internal_revenue_service director exempt_organizations department of the treasury p o box cincinnati ohio contact person identification_number contact numbers phone fax employer_identification_number vil list number release date date date legend b state c name d name t dollar amount u dollar amount v dollar amount w dollar amount dear by letter dated date you requested a determination that a set-aside in the amount of st for the taxable_year ending date meets the requirements of sec_4942 and accordingly constitutes a qualifying_distribution under sec_4942 facts you are incorporated under the laws of the state of b are exempt from federal_income_tax under sec_501 of the code and are classified as a private non-operating foundation under sec_509 you wish to set_aside dollar_figuret for the purpose of funding a project of d a publicly_supported_organization exempt under sec_501 of the internal_revenue_code d operates c which is a camp in b and provides camp recreational programs for disabled children and adults you have previously made d’s current project is qualifying distributions in the amount of dollar_figurew to d to construct a dormitory for c an expansion of c’s dining hall at an estimated cost of dollar_figureu d has not set a specific starting date for the project but has obtained estimates for the construction as well as engineered drawings of the planned renovation and improvements in addition to the set-aside you intend to make significant distributions to d after construction has begun to ensure that the project is eventually completed the cost of the project is significant in relation to your total assets and income your annual distributions being typically in the range of dollar_figurev will not initiate construction until it has been able to raise percent of the estimated cost of the project's first_phase the set-aside of dollar_figuret is equal to approximately percent of the first_phase cost for the project even to begin therefore d must first raise funds equal to percent of the estimated cost of phase these must come from increased general contributions as d has recently conducted two capital campaigns and considers it prudent to let some time pass before it undertakes another hence d anticipates that the funding threshold will not be met before late or early if as expected d is able to attain the funding target within this period it anticipates that the project will be completed by december d law sec_4942 of the code defines qualifying_distribution as a any amount_paid to accomplish one or more purposes described in sec_170 other than any contribution to i an organization controlled by the foundation or one or more disqualified persons or ii a private_foundation which is not an operating_foundation except as otherwise provided b any amount_paid to acquire an asset used directly in carrying out one or more purposes described in sec_170 sec_4942 of the code provides that for all taxable years beginning on or after date an amount set_aside for a specific project within one or more purposes of sec_170 may be treated as a qualifying_distribution if the amount meets the requirements of sec_4942 sec_4942 of the code provides that an amount set_aside for a specific project may be treated as a qualifying_distribution if at the time of the set-aside the foundation establishes to the satisfaction of the secretary the amount set_aside will be paid for the specific project within five years and the specific project is one that can better be accomplished by the set-aside of income rather than by the immediate payment of funds the suitability test sec_53_4942_a_-3 of the foundation and similar excise_tax regulations defines as a qualifying_distribution any amount set_aside within the meaning of paragraph b of sec_3 sec_53_4942_a_-3 provides that the amounts of income set_aside for a specific project for one or more of the purposes in sec_170 or sec_170 of the code may be treated as qualifying distributions for the tax_year s in which such amounts are set_aside but not in the tax_year in which actually paid if the requirements of sec_4942 and paragraph b are satisfied the requirements of paragraph b are satisfied if the foundation establishes to the satisfaction of the commissioner that the amount set_aside will be paid for the specific project within months after it is set_aside and i the set-aside otherwise meets the suitability test of sec_53_4942_a_-3 or ii the foundation satisfies the cash distribution test sec_53_4942_a_-3 of the regulations provides that the suitability test for a set-aside is met if the foundation establishes the specific project is one in which relatively long-term grants or expenditures must be made in order to assure the continuity of particular charitable projects or program-related investments or where grants are made as part of a matching grant program sec_53_4942_a_-3 provides that a private_foundation must obtain internal_revenue_service approval of its set-aside of income under the suitability test by applying before the end of the tax_year in which the amount is set_aside in revrul_77_7 1977_1_cb_354 the term specific project as defined in sec_53 a - b of the excise_tax regulations was held to include a building project to be undertaken by a public charity unrelated to the foundation making the set-aside analysis you have sought timely approval of your set-aside of income in accordance with sec_53 a - b i as required by sec_4942 of the code and sec_53_4942_a_-3 of the regulations your proposed set-aside will be for a specific project for one or more of the purposes in sec_170 of the code as in revrul_77_7 the specific project is a building project to be undertaken by a public charity unrelated to you the building project is in furtherance of educational_purposes within the meaning of in sec_170 you have represented that the amount set-aside for this specific project will be paid out within months from the set-aside as required by sec_4942 of the code and sec_53_4942_a_-3 of the regulations the project can better be accomplished by a set-aside of income than by the immediate payment of funds the project cannot move forward until d has secured most of the funding required your pledge of dollar_figuret will ensure that the project's threshold funding is achieved furthermore the set-aside will leave you in a better position to make additional qualifying contributions to d during the construction phase to ensure completion of the project your project therefore satisfies the suitability test as set forth in sec_4942of the code and sec_53_4942_a_-3of the regulations ruling based on the foregoing the set-aside of dollar_figuret for the taxable_year ending date meets the requirements of sec_4942 and accordingly constitutes a qualifying distributions under sec_4942 we direct your attention to sec_53_4942_a_-3 of the regulations entitled evidence of set- aside this section provides that any set-aside approved by the internal_revenue_service shall be evidenced by the entry of a dollar amount in the books_and_records of a private_foundation as a pledge or obligation to be paid at a future date or dates further the amount of the set-aside must be taken into account in determining the foundation’s minimum_investment_return see sec_53 a - c of the regulations and any income attributable to a set-aside must be taken into account in computing adjusted_net_income see sec_53_4942_a_-2 of the regulations this ruling is based on the understanding there will be no material changes in the facts upon which it is based any changes that may have a bearing on your tax status should be reported to the internal_revenue_service this ruling does not address the applicability of any section of code or regulations to the facts submitted other than with respect to the sections described this ruling letter is directed only to the organizations that requested them sec_6110 of the code provides that they may not be used or cited as precedent please keep a copy of this ruling letter in your permanent records if you have any questions about this ruling please contact the persons whose name and telephone number are shown above in the heading of this letter sincerely yours lois lerner director exempt_organizations notice enclosure


internal_revenue_service number release date index number ----------------------------------------------------------- --------------------------- ------------------------------ -------------------------------------------------- legend city c ---------------------------------- -------------------------------------------- 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 tege eb qp2 plr-148503-07 date date plan ------------------------------------------------------------------------------ dear ------------ this responds to your authorized representative’s letter of date and subsequent correspondence on behalf of city c and it sec_457 plan requesting a ruling concerning the proposed amended and restated deferred_compensation plan the plan which c intends to be an updated eligible_deferred_compensation_plan under sec_457 of the internal_revenue_code_of_1986 the code as amended under the economic_growth_and_tax_relief_reconciliation_act_of_2001 egtrra and in subsequent legislation the plan has been or will be adopted only by c which is represented to be an eligible governmental employer described in sec_457 of the code under the plan a participant who is currently an employee of c may elect to defer compensation that would have been received for services rendered to c in any taxable_year until death severance_from_employment attainment of age 70½ or until the occurrence of an unforeseeable_emergency the plan also contains a provision allowing an elective in-service distribution of de-minimis plan account balance of dollar_figure or less to be paid to a participant from his or her account in certain limited circumstances set forth thereunder and in sec_457 in addition the plan authorizes c to permit in-service distributions of certain amounts rolled over into the plan from other eligible retirement plans in accordance with notice_2004_67 2004_2_cb_376 provided that the plan complies with this notice’s requirements such as maintaining these rollovers in separate_accounts plr-148503-07 the plan also permits c to establish a program allowing participants to take loans from their plan accounts subject_to certain restrictions loans made under the plan are subject_to rules in the plan and in sec_1_457-6 of the income_tax regulations including provisions restricting the maximum amount and term of a plan_loan under the plan the amounts that may be deferred under the annual maximum limitation and the catch-up provisions are within the limitations of sec_457 including the sec_457 coordinated deferral provision a participant’s election under the plan to defer compensation not yet paid must be filed prior to the beginning of the month in which the compensation to be deferred is paid or made available the plan provides for a maximum amount that may be deferred by a participant in any taxable_year and also provides for a catch-up computation for amounts deferred for one or more of the participant's last three taxable years ending before he attains normal_retirement_age under the plan the plan also provides for the age plus catch-up_contributions described in sec_414 however the plan provides that a participant can only utilize one of the two catch-up contribution provisions during a single year with certain limitations a participant or a beneficiary including an alternate_payee may elect the manner in which their deferred amounts will be distributed the plan provides that the manner and time of benefit payout must meet the distribution_requirements of sec_401 and sec_457 of the code the plan provides that amounts of compensation deferred thereunder are to be transferred to and held in a_trust described in sec_457 for the exclusive benefit of the participants and their beneficiaries the rights of any participant or beneficiary to payments pursuant to the plan are generally nonassignable and not subject_to pledge assignment or encumbrance sec_457 of the code provides rules for the deferral of compensation by an individual participating in an eligible_deferred_compensation_plan as defined in sec_457 sec_457 of the code provides that in the case of a participant in an eligible governmental deferred_compensation plan any amount of compensation deferred under the plan and any income attributable to the amounts so deferred shall be includible in gross_income only for the taxable_year in which such compensation or other income is paid to the participant or beneficiary plr-148503-07 sec_457 prescribes that an eligible_deferred_compensation_plan must meet the distribution_requirements of sec_457 sec_457 provides that for a sec_457 plan to be an eligible_plan the plan must have distribution_requirements providing that under the plan amounts will not be made available to participants or beneficiaries earlier than i the calendar_year in which the participant attains age 70½ ii when the participant has a severance_from_employment with the employer or iii when the participant is faced with an unforeseeable_emergency as determined under treasury regulations sec_457 defines an eligible_employer to be a state political_subdivision of a state any agency_or_instrumentality of a state or political_subdivision of a state sec_457 provides that a plan maintained by an eligible governmental employer shall not be treated as an eligible_deferred_compensation_plan unless all assets and rights purchased with such deferred_compensation amounts and all income attributable to such amounts property or rights of the plan are held in trust for example in custodial accounts or annuity_contracts for the exclusive benefit of participants and their beneficiaries based upon the provisions of the plan summarized above and the documents presented we conclude as follows the plan constitutes an eligible_deferred_compensation_plan as defined in sec_457 of the code as amended under egtrra and subsequent statutes amounts of compensation deferred in accordance with the plan including any income attributable to the deferred_compensation will be includible under sec_457 in the recipient’s gross_income only for the taxable_year or years in which amounts are paid to a participant or beneficiary in accordance with the terms of the plan no opinion is expressed concerning the timing of the inclusion in income of amounts deferred under any deferred_compensation plan other than the above- described plan city c has represented that it does not provide its participants with the option to make contributions to a deemed_ira under the plan and this ruling is conditioned upon this representation if the plan is significantly modified this ruling may not necessarily remain applicable plr-148503-07 this ruling is directed only to the plan and not to any other sec_457 plan and it applies only if c revises the plan submitted on date with the amendments submitted on date sec_6110 of the internal_revenue_code provides that this ruling may not be used or cited as precedent sincerely cheryl press senior counsel qualified_plans branch employee_benefits tax exempt government entities enclosure


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 b03 plr-135129-08 date date x -------------------------------------------------------- ----------------------- legend legend county ---------- date ------------------ dear ----------- this letter responds to a letter dated date submitted on behalf of x requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations for x to file an entity classification election under sec_301_7701-3 facts the information submitted states that x was formed under the laws of country on date x represents that x is a foreign_entity eligible to elect to be treated as a disregarded_entity for federal tax purposes x intended to elect to be treated as a disregarded_entity for federal tax purposes effective on date however x did not timely file a form_8832 entity classification election law and analysis sec_301_7701-3 provides that a business_entity that is not classified as a corporation under sec_301_7701-2 or an eligible_entity can plr-135129-08 elect its classification for federal tax purposes as provided in sec_301_7701-3 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 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 except as provided in sec_301_7701-3 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 with the appropriate service_center sec_301_7701-3 provides 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 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 sec_301_9100-1 provides that the commissioner may grant a reasonable extension of time under the rules set forth in sec_301_9100-2 and sec_301_9100-3 to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the code except subtitles e g h and i sec_301_9100-1 defines a regulatory election to include an election whose due_date is prescribed by a regulation published in the federal_register sec_301_9100-2 provides the rules governing automatic extensions of time for making certain elections sec_301_9100-3 provides the standards the commissioner will use to determine whether to grant an extension of time for regulatory elections that do not meet the requirements of sec_301_9100-2 sec_301_9100-3 provides that requests for relief subject_to sec_301_9100-3 will be granted when the taxpayer provides the evidence including affidavits described in sec_301_9100-3 to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and the grant of relief will not prejudice the interests of the government conclusion 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 plr-135129-08 extension of time of sixty days from the date of this letter to elect to be treated as a disregarded_entity 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 this ruling is directed only to the taxpayer s requesting it sec_6110 of the code provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter will be sent to your authorized representative sincerely s curtis g wilson associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes


a ek department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division nov ull - tep legend taxpayer a o taxpayer b ira x amount d amount e amount f amount g bank b account e taxpayer c individual m dear this is in response to your letter dated date as supplemented by correspondence dated date date date date date and date submitted on your behalf by your authorized representative in which you request a waiver of the day rollover requirement contained in sec_408 of the internal_revenue_code the code the following facts and representations have been submitted under penalties of perjury in support of your request oo so taxpayer b _ taxpayer a’s husband taxpayer b died on maintained an individual_retirement_arrangement ira x with bank b taxpayer a asserts that she was the designated_beneficiary of taxpayer b’s ira taxpayer a and taxpayer b also maintained a joint checking account account e with’ bank b taxpayer a states that on date she went to bank b to transfer accounts into her name taxpayer a asserts that bank b personnel advised her that there would not be any penaities or negative income_tax consequences in transferring all funds including ira x into account e documentation submitted by taxpayer a shows that she completed an ira beneficiary distribution form on date on which she elected to receive a distribution of the total balance from ira x and on which she elected to have federal_income_tax withheld on the distribution documentation submitted by taxpayer a further shows that per her request distributions in the amounts of amount d and amount e were made to taxpayer a on date documentation submitted by taxpayer a also shows that the total balance of jra x amount g amount d amount e and taxpayer b’s required_minimum_distribution was deposited into account e on date in addition account e _ was changed beginning with the date statement from taxpayer a and taxpayer b’s names to taxpayer a and taxpayer c’s names ' states that in early she received a form 1099-r from bank b taxpayer a indicating that the total amount distributed from ira x amount g was taxable taxpayer a represents that her intent was to transfer ira x into her name without incurring penalties or negative tax consequences and relied on bank b personnel to accomplish this taxpayer a further states that she was incorrectly as to how to accomplish her intent taxpayer a states upon advised by bank b learning of the taxable nature of the transaction she asked bank b to correct the problem but bank b informed her that nothing could be done because the 60-day rollover period had expired however in a letter individual m of bank b stated that there must have been a miscommunication between taxpayer a and the bank b representative that it seems as though the representative did not give information clearly in regards to the tax payment needed for a spousal beneficiary ira payout and the taxpayer a was unaware of any_tax consequences taxpayer a states that the incorrect advice given by bank b upon which she relied resulted in the distribution from ira x not being rolled over to another ira within the applicable 60-day time period - - based upon the foregoing facts and representations you request that the service ‘waive the day rollover requirement with respect to the distribution of amount f from ira x sec_408 of the code provides that except as otherwise provided in sec_408 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 inthe manner provided under sec_72 of the code sec_408 of the code defines and 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 received 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 day after the date on which the such individual not later than 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 sec_408 of the code provides that sec_408 does not apply to any amount described in sec_408 received by an individual from an ira if at any time during the 1-year period ending in the day of such receipt such individual received any other amount described in sec_408 from an ira which was not included in gross_income because of the application of sec_408 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 day requirement under sec_408 and sec_408 of the code where the failure to waive such requirement would be against equity and good conscience including casualty disaster or other events beyond the reasonable control of the individual subject_to such requirement only distributions that occur a after date are eligible for the waiver under sec_408 of oo the code revproc_2003_16 i r b provides that in determining whether to grant a waiver of the 60-day rollover requirement pursuant to sec_408 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 or hospitalization incarceration restrictions imposed by a foreign_country or postal error the use of 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 submitted in this case indicates that taxpayer a received amount g from ira x on date and that such amount was_ deposited into account e a joint checking account-with taxpayer c taxpayer a states that she failed to complete a rollover of amount f to another ira within the applicable 60-day time period because bank b personnel gave her incorrect advice as to the tax consequences of such distribution even though the beneficiary distribution form clearly indicates the distribution was taxable taxpayer a has not presented any evidence to the service to show that she attempted to roll over such amount to an ira in her name in fact amount g was deposited into a joint checking account with taxpayer c and commingled with other funds being used by taxpayer a for living_expenses further taxpayer a has not presented any evidence that she informed bank b personnel that she into an-ira and only learned of the adverse tax wanted to roll over amount f consequences after the day rollover period had expired in this case there _ was no intent to rollover nor was there erroneous advice given regarding the rollover transaction itself taxpayer a learned of the adverse tax consequences after the 60-day rollover period had expired and now wishes to reverse the transaction because of the increased tax_liability created by the withdrawal under the circumstances presented in this case the service hereby declines to waive the 60-day rollover requirement for the distribution of amount f from ira x no opinion is expressed as to the tax treatment of the transactions described herein under the provisions of any other section of either the code or regulations which may be applicable thereto this ruling is directed only to the taxpayer that requested it sec_61 k of the code provides that it may not be used or cited by others as precedent ’ a copy of this letter is being sent to your authorized representative in accordance with forms on file in this office if you have any questions regarding this letter please contact se t ep ra t sincerely yours - signed joyoe b floyd joyce e floyd manager employee_plans technical group enclosures deleted copy of letter_ruling notice


internal_revenue_service department of the treasury number release date index numbers washington dc person to contact telephone number refer reply to cc corp - plr-110197-02 date date legend parent purchaser purchaser partnership target sellers date a date b company official tax professional dear plr-110197-02 this letter responds to a letter dated date submitted on behalf of parent requesting an extension of time under sec_301_9100-1 through of the procedure and administration regulations to file an election parent is requesting an extension to file a sec_338 election under sec_338 with respect to the acquisition of the stock of target sometimes hereinafter referred to as the election on date a all citations in this letter to regulations under sec_338 are to regulations in effect on date a additional information was received in a letter dated date the material information is summarized below parent is the common parent of a consolidated_group purchaser is a wholly owned subsidiary of parent purchaser is an llc wholly owned by purchaser and disregarded as an entity separate from purchaser for federal_income_tax purposes target is a foreign_corporation wholly owned by partnership a domestic_partnership sellers were the only partners of partnership on date a pursuant to a purchase agreement of the same date purchaser and purchaser acquired all of sellers’ partnership interests in partnership in exchange for cash it is represented that the acquisition of target by means of the acquisition of all of the partnership interests in partnership qualified as a qualified_stock_purchase as defined in sec_338 prior to the acquisition target did not file a united_states income_tax return was not subject_to united_states income_taxation nor was required under sec_1_6012-2 to file a united_states income_tax return target is a controlled_foreign_corporation within the meaning of sec_957 target is not a passive_foreign_investment_company for which an election under sec_1295 was in effect or foreign_investment_company or foreign_corporation the stock ownership of which is described in sec_552 parent intended to file the election the election was due on date b but for various reasons a valid election was not filed after the due_date for the election it was discovered that the election had not been filed subsequently this request was submitted under sec_301_9100-1 for an extension of time to file the election the period of limitations on assessment under sec_6501 has not expired for parent’s consolidated group’s or target’s taxable_year in which the acquisition occurred the taxable_year in which the election should have been filed or any taxable_year that would have been affected by the election had it been timely filed sec_338 permits certain stock purchases to be treated as asset acquisitions if the purchasing_corporation makes or is treated as having made a sec_338 election or a sec_338 election and the acquisition is a qualified_stock_purchase under sec_301_9100-1 the commissioner has discretion to grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except subtitles e g h and i plr-110197-02 sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make a regulatory election sec_301_9100-1 sec_301_9100-2 provides automatic extensions of time for making certain elections requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 in this case the time for filing the election is fixed by the regulations ie sec_1_338-2t d therefore the commissioner has discretionary authority under sec_301_9100-1 to grant an extension of time for parent to file the election provided parent acted reasonably and in good_faith the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and granting relief will not prejudice the interests of the government information affidavits and representations submitted by parent company official and tax professional explain the circumstances that resulted in the failure to timely file a valid election the information establishes that parent reasonably relied on a qualified_tax professional who failed to make or advise parent to make the election and that the government will not be prejudiced if relief is granted see sec_301_9100-3 based on the facts and information submitted including the representations made we conclude that parent has shown it acted reasonably and in good_faith the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and granting relief will not prejudice the interests of the government accordingly an extension of time is granted under sec_301_9100-1 until days from the date on this letter for parent to file the election with respect to the acquisition of the stock of target as described above the above extension of time is conditioned on the filing within days of the date on this letter of all returns and amended returns if any necessary to report the transaction in accordance with the election and the taxpayers' parent’s consolidated group’s and target’s tax_liability if any being not lower in the aggregate for all years to which the election applies than it would have been if the election had been timely made taking into account the time_value_of_money no opinion is expressed as to the taxpayers’ tax_liability for the years involved a determination thereof will be made by the applicable director’s office upon audit of the federal_income_tax returns involved further no opinion is expressed as to the federal_income_tax effect if any if it is determined that the taxpayers’ tax_liability is lower sec_301_9100-3 parent must file the election in accordance with sec_1_338-2t d that is a new election on form_8023 must be executed on or after the date on this letter which grants an extension and filed in accordance with the instructions to the form a copy of this letter must be attached to the election form parent must file or amend as applicable its return to report the transaction as a sec_338 transaction for the taxable_year in which plr-110197-02 the transaction was consummated and for any other affected_taxable_year and to attach to the return a copy of this letter and a copy of the election we express no opinion as to whether the acquisition of the target’s stock qualifies as a qualified_stock_purchase under sec_338 or any other tax consequences arising from the election in addition we express no opinion as to the tax consequences of filing the election late under the provisions of any other section of the code and regulations or as to the tax treatment of any conditions existing at the time of or resulting from filing the election late that are not specifically set forth in the above ruling for purposes of granting relief under sec_301_9100-1 we relied on certain statements and representations made by the taxpayers however the director should verify all essential facts in addition notwithstanding that an extension is granted under sec_301_9100-1 to file the election penalties and interest that would otherwise be applicable if any continue to apply this letter is directed only to the taxpayer s who requested it sec_6110 provides that it may not be used or cited as precedent pursuant to the power_of_attorney on file in this office a copy of this letter is being sent to your authorized representative sincerely yours ken cohen senior technician reviewer branch office of associate chief_counsel corporate plr-110197-02 cc


internal_revenue_service department of the treasury washington dc index number person to contact number release date telephone number refer reply to cc dom p si - plr-119550-99 date date x a d1 year dear this letter responds to a letter dated date and subsequent correspondence written on behalf of x by its authorized representative requesting a ruling under sec_1362 of the internal_revenue_code the information submitted states that x was incorporated on d1 of year a the sole shareholder of x intended for x to be an s_corporation beginning in year its first taxable_year a represents that a signed and forwarded a form_2553 election by a small_business_corporation to x’s accountant however the service has no record of receiving a form_2553 timely filed for x for year for year and all subsequent years x filed form_1120s u s income_tax return for an s_corporation and a filed form_1040 u s individual_income_tax_return consistent with x being an s_corporation sec_1362 of the code provides that if -- a an election under sec_1362 is made for any taxable_year after the date prescribed by sec_1362 for making such election for such taxable_year or no such election is made for any taxable_year and b the secretary determines that there was reasonable_cause for the failure to timely make such election the secretary may mr steven c kaufman treat such an election as timely made for such taxable_year based solely on the facts and the representations submitted we conclude that x has established reasonable_cause for failing to make a timely election to be an s_corporation for x’s first taxable_year accordingly provided that x makes an election to be an s_corporation by filing a completed form_2553 with the appropriate service_center effective for its year taxable_year within days following the date of this letter then such election will be treated as timely made for x’s year taxable_year a copy of this letter should be attached to the form_2553 except as specifically set forth above no opinion is expressed concerning the federal tax consequences of the facts described above under any other provision of the code including whether x was or is a small_business_corporation under sec_1361 of the code this ruling is directed only to the taxpayer who requested it sec_6110 of the code provides that it may not be used or cited as precedent pursuant to a power_of_attorney on file with this office a copy of this letter is being sent to x’s authorized representative sincerely yours branch h grace kim assistant to the chief office of the assistant chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes


o f f i c e o f t h e c h i e f c o u n s e l department of the treasury i n t e r n a l r e v e n u e s e r v i c e w a s h i n g t o n d c date number info release date conex-135560-09 uil 36a the honorable tom price m d member u s house of representatives roswell road suite marietta ga attention ------------------- dear congressman price i am responding to your inquiry dated date on behalf of your constituent --- ------------------------- -------------- asks how a married couple who files a joint_return calculates the making_work_pay_credit if only one spouse has earned_income and the other spouse who does not work receives a dollar_figure economic recovery payment from the department of veterans affairs or the social_security administration taxpayers with earned_income in and may be eligible for the refundable making_work_pay_credit sec_36a of the internal_revenue_code the code added by sec_1001 of the american recovery and reinvestment tax act of the act in general a qualifying taxpayer’s making_work_pay_credit is equal to percent of earned_income not to exceed dollar_figure dollar_figure if married_filing_jointly the making_work_pay_credit is reduced by percent of the amount that the taxpayer’s modified_adjusted_gross_income magi exceeds dollar_figure dollar_figure for married couples filing jointly sec_36a of the code the making_work_pay_credit is also reduced by the amount of any economic recovery payments that the taxpayer receives under sec_2201 of the act and any government_retiree_credit allowed to the taxpayer under sec_2202 of the act sec_36a of the code conex-135560-09 sec_2201 of the act authorizes a dollar_figure economic recovery payment for individuals receiving certain governmental benefits such as social_security_benefits or veterans disability compensation or pension benefits sec_2202 of the act authorizes a dollar_figure refundable tax_credit the government_retiree_credit for federal state and local_government retirees whose government service was not covered by social_security and who do not receive the dollar_figure economic recovery payment the government_retiree_credit is dollar_figure in the case of a joint_return if both spouses are eligible for the credit the following example illustrates the application of these rules to a situation in which a non-working spouse receives an economic recovery payment of dollar_figure and the married couple would otherwise be entitled to a making_work_pay_credit of dollar_figure due to the earned_income of the working spouse result if married couple files jointly a married couple filing a joint_return is eligible to claim a making_work_pay_credit of up to dollar_figure even if only one spouse has earned_income however the married couple must reduce the making_work_pay_credit by the dollar_figure economic recovery payment the non-working spouse receives the married couple’s making_work_pay_credit is dollar_figure dollar_figure making_work_pay_credit reduced by the dollar_figure economic recovery payment that the nonworking spouse received thus the married couple receives a total of dollar_figure from economic recovery payments dollar_figure and the making_work_pay_credit dollar_figure result if married couple files separate returns if the married couple filed separate returns the working spouse would be eligible to claim a making_work_pay_credit of up to dollar_figure without any reduction for the economic recovery payment the non-working spouse receives the working spouse may claim a making_work_pay_credit of dollar_figure on his or her return thus the married couple receives a total of dollar_figure from economic recovery payments dollar_figure and the making_work_pay_credit dollar_figure consequently in some situations a married couple may receive a greater total amount from the making_work_pay_credit economic recovery payments and the government_retiree_credit by filing separate returns in other situations the married couple may receive a greater amount by filing a joint_return i hope this information is helpful if you have any questions please contact me or ------ -------------------- at --------------------- sincerely michael j montemurro chief branch office of associate chief_counsel income_tax accounting


internal_revenue_service department of the treasury index number washington dc person to contact telephone number refer reply to cc dom corp 1-plr-115468-99 date date taxpayer state a date date date dear we respond to your letter dated date in which you requested rulings as to the federal_income_tax consequences of a completed transaction specifically you requested rulings under sec_336 and sec_337 of the internal_revenue_code the information submitted for consideration is summarized below taxpayer was incorporated on date as a for-profit state a stock corporation on date which was prior to date taxpayer amended and restated its articles of incorporation under the applicable_section of the corporation law of state a to convert to not-for-profit status also on date taxpayer filed form_1023 application_for recognition of exemption under sec_501 taxpayer has not yet received an internal_revenue_service letter determining taxpayer's tax-exempt status taxpayer employs the accrual_method of accounting for both tax and financial reporting plr-115468-99 x is a state a not-for-profit institution formed on date x has qualified as a sec_501 tax-exempt_organization for income_tax purposes by being described in sec_501 conversion from a for-profit corporation to a not-for-profit corporation x owned all of the outstanding shares of taxpayer since date x is the sole member of taxpayer prior to taxpayer's taxpayer represents that the conversion of taxpayer from for-profit to not-for- profit status through amendment of its articles and bylaws on date did not cause its dissolution under state a law based solely on the facts and representations submitted and provided that the tax-exempt status of taxpayer under sec_501 becomes effective as of date the conversion of taxpayer from a taxable for-profit corporation to a tax-exempt not-for- profit corporation will not result in recognition of gain_or_loss under sec_336 and sec_337 we express no opinion about the tax treatment of the transaction under other provisions of the code and regulations or about the tax treatment of any conditions existing at the time of or effects resulting from the transaction that are not specifically covered by the above rulings taxpayer is a tax-exempt_organization under sec_501 in particular we express no opinion on whether this ruling is directed only to the taxpayer s requesting it sec_6110 of the code provides that it may not be used or cited as precedent a copy of this letter must be attached to any income_tax return to which it is relevant sincerely assistant chief_counsel corporate by mark s jennings acting chief branch 2g


cca_2016060711402206 id uilc number release date from sent tuesday june am to cc bcc subject form_8928 referrals ----- as we discussed during our phone call on date concerning -------------- we agree with granting the waiver of the excise_tax under part ii of the form_8928 the form_8928 instructions page provide that the secretary may waive part or all of the excise_tax under part ii to the extent that payment of the tax would be excessive relative to the failure involved this only applies to failures due to reasonable_cause and not due to willful neglect we believe the waiver is appropriate under the circumstances involved in this matter --------- -------------------- ------------------------------ -------- -------------------------------- ------------------


tax_exempt_and_government_entities_division u i l kkk rherekrerekrerererererer kreerererekrerrereerree legend taxpayer a employer m department of the treasury internal_revenue_service washington d c dec se t ef -fa t e ‘ a rrr rre rea rer ere re er ee a kerr rerere brera rake plan x keke rekrerkrkkerekkker custodian d eere ree re eere rrr amount d ira z eieio iie me fei ii iir account h ee shares y oie iii ir i dear krekeekerkekrrerererkreee this is in response to your letter dated date which was received in our office on date submitted on your behalf by your authorized representative in which you request a waiver of the 60-day rollover requirement contained in sec_402 of the internal_revenue_code the code’ your request is supplemented by correspondence to our office dated date date date and date the following facts and representations have been submitted under penalties of perjury in support of the ruling requested keerrekreerrererrerrererereerere taxpayer a prior to his retirement on p was a participant in plan x a retirement_plan sponsored by employer m custodian d is the custodian of plan x cr plan x with ira documentation submitted by taxpayer a indicates that on i es 02ve a decided to close his account in rolling it over to an individual_retirement_arrangement the intention of taxpayer a established ira z a rollover ira with custodian d taxpayer ee amount d was a’s plan x account consisted of cash in the amount of amount d and shares y account statements indicate that on transferred from plan x to ira z taxpayer a asserts that a stock certificate representing shares y was sent to him by custodian d for his signature so that shares y could then be added to ira z taxpayer a asserts that he signed the stock certificate and returned it to custodian d for deposit in ira z taxpayer a further asserts that upon receipt of the stock certificate custodian d did not deposit shares y in ira z but rather deposited shares y in account h a regular investment account taxpayer a also maintains with custodian d documentation submitted by taxpayer a indicates that on shares y were deposited into account h m7 he discovered that shares y had not been taxpayer a states that in early rolled over to ira z but had been deposited in account h correspondence submitted by taxpayer a indicates that he contacted custodian d upon discovering the mistake but was informed by custodian d that it could not transfer shares y to ira z because the 60-day rollover period had expired taxpayer a filed his request for a waiver of the shortly after being informed by custodian d that it could not transfer shares y to ra z taxpayer a further states that he has not redeemed negotiated or otherwise used any of shares y since they have been in accou statements for account h -_- to be held in that account a submitted copies of monthly show that shares y continue based upon the foregoing facts and representations you request that the service waive the day rollover requirement with respect to the distribution of shares y from plan x sec_402 of the code provides that except as otherwise provided in this section any amount actually distributed to any distributee by any employees’ trust described in sec_401 of the code which is exempt from tax under sec_501 shall be taxable to the distributee in the taxable_year of the distributee in which distributed in the manner provided under sec_72 relating to annuities sec_402 of the code provides rules governing rollovers of amounts from exempt trusts to eligible retirement plans including iras krekererekkere eer erererrrerreree q code sec_402 provides generally that if any portion of an eligible_rollover_distribution from a qualified_trust is paid to the employee in an eligible_rollover_distribution and the employee transfers any portion of the property received in such distribution to an eligible_retirement_plan and in the case of a distribution_of_property other than money the amount so transferred consists of property distributed such distribution to the extent so transferred shall not be includible in gross_income for the taxable_year in which paid sec_402 of the code provides that the maximum amount of an eligible_rollover_distribution to which paragraph applies shall not exceed the portion of such distribution which is includible in gross_income determined without regard to paragraph sec_402 of the code defines eligible_rollover_distribution as any distribution to any employee of all or a portion of the balance_to_the_credit of an employee in a qualified_trust except that such term shall not include a any distribution which is one of a series of substantially_equal_periodic_payments not less frequently than annually made- i for the life or life expectancy of the employee or the joint lives or joint life expectancies of the employee and the employee’s designated_beneficiary or ii for a specified period of years or more b any distribution to the extent the distribution is required under sec_401 and c any distribution which is made upon hardship of the employee code sec_402 defines eligible_retirement_plan as i an individual_retirement_account described in sec_408 ii an individual_retirement_annuity described in sec_408 other than an endowment_contract iii a qualified_trust iv an annuity plan described in sec_403 v an eligible_deferred_compensation_plan described in sec_457 maintained by an eligible_employer as described in sec_457 and vi an annuity_contract described in sec_403 code sec_402 provides generally that sec_402 shall not apply to any transfer of a distribution made after the day following the day on which the disributee received the property distributed code sec_402 provides that the secretary may waive the 60-day requirement under subparagraph a where the failure to waive such requirement would be against equity or good conscience including casualty disaster or other s krekekrekekrekrreereekrekeerrekrrerekke q l events beyond the reasonable control of the individual subject_to such requirement only distributions that occur after date are eligible for the waiver under sec_402 revproc_2003_16 2003_4_irb_359 provides that in determining whether to grant a waiver of the 60-day rollover requirement pursuant to sec_402 of the code the service will consider all relevant facts and circumstances including errors committed by a financial_institution inability to complete a rollover due to death disability hospitalization incarceration restrictions imposed by a foreign_country or postal error the use of the amount distributed for example in the case of payment by check whether the check was cashed and the time elapsed since the distribution occurred in this case documentati mitted by taxpayer a indicates that a distribution was made from plan x il further documentation submitted by taxpayer inci ira z_a rollover ira with custodian d on amount d an amount that represents the cash portion of taxpayer a’s plan x account balance was transferred from plan x to ira z taxpayer a asserts that when returned the signed stock certificate to custodian d that represented shares y he assumed that shares y would aiso be deposited into ira z taxpayer a discovered that shares y had not been rolled over to ira z as he intended but rather had been deposited by custodian d into account h a regular investment account taxpayer a also maintains with custodian d taxpayer a asserts that he has not used negotiated redeemed or otherwise used any of shares y since they have been held in account h and has submitted monthly account statements for account h since account h that support that shares y continue to be held in account h the month in which shares y were deposited in ablished nd that on therefore assuming that the distribution of from plan x qualifies as an eligible_rollover_distribution under code sec_402 pursuant to sec_402 of the code the service hereby waives the 60-day rollover requirement with respect to the distribution of shares y from plan x taxpayer a is granted a period of sixty days from the date of this ruling to contribute shares y to an ira provided all other requirements of sec_402 of the code except the 60-day requirement are met with respect to such contribution we conclude that the 60-day rollover requirement is waived and shares y will be considered a valid rollover_contribution within the meaning of code sec_402 this ruling does not authorize the rollover of amounts if any that are required to be distributed by sec_401 of the code this letter assumes that plan x satisfies the requirements for qualification under code sec_401 at all times relevant to this transaction this ruling further krkrerrerkerererererrerrerrereree io pab ti an r q assumes that ira z meets the requirements of code sec_408 at all times relevant to this transaction no opinion is expressed as to whether the distribution from plan x qualifies as an eligible_rollover_distribution under code sec_402 this ruling is directed only to the taxpayer who requested it code sec_6110 provides that it may not be used or cited by others as precedent if you have any questions regarding this letter please contact rrkkkerek err erk err rre rrr aee rrer ere set oe dp rast sincerely yours signed joyce eb floyd joyce e floyd manager employee_plans technical group enclosures deleted copy of ruling letter notice of intention to disclose


internal_revenue_service number release date index number department of the treasury washington dc in re person to contact telephone number refer reply to cc psi 9-plr-133910-03 date date legend taxpayer spouse trust agreement trust trust trust company accounting firm date date date date year year a b dear this is in response to your letter dated date and subsequent correspondence in which you requested on behalf of the taxpayer an extension of time pursuant to sec_2642 of the internal_revenue_code and sec_301_9100-3 of the procedure and administration regulations to make allocations of taxpayer’s generation-skipping_transfer gst tax exemption to transfers to an irrevocable_trust a summary of the facts and representations submitted is as follows on date plr-133910-03 taxpayer’s spouse spouse executed a_trust agreement trust agreement that provides that the initial trust property be divided into three equal shares and held as three separate trusts for the benefit of each of taxpayer and spouse's three children trust sec_1 and article second paragraph a of trust agreement provides the trustees of trust sec_1 and with the discretion to distribute trust net_income and principal to the child for whom the trust was established primary beneficiary and the primary beneficiary’s issue there is no requirement to equalize distributions among beneficiaries any undistributed_net_income is to be added to principal article second paragraph b provides that upon the primary beneficiary’s death his or her trust’s remaining property is to be distributed as the primary beneficiary appoints in his or her will among spouse's issue other than the primary beneficiary trust property not effectively appointed is to be distributed to the primary beneficiary’s issue by right of representation if any if none to spouse's then living issue by right of representation any trust property passing to a person under age is to be held in further trust and administered in accordance with article third under article third the trustees of a_trust established for a beneficiary under age have the discretion to distribute trust net_income and principal to the beneficiary the beneficiary is to receive one-third of the trust’s net_income and principal upon attaining age one-half of the trust’s net_income and principal upon attaining age and the remaining trust net_income and principal upon attaining age in the event the beneficiary dies prior to attaining age the trust’s property is to be distributed as the beneficiary appoints in a will executed after spouse's death trust property not effectively appointed is to be distributed to the beneficiary’s living issue by right of representation if any if none to the living issue of the beneficiary’s ancestor who was spouse's child by right of representation if any if none to spouse's living issue by right of representation article third further provides that the trusts are to terminate no later than years after the death of the survivor of all persons named in the trust agreement and their issue who were alive on date taxpayer has represented that in year sec_1 and she relied upon accounting firm to prepare her individual tax returns taxpayer also relied on the family’s tax estate_planning and financial advisor to provide accounting firm with the necessary information in order for accounting firm to prepare her individual tax returns on date in year spouse transferred a shares of company stock to each of the three trusts on date in year spouse transferred b shares of company stock to each of the three trusts taxpayer retained accounting firm to prepare her form_709 united_states gift and generation-skipping_transfer_tax return for year and year on these returns taxpayer elected to treat spouse's transfers in year sec_1 and as being made plr-133910-03 one-half by each pursuant to sec_2513 through an oversight the tax professionals retained by taxpayer failed to allocate taxpayer's gst_exemption to the transfers made to trust sec_1 and on date sec_2 and on date spouse’s attorney who drafted the trust agreement discovered the failure to allocate taxpayer’s gst_exemption to the transfers to the trusts taxpayer represents that she currently has sufficient gst_exemption to allocate to the transfers made on date and date taxpayer requests an extension of time under sec_2642 and sec_301_9100-3 to allocate her gst_exemption to the transfers to trust sec_1 and on date sec_2 and and a ruling that such allocations will be based on the value of the property transferred to trust sec_1 and on date sec_2 and law and analysis sec_2601 imposes a tax on every generation-skipping_transfer gst a gst is defined under sec_2611 as a taxable_distribution a taxable_termination and a direct_skip sec_2602 provides that the amount of the tax is the taxable_amount multiplied by the applicable_rate sec_2641 defines applicable_rate as the product of the maximum_federal_estate_tax_rate and the inclusion_ratio with respect to the transfer sec_2642 provides the method for determining the inclusion_ratio sec_2631 provides that for purposes of determining the inclusion_ratio every individual shall be allowed a gst_exemption of dollar_figure adjusted for inflation under sec_2631 which may be allocated by such individual or his executor to any property with respect to which such individual is the transferor sec_2631 provides that any allocation under sec_2631 once made shall be irrevocable sec_2632 provides that any allocation by an individual of his or her gst_exemption under sec_2631 may be made at any time on or before the date prescribed for filing the estate_tax_return for such individual’s estate determined with regard to extensions regardless of whether such a return is required to be filed sec_26_2632-1 of the generation-skipping_transfer_tax regulations provides that an allocation of gst_exemption to property transferred during the transferor’s lifetime other than in a direct_skip is made on form_709 as applicable to transfers during year and year sec_2642 provides in relevant part that if the allocation of the gst_exemption to any transfers of property is made on a timely filed gift_tax_return or is deemed to be made under sec_2632 deemed allocations to certain lifetime direct skips - plr-133910-03 a the value of such property for purposes of determining the inclusion_ratio shall be its value for purposes of chapter and b such allocation shall be effective on and after the date of such transfer sec_2642 provides generally that the secretary shall by regulation prescribe such circumstances and procedures under which extensions of time will be granted to make an allocation of gst_exemption described in sec_2642 such regulations shall include procedures for requesting comparable relief with respect to transfers made before the date of the enactment of sec_2642 which was enacted into law on date sec_2642 provides that in determining whether to grant relief the secretary shall take into account all relevant circumstances including evidence of intent contained in the trust instrument or instrument of transfer and such other factors as the secretary deems relevant for purposes of determining whether to grant relief the time for making the allocation shall be treated as if not expressly prescribed by statute sec_2652 provides that if under sec_2513 one-half of a gift is treated as made by an individual and one-half of the gift is treated as made by the spouse of such individual such gift shall be so treated for purposes of the gst tax notice_2001_50 2001_34_irb_189 provides that under sec_2642 the time for allocating the gst_exemption to lifetime transfers and transfers at death the time for electing out of the automatic allocation rules and the time for electing to treat any trust as a generation-skipping_transfer_trust are to be treated as if not expressly prescribed by statute the notice further provides that taxpayers may seek an extension of time to make an allocation described in sec_2642 or b or an election described in sec_2632 or c under the provisions of sec_301_9100-3 sec_301_9100-1 provides that the commissioner has discretion to grant a reasonable extension of time under the rules set forth in sec_301_9100-2 and sec_301_9100-3 to make a regulatory election or a statutory election but no more than 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_9100-3 provides the standards used to determine whether to grant an extension of time to make an election whose due_date is prescribed by a regulation and not expressly provided by statute under sec_301_9100-1 a regul atory election includes an election whose due_date is prescribed by a notice published in the internal_revenue_bulletin in accordance with sec_2642 and notice_2001_50 taxpayers may seek an extension of time to make an allocation described in sec_2642 under plr-133910-03 the provisions of sec_301_9100-3 requests for relief under sec_301_9100-3 will be granted when the taxpayer provides the evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 provides that a taxpayer is deemed to have acted reasonably and in good_faith if the taxpayer reasonably relied on a qualified_tax professional including a tax professional employed by the taxpayer and the tax professional failed to make or advise the taxpayer to make the election based on the facts submitted and the representations made we conclude that the requirements of sec_301_9100-3 have been satisfied therefore taxpayer is granted an extension of time of sixty days from the date of this letter to allocate her available gst_exemption to the transfers to trust sec_1 and on date sec_2 and the allocations will be effective as of date sec_2 and and will be made based on the value of the property transferred to the trusts as of the dates of the transfers the allocations should be made on supplemental form sec_709 for year sec_1 and and filed with the internal_revenue_service center cincinnati ohio a copy of this letter should be attached to each supplemental form_709 two copies are enclosed for this purpose the rulings contained in this letter are based upon information and representations submitted by the 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 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 specifically no opinion is expressed or implied regarding the value of plr-133910-03 property spouse transferred to trust sec_1 and on date sec_2 and for federal transfer_tax purposes in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to the taxpayer this ruling is directed only to taxpayer the party requesting it sec_6110 provides that it may not be used or cited as precedent sincerely heather c maloy associate chief_counsel passthroughs and special industries enclosures copy for sec_6110 purposes two copies of this letter cc


t c memo united_states tax_court national bancorp of alaska inc petitioner v commissioner of internal revenue respondent docket no filed date william h hippee jr irwin l treiger andrew t gardner mark alan hagar william kenneth wilcox and jeffrey a sloan for petitioner jack forsberg and reid m huey for respondent memorandum opinion ruwe judge respondent determined a deficiency of dollar_figure in petitioner’s federal_income_tax after a concession ’ ‘petitioner concedes that it is not entitled to deduct dollar_figure of expenditures incurred in connection with a cessna prop aircraft owned by nb aviation inc aviation - - the issue for decision is whether petitioner’s deduction for expenses_incurred in providing employees with nonbusiness flights on a company-owned airplane is limited by sec_274 to the amount reported as imputed_income to the recipient employees background the parties submitted this case fully stipulated the stipulation of facts and the attached exhibits are incorporated herein by this reference petitioner is a corporation that had its principal_place_of_business in anchorage alaska at the time it filed its petition at all relevant times petitioner had a fiscal and taxable_year ending december and used the accrual_method of accounting for both financial reporting and tax purposes for the year in issue petitioner was the parent_corporation of an affiliated_group_of_corporations that provided banking and other financial services and filed consolidated federal_income_tax returns nb aviation inc aviation was a wholly owned subsidiary of petitioner and was a member of petitioner’s consolidated_group aviation owned a gulfstream g-11b jet_aircraft the 7unless otherwise indicated all section references are to the internal_revenue_code in effect for the year in issue and all rule references are to the tax_court rules_of_practice and procedure spetitioner and aviation are collectively referred to as nba gulfstream during the gulfstream was used partly in pursuit of nba’s trade_or_business for transportation purposes and partly for personal entertainment use by certain employees the employees of nba the net expenditures including depreciation incurred by aviation during the taxable_year in connection with the operation and ownership of the gulfstream totaled dollar_figure on the basis of an allocation according to flight miles dollar_figure or approximately percent of the net expenditures was attributed to business use the remaining portion dollar_figure or approximately percent was attributed to personal entertainment use petitioner deducted the entire dollar_figure related to the operation and ownership of the gulfstream on its federal_income_tax return the personal entertainment use of the gulfstream was treated as fringe benefit compensation to the recipient employees on the basis of the valuation rules set forth in sec_1_61-21 income_tax regs nba determinated that the value of the fringe_benefits received by the employees on account of the personal entertainment use of the gulfstream totaled dollar_figure for the taxable_year the amount of the fringe_benefits attributable to each employee was included on the employees’ respective forms w-2 wage and tax statement the dollar_figure the personal entertainment use consisted of hunting fishing vacation and other similar trips for certain employees of nba q4e- deducted by petitioner includes the dollar_figure treated as fringe benefit compensation discussion the parties agree that the value of the personal entertainment use of the gulfstream is reportable by the employees as compensation and that petitioner is entitled to deduct some amount in connection with that use respondent argues that the portion of petitioner’s deduction for personal entertainment use reported on its federal_income_tax return is limited to dollar_figure the amount treated as fringe benefit compensation to the employees petitioner argues that it is entitled to deduct the entire amount of expenses_incurred in owning and operating the gulfstream including any amounts attributable to personal entertainment use of the aircraft sec_162 generally provides that a taxpayer may deduct all ordinary and necessary expenses paid_or_incurred by the taxpayer in carrying_on_a_trade_or_business an expenditure is ordinary and necessary if the taxpayer establishes that it is directly connected with or proximately related to the taxpayer’s trade_or_business activities bingham’s 325_us_365 as an ordinary_expense of carrying_on_a_trade_or_business a taxpayer employer may deduct expenses paid as compensation_for_personal_services sec_162 if the compensation is in the form of a noncash fringe benefit the employer may take a - - deduction for expenses_incurred in providing the benefit if the value of the noncash fringe benefit is includable in the recipient employee’s gross_income sec_1_162-25t temporary income_tax regs fed reg date amended fed reg date see sec_1_61-21 income_tax regs employee is required to include in gross_income the value of any fringe benefit received the employer may not deduct the value reported to an employee as compensation rather the employer 1s required to deduct its costs incurred in providing the benefit to the employee sec_1_162-25t temporary income_tax regs supra some deductions previously allowable under sec_162 were disallowed by the enactment of sec_274 sec_274 a a generally provides for the disallowance of deductions involving an entertainment amusement or recreation activity sec_274 b disallows the deduction of otherwise allowable expenses_incurred with respect to a facility used in connection with such activity however sec_274 provides that for purposes of this analysis we assume without deciding that the gulfstream was a facility within the meaning of sec_274 b the parties dispute whether the gulfstream was a facility used in connection with an activity which is of a type generally considered to constitute entertainment amusement or recreation sec_274 a and b however as we noted in sutherland lumber-southwest inc v commissioner t1t c n affd per curiam __ f 3d __ 8th cir date we need not decide this because sec_274 removes petitioner’s deduction from the reach of sec_274 and provides a universal answer to the controversy between the parties here -- - the general disallowance provision of sec_274 will not apply to expenses treated as compensation ----expenses for goods services and facilities to the extent that the expenses are treated by the taxpayer with respect to the recipient of the entertainment amusement or recreation as compensation to an employee on the taxpayer’s return of tax under this chapter and as wages to such employee for purposes of chapter relating to withholding of income_tax at source on wages emphasis added respondent argues that the to the extent language limits petitioner’s deduction to the amounts includable in income by its employees this is not an issue of first impression in 114_tc_197 affd per curiam __ f 3d __ 8th cir date we held that sec_274 acts to except the deductions in controversy from the effect of sec_274 and accordingly petitioner’s deduction for operation of the aircraft is not limited to the value reportable by its employees respondent recognizes that sutherland lumber-southwest inc precludes us from limiting petitioner’s deduction to the amount treated as fringe benefit compensation to the employees unless we choose to overrule our prior opinion respondent urges us to do just that in sutherland lumber-southwest inc we provided an extensive analysis of the statute the context in which it appears its legislative_history and relevant regulations in affirming our opinion the court_of_appeals for the kighth circuit stated after a complete review de novo we agree with the tax court’s well-reasoned opinion and affirm on the basis of the analysis set forth therein because we have nothing of substance to add to the tax court’s thorough analysis further discussion is superfluous sutherland lumber-southwest inc v commissioner f 3d at __ the above quote applies to the case before us no purpose would be served by repeating the statutory analysis that led us to hold that an employer’s deduction is not limited to the amount reportable by its employees the doctrine_of stare_decisis generally requires that we follow the holding of a previously decided case absent special justification 111_tc_210 affd 214_f3d_1254 10th cir while respondent has thoroughly rearticulated his arguments in support of a different interpretation of the statute we find nothing therein that would cause us to refrain from applying the doctrine_of stare_decisis in the instant case accordingly we hold that petitioner’s deduction for operation of the gulfstream is in no way limited by the value reportable by its employees decision will be entered under rule