department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division nov uniform issue list setter rat i legend taxpayer a ira b financial_institution c financial_institution d fund e financial_institution f financial tnstitutiong account h ira financial_institution j fund k amount amount amount amount amount dear this letter is in response to a request for a letter_ruling dated date as supplemented by email correspondence dated august and from your authorized representative in which you request a waiver of the 60-day rollover requirement contained in sec_408 of the intemal revenue code code the following facts and representations have been submitted under penalty of perjury in support of the ruling requested taxpayer a age represents that he took a distribution from ira b totaling amount taxpayer a asserts that his 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 d taxpayer a further asserts that amount has not been used for any purpose taxpayer a maintained ira b an individual_retirement_account under sec_408 of the code with financial_institution c financial_institution d manages fund e a pooled investment fund that invests in publicly-traded equity securities of companies with market capitalizations below certain prescribed levels the custodian for fund e is financial_institution f a subsidiary of financial_institution g financial_institution d had served as an investment_advisor to taxpayer a by regularly providing investment_asset management and advisory services in july taxpayer a transfer funds from ira b to fund e because it presented a good investment opportunity _ a financial advisor at financial_institution d recommended that the financial advisor at financial_institution d prepared on on july 20_ taxpayer a’s behalf a subscription agreement for investing in fund e taxpayer a completed and executed the subscription agreement electing an investment of amount and designating taxpayer a ira as the investor in the fund taxpayer a included this designation on the subscription agreement as a written instruction to financial_institution d that the new account be an ira financial_institution d mailed a new account opening form to financial_institution g taxpayer a ira as accountholder and directed it to receive a wire transfer of assets in ira b per the subscription agreement subsequently taxpayer a directed financial_institution c to execute a wire transfer of amount from ira b to an account with financial_institution f in the name of taxpayer a ira the transfer was completed on july listing -_ taxpayer a expected financial institutions d and g to coordinate the transfer of in a manner that assured it would be deposited into an ira taxpayer amount a had no direct contact with financial_institution g regarding the transaction financial_institution d requested confirmation from financial_institution g that account h was labeled taxpayer a ira financial_institution g provided a letter accepting transfer of amount into an account in the name of taxpayer a ira the letter was forwarded by financial_institution d to financial_institution c as part of the request to transfer amount after the transfer of amount from ira b taxpayer a received monthly statements for account h which indicated it was an ira in late march of taxpayer a’s financial advisor at financial_institution d communicated with financial_institution g regarding another client's beneficiary designation for fund e after a series of discussions on or around april __ financial_institution g informed taxpayer a's financial advisor that account h was not an ira even though he was told it would be an ira and it was titled as an ira account financial_institution d has acknowledged in writing that it erred when it failed to assure that amount would be transferred to an ira taxpayer a decided to reduce his overall taxpayer established ira with financial after the initial transfer in july portfolio risk on september institution j on october account h to a money market fund within ira i on may requested a redemption of amount from fund e for subsequent reinvestment in fund k this investment remained in account h both of these transactions were coordinated by financial_institution c on june _ removed amount from account h for personal_use amount was transferred directly from taxpayera taxpayer a 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 day after paid into an ira for the benefit of such individual not later than the 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 r b 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 his assertion that his failure to accomplish a timely rollover of amount was due to an error by financial_institution d code sec_408 and is ineligible to be rolled over therefore pursuant to sec_408 of the code the service hereby waives the 60-day rollover requirement with respect to the distribution of amount is granted a period of days from the issuance of from ira b taxpayer a this letter_ruling to contribute amount into a rollover ira provided all other requirements of sec_408 of the code except the 60-day requirement are met with respect to such contribution amount will be considered a rollover_contribution within the meaning of sec_408 since amount was removed from account h for personal_use it fails to satisfy the requirements of 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 s i d if you wish to inquire about at ' sincerely yours cobtr a wethow manager employee_plans technical group enclosures deleted copy of this letter notice of intention to disclose notice cc


t c memo united_states tax_court thomas joseph ritter petitioner v commissioner of internal revenue respondent docket no filed date thomas joseph ritter pro_se richard l wooldridge for respondent memorandum opinion chiechi judge respondent determined a deficiency in and an accuracy- related penalty under sec_6662 a on petitioner’s federal_income_tax tax for his taxable_year of dollar_figure and dollar_figure respectively 1all section references are to the internal_revenue_code code in effect for the year at issue all rule references are to the tax_court rules_of_practice and procedure the issue remaining for decision for petitioner’s taxable_year is whether the dollar_figure that he received in that year from a certain qualified settle- ment fund is includible in gross_income we hold that it is background the facts in this case which the parties submitted under rule have been stipulated by the parties and are so found petitioner thomas joseph ritter resided in illinois at the time he filed the petition on date jp morgan chase bank chase bank filed a complaint to foreclose mortgage with the chancery court of bureau county illinois chancery court in which it sought to foreclose with respect to the mortgage loan on petitioner’s then principal_residence on date that court entered a judgment of foreclosure against petitioner and in favor of chase bank on date petitioner filed a petition with the u s bankruptcy court for the central district of illinois bankruptcy court under chapter of title of the u s code chapter on date chase bank filed a motion 2respondent concedes that petitioner is not liable for the accuracy-related_penalty under sec_6662 that respondent determined in the notice_of_deficiency notice issued to him for his taxable_year notice for relief from stay in that bankruptcy proceeding which the bankruptcy court granted on date on date the bankruptcy court granted petitioner a discharge under chapter on date the chancery court issued an order in which it approved the report of sale and distribution and confirmed the foreclosure sale of petitioner’s then principal_residence on date chase bank and the office of the comptroller of the currency occ entered into a settlement agreement known as the independent foreclosure review ifr pursuant to that agreement chase bank agreed to take certain actions in order to remedy certain deficiencies and unsafe or unsound practices in chase bank’s residential mortgage servicing and in the bank’s initiation and handling of foreclosure proceedings that the occ had identified 3separate from and independent of the ifr the united_states and states and the district of columbia entered into consent agreements with various mortgage loan servicers including chase bank known as the national mortgage settlement nms to settle allegations by those governments that those mortgage loan servicers had violated various federal and state laws nms settlement agreements pursuant to the nms settlement agreements the mortgage loan servicers were required to pay specified amounts to certain borrowers pursuant to one component of those agreements each borrower covered was to receive a payment of dollar_figure from a so-called borrower payment fund as expressly set forth in the nms settlement agreements the purposes of the payments pursuant continued petitioner was one of the borrowers harmed by those practices on date chase bank and the occ entered into an agreement to amend the ifr date amendment by superseding article vii titled foreclosure review of the ifr in the interest of providing the greatest benefit to borrowers potentially affected by the practices at the bank addressed in the ifr in a more timely manner than would have occurred pursuant to the date amendment to which chase bank and the occ agreed chase bank agreed to establish a qualified_settlement_fund qsf within the meaning of sec_1_468b-1 income_tax regs with certain other lenders that had also entered into certain other agreements with the occ from which payments were to be made to those borrowers who had been harmed by chase bank’s as well as certain other lenders’ banking practices and who had pending or completed foreclosures with respect to their primary residences during the period date through date petitioner was one of the borrowers who received a payment from the qsf which is the payment at issue here continued to the nms are remedial and relate to the reduction in the proceeds deemed realized by borrowers for tax purposes from the foreclosure sale of residential properties owned by the borrowers allegedly resulting from the allegedly unlawful conduct of the mortgage loan servicers pursuant to the ifr and the date amendment a borrower was not required to show financial harm or request a review through the ifr in order to receive a payment the date amendment expressly provided that the payments from the qsf did not in any manner reflect specific financial injury or harm that may have been suffered by borrowers receiving payments more- over the categories for the so-called standard payment amounts set forth in a document titled independent foreclosure review payment agreement details did not include any amounts for lost equity a plan to distribute funds from the qsf distribution plan was prepared which established different categories of borrowers that were based upon different loan file characteristics and whether the borrower had requested a review through the ifr the occ and the board_of governors of the federal reserve system federal reserve board determined in their sole discretion a specific payment amount a so-called standard payout amount for each category of borrowers pursuant to the distribution plan petitioner was categorized as a borrower who did not request review through the ifr and whose mortgage loan servicer ie chase bank initiated or completed foreclosure with respect to the mortgage loan on petitioner’s then principal_residence while he was protected by federal bankruptcy law for convenience we shall refer to the category of borrowers into which petitioner was placed who did not request review through the ifr and whose mortgage loan servicer ie chase bank initiated or completed foreclosure while the borrower was protected by federal bankruptcy law as petitioner’s category of borrowers petitioner’s category of borrowers was not eligible for a payment representing lost equity like all borrowers so categorized the occ and the federal reserve board had determined that the standard payout amount payable to petitioner’s category of borrowers was dollar_figure on date pursuant to the ifr and the date amendment the qsf issued to petitioner a check for dollar_figure which he cashed we shall sometimes refer to the dollar_figure that the qsf paid to petitioner as the dollar_figure payment the qsf issued to petitioner and sent to respondent a copy of form misc miscellaneous income petitioner’s form_1099 for his taxable_year that form which was accompanied by a letter to petitioner showed that petitioner has other income of dollar_figure for that year and that no tax was withheld from that income the letter that accompanied petitioner’s form_1099 gave the follow- ing explanation why the qsf had issued that form in the tax_year you received a payment as_a_result_of_an_agreement between federal banking regulators and your mortgage servicer in connection with an enforcement action related to deficient mortgage servicing and foreclosure processes your payment in- cluded a letter explaining the breakdown of your payment and other important information and disclosures please visit www independentforeclosurereview com for tax information below is your irs form 1099-misc which you will need when you file your tax_return for the period date through date if you have questions about the taxability of your payment you should contact a tax advisor petitioner timely filed form_1040 u s individual_income_tax_return for his taxable_year in that return petitioner did not include in gross_income the dollar_figure that he received from the qsf pursuant to the ifr and the date amendment in the notice that respondent issued to petitioner respondent deter- mined inter alia that the dollar_figure payment is includible in gross_income discussion petitioner bears the burden of proving that the determination in the notice that remains at issue ie the dollar_figure payment is includible in gross_income for petitioner’s taxable_year is erroneous see rule a 290_us_111 4we allowed the parties to file briefs petitioner chose not to do so sec_61 defines the term gross_income in general to mean all income from whatever source derived it is axiomatic that a taxpayer’s acces- sions to wealth are presumed to be includible in gross_income see eg commis- sioner v glenshaw glass co 348_us_426 accessions to wealth may be excluded from gross_income only if the taxpayer establishes that the code specifically provides such an exclusion see id in determining the tax treatment of a payment to settle a claim we must ask i n lieu of what were the damages awarded 144_f2d_110 1st cir aff’g 1_tc_952 sec_468b and the regulations thereunder provide special rules for the taxation of a designated_settlement_fund like the qsf pursuant to sec_1_468b-4 income_tax regs whether a distribution from a designated_settlement_fund like the qsf is includible in a payee’s gross_income is generally determined by reference to the claim in respect of which the distribution is made and as if the distribution were made directly to the payee by the transferor to the designated_settlement_fund the dollar_figure payment that petitioner received from the qsf was a payment to remedy certain deficiencies and unsafe or unsound practices in chase bank’s residential mortgage servicing and in the bank’s initiation and handling of foreclosure proceedings that the occ had identified pursuant to the ifr and the date amendment a borrower was not required to show financial harm or request a review through the ifr in order to receive a monetary payment the date amendment expressly provided that the pay- ments from the qsf did not in any manner reflect specific financial injury or harm that may have been suffered by borrowers receiving payments moreover the categories for the so-called standard payment amounts set forth in a document titled independent foreclosure review payment agreement details did not include any amounts for lost equity the distribution plan for distributions from the qsf established different categories of borrowers that were based upon different loan file characteristics and whether the borrower requested a review through the ifr the occ and the federal reserve board determined in their sole discretion a specific payment amount a so-called standard payout amount for each category of borrowers pursuant to the distribution plan petitioner was categorized as a borrower who did not request review through the ifr and whose mortgage loan servicer ie chase bank initiated or completed foreclosure with respect to the mortgage loan on petitioner’s then principal_residence while he was protected by federal bankruptcy law petitioner’s category of borrowers was not eligible for a payment represent- ing lost equity like all borrowers so categorized the occ and the federal reserve board had determined that the standard payout amount payable to petitioner’s category of borrowers was dollar_figure the fully stipulated record is devoid of evidence establishing that the dollar_figure payment was or was intended to be a deemed increase or decrease in the amount_realized by petitioner from the foreclosure with respect to the mortgage loan on his then principal_residence nor does that record contain any evidence establishing that petitioner is entitled under a specific code section to exclude that payment from gross_income 5although petitioner does not rely on revrul_2014_2 2014_2_irb_255 we address it briefly that ruling considered the tax treatment of payments made pursuant to the nms which was totally separate from and independent of the ifr see supra note in revrul_2014_2 supra the internal_revenue_service irs answered the question i n lieu of what were the damages payments pursuant to the nms awarded 144_f2d_110 1st cir aff’g 1_tc_952 as follows here as reflected in the nms settlement documents the nms payment from the fund is an additional_amount realized on the foreclosure of the borrower’s principal_residence that amount_realized is used to determine any gain_or_loss realized under section including gain that may be excluded under section the payments pursuant to the nms that the irs analyzed in revrul_2014_2 supra are materially distinguishable from the payments pursuant to the ifr and the date amendment such as the dollar_figure payment that petitioner received consequently revrul_2014_2 supra does not control the tax treatment of that payment on the record before us we find that petitioner is required to include in gross_income for his taxable_year the dollar_figure payment that he received we have considered all of the contentions and arguments of the parties that are not discussed herein and we find them to be without merit irrelevant and or moot to reflect the foregoing and the concession of respondent decision as to the deficiency will be entered for respondent and as to the accu- racy-related penalty under sec_6662 will be entered for petitioner


department of the treasury internal_revenue_service washington d c o f f ic e o f c h ief c o u n sel number info release date uil date attention dear i am responding to your date inquiry on behalf of your constituent wrote about the application of the segment tax to on- demand air charter flights in a recent technical_advice_memorandum tam issued by the irs i hope the following information is helpful to you the air transportation excise_taxes are user fees and the amounts collected are paid into the airport_and_airway_trust_fund the trust fund the trust fund uses these funds to plan construct develop operate and maintain the united states’ airport and airway system in addition the trust fund covers the portion of the department of transportation’s budget dealing with air transportation and air safety this includes over one-half of the operating costs of the federal aviation administration prior to the taxpayer_relief_act_of_1997 vol c b the act air transportation providers calculated the excise_tax on domestic air transportation solely as a percentage of the amount_paid for that transportation in addition providers of international air transportation beginning or ending in the united_states calculated an international_travel_facilities_tax as a fixed amount applicable to any amount_paid for that air transportation under the act the congress enacted legislation to decrease this percentage and add a new tax on each segment of taxable_transportation the act states the segment tax is imposed on the amount_paid for each domestic_segment of taxable_transportation in the context of commercial air transportation the segment tax applies to each passenger who pays any amount for a segment the term domestic_segment is defined as one takeoff and one landing which is taxable_transportation described in sec_4262 of the internal_revenue_code sec_4261 of the code the international_travel_facilities_tax is similar to the segment tax because both are calculated not as a percentage of the amount_paid but as a fixed amount applicable to any amount_paid for the transportation revrul_72_309 1972_1_cb_348 shows how to calculate the international_travel_facilities_tax when the purchaser makes a single payment for a charter that revenue_ruling concluded that when an individual or organization pays a single amount for a charter implicit in the charter fee is an amount_paid for the transportation of each passenger actually on the flight the similar language in sec_4261 and sec_4261 supports the conclusion that the segment tax should apply in the same way as the international_travel_facilities_tax thus although the irs has not issued guidance on the segment tax specifically the guidance for the similar international_travel_facilities_tax clearly suggests the segment tax should also apply per passenger the per-passenger application means all users of the airport and airway system will share equally in the cost rather than commercial air passengers bearing a higher share of those costs than passengers in chartered aircraft the secretary_of_the_treasury can prescribe the extent if any to which any ruling applies without retroactive effect sec_7805 of the code the holding of a tam applies retroactively unless the secretary exercises this discretionary authority generally a tam will not apply retroactively where the irs has a contrary regulation or revenue_ruling on point or where the irs has issued an earlier tam or letter_ruling to the taxpayer about the same matter under consideration in the tam revenue_procedure 2001_1_irb_79 the irs has not issued any regulation or revenue_ruling on the segment tax thus because the irs had not issued a letter_ruling to the taxpayer before issuing the tam it would generally not be appropriate to apply the tam nonretroactively simply because the taxpayer disagreed with the position reached in that tam i recognize many may disagree with the application of the segment tax to each passenger however where taxpayers are unclear on the application of a particular tax they can request a letter_ruling rather than wait for published guidance from the irs the letter_ruling program provides guidance to taxpayers when they are unclear on the application of the code each year we announce the procedures for requesting a letter_ruling in the first revenue_procedure published in the internal_revenue_bulletin this year’s procedures are in revproc_2001_1 2001_1_irb_1 copy enclosed if you have any questions please contact me or sincerely associate chief_counsel passthroughs and special industries by richard a kocak chief branch enclosure


internal_revenue_service number release date index number ----------------------- -------------------------- --------------------- -------------------------------- ------------------------------- department of the treasury washington dc person to contact -------------------------- ---------------------- telephone number --------------------- refer reply to cc psi - plr-101511-04 date jun legend taxpayer subsidiary a subsidiary b subsidiary c subsidiary d date year --------------------- -------------------------------- ------------------------------- ------------------------- ------------------------------- ----------------------- ---------------------- -------------------------------------------- -------------------------- ------- dear --------------- this letter responds to your letter dated date and supplemental submission dated date submitted on behalf of taxpayer requesting a private_letter_ruling under sec_45 of the internal_revenue_code facts taxpayer represents that the relevant facts are as follows subsidiary a is a wholly owned subsidiary of taxpayer subsidiary a wholly on date subsidiary b through subsidiary c and subsidiary d acquired a plr-101511-04 owns subsidiary b which wholly owns subsidiary c which wholly owns subsidiary d subsidiary b subsidiary c and subsidiary d are disregarded entities for federal tax purposes wind electricity generation facility and all related assets out of a bankruptcy_estate the facility was originally placed_in_service in year electricity produced at the facility is sold to a utility pursuant to a power purchase agreement ppa originally entered into before date the facility has not been re-powered or upgraded with new or more efficient equipment the ppa has not been amended to comply with the provisions of sec_45 ruling requested facility the determination of the facility’s placed_in_service_date for purposes of sec_45 is made by reference to the date the facility was originally placed_in_service not the date the facility is placed_in_service by the transferee taxpayer law and analysis production credit may be claimed in an amount equal to cents multiplied by the kilowatt hours of electricity produced_by_the_taxpayer from qualified_energy_resources at a qualified_facility during the 10-year period beginning on the date the facility was originally placed_in_service and sold by the taxpayer to an unrelated_person during the taxable_year taxpayer requests the service to rule that in the case of a transfer of a qualified sec_45 provides that for purposes of sec_38 the renewable electricity sec_45 provides that in the case of a facility using wind to produce sec_45 provides that the credit does not apply to electricity electricity the term qualified_facility means any facility owned by the taxpayer which is originally placed_in_service after date and before date i produced at a qualified_facility described in subsection c a which is placed_in_service by the taxpayer after date and ii sold to a utility pursuant to a contract originally entered into before date whether or not amended or restated after that date however sec_45 creates an exception whereby the provisions of subparagraph a will not apply if the contract is amended to impose a limit on the amount of electricity that may be sold under the contract at prices that exceed avoided cost prices determined at the time of delivery include sec_45 however it seems clear from the wording of the statute that it was there is no discussion in the legislative_history on why sec_45 was amended to taxpayer maintains that sec_45 was intended to address two specific fact taxpayer would apply sec_45 only to disallow the credit for electricity from a plr-101511-04 directed at windfalls arising in situations where power under pre-1987 ppas is sold to a utility in excess of amounts contemplated under the ppas at above market prices patterns related to pre-1987 power purchase contracts that were perceived to create a potential windfall for taxpayers that owned these contracts first the section prevents a taxpayer from constructing a new facility using more advanced and efficient technology that will sell power under an unutilized pre-1987 contract and also qualify for sec_45 credits second the section prevents an existing facility that was placed_in_service prior to date from upgrading and re-powering its operations with new more efficient equipment and thereby generating more megawatts of power and more sec_45 credits while selling power at significantly above market prices under a pre-1987 contract newly developed facility placed_in_service after date or an existing facility which had been re-powered taxpayer argues that sec_45 should not apply to a transferred qualified_facility originally placed_in_service before date if the facility had not been upgraded taxpayer would treat a qualified_facility placed_in_service before date and selling power pursuant to a pre-1987 ppa as a unit entitled to generate a credit for years regardless of any transfer of the facility after date accordingly taxpayer would interpret the placed_in_service_date in sec_45 as the date the transferred facility was originally placed_in_service under the suggested interpretation the date the transferee placed the facility in service would not be relevant if the transferred facility had not been upgraded appear in sec_45 the statutory scheme of sec_45 contemplates a two- prong determination sec_45 makes reference to a qualified_facility described in sec_45 the statute presupposes that a determination has been made that the requirements of a qualified_facility under sec_45 have been satisfied including the requirement that the facility be originally placed_in_service within the requisite time period sec_45 then requires a determination as to whether the qualified_facility was placed_in_service by the taxpayer after date in the case of a facility that has been transferred the date the transferee taxpayer places the facility in service is the relevant date sec_45 does not require that an actual windfall exist but presumes a windfall if electricity from a qualified_facility is sold pursuant to a pre-1987 ppa the only exception provided by the statute to prevent the application of sec_45 is set forth in sec_45 the exception requires an amendment to the ppa to impose a limit on the amount of production that may be sold at the higher prices to a utility pursuant to the ppa taxpayer in the case of a transfer of a qualified_facility we rule that the determination we do not agree with taxpayer’s interpretation the term originally does not based solely on the foregoing analysis and the representations made by under the facts in this case the subject ppa has not been amended in except as specifically set forth above no opinion is expressed or implied this ruling is directed only to the taxpayer who requested it sec_6110 plr-101511-04 of the facility’s placed_in_service_date for purposes of sec_45 is made by reference to the date the facility is placed_in_service by the transferee taxpayer accordance with sec_45 so as to make sec_45 inapplicable therefore in applying sec_45 to the instant case we rule that the sec_45 credit does not apply to the electricity produced at the facility that is the subject of this ruling because the facility was placed_in_service by taxpayer after date and the electricity is sold to a utility pursuant to a ppa originally entered into before date concerning the federal_income_tax consequences of the above described facts under any other provision of the code or regulations of the code provides that it may not be used or cited as precedent to each of your authorized representatives enclosure copy cc walter h woo senior technician reviewer branch office of associate chief_counsel passthroughs and special industries in accordance with the powers of attorney on file a copy of this letter will be sent s walter h woo sincerely


office_of_chief_counsel internal_revenue_service memorandum number release date cc tege eoeg et1 postn-141842-06 uilc date date to director submission processing cincinnati oh attn entity unit from office of division counsel associate chief_counsel tax exempt government entities subject railroad_retirement_tax_act status ----------------------------------------------------------- in accordance with the coordination procedure established between the service and the railroad retirement board rrb the rrb has provided us with its opinion dated ------------------ that the following business ceased to be an employer under the railroad retirement act and the railroad unemployment insurance act effective -------------------------- ------------------------------------------------------------ -------------------------------------------------------------- ----------------------------------------------------------------------------- we have reviewed the opinion of the rrb and based upon the information submitted to us by the rrb we also conclude that ------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------- ceased to be an employer under the railroad_retirement_tax_act on ------------------------- ------- please take the appropriate action regarding this business ________________ janine cook


internal_revenue_service department of the treasury index number washington dc number release date person to contact telephone number refer reply to cc dom corp plr-100673-00 date date distributing controlled union date p date pp date q date r date s this responds to your date request that we supplement our letter_ruling of date the prior letter_ruling and supplemental letter_ruling of date together the prior letter rulings capitalized terms retain the meanings originally assigned them the information provided in this request and in later correspondence is summarized below the prior letter_ruling addresses a proposed transaction in which controlled would sell stock in an initial_public_offering and distributing would distribute the remaining controlled stock to holders of distributing class c common_stock as part of the transaction distributing and controlled agreed to an allocation of retirement benefit liabilities using assumptions based on then-available information the assumptions to the extent this allocation were later found to be inaccurate a true- up payment would be made by one corporation to the other the ipo was completed on date k and the controlled stock was distributed on date p plr-100673-00 shortly after the spin-off distributing and controlled each entered into negotiations with union on a new labor contract the resulting bargaining agreement which applies to both distributing and controlled and was ratified by the union membership on date pp affects the assumptions by i extending to date r the date by which a controlled employee who retires will still be considered a distributing employee for payment of certain retirement benefits ii increasing the pension benefits available to controlled employees and iii legally obligating distributing to guarantee through date q the payment of lay-off and retirement benefits to certain former distributing employees now employed by controlled in the event controlled is unable to make such payments because of financial distress as a result partly of these changes partly of an unexpected increase in the number of controlled employees retiring by date r and partly for other reasons the true-up payment will be made by controlled to distributing and will be significantly larger than originally thought accordingly to avoid adversely affecting controlled’s ability to compete within its industry distributing and controlled have proposed to defer at a reasonable rate of interest part or all of the true-up payment to a date no later than date s consistent with this proposal distributing wishes to amend representation k of the prior letter_ruling to read as follows k except for an obligation to make a true-up payment for certain retirement benefit liabilities no intercorporate debt will exist between distributing and controlled at the time of or after the distribution other than payables and receivables arising in the ordinary course of business based solely on the information submitted and the representations set forth above we rule that the above changes will have no effect on the rulings issued in the prior letter rulings we express no opinion about the tax treatment of the transaction under other provisions of the code or regulations or the tax effect of any condition existing at the time of or effect resulting from the transaction that is not specifically covered by the above ruling this 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 this transaction should attach copies of the prior letter plr-100673-00 rulings and this supplemental ruling to the taxpayer’s federal_income_tax return for the taxable_year in which the transaction is completed in accordance with the power_of_attorney on file in this office the taxpayer and two authorized representatives each will receive a copy of this letter sincerely assistant chief_counsel corporate by wayne t murray senior technician reviewer branch


internal_revenue_service number release date index number ----------------------- -------------------------- ----------------------------------- ---------------------------------- ------------------------- in re ----------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact ------------------------ id no ------------- telephone number -------------------- refer reply to cc corp bo1 plr-116212-08 date date distributing ----------------------------------- ---------------------------------------------------------------------- ---------------------------------------------------------- controlled ---------------------------------------------------------------------- ---------------------------------------------------------- -------------------------------------------- busine sec_1 ------------------------------------------- busine sec_2 ----------------------------------------------- --------------------------------------------------------------------------------- state x z aa bb ----------------------- ----- -------- --------- dear ---------------- we respond to your date request for rulings regarding certain federal_income_tax consequences of a proposed transaction the information submitted in that request and in your later correspondences dated june june and date are summarized below the rulings contained in this letter are based on facts and representations plr-116212-08 submitted by the taxpayer and accompanied by a penalties of perjury statement executed by an appropriate party this office has not verified any of the materials submitted in support of the request for rulings verification of the information representations and other data may be required as part of the audit process moreover no information provided by the taxpayer has been reviewed and no determination has been made regarding whether the transaction i satisfies the business_purpose requirement of sec_1_355-2 of the income_tax regulations ii is used principally as a device for the distribution of the earnings_and_profits of the distributing_corporation or the controlled_corporation or both see sec_355 of the internal_revenue_code and sec_1_355-2 or iii is part of a plan or series of related transactions pursuant to which one or more persons will acquire directly or indirectly stock representing a 50-percent_or_greater_interest in the distributing_corporation or the controlled_corporation see sec_355 and sec_1_355-7 summary of facts distributing a state x corporation is treated as an s_corporation for federal_income_tax purposes and is engaged directly in busine sec_1 distributing has aa shares of outstanding class a voting common_stock owned by six shareholders and bb shares of outstanding class b nonvoting common_stock owned by shareholders together the shareholders other than the right to vote classes a and b confer identical rights to distribution and liquidation proceeds distributing owns all the stock of controlled a corporation that has aa shares of class a voting common_stock and bb shares of class b nonvoting_stock other than the right to vote classes a and b confer identical rights to distribution and liquidation proceeds controlled is a qualified_subchapter_s_subsidiary qsub for federal tax purposes controlled is engaged in busine sec_2 the financial information submitted by distributing indicates that busine sec_1 and busine sec_2 each has had gross_receipts and operating_expenses representing the active_conduct_of_a_trade_or_business for each of the last five years distributing has proposed the following transaction in order to protect busine sec_1 from the risk of busine sec_2 and also to allow the two businesses to set up a management structure that is best suited for each business proposed transaction in order to achieve these purposes distributing will distribute all the stock of controlled to distributing’s shareholders pro_rata each of distributing’s class a voting shareholders will receive an equal number of class a voting_stock in controlled and plr-116212-08 each of distributing’s class b nonvoting shareholders will receive an equal number of class b nonvoting_stock in controlled the distribution representations the taxpayers have made the following representations in connection with the proposed transaction a no part of the consideration to be distributed by distributing will be received by a shareholder as a creditor employee or in any capacity other than that of a shareholder of the corporation b the five years of financial information submitted on behalf of distributing with regard to busine sec_1 and busine sec_2 is representative of each business’ present operations and with regard to each business there have been no substantial operational changes since the date of the last financial statements submitted c following the transaction distributing and controlled will each continue the active_conduct of its business independently and with its separate employees d the distribution of the stock of controlled is carried out for the following corporate business purposes risk reduction by enhancing the protection of busine sec_1 from the risks of busine sec_2 and allowing busine sec_1 and busine sec_2 to set up management that is best suited to their industry the distribution of the stock of controlled is motivated in whole or substantial part by one or more of these corporate business purposes e the transaction is not used principally as a device for the distribution of the earnings_and_profits of distributing or controlled or both f the distribution is not part of a plan or series of related transactions within the meaning of sec_1_355-7t pursuant to which one or more persons will acquire directly or indirectly stock representing a 50-percent_or_greater_interest within the meaning of sec_355 in distributing or controlled including any predecessor or successor of any such corporation g the distribution of controlled stock is not a disqualified_distribution within the meaning of sec_355 within the 5-year period ending on the date of the distribution z percent less than percent of class b common shares were acquired by purchase within the meaning of section sec_355 h the total adjusted bases and the fair_market_value of the assets transferred to controlled by distributing each equals or exceeds the sum of the liabilities assumed plr-116212-08 within the meaning of sec_357 by controlled plus any liabilities to which the transferred assets are subject i the liabilities assumed as determined under sec_357 in the transaction and the liabilities to which the transferred assets are subject were incurred in the ordinary course of business and are associated with the assets being transferred j no investment tax property for purposes of the investment_tax_credit will be transferred between distributing and controlled as part of this transaction k distributing neither accumulated its receivables nor made extraordinary payment of its payables in anticipation of the transaction l no intercorporate debt will exist between distributing and controlled at the time of or subsequent to the distribution of controlled stock m payments made in connection with all continuing transactions if any between distributing and controlled will be for fair_market_value based on terms and conditions arrived at by the parties bargaining at arm's length n no two parties to the transaction are investment companies as defined in sec_368 and iv o immediately after the distribution controlled will elect to be an s_corporation within the meaning of sec_1361 rulings based solely on the information submitted and the representations made we rule as follows the distribution will cause a termination of controlled’s election to be a qsub because controlled will cease to be a wholly-owned subsidiary of an s_corporation for federal tax purposes the distribution will be treated as if controlled is a new corporation acquiring all the assets and assuming all of its liabilities in a deemed contribution the contribution from distributing occurring immediately before the distribution and distributing will be deemed to receive the class a and class b stock of controlled in exchange for the contribution sec_1_1361-5 the contribution followed by the distribution will be a reorganization within the meaning of sec_368 distributing and controlled will each be a_party_to_a_reorganization within the meaning of sec_368 plr-116212-08 no gain_or_loss will be recognized by distributing upon the contribution sec_361 and sec_357 no gain_or_loss will be recognized by controlled upon the contribution sec_1032 the basis of each asset deemed received by controlled will be determined in accordance with sec_362 and sec_362 the holding_period for each of the assets deemed received by controlled will include the period during which such asset was held by distributing sec_1223 no gain_or_loss will be recognized by distributing upon the distribution sec_361 no gain_or_loss will be recognized by and no amount will be included in the income of the shareholders upon receipt of controlled stock sec_355 the aggregate basis of the controlled stock and distributing stock in the hands of the shareholders after the distribution will equal the basis of the distributing stock held by each respective shareholder immediately before the distribution allocated in proportion to the fair_market_value of each in accordance with sec_1_358-2 sec_358 b and c the holding_period of the controlled stock received by the shareholders in the distribution will include the holding_period of the distributing stock with respect to which it is received provided that the distributing stock is held as a capital_asset in the hands of the shareholder on the date of the exchange sec_1223 as provided in sec_312 of the code proper allocation of earnings_and_profits among distributing and controlled will be made under sec_1_312-10 caveats except as expressly provided herein no opinion is expressed about the tax treatment of the transactions described above under other provisions of the code or regulations or about the tax treatment of any conditions existing at the time of or effects resulting from the transactions not specifically covered by the above rulings in particular no opinion is expressed regarding i whether the distribution satisfies the business_purpose requirement of sec_1_355-2 ii whether the distribution is used principally as a device for the distribution of earnings_and_profits of distributing and controlled or both see sec_355 and sec_1_355-2 or iii whether the distribution is part of a plan or series of related transactions under sec_355 additionally no opinion is expressed regarding issues relating to controlled’s subchapter_s_election plr-116212-08 procedural statements this ruling is directed only to the taxpayers who requested it sec_6110 of the code provides that this private_letter_ruling may not be used or cited as precedent a copy of this letter must be attached to the federal_income_tax returns to which it is relevant alternatively taxpayers filing their returns electronically may satisfy this requirement by attaching to the return a statement that provides the date and control number plr-116212-08 of this ruling letter pursuant to the power_of_attorney on file in this matter a copy of this letter is being sent to your authorized representative sincerely _________________________ mark weiss assistant to the branch chief branch office of associate chief_counsel corporate 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 tege eoeg teb presp-146651-06 date date dear ------------ pursuant to sec_54 of the internal_revenue_code the code and notice_2005_98 2005_52_irb_1211 and after review of your application submitted on date including supplements thereto we have determined that the project described in appendix a attached hereto is qualified for purposes of sec_54 and will be owned by one or more qualified borrowers we allocate authority to ----------------------------------- --------------------- the issuer a qualified issuer under sec_54 to issue up to dollar_figure---------- ------------ of clean renewable energy bonds crebs bonds issued pursuant to this allocation must be designated by the issuer as bonds for purposes of sec_54 for the project described in appendix a up to the amount allocated for each project described in appendix a bonds so designated must be issued on or before date please be aware that in order for bonds to be crebs the applicable_requirements of the code including without limitation sec_54 notice_2005_98 and notice_2006_7 2006_10_irb_559 must be met please note that creb proceeds may be used to reimburse capital expenditures paid_by qualified borrowers for qualified projects only if the provisions of sec_54 are met if you have any questions with respect to this allocation please contact --------------------- ---------------------------------------- of the office of division counsel associate chief_counsel tax-exempt and government entities on --------------------- not a toll-free call 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 for purposes of the renewable_electricity_production_credit under sec_45 of the code no inference may be drawn from this allocation that any project listed in appendix presp-146651-06 a is a qualified_facility or that electricity to be produced at such project s is electricity from a qualified_energy resource at a qualified_facility within the meaning of sec_45 this determination is directed only to the applicant named above 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 form 8038-g information_return for tax- exempt governmental obligations filed for bonds issued pursuant to this allocation the allocation contained in this letter is based upon information and representations submitted by the applicant for the creb allocation 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 application_for an allocation it is subject_to verification on examination sincerely assistant chief_counsel exempt_organizations employment_tax government entities tax exempt government entities by timothy l jones senior counsel tax-exempt_bonds branch presp-146651-06 borrower name appendix a project type project location --------------------------------- --------------------- solar_energy_facility -------------------------------- ---- amount allocated dollar_figure-----------


department of the treasury washington dc third party communication none date of communication not applicable_person to contact ----------------------- id no ------------- telephone number --------------------- refer reply to cc intl b02 plr-124054-10 date date internal_revenue_service number release date index number -------------- ------------------------------- ----------------------------------- ---------------------------------- in re -------------- legend taxpayer ------------- year ------ dear ----------------------- this is in response to a letter dated date submitted on behalf of taxpayer by its authorized representative requesting a ruling granting taxpayer permission to revoke an election made under sec_1_954-2 with respect to certain of its controlled_foreign_corporations cfcs 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 this request_for_ruling such material is subject_to verification upon examination the information submitted in the request is substantially as set forth below facts taxpayer is a large_corporation headquartered in the united_states it operates outside the united_states in various foreign countries and through multiple legal entities including a number of wholly-owned cfcs taxpayer has a significant amount of foreign sales and it employs a hedging strategy whereby certain of its cfcs and foreign disregarded entities enter into short- term foreign_currency forward contracts and options to offset some of its foreign_currency exchange risk in year taxpayer made an election under sec_1_954-2 on behalf of its cfcs in the interest of administrative convenience to offset net currency losses from sec_988 transactions against other categories of foreign_personal_holding_company_income attributable to those cfcs as a result net foreign_currency losses of taxpayer’s cfcs are taken into account to determine its fphci but net foreign_currency gains cannot qualify for the business needs exception and are therefore fphci plr-124054-10 because of significant changes of circumstances that have occurred since the year election taxpayer now wants to revoke the election these changes of circumstances reflect changes in taxpayer's foreign business operations taxpayer believes that the business needs exception available under sec_1_954-2 would likely allow it to exclude a significant portion of its cfcs’ sec_988 foreign_currency gains and losses from the calculation of fphci since the election taxpayer’s international sales have increased dramatically both in terms of total sales and in terms of the percentage of overall sales this increase in sales volume as well as the increase in the percentage of sales outside of the u s including in new markets exposes a larger amount of taxpayer’s revenue to foreign_currency risk magnifying the size of taxpayer’s potential hedging gains or losses taxpayer claims that volatility in the foreign_currency makes it more complicated for taxpayer to hedge its foreign_currency exposure increasing the costs associated with taxpayer’s hedging operations and affecting decisions about the amounts hedged the timing of placing hedges and the types of hedges to use this higher volatility results in increased gains and losses generated from both taxpayer’s underlying currency exposures and from taxpayer’s hedging activity in response to these changes taxpayer has expanded its hedging program and represents that it now has better methods of tracking data associated with hedging operations than it did in year including the ability to track currency gains and losses for purposes of the business needs exception and the bona_fide hedging_exception under sec_1_954-2 rulings requested taxpayer requests permission to revoke the election under sec_1_954-2 that it made with respect to its cfcs law code sec_951 requires a united_states_shareholder of a cfc to include in gross_income its pro_rata share of the cfc's subpart_f_income for the taxable_year code sec_952 defines subpart_f_income to include among other things foreign_base_company_income code sec_954 defines foreign_base_company_income to include fphci code sec_954 provides that fphci includes the excess of foreign_currency gains over foreign_currency losses as defined in sec_988 attributable to any sec_988 transactions unless the transaction is directly related to the business needs of the cfc code sec_988 provides generally that any foreign_currency_gain_or_loss attributable to a sec_988 transaction shall be computed separately and treated as ordinary_income or loss code sec_988 defines foreign_currency_gain as any gain from a sec_988 transaction plr-124054-10 to the extent such gain does not exceed gain realized by reason of changes in exchange rates on or after the booking_date and before the payment_date code sec_988 defines foreign_currency_loss as any loss from a sec_988 transaction to the extent such loss does not exceed the loss realized by reason of changes in exchange rates on or after the booking_date and before the payment_date sec_1_954-1 provides generally that a net_loss in any category of fphci may not reduce income in any other category of fphci sec_1_954-2 provides that foreign_currency_gain_or_loss directly related to the business needs of the cfc is excluded from fphci foreign_currency_gain_or_loss is directly related to the business needs of a cfc if it generally falls within one of three categories of foreign_currency_transactions certain transactions or property related to the business activities of the cfc certain gains and losses from bona_fide hedging_transactions or transactions in dealer_property foreign_currency gains or losses that fall within the general definition of fphci under sec_954 will be excluded from fphci if one of the business needs exceptions is met sec_1_954-2 provides that a u s shareholder can elect to include in its computation of fphci the excess of foreign_currency gains over losses or the excess of foreign_currency losses over gains attributable to any sec_988 transaction except gains or losses treated as capital_gain or loss under sec_988 thus the general_rule of sec_1_954-1 that net foreign_currency losses may not reduce income in any other category of fphci would not apply if the cfc has made this election because the regulations specifically provide that the excess of foreign_currency losses over foreign_currency gains may reduce other categories of fphci sec_1_954-2 provides that an election under sec_1 g i is effective for the taxable_year of the cfc for which it is made and all subsequent years of such cfc unless revoked by or with the consent of the commissioner analysis as a u s shareholder of its cfcs taxpayer must include in gross_income its pro_rata share of their subpart_f_income for the taxable_year including their fphci since taxpayer made an election on behalf of its cfcs under sec_1_954-2 they are subject_to the terms of that election for purposes of calculating their fphci therefore in the absence of consent being granted to revoke the sec_1 g election made by taxpayer its cfcs must include their net foreign_currency gains as fphci without application of any of the exceptions to inclusion of the gains as fphci that might otherwise apply plr-124054-10 ruling based upon the facts submitted permission is granted for taxpayer to revoke the election under sec_1_954-2 the revocation is effective for the taxable_year of taxpayer in which this letter_ruling is dated additionally taxpayer is prohibited from making a new election under sec_1_954-2 until the sixth taxable_year following the taxable_year for which the revocation is first effective no opinion is expressed about whether the business needs exception or the bona_fide hedging_exception is satisfied in this case this private_letter_ruling is directed only to the taxpayer who requested it code sec_6110 provides that it may not be used or cited as precedent a copy of this letter_ruling must be attached to any federal_income_tax return to which it is relevant in accordance with the power_of_attorney on file with this office copies of this letter are being sent to taxpayer's representatives sincerely jeffery g mitchell chief branch international


id office uilc cca_2009071615272050 ------------------------- number release date from -------------------- sent thursday date pm to ------------------------------------- cc --------------------------------------------------------------------------------------------------------------------------- ------------- subject re disqualification of a profit sharing plan ---------------------- i spoke with --------------------in -----------------and he did not think the tax_benefit_rule would apply in this case also given that taxable years ------------------------------are close taxable years he did not think that it was likely that we could proceed against the taxpayer on any of these years however there maybe a possibility if we could establish that the ------- transfer of dollar_figure---------------was not a qualified_transfer then we may be able to disqualify the plan for taxable_year ------- ---------- did not understand why we focused on the ------- taxable_year if there were no transfers or rollovers in taxable_year ------- whether we can argue the duty_of_consistency we will have to wait for ------------to make that determination --------------------asked that he have a wli opened for -------------- if you have questions for ----------------- -------- you can call him at --------------------- -------------------