do so respondent’s determination that the liability should be classified as uncollectible reguired the exercise of discretion and judgment hence it was not a ministerial_act see sec_301_6404-2t b temporary proced admin regs fed reg date and cannot provide the requisite basis for abating interest under sec_6404 moreover even if we were to assume for sake of argument that respondent’s officers or employees erroneously performed or failed to perform one or more prescribed ministerial acts in classifying the liability as uncollectible as petitioner alleges petitioner has still failed to establish that any such missteps were the cause of her delayed payment of the liability to the contrary the evidence shows that the delay in - payment resulted quite simply from petitioner’s failure to pay the liability that she and frank reported on their joint_return or else to ensure that frank was taking care of it the evidence does not suggest that petitioner’s failure to pay the liability resulted from respondent’s classifying it as uncollectible indeed the evidence does not indicate when petitioner might have first become aware that respondent had classified the liability as uncollectible on brief petitioner acknowledges that there is no question that petitioner was aware of the tax_liability at the time the return was filed similarly petitioner acknowledges that she knew at the time she left her husband there was an outstanding liability she states on brief that she did not lack the ability to pay the liability after she left her husband in february nevertheless she claims that no significant aspect of the delay in payment was attributable to her because respondent failed to send her additional notices of the balance due although intrigued by the novelty of a complaint that the irs has failed to hound the taxpayer enough we find therein no basis to grant petitioner relief in date respondent sent petitioner and frank a notification of the liability they had reported on their joint_return respondent was under no obligation to send additional notices whether respondent acted improvidently in - classifying the liability as uncollectible or in failing to take more vigorous collection sooner is immaterial this conclusion is bolstered by the legislative_history of sec_6404 which states if a taxpayer files a return but does not pay the taxes due this provision would not permit abatement of this interest regardless of how long the irs took to contact the taxpayer and request payment 4h rept supra pincite c b vol pincite s rept supra pincite c b vol pincite thi sec_1s not a case where after reporting a tax_liability on the return and failing to pay it the taxpayer was misled by incorrect information from respondent to make payment of less than the full balance due cf douponce v commissioner tcmemo_1999_398 respondent did nothing that would have misled petitioner into believing that the liability was less than she and frank reported on their joint_return or that the liability had been previously satisfied as far as the evidence shows respondent never notified petitioner that the liability had been classified as uncollectible in respondent notified petitioner that her claimed refund was being applied to the liability in petitioner received a similar notification shortly after claiming a refund on her tax_return as far as the record reveals in neither instance did petitioner inquire of respondent why her claimed refunds were being applied against the liability or what the remaining balance was we infer that petitioner either knew or was content not to know the answers only after respondent issued a wage levy to petitioner’s employer did petitioner act to satisfy the liability with respect to respondent’s notifications that her and refunds were being applied to the liability petitioner argues that respondent’s failure to state the balances due to segregate her and frank’s accounts and to include her social_security_number on the notifications constituted malfeasance by respondent in performing his duty to collect taxes ’ petitioner concedes on brief however that any such failure does not legally justify the abatement of interest we agree on brief petitioner suggests that the equities should lie with her claiming that she was the innocent victim of an abusive marital situation that unfairly left her holding the bag for the liability on reply brief however petitioner concedes that she does not qualify for relief under sec_6015 given that petitioner has conceded liability for the underlying tax it follows that interest properly accrued on that liability for the ’ in fact as previously noted petitioner’s social_security_number did appear on the notices which expressly refer to federal taxes owed on the secondary social_security_number e petitioner’s in any event respondent’s application of her and refunds to the liability should have alerted petitioner that respondent believed she remained liable on the liability period it remained unpaid see sec_6601 even if we were to assume arguendo that petitioner’s delay in paying the liability was partly attributable to her marital difficulties this circumstance would not tend to show that the delay was attributable to ministerial error or delay by the irs as required for her to establish entitlement to relief pursuant to sec_6404 in sum we are unable to conclude that there was any erroneous or dilatory performance of a ministerial_act by respondent that caused or contributed to the delay in petitioner’s payment of the liability or that the delay was not in significant part attributable to petitioner consequently respondent’s refusal to abate petitioner’s interest under sec_6404 was not an abuse_of_discretion to reflect the foregoing decision will be entered for respondent


internal_revenue_service number release date index number ------------------------------------------------------------ --------------- ------------------------------------------------------------ ------------------------------------------------------------ ---------- ---------------------------------- ------------------------ department of the treasury washington dc third party communication none date of communication not applicable_person to contact ----------- id no ----------------- telephone number --------------------- refer reply to cc psi b05 plr-133911-14 date date legend taxpayer -------------------------------------------------- -------------------------------------------------------------------------- state address bin year year -------------------- ---------------------------------------------------------- ------------------ ------ ------ agency --------------------------------------------- ----------------------------------------------------------------------------------------- dear ----------------- this letter responds to a letter dated date and related correspondence submitted on behalf of taxpayer requesting an extension of time pursuant to sec_301_9100-1 of the procedure and administration regulations to make an election under sec_42 of the internal_revenue_code plr-133911-14 the information submitted states that taxpayer owns and operates a single- building low-income_housing project in state the project is located at address and identified by bin taxpayer placed the building in service in year in year agency issued taxpayer a form_8609 low-income_housing_credit allocation and certification for the building taxpayer intended to start the credit_period for the building in year the year following the year the building was placed_in_service however the person preparing taxpayer’s return for year inadvertently checked the no box on line 10a of the form_8609 for the building thus erroneously indicating that the credit_period for the building was to begin in year the year the building was placed_in_service consistent with its intent taxpayer seeks an extension of time to make an election under sec_42 to start the credit_period for the building in year sec_42 defines credit_period to mean with respect to any building the period of taxable years beginning with the taxable_year in which the building is placed_in_service or at the election of the taxpayer the succeeding taxable_year but in either case only if the building is a qualified_low-income_building as of the close of the first year of such period the election once made is irrevocable sec_301_9100-8 provides that the election under sec_42 generally must be made for the taxable_year in which the building is placed_in_service or the succeeding taxable_year if the sec_42 election is made to defer the start of the credit_period and must be made in the certification required to be filed pursuant to sec_42 and sec_301_9100-8 provides that the election under sec_42 is irrevocable sec_1_42-1 provides in part that unless otherwise provided in forms or instructions a completed form_8609 or any successor form must be filed by the building owner with the irs the requirements for completing the form_8609 are provided in the instructions to the form 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 defines the term regulatory election as including 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 under sec_301_9100-1 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 e g h and i plr-133911-14 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 including affidavits described in sec_301_9100-3 to establish that the taxpayer acted reasonably and in good_faith and that granting 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 sec_301_9100-1 and sec_301_9100-3 have been met accordingly taxpayer is granted an extension of time to make the sec_42 election on form_8609 to treat the credit_period for the building located at address and identified by bin as beginning in year the election must be made by filing within days from the date of this letter an amended form_8609 that includes this intended election the amended form_8609 along with a copy of this letter is to be sent to the following address department of the treasury internal_revenue_service center philadelphia pa a copy of this letter is enclosed for this purpose 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 building located at address and identified by bin otherwise qualifies for credit under sec_42 this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent the ruling contained in this letter is based upon information and representations submitted by taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination plr-133911-14 in accordance with the power_of_attorney on file with this office copies of this letter are being sent to your authorized representatives sincerely associate chief_counsel passthroughs special industries by _______________________ christopher j wilson senior counsel branch office of associate chief_counsel enclosures copy of this letter copy for sec_6110 purposes cc


t c summary opinion united_states tax_court jody schoolcraft-burkey petitioner v commissioner of internal revenue respondent docket no 17437-06s filed date jody schoolcraft-burkey pro_se anita a gill and cathy j horner for respondent jacobs 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 pursuant to sec_7463 sec_1unless 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 the decision to be entered is not reviewable by any other court and this opinion shall not be treated as precedent for any other case respondent determined a dollar_figure deficiency in petitioner’s federal_income_tax and a dollar_figure accuracy-related_penalty under sec_6662 the issues for decision are whether all payments petitioner received from his former employer mahoning valley economic development corp mvedc pursuant to the settlement of a lawsuit are includable in income whether petitioner may deduct attorney’s fees he paid in bringing a lawsuit against mvedc whether petitioner paid deductible expenses which would offset income he received in the performance of consulting services and whether petitioner is liable for an accuracy-related_penalty under sec_6662 background some of the facts have been stipulated and are so found the stipulation of facts and the attached exhibits are incorporated herein by this reference at the time he filed his petition petitioner resided in niles ohio petitioner as a married taxpayer filing separately timely filed a form_1040 u s individual_income_tax_return for in which he reported total income of dollar_figure tax of dollar_figure and tax_payments of dollar_figure both petitioner and his wife claimed the standard_deduction for in their separate returns on the basis of third-party information reported to the irs respondent determined that petitioner failed to report relatively small amounts of capital_gain dividend income_interest income and pension annuity income investment_income as well as dollar_figure of nonemployee consulting compensation and dollar_figure of the dollar_figure he received from mvedc in connection with settlement of a lawsuit see infra petitioner concedes error in his failure to report the various amounts of investment_income as well as the dollar_figure of nonemployee consulting compensation but he disputes the taxability of dollar_figure of the dollar_figure in settlement proceeds he received from mvedc claiming that portion was nontaxable compensation_for personal injuries moreover petitioner claims entitlement to deductions for certain expenses in connection with his lawsuit against mvedc and in rendering his consulting services from until he was dismissed on date petitioner was a loan officer for mvedc for several months before his dismissal petitioner had been cooperating with the fbi and the u s department of justice in providing files correspondence and other documents pertaining to certain of mvedc’s activities in petitioner brought suit against mvedc2 for terminating hi sec_2petitioner’s lawsuit in addition to naming mvedc included mvedc’s executive director and treasurer and mahoning valley industrial loan fund as defendants employment alleging that his discharge was in retaliation for his cooperation with government officials in his complaint against mvedc petitioner claimed the following breach of contract intentional breach of contract infliction of emotional distress promissory estoppel principal and agent relationship--breach of fiduciary duty breach of fiduciary duty equitable claim for unjust enrichment public policy and common_law tortious interference with contractual relationship and civil conspiracy the complaint made no reference to any state or federal statute such as a whistleblower protection regime or civil rights legislation as a possible basis for relief in his complaint petitioner demanded in addition to equitable relief such as reinstatement compensatory_damages in an amount in excess of dollar_figure and punitive_damages in an amount in excess of dollar_figure in connection with his claim based on intentional breach of contract petitioner alleged that he suffered adverse health effects in connection with his claim based on infliction of emotional distress petitioner alleged that he suffered physical injury in the form of adverse health effects in connection with his claim based on public policy and common_law petitioner alleged that he suffered physical pain and distress the complaint did not allege that petitioner sustained any other personal physical injury or physical sickness and it did not explain or describe the adverse health effects physical injury or physical pain petitioner claimed to have suffered petitioner entered into a settlement with mvedc on or about date in which petitioner agreed to dismissal of his lawsuit in exchange for dollar_figure the settlement agreement designated dollar_figure of the dollar_figure in settlement proceeds as back pay or lost wages and petitioner agrees that the dollar_figure is taxable the settlement agreement designated the remaining dollar_figure of the dollar_figure as compensation_for any emotional pain suffering inconvenience mental anguish loss of enjoyment of life fright nervousness indignity humiliation embarrassment and other personal injuries that burkey claims to have suffered as well as in exchange for his release of any common_law and statutory causes of action for sexual harassment sex or gender discrimination age discrimination disability discrimination personal injury retaliation wrongful discharge constructive discharge claims of discrimination or harassment on any basis claims alleging whistleblowing under state or federal_law claims of breach of public policy breach of fiduciary duty breach of express or implied contract breach of any employment agreement conspiracy interference with employment contract unjust enrichment invasion of privacy fraud conversion intentional infliction of mental distress promissory estoppel defamation intentional interference with any contract or business relationship and any other claims of any kind that burkey may possess against mvedc the settlement agreement specified that mvedc would not withhold any taxes from the dollar_figure portion of the dollar_figure payment and that mvedc made no representation or warranty whatsoever concerning the tax consequences of burkey’s receipt of any monetary payments from mvedc mvedc reported the dollar_figure portion to the irs by means of form 1099-misc miscellaneous income as other income petitioner did not report the dollar_figure portion on his return at trial petitioner continued to maintain that the dollar_figure portion was compensation_for personal injuries and not includable in income he further claimed that he was entitled to a deduction for attorney’s fees he paid in connection with his lawsuit against mvedc additionally petitioner claimed he paid deductible expenses in connection with the production of the dollar_figure in consulting income finally petitioner who resided in a home owned by his daughter and paid no rent to her in claimed that rent he would have paid had he been required to pay rent together with an array of other expenses was deductible and that he should have deducted those expenses on a schedule c profit or loss from business with his return 3petitioner did not attach a schedule c to his return at trial petitioner submitted a handwritten page dated date captioned amended schedule ‘c’ on which deductions totaling dollar_figure for rent phone advertising cards supplies meals mileage travel misc membership were listed this summary was revised during the trial to show a corrected total of dollar_figure of deductions for rent mileage travel and misc membership in addition at trial petitioner submitted a statement in which he claimed a deduction for the equivalent of lost medical insurance coverage discussion petitioner has neither claimed nor shown that he satisfied the requirements of sec_7491 to shift the burden_of_proof to respondent hence petitioner bears the burden of proving that respondent’s deficiency determinations are incorrect see rule a 290_us_111 it is well established that pursuant to sec_61 gross_income includes all income from whatever source derived unless otherwise excluded by the internal_revenue_code see 348_us_426 exclusions from gross_income are construed narrowly 515_us_323 generally amounts received for damages are excludable from gross_income if the taxpayer demonstrates that the underlying cause of action giving rise to the recovery is based upon tort or tort type rights and the taxpayer shows that the damages were received on account of personal injuries or sickness id pincite the specific exclusion upon which petitioner relies is found in sec_104 sec_104 as relevant here provides sec_104 compensation_for injuries or sickness a in general --except in the case of amounts attributable to and not in excess of deductions allowed under sec_213 relating to medical etc expenses for any prior taxable_year gross_income does not include-- the amount of any damages other than punitive_damages received whether by suit or agreement and whether as lump sums or as periodic_payments on account of personal physical injuries or physical sickness for purposes of paragraph emotional distress shall not be treated as a physical injury or physical sickness damages received means amounts received through prosecution of a legal suit or action based upon tort or tort type rights or through a settlement agreement entered into in lieu of such prosecution sec_1_104-1 income_tax regs when damages are received pursuant to a settlement agreement courts decide the purpose or purposes for which a payment was made by considering inter alia the following the underlying complaint and the nature of the claims the settlement negotiations and settlement agreement and the intent of the payor see 504_us_229 866_f2d_709 4th cir affg 89_tc_632 349_f2d_610 10th cir affg tcmemo_1964_33 bagley v sec_104 was amended by the small_business job protection act of publaw_104_188 sec 110_stat_1838 to provide with respect to amounts received after date that the personal_injury_or_sickness for which the damages are received must be physical in nature commissioner 105_tc_396 affd 121_f3d_393 8th cir petitioner’s complaint does not specify the physical injury he suffered as a result of mvedc’s conduct there is nothing in the record to indicate that petitioner either suffered a particular physical injury or physical sickness or informed mvedc that he was suffering from a particular physical injury or physical sickness as a result of his discharge in fact the settlement agreement does not refer to physical injury or physical sickness rather it enumerates other types of injuries such as emotional pain suffering inconvenience mental anguish etc as well as injuries that petitioner never alleged such as sexual harassment and discrimination hence it appears that mvedc’s intent in entering into the settlement agreement was to secure a broad general release from petitioner rather than to compensate him for physical injury or sickness petitioner did not submit any medical records showing that he received treatment for physical injuries and the record is devoid of any detailed description of what those injuries might have been in sum we do not find any basis in this record upon which 5in a posttrial memorandum filed with the court petitioner described having symptoms such as anxiety chronic pain with physical symptoms such as high blood pressure increased pulse and respiration compulsions delusions denial and depression stress-related symptoms such as these relate to emotional distress and not to physical sickness see lindsey v continued we could make a rational allocation of mvedc’s dollar_figure payment to compensation_for physical harm if indeed petitioner suffered physical harm within the meaning of sec_104 therefore the entire dollar_figure settlement payment is includable in petitioner’s income in bringing his lawsuit against mvedc petitioner retained an attorney whom he compensated on an hourly basis petitioner made periodic_payments to his attorney beginning in and he paid dollar_figure in legal fees during at trial petitioner claimed that his legal fees were deductible generally legal fees are deductible under sec_162 only if the matter with respect to which the fees were paid originated in the taxpayer’s trade_or_business and only if the claim is sufficiently connected with that trade_or_business see 372_us_39 118_tc_467 affd 351_f3d_982 9th cir test v commissioner tcmemo_2000_362 affd 49_fedappx_96 9th cir expenses not incurred_in_a_trade_or_business activity but in the production_or_collection_of_income are deductible as miscellaneous_itemized_deductions on schedule a itemized_deductions sec_67 sec_212 further it is well established that even though a taxpayer’s employee status may be continued commissioner tcmemo_2004_113 affd 422_f3d_684 8th cir regarded as a trade_or_business legal fees stemming from a taxpayer’s employee status are to be treated as miscellaneous_itemized_deductions subject_to the 2-percent floor see sec_62 see also 543_us_426 102_tc_465 vacated on other grounds without published opinion 84_f3d_433 5th cir test v commissioner supra alexander v commissioner tcmemo_1995_51 affd 72_f3d_938 1st cir it is undisputed that petitioner was an employee of mvedc and that the legal fees petitioner paid stemmed from that relationship therefore the legal fees of dollar_figure petitioner paid to his attorney relating to the settlement of petitioner’s claims against mvedc would have been deductible on schedule a itemized_deductions petitioner did not file a schedule a with his return but instead claimed the standard_deduction petitioner’s spouse also filed a separate_return for and claimed the standard_deduction as a consequence respondent contends that petitioner 6the excess unreimbursed employee and other miscellaneous expenses deduction is claimed on schedule a itemized_deductions the amount of the deduction equals the sum of unreimbursed employee expenses--job travel union dues job education etc tax preparation fees and other expenses--investment safe deposit box etc less an amount equal to percent the percent floor of the taxpayer’s adjusted_gross_income see sec_67 is precluded from itemizing his deductions by the provisions of sec_63 and sec_6013 sec_63 provides that taxpayers must elect to itemize deductions and this election is to be made on the taxpayer’s return sec_63 and a taxpayer may change his election after filing the return but if the taxpayer’s spouse filed a separate_return for the same taxable_year sec_63 provides the change shall not be allowed unless a the spouse makes a change_of election with respect to itemized_deductions for the taxable_year covered in such separate_return consistent with the change_of treatment sought by the taxpayer and b the taxpayer and his spouse consent in writing to the assessment within such period as may be agreed on with the secretary of any deficiency to the extent attributable to such change_of election petitioner did not elect to itemize deductions either on his original return or by means of an amended_return even were we to construe petitioner’s submissions at trial as an attempt to elect itemization under sec_63 the statutory requirements of that section have not been met see boyd v commissioner tcmemo_2003_286 therefore petitioner is not entitled to itemize his deductions for consequently he cannot claim any deduction for legal fees he paid petitioner concedes that he received nonemployee compensation of dollar_figure for consulting services petitioner did not report this income on his return nor any expenses associated with the production of that income the amended schedule ‘c’ that petitioner submitted at trial see supra note was prepared shortly before trial and represents a reconstruction of expenses petitioner believed he paid amounts shown on the schedule c were revised at trial to show a rent expense of dollar_figure a mileage travel expense of dollar_figure and a misc membership expense of dollar_figure petitioner testified that although he used portions of his dwelling for purposes of meeting clients for the first months of he neither owned nor paid rent for the premises moreover he did not pay specifically for utilities telephone or internet services rather he contributed to the general upkeep of the home where he resided with his wife the amount he determined deductible as rent was the amount that he theoretically would have paid for that portion of the home he used for his consulting activities had there been a third-party landlord as well as a portion of the utilities telephone and internet services that were allocable in petitioner’s view to his consulting activities petitioner did not submit any documentary substantiation such as utility bills or telephone bills in support of his claimed deduction for expenses paid in using a portion of his home for his consulting activities 7petitioner clarified that dollar_figure represents the total amount for rent utilities telephone and internet services while we accept that petitioner used a portion of his dwelling for consulting activities we are unable to determine the amounts if any of expenses he paid in connection with that activity the fact that petitioner contributed to general household expenses does not suffice to convert those personal living_expenses into home_office business_expenses moreover it is not clear that any transfer of funds actually took place in the first months of and no other taxpayer ie petitioner’s daughter who held title to the home or his wife reported any rental income from the dwelling in sum petitioner has not proven entitlement to any deduction for rent for the first months of or to a deduction for utilities telephone or internet services for the last months of petitioner moved his place of business to different premises petitioner credibly testified and substantiated that he paid rent of dollar_figure per month for the last months of to an unrelated third-party landlord petitioner is therefore entitled to a dollar_figure deduction for a rent expense in carrying on his consulting activity in petitioner claimed a dollar_figure deduction for mileage travel_expenses paid in connection with his consulting activity in support of the claimed deduction petitioner submitted records showing the number of miles he traveled each month and a description of the purpose of the travel the records were prepared contemporaneously with the travel petitioner testified that he kept the travel records in an effort to determine during whether the income from his consulting activity was sufficient to cover his expenses sec_274 provides that expenses paid_or_incurred with respect to travel and certain listed_property are deductible only if the taxpayer meets the stringent substantiation requirements of sec_274 see sec_280f for these expenses only certain types of documentary_evidence will suffice passenger automobiles are listed_property under sec_280f and therefore strict substantiation for their use as transportation is required sec_274 no deduction is allowed for any travel or transportation expense unless the taxpayer substantiates by adequate_records or by sufficient evidence corroborating the taxpayer’s own statement the amount of the expense the mileage for each business use of the automobile and the total mileage for all use of the automobile during the taxable_period the date of the business use and the business_purpose for the use sec_1_274-5t temporary income_tax regs fed reg date adequate_records include the maintenance of an account book diary log statement of expense trip sheets and or other documentary_evidence which in combination are sufficient to establish each element of expenditure or use sec_1_274-5t temporary income_tax regs fed reg date petitioner submitted a travel log consisting of pages one for each month of the purpose for the claimed travel expense is indicated on every page as travel from niles to steubenville and return or travel from niles to steubenville lisbon et al and return the description of the travel is shown on every page as client calls at chamber commerce and or client calls at one stop center actual travel on specific days is not shown rather monthly totals are given specific client names are not provided or itemized with identifying information redacted the nature of the business discussions petitioner conducted is not shown we are unable to conclude from petitioner’s travel log that the strict substantiation requirements of sec_274 have been met accordingly the claimed mileage travel_expenses are not deductible at trial petitioner claimed that he is entitled to a deduction for lost medical insurance coverage petitioner testified that during he did not have insurance coverage and did not pay any amounts for medical insurance his claimed deduction is based on amounts he estimated that he would have paid if he had purchased such insurance because petitioner did not pay this expense he is not entitled to this deduction finally petitioner claimed that he is entitled to a dollar_figure deduction for the membership fee to join the jefferson county chamber of commerce petitioner testified and we believe that he joined the chamber of commerce in order to achieve more recognition for his business this expense is deductible under sec_162 as noted supra respondent determined a sec_6662 penalty of dollar_figure for pursuant to sec_6662 and b a taxpayer may be liable for a penalty of percent of the portion of an underpayment_of_tax attributable to a substantial_understatement_of_income_tax the term understatement means the excess of the amount of tax required to be shown on a return over the amount of tax imposed which is shown on the return reduced by any rebate within the meaning of sec_6211 sec_6662 generally an understatement is a substantial_understatement when the understatement exceeds the greater of dollar_figure or percent of the amount of tax required to be shown on the return sec_6662 the commissioner has the burden of production with respect to the accuracy-related_penalty sec_7491 to meet this burden the commissioner must produce sufficient evidence indicating that it is appropriate to impose the penalty see 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 pincite the taxpayer may meet this burden by proving that he or she acted with reasonable_cause and in good_faith see sec_6664 see also higbee v commissioner supra pincite sec_1_6664-4 income_tax regs respondent has met his burden of production under sec_7491 petitioner’s return contains an understatement_of_tax greater than dollar_figure which is greater than percent of the amount of tax required to be shown on the return see sec_6662 accordingly petitioner bears the burden of proving that the accuracy-related_penalty should not be imposed with respect to any portion of the underpayment for which he acted with reasonable_cause and in good_faith see sec_6664 higbee v commissioner supra pincite petitioner did not carry his burden of showing that his omissions from income which resulted in the underpayment were made with reasonable_cause and in good_faith accordingly petitioner is liable for the sec_6662 penalty decision will be entered under rule


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 - plr-159261-03 date date legend x ------------------------------------------------------------------------------------------------------ a ------------------------------------------------------------------------------------------------------ ----------------------- ------------------------- state ------------ -------------------- d1 dear --------------- this letter responds to your letter dated date and subsequent correspondence written on behalf of x requesting a ruling under ' b of the internal_revenue_code facts d1 x's sole shareholder a intended for x to be an s_corporation as of d1 however x’s form_2553 election by a small_business_corporation was not filed timely according to the information submitted x was incorporated under state law on x requests a ruling under sec_1362 that its sec_1362 election will be treated sec_1362 provides that a small_business_corporation may elect to be an s sec_1362 provides the rule on when an s election will be effective plr-159261-03 as timely made for its taxable_year that began on d1 law and analysis corporation generally 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 sec_1362 provides that 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 an election under sec_1362 is made for any taxable_year after the date prescribed by sec_1362 for making the election for the taxable_year or no sec_1362 election is made for 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 such taxable_year and sec_1362 shall not apply conclusion established reasonable_cause for failing to make a timely s_corporation_election and that x is eligible for relief under sec_1362 for its taxable_year that began on d1 accordingly if x makes an election to be an s_corporation by filing with the appropriate service_center a completed form_2553 effective d1 within days following the date of this letter then such election will be treated as timely made a copy of this letter should be attached to the form_2553 filed with the service_center the federal tax consequences of any aspect of any transaction or item discussed or referenced in this letter specifically we express or imply no opinion concerning whether x is otherwise eligible to be an s_corporation for federal tax purposes this letter to x pursuant to a power_of_attorney on file with this office we are sending a copy of based on the facts submitted and representations made we conclude that x has except as expressly provided herein we express or imply no opinion concerning this ruling is directed only to the taxpayer who requested it sec_6110 of plr-159261-03 the code provides that it may not be used or cited as precedent enclosures copy of this letter copy for sec_6110 purposes sincerely s mary beth collins senior technician reviewer branch office of associate chief_counsel passthroughs and special industries


department of the treasury internal_revenue_service washington d c nov cc ebeo uilc number release date memorandum for district_counsel from subject assistant chief_counsel employee_benefits and exempt_organizations cc ebeo we are forwarding the attached tax_court case legal file to you for assignment to an attorney in your office because the designated place for trial is chicago illinois the petition was served on the irs chief counsel’s office on on the service sent the taxpayer a notice_of_determination concerning worker classification under sec_7436 advising the taxpayer that the service had determined during the course of an employment_tax audit that one or more individuals performing services for the taxpayer are to be legally classified as employees for purposes of the federal employment_taxes under subtitle c of the internal_revenue_code and that the taxpayer is not entitled to employment_tax relief pursuant to sec_530 of the revenue act of with respect to such individuals taxpayer filed a petition for review of that determination with the tax_court on the petition bears a postmark date of because the postmark date is before the 91st day after the notice_of_determination was sent the petition is considered timely filed sec_302 a accordingly the tax_court has jurisdiction over this case the jurisdiction of the tax_court extends only to determining whether the workers at issue should be legally classified as employees and whether the taxpayer is entitled to employment_tax relief under sec_530 sec_7436 a proceeding under sec_7436 is not a deficiency proceeding and the service is not authorized to send a notice_of_deficiency with respect to employment_taxes see sec_6212 in paragraphs and of the petition taxpayer petitions for a redetermination of the amount of the disputed deficiency and additions to tax the tax_court does not have jurisdiction to determine the specific amounts of employment_taxes owed or the applicability of additions to tax please file a motion to dismiss in part for lack of jurisdiction and a motion to strike the portion of the petition related to the amount of the tax please refer to rules through of the tax court’s rules_of_practice and procedure for guidance in filing a responsive pleading the taxpayer has elected that the proceedings be conducted under the small tax_court procedures described in sec_7436 and tax_court rule the tax_court has designated this an s_case small tax cases under sec_7436 are subject_to rules similar to those set forth under sec_7463 finally because proceedings under sec_7436 are so new you should coordinate all documents including the decision document even if this case settles filed with the tax_court with the national_office employee_benefits and exempt_organizations branch two for a sample motion to strike and to dismiss in part please contact lynne a camillo of this office at mary oppenheimer by jerry e holmes chief branch cc ebeo attachments legal file


department of the treasury internal_revenue_service washington c tax_exempt_and_government_entities_division jul uniform issue list tep ract legend taxpayer a irab roth_ira c account d financial_institution e ira f roth_ira g account h financial_institution amount amount amount amount dear this letter is in response to a request for a letter_ruling dated date as supplemented by additional correspondence dated june and from your authorized representative in which you request a waiver of the 60-day rollover requirement contained in sec_408 of the internal_revenue_code code the following facts and representations have been submitted under penalty of perjury in support of the ruling requested taxpayer a represents that she took a distribution from ira b totaling amount taxpayer a age at the time of the distribution asserts that her failure to accomplish a rollover within the 60-day period prescribed by sec_408 of the code was due to an error by financial_institution taxpayer a further asserts that the part of amount which was not rolled over to an ira amount has not been used for any other purpose taxpayer a maintained ira b a traditional_ira under sec_408 of the code roth_ira c a roth_ira under sec_408a and account d a regular investment account with financial_institution e on date taxpayer a requested that ira b roth_ira c and account d be liquidated she received checks for amount from account d amount from roth_ira c and amount from ira b on date she mailed the three checks to financial_institution she included written instructions that the three checks be deposited into like accounts amount was deposited into roth_ira g as requested by taxpayer a however amount sec_1 and were incorrectly deposited into ira f and account h respectively taxpayer had requested that amount be deposited into a traditional_ira but amount was instead as a result amount was not rolled into an ira contrary to taxpayer a’s instructions financial_institution has acknowledged in writing it failed to follow taxpayer a’s instructions based on the above facts and representations you request that the internal_revenue_service service waive the 60-day rollover requirement contained in sec_408 of the code with respect to the distribution of amount sec_408 of the code provides that except as otherwise provided in sec_408 of the code any amount_paid or distributed out of an ira shall be included in gross_income by the payee or distributee as the case may be in the manner provided under sec_72 of the code sec_408 of the code provides the rules applicable to ira_rollovers sec_408 of the code provides that sec_408 of the code does not apply to any amount_paid or distributed out of an ira to the individual for whose benefit the ira is maintained if - i the entire amount received including money and any other_property is paid into an ira for the benefit of such individual not later than the day after the day on which the individual receives the payment or distribution or ii the entire amount received including money and any other_property is paid into an eligible_retirement_plan other than an ira for the benefit of such individual not later than the day after the date on which the payment or distribution is received except that the maximum amount which may be paid into such plan may not exceed the portion of the amount received which is includible in gross_income determined without regard to sec_408 of the code sec_408 of the code provides that sec_408 of the code does not apply to any amount described in sec_408 of the code received by an individual from an ira if at any time during the 1-year period ending on the day of such receipt such individual received any other amount described in sec_408 of the code from an ira which was not includible in gross_income because of the application of sec_408 of the code sec_408 of the code provides a similar 60-day rollover period for partial rollovers sec_408 of the code provides that the secretary may waive the 60-day requirement under sec_408 and sec_408 of the code 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_408 of the code revproc_2003_16 2003_4_irb_359 date provides that in determining whether to grant a waiver of the 60-day rollover requirement pursuant to sec_408 of the code the service will consider all relevant facts and circumstances including errors committed by a financial_institution inability to complete a rollover due to death disability hospitalization incarceration restrictions imposed by a foreign_country or postal error the use of the amount distributed for example in the case of payment by check whether the check was cashed and the time elapsed since the distribution occurred the information presented and the documentation submitted by taxpayer a is consistent with her assertion that her failure to accomplish a timely rollover of amount was due to an error by financial_institution i therefore pursuant to sec_408 of the code the service hereby waives the 60-day rollover requirement with respect to the distribution of amount from ira b taxpayer a is granted a period of days from the issuance of this letter_ruling to contribute no more than amount to ira f or another rollover ira provided all other requirements of sec_408 of the code except the 60-day requirement are met with respect to such contribution the contribution will be considered a rollover_contribution within the meaning of sec_408 no opinion is expressed as to the tax treatment of the transaction described herein under the provisions of any other section of either the code or regulations which may be applicable thereto this letter is directed only to the taxpayer who requested it sec_6110 of the code provides that it may not be used or cited as precedent a copy of this letter_ruling has been sent to your authorized representative pursuant to a power_of_attorney on file in this office this ruling please contact if you wish to inquire about d at sincerely yours coblk a woth manager employee_plans technical group enclosures deleted copy of this letter notice of intention to disclose notice cc


internal_revenue_service number release date index number ------------------------------------------ ---------------------------------------- ----------------------------- ---------------------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact -------------- id no ------------- telephone number --------------------- refer reply to cc psi b02 plr-142265-09 date january legend x country date dear -------------- ---------------------------------------- ------- --------------- --------------------- --------------------- this responds to your letter dated date submitted on behalf of x requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations to file an election to be classified as a partnership for federal tax purposes the information submitted states that x was formed in country on date x represents that as a foreign eligible_entity x was eligible to elect to be treated as a partnership for federal tax purposes effective date however x inadvertently failed to timely file a form_8832 entity classification election sec_301_7701-3 of the income_tax regulations provides that so long as a business_entity is not classified as a corporation under sec_301_7701-2 or an eligible_entity it may elect its classification for federal tax purposes sec_301_7701-3 further provides that an eligible_entity with at least two members can elect to be classified as either an association and thus a corporation under plr-142265-09 sec_301_7701-2 or as a partnership and an eligible_entity with a single owner can elect to be classified as an association or to be disregarded as an entity separate from its owner sec_301_7701-3 provides that unless the entity elects otherwise a foreign eligible_entity is a partnership if it has two or more members and at least one member does not have limited_liability except as provided in sec_301_7701-3 sec_301_7701-3 provides that an eligible_entity may elect to be classified other than as provided under sec_301_7701-3 by filing a form_8832 with the appropriate service_center under sec_301_7701-3 this election 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 date specified on form_8832 cannot be more than days prior to the date on which the election is filed and cannot be more than months after the date on which the election is filed sec_301_9100-1 provides that 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 including an election with a deadline prescribed by a regulation published in the internal_revenue_bulletin 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_9100-2 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 sec_301_9100-3 provides that request 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 based solely on the facts submitted and representations made we conclude that the requirements of sec_301_9100-3 have been satisfied accordingly x is granted an extension of sixty days from the date of this letter to elect to be classified as a partnership for federal tax purposes effective date the election should be made by filing form_8832 with the appropriate service_center a copy of this letter should be attached to the election 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 plr-142265-09 this ruling is directed only to the taxpayer requesting 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 will be sent to x's authorized representative sincerely curt g wilson associate chief_counsel passthroughs special industries enclosure copy of this letter copy for sec_6110 purposes


department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division may uniform issue list t ‘ ep 2a t oo legend taxpayer a k account b k account c ira d irae amount amount amount amount dear this is in response to your request dated date as supplemented by correspondence dated august september and date and 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 2vu15330 taxpayer a represents that she received distributions from k account b and k account c totaling amount and amount respectively taxpayer a asserts that her failure to accomplish a rollover of amount a portion of amount and amount-4 a portion of amount within the 60-day period prescribed by sec_402 was due to her temporary use of the funds because of medical and financial difficulties which delayed the rollover of the funds into ira d and ira e taxpayer a maintained k account b and k account c a and her spouse were experiencing financial difficulties due to medical issues as a result of these difficulties taxpayer a took a distribution of amount from k account b on date and amount from k account c on date taxpayer a used the funds to pay off a second mortgage to avoid foreclosure in date taxpayer a’s spouse was able to obtain a cash advance from his employer on date taxpayer a deposited amount into rollover ira d and on date deposited amount into rollover ira e both of these deposits were after the 60-day period had expired in late taxpayer based on the facts and representations you request a ruling that the internal_revenue_service waive the 60-day rollover requirement with respect to the distribution of amount from k account b and amount from k account c 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 pian 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 sec_402 of the code provides in relevant part that the secretary may waive the 60-day requirement under sec_402 where the failure to waive such requirement would be against equity or good conscience including casualty disaster or other events beyond the reasonable control of the individual subject_to such requirement only distributions that occurred after date are eligible for the waiver under sec_402 of the code sec_402 of the code provides that an eligible_rollover_distribution shall not include any distribution to the extent such distribution is required under sec_401 sec_402 of the code provides that an individual_retirement_account ira is one type of eligible_retirement_plan revproc_2003_16 2003_4_irb_359 date provides that in determining whether to grant a waiver of the 60-day rollover requirement pursuant to sec_402 of the code the service will consider all relevant facts and v153 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 taxpayer a has not presented any evidence to the service as to how any of the factors outlined in revproc_2003_16 affected her ability to timely roll over the distributions of amount of k account b and amount of k account c to an ira taxpayer a has stated that the distributions were used to pay off a second mortgage and the delay in the rollover of amount and amount was caused by a delay beyond their control in essence taxpayer a made a short term_loan when she withdrew amount from k account b and amount from k account c and while she had the intent at the time of withdrawal to redeposit these amounts into an ira prior to the expiration of the 60-day rollover period she assumed the risk that they may not be returned timely therefore pursuant to sec_402 of the code the internal_revenue_service hereby declines to waive the 60-day rollover requirement with respect to the december distributions to taxpayer a of amount and amount thus the contributions of amount into ira d on date and amount into ira e on date which taxpayer a deposited back into iras after the expiration of the 60-day period will not be considered valid rollovers because the day requirement under sec_402 of the code with respect to such contributions was not satisfied no opinion is expressed as to the tax treatment of the transaction described herein under the provisions of any other section of either the code or regulations which may be applicable thereto this letter is directed only to the taxpayer who requested it sec_6110 of the code provides that it may not be used or cited as precedent a copy of this letter has been sent to your authorized representative in accordance with a power_of_attorney on file in this office if you wish to inquire about this ruling please contact please address all correspondence to se t ep ra t1 sincerely oba a with carlton a watkins manager employee_plans technical group enclosures deleted copy of ruling letter notice of intention to disclose cc


internal_revenue_service number release date index number -------------------------------------- ------------------------------------- -------------------------- -------------------------- ----------------------------------- ----------------------------------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact ------------------------ id no ------------ telephone number --------------------- refer reply to cc corp bo1 plr-118143-08 date date corp a ------------------------------------------------------------------- ---------------------------------------------------------- --------------------------------------------------- corp b ------------------------------------------------------------------- ---------------------------------------------------------- ------------------------- corp c ------------------------------- ------------------------------------------------------------------- ---------------------------------------------------------- corp d ------------------------------------------------------------------- ---------------------------------------------------------- ------------------------------------------------------ corp e ------------------------------------------------------------------- ---------------------------------------------------------- ---------------------------------------------------------------- llc ----------------------------------------------------------------------------------- ----------------------------------------------------------- ---------------------------------- ------------------------------------------------ llc ----------------------------------------------------------------------------------- ----------------------------------------------------------- individual g ------------------------------------------------------------- ------------------- plr-118143-08 individual h ------------------------------------------------------------- ------------------- individual i ------------------------------------------------------------- ----------------------------- trust -------------------------------------------- --------------------------------------------------------------------------------------------------------------------- ------------------------------------------ -------------------------------------------------------------------------------- trust ------------------------------------------------------------------------------------------------------------------ --------------------------------------------------------------------------------------------------------------------- ------------------------------------------- -------------------------------------------------------------------------------- trust -------------------------------------------------------- --------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------ trust ------------------------------------------------------------------------------------------------------------ ----------------------------------------------------------------------------------- -------------------------------------------------------------------------------- trust --------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------- -------------------------------------------------------------------------------- trust ----------------------------------------------- ----------------------------------------------------------------------------------- trust ----------------------------------------------- ----------------------------------------------------------------------------------- trust ----------------------------------------------------------------------------------- ------------------------------------------------------- date date date -------------------------- ------------------------- --------------------- plr-118143-08 --------------------------- ---------------- ------------- ------------- ------------- ------------ date a b c state x state y dear ------------- this letter replies to your letter dated date requesting rulings concerning certain federal_income_tax consequences of a proposed transaction the following information is provided in that letter and a letter dated date corp a corp b corp c and corp d are each state x corporations that have each elected to be taxed as s_corporations together the s_corporations their stock is owned by eight trusts trust sec_1 and which collectively benefit individual individual and individual corp e’s stock was also collectively owned by the trusts before the transactions described below llc is a state y limited_liability_company that is treated as a partnership for federal_income_tax purposes from date until date all the interests of llc were held by the s_corporations on date llc another state y limited_liability_company became a fifth member of llc on date a date within the past years the shareholders of the s_corporations contributed the stock of corp e to the s_corporations the taxpayers state that these contributions qualified for nonrecognition_of_gain_or_loss under sec_351 of the internal_revenue_code immediately after the above contributions the s_corporations contributed the stock of corp e to llc the taxpayers state that these contributions qualified for nonrecognition_of_gain_or_loss under sec_721 as of date the basis of corp e stock was approximately dollar_figurea between date and date llc contributed approximately dollar_figureb in cash capital contributions to corp e to finance operating deficits of corp e on date llc distributed the corp e stock to the s_corporations as of date the total basis of corp e stock was dollar_figurec each of the s_corporations represent that it plr-118143-08 had sufficient basis in its membership interest in llc so that the basis limitation contained in sec_732 was not applicable to the distribution of corp e stock to each s_corporation proposed transactions the taxpayers now propose to liquidate the s_corporations in liquidations within the meaning of sec_331 and sec_336 each of the s_corporations will distribute their assets including the llc interests and the corp e stock to their trust shareholders and dissolve ruling based solely on the information submitted we hold that the losses if any to the s_corporations on their liquidating distributions of the interests in llc will be disallowed under sec_336 only if and to the extent that the total losses if any to the s_corporations on the liquidating distributions of the corp e stock that was realized but disallowed under sec_336 was less than a the basis of the corp e stock on date caveats we express no opinion concerning the federal tax consequences of the proposed transactions under any other provision of the code or regulations or concerning any conditions existing at the time of or effects resulting from the proposed transactions that are not specifically covered by the above ruling in particular we express no opinion on the amount of the loss if any recognized by any of the s_corporations on their liquidations we also express no opinion on the operation of any partnership or s_corporation provisions of the code procedural statements this letter_ruling is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent each taxpayer involved in the transaction should attach a copy of this ruling letter to the taxpayer's federal_income_tax return for the taxable_year in which the transaction covered by this letter is completed 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 this ruling letter plr-118143-08 pursuant to a power_of_attorney on file with this office a copy of this letter will be sent to two of your authorized representatives sincerely yours __________________________ mark weiss assistant to the chief branch office of associate chief_counsel corporate


internal_revenue_service number release date index number --------------------------- ----------------------------------------------------- -------------------------- ------------------------------------------ --------------------------- - department of the treasury washington dc third party communication none date of communication not applicable_person to contact ----------------- id no ------------- telephone number --------------------- refer reply to cc psi b01 plr-148671-05 date date ------------------------------------------------------- x legend --------------------------------------------------------------------- date country dear -------------- ------------------- ------------ this letter responds to a request dated date written on behalf of x requesting a written_determination granting x an extension of time pursuant to sec_301_9100-3 of the procedure and administration regulations to file an election to be treated as a partnership for federal tax purposes under sec_301_7701-3 facts according to the information submitted on date x was formed as a limited_partnership under the laws of country however x inadvertently failed to file a timely election to be treated as a partnership for federal tax purposes government x also represents that its failure_to_file a form_8832 entity classification election was reasonable and that it has acted in good_faith x represents that the granting of relief will not prejudice the interest of the plr-148671-05 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 party can elect its classification for federal tax purposes as provided in this section an eligible_entity with at least two members can elect to be classified as either an association and thus a corporation under sec_301_7701-2 or a partnership sec_301_7701-3 provides that unless the entity elects otherwise a foreign eligible_entity is a a partnership if it has two or more members and at least one member does not have limited_liability b an association if all members have limited_liability or c disregarded as an entity separate from its owner if it has a single owner that does not 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 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 if the taxpayer demonstrates to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that granting the relief will not prejudice the interests of the government sec_301_9100-2 and sec_301_9100-3 provide the standards the commissioner will use to determine whether to grant an extension of time to make 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 plr-148671-05 conclusion based solely on the facts and representations submitted we conclude that the requirements of sec_301 and have been satisfied accordingly x is granted an extension of time of days from the date of this written_determination to file form_8832 effective on date with the appropriate service_center a copy of this letter should be attached to the election a copy is enclosed for such a purpose except as specifically ruled upon this letter expresses no opinion concerning the federal tax consequences of the facts described under any other provision of the code or regulations provides that it may not be used or cited as precedent be provided to x’s authorized representatives pursuant to the power_of_attorney on file with this office a copy of this letter will this letter is directed only to the taxpayer who requested it sec_6110 sincerely heather c maloy heather c maloy associate chief_counsel passthrough special industries enclosures cc copy of this letter copy of this letter for sec_6110 purposes