t c memo united_states tax_court samuel k rasco petitioner v commissioner of internal revenue respondent docket no filed date samuel k rasco pro_se fred fe green jr for respondent memorandum opinion dinan special_trial_judge this case was heard pursuant to the provisions of sec_7443a and rule sec_180 sec_181 and sec_182 unless otherwise indicated all section references are to the internal_revenue_code in effect for the taxable_year in issue all rule references are to the tax_court rules_of_practice and procedure - - respondent determined a deficiency in petitioner's federal_income_tax for in the amount of dollar_figure the issues for decision are whether petitioner is entitled to dependency_exemption deductions whether petitioner is entitled to head_of_household filing_status and whether petitioner is entitled to an earned_income_credit some of the facts have been stipulated and are so found the stipulations of fact and attached exhibits are incorporated herein by this reference petitioner resided in las vegas nevada on the date the petition was filed in this case petitioner worked for d i hastern texaco during on his return he reported wages in the amount of dollar_figure and unemployment_compensation in the amount of dollar_figure lisa k froemel moved into petitioner's apartment in the summer of ms froemel has three children from two previous marriages her daughter from her first marriage amber r franks was born in her son from her first marriage was not identified by name in the record her son from her second marriage joshua d noble was born in amber and joshua lived with petitioner and ms froemel continuously from date through during ms froemel received welfare_payments of approximately dollar_figure per month she also received food stamps during she did not receive any support payments - - from the fathers of her children during ms froemel did not work while she lived with petitioner petitioner's rent for his apartment during was dollar_figure per month ms froemel contributed dollar_figure per month toward the rent she used her monthly food stamps to buy groceries for the apartment petitioner paid for all of the other household expenses he also paid for joshua's and amber's clothing during the first issue for decision is whether petitioner is entitled to dependency_exemption deductions on his return petitioner claimed dependency_exemption deductions for ms froemel joshua and amber in the statutory_notice_of_deficiency respondent disallowed the claimed deductions an individual taxpayer is allowed as a deduction in computing taxable_income an additional exemption for each dependent as defined in sec_152 see sec_151 a dependent is generally defined as an individual who receives over half of his support from the taxpayer in the calendar_year in which the taxpayer's taxable_year begins see sec_152 individuals listed under this general definition include among others an individual who for the taxable_year of the taxpayer has as his principal_place_of_abode the home of the taxpayer and is a member of the taxpayer's household see sec_152 q4e- petitioner testified that ms froemel joshua and amber moved out of his apartment in date petitioner also submitted a notarized statement from james and annette bunty who operated d i eastern texaco and lived in petitioner's neighborhood during all times relevant to this case in their notarized statement james and annette bunty state that ms froemel joshua and amber lived with petitioner during the year of based on the record we find that ms froemel joshua and amber were members of petitioner's household for his entire taxable_year see sec_1_152-1 income_tax regs we further find that petitioner has proved that he provided more than half of ms froemel's joshua's and amber's support during predicated upon our review and particular analysis of the evidence introduced at trial the following chart summarizes our analysis of the evidence at trial respondent's counsel stated that petitioner had previously provided respondent with a copy of the notarized statement and that respondent had no objection to the notarized statement being admitted as evidence there is no evidence in the record which disputes petitioner's testimony that ms froemel joshua and amber moved out of his apartment in date --- - total contributions to the support of petitioner ms froemel amber and joshua during in the amount of dollar_figure petitioner wages dollar_figure unemployment income_tax big_number social_security_taxes big_number refund big_number total big_number ms froemel amber joshua welfare dollar_figure x month food stamps big_number x month total total support per individual dollar_figure big_number total petitioner ms froemel amber joshua total dollar_figure dollar_figure dollar_figure dollar_figure dollar_figure welfare -- stamps big_number big_number big_number petitioner big_number big_number big_number big_number big_number assume welfare food stamps are allocated equally to ms froemel amber and joshua -- no evidence in record of allocation petitioner provided of ms froemel's amber's and joshua's support dollar_figure dollar_figure we hold that petitioner is entitled to dependency_exemption deductions for for ms froemel joshua and amber the second issue for decision is whether petitioner is entitled to head_of_household filing_status petitioner claimed head_of_household filing_status on his return in the statutory_notice_of_deficiency respondent disallowed the claimed filing_status head_of_household as relevant here is defined as an unmarried taxpayer who maintains as his home a household which constitutes for more than one half of the taxable_year the principal_place_of_abode of an individual for whom the taxpayer is entitled to a dependency_exemption deduction under sec_151 see sec_2 a a taxpayer is considered as maintaining a household only if he furnishes over half of the cost of maintaining the household during the taxable_year see sec_2 based on the record we find that petitioner furnished over half of the cost of maintaining his apartment during we further find that he meets the other requirements of sec_2 and hold that he is entitled to head_of_household filing_status for the third issue for decision is whether petitioner is entitled to an earned_income_credit petitioner claimed an earned_income_credit for in the amount of dollar_figure with joshua and amber listed as his qualifying children in the statutory_notice_of_deficiency respondent disallowed the claimed credit respondent stated in his trial memorandum that his adjustment for recapture of the earned_income_credit 1s computational based on the court's holdings on the other issues in this case respondent misstates the law applicable to this case petitioner's entitlement to the sec_32 earned_income_credit for is not conditioned on petitioner's entitlement to dependency_exemption deductions under sec_151 or head_of_household filing_status under sec_2 the statutory language which previously linked those issues was removed by the omnibus continued - sec_32 generally provides for an earned_income_credit in the case of an eligible_individual in pertinent part sec_32 a defines an eligible_individual as an individual who has a qualifying_child for the taxable_year based on the record we find that joshua and amber each satisfy the requirements for a qualifying_child with respect to petitioner for see sec_32 a through based on his income and the earned_income_credit tables prescribed pursuant to sec_32 we hold that petitioner is entitled to an earned_income_credit for in the amount of dollar_figure to reflect the foregoing decision will be entered for petitioner continued budget reconciliation act of publaw_101_508 sec 104_stat_1388 effective for taxable years beginning after date moreover our holdings with respect to the first two issues in this case have no bearing on petitioner's adjusted_gross_income or earned_income which are used to compute the amount of petitioner's sec_32 earned_income_credit


id office uilc cca_2013110815431264 -------------- number release date from ----------------- sent friday november pm to --------------------------- cc -------------------- subject excess_proceeds and application to period in cdp ---- - in response to your question the excess levy proceeds can be applied against the liabilities for the periods covered by the cdp request applying the excess_proceeds to the cdp years constitutes an offset authorized under sec_6402 and not an additional levy relating to the cdp years which would be prohibited under sec_6330 counsel issued cca supporting this conclusion on date see wl furthermore irm provides that surplus levy proceeds are an offset under sec_6402 and therefore levy proceeds received in excess of the periods covered by the levy may be applied to liabilities not listed on the levy please let me know if you have any questions thank you ---------------- ------------------------------------------------------------------------------------------------------- ---------------------------


acknowledged significant advice may be disseminated acknowledged sca district_counsel south texas district assistant chief_counsel field service cc dom fs significant service_center advice concerning processing questionable refund cases -- false w-2’s and or overstated dependents and earned_income_credit this responds to your request for significant service_center advice dated date with respect to processing tax_year cases in the questionable refund program this request for advice arose as result of a visit by you to the austin service_center during this visit you were queried about whether a taxpayer’s refund can be frozen and his her tax account adjusted without any notice being sent to the taxpayer under the following scenarios where the taxpayer claims an earned_income_credit eic to which he she is not entitled where a fraudulent w-2 wage and tax statement is filed claiming false withholding credits to generate a refund and where there is both a fraudulent w-2 and invalid eic claim tangentially you were questioned concerning when the internal_revenue_service service can treat a return as a nullity under these scenarios we initially provided oral advice to you solely for the tax_year although you specifically requested advice concerning the tax_year the analysis set forth below would also apply to other tax years except it does not take into account the changes in law with respect to the eic due to the enactment of the personal responsibility and work opportunity act of those changes affect returns the due_date of which without regard to extensions is more than days after date the date of enactment of the act disclosure statement unless specifically marked acknowledged significant advice may be disseminated above this memorandum is not to be circulated or disseminated except as provided in paragraphs iii d and iv a of office_of_chief_counsel notice n service_center advice procedure this document may contain confidential information subject_to the attorney-client and deliberative_process privileges therefore this document shall not be disclosed beyond the office or individual s who originated the question discussed herein and are working the matter with the requisite need to know in no event shall it be disclosed to taxpayers or their representatives issue sec_1 when may the service reverse tax assessments withholding credits or the eic claimed on a signed income_tax return whether the service must issue a statutory_notice_of_deficiency when disallowing eic whether the service may assess an underpayment created by the disallowance of payments withholding credits shown on the form_w-2 what should the service do when there is both an invalid eic claim and a fraudulent form_w-2 conclusion sec_1 if there is information from which the service determines that the taxpayer did not sign the income_tax return then the service may reverse any_tax assessments withholding credits or eic claimed however if there is a signed return and the service determines that it was the taxpayer who signed the return the service must respect that return even if the taxpayer signs the return the return will not be valid when there is insufficient data to compute the tax if the taxpayer files a return claiming false withholding credits or claiming an eic to which the taxpayer is not entitled but there is sufficient data to compute the tax then the service must respect the return this would be so even if the withholding information were based on a false form_w-2 when part or all of the eic is disallowed the calculation will result in a deficiency therefore the service has to send a statutory_notice_of_deficiency when disallowing the credit however if a determination is made under policy statement that civil enforcement may imperil the criminal investigation and prosecution of a case then a decision may be made to delay the issuance of a statutory_notice_of_deficiency if the service disallowed payments withholding credits shown on the form_w-2 the taxpayer may be assessed under sec_6201 and the notice of assessment under sec_6303 should be sent to the taxpayer within days of assessment where there is both an invalid eic claim and a fraudulent form_w-2 the service should send the notice_of_deficiency for the disallowed eic and assess the disallowed withholding credits under sec_6201 the service would be required to send the notice of assessment under sec_6303 for the disallowed withholding credits to the taxpayer within days of assessment discussion you seek our advice concerning whether a taxpayer’s refund can be frozen and his her tax account adjusted without notice under the following scenarios where the taxpayer claims an eic to which he she is not entitled where a fraudulent w-2 is filed claiming false withholding credits to generate a refund and where there is both a fraudulent w-2 and invalid eic claim you also seek advice concerning when a return may be treated as a nullity under these scenarios we will first address the nullity issue we will then address these scenarios under the factual assumption that the taxpayer actually filed and signed the tax_return in question when we initially provided oral advice to you for the tax_year we advised that statutory notices of deficiency needed to be sent by date in the case of summary assessments assessments needed to be made by date and notices of assessment needed to be sent within sixty days thereafter since this date has now passed the analysis set forth below would also apply to other tax years except it does not take into account the changes in law with respect to the eic due to the enactment of the personal responsibility and work opportunity act of the service may now summarily assess additional tax due as a mathematical_or_clerical_error for a taxpayer who claims eic if that taxpayer fails to provide a correct taxpayer_identification_number or fails to pay the proper amount of self- employment_tax on net_earnings the service must provide an explanation of the adjustment and the taxpayer has days to request abatement should the taxpayer request abatement the service must abate the assessment and any reassessment is subject_to deficiency procedures those changes affect returns the due_date of which without regard to extensions is more than days after date the date of enactment of the act if you wish for us to opine on these changes please request in writing that we do so treating returns as a nullity the service may treat a purported return as a nullity when the return is not signed by the taxpayer or someone authorized to sign on the taxpayer’s behalf it is our understanding that there are various criminal schemes wherein returns are filed using a taxpayer’s name and social_security_number to generate fraudulent refunds for example a person appropriates a taxpayer’s name and social_security_number and then fraudulently files a federal_income_tax return claiming substantial withholding credits or the eic to generate a refund which that person intends to abscond you asked how the service should treat such returns in order to have a valid_return the taxpayer must execute that return under penalties of perjury 82_tc_766 aff’d 793_f2d_139 6th cir sec_6064 provides that t he fact that an individual’s name is signed to a return statement or other document shall be prima facie evidence for all purposes that the return statement or other document was actually signed by him sec_6064 creates the rebuttable_presumption where it is presumed that the taxpayer signed the return if that taxpayer’s name is signed to the return 420_f2d_1132 5th cir there is little doubt that a person may rationally be presumed to have signed his her name when the name of that person has been signed to the return 884_f2d_189 5th cir this presumption gives way if there is proof that the taxpayer did not sign the return id pincite n for instance an irregularity on the return which indicates that the taxpayer did not sign the return can rebut the presumption 470_f2d_257 7th cir if the service determines that the taxpayer did not sign the return then the service can reverse any_tax assessments withholding credits or eic claimed the service presently treats such a return as a nullity and deletes the return from master_file records however the service should be cautious with respect to the returns it treats as a nullity if there is a signed return and the service has insufficient reason to conclude that it was not the taxpayer who signed the return then the service must respect that return even if the taxpayer signs the return there are circumstances where the return will not be valid for instance a return is not a valid_return when there is insufficient data to compute the tax joseph v commissioner tcmemo_1996_77 in 618_f2d_74 9th cir the defendant submitted what he alleged were copies of his previously filed tax returns the defendant inserted zeros in the spaces reserved for entering exemptions income_tax and tax withheld id pincite the court_of_appeals in reversing defendant’s conviction for willfully failing to file income_tax returns found that the zeros entered on the tax forms constituted information relating to the defendant’s income from which the tax can be computed the service could calculate the assessments from the strings of zeros just as if the defendant had entered other numbers on the return the resulting assessments might not reflect the defendant’s actual tax_liability but some computation was possible id in 925_f2d_356 9th cir the defendant appealed his conviction for willfully failing to file income_tax returns the defendant wrote only asterisks in the space provided on the income_tax forms and signed his name the ninth circuit en_banc found that defendant’ sec_1040 forms contained no financial information whatsoever id pincite the court reasoned that nothing could be calculated from the asterisks whereas an amount could be calculated from the zeros set out on the tax forms in the long case id pincite both long and kimball unequivocally stated that a return containing false or misleading information is still a return united_states v long f 2d pincite united_states v kimball f 2d pincite although false figures convey false information they do convey information united_states v long f 2d pincite sec_7206 further buttresses the argument that a return containing false or misleading information is still a return that section provides that it is a crime to willfully make a false statement on a return if false information contained on a return actually nullifies the return then this section would be rendered meaningless in summary if the taxpayer files a signed return claiming false withholding credits or claiming an eic to which the taxpayer is not entitled but there is sufficient data to compute the tax then the service must respect that return this result would be so even if the withholding information was based on a false form_w-2 wage and tax statement a form_w-2 is a separate and distinct information_return from a form_1040 we now turn to the issue you raised concerning what the service should do when returns are determined not to be nullities all the scenarios described below are answered under the assumption that the taxpayer actually filed and signed the tax_return in question and included sufficient information to compute the tax the taxpayer claims an earned_income_credit to which he she is not entitled you have asked whether the service must issue a statutory_notice_of_deficiency when disallowing eic sec_6212 provides that if the secretary determines there is a deficiency with respect to various types of tax including income_tax imposed by subtitle a the secretary is authorized to send notice of such deficiency to the taxpayer sec_6213 provides that in general a taxpayer may file a petition for redetermination with the united_states tax_court within days of the mailing of the notice_of_deficiency the service is prohibited from assessing the deficiency during thi sec_90 day period if the taxpayer fails to file a petition with the tax_court during this period the service may assess the deficiency sec_6211 sets out the definition of deficiency by using the following formula a deficiency equals the correct_tax imposed minus the total of the tax on the taxpayer’s return minus prior assessments plus rebates sec_32 provides for a credit against earned_income to certain eligible individuals and is commonly referred to as the earned_income_credit sec_6211 provides for purposes of subsection a - a any excess of the sum of the credits allowable under sec_32 and sec_34 over the tax imposed by subtitle a determined without regard to such credits and b any excess of the sum of such credits as shown by the taxpayer on his return over the amount shown as the tax by the taxpayer on such return determined without regard to such credits shall be taken into account as negative amounts of tax this language was added to the code by sec_1015 of the technical_and_miscellaneous_revenue_act_of_1988 tamra the legislative_history explained that under the law in effect prior to the act deficiency procedures allowing taxpayers to litigate issues in the tax_court relating to the earned_income_credit sec_32 may not apply h_r rep no 100th cong 2d sess and s rep no 100th cong 2d sess tamra added new sec_6211 which provides that the tax_court deficiency procedures apply to credits allowable under sec_32 notwithstanding that the credits reduce the net tax to less than zero h_r rep no 100th cong 2d sess and s rep no 100th cong 2d sess the language negative amounts of tax means that the credit_amount must be considered even if it is a negative number when part or all of a claimed credit described in sec_6211 is disallowed the calculation will result in a deficiency therefore the service would have to send a statutory_notice_of_deficiency when disallowing the credit the determination of the deficiency can be summarized by the following formula a tax shown less sec_6211 credit shown tax on return b correct_tax less correct sec_6211 credit tax imposed c tax imposed less tax on return deficiency policy statement provides that when civil enforcement actions may imperil subsequent prosecution then the consequences of the civil enforcement action upon the criminal investigation and prosecution case should be carefully weighed then only such actions will be taken as the division chiefs of the responsible field functions agree should be taken or if agreement cannot be reached such actions as the district_director determines shall be taken therefore if a determination is made under policy statement that civil enforcement may imperil subsequent prosecution then a decision may be made to delay the issuance of a statutory_notice_of_deficiency if such a determination results in the issuance of the notice beyond the three year period provided for assessment in sec_6501 it may be that the service can rely on sec_6501 to ultimately assess the tax sec_6501 provides that where the taxpayer files a false_or_fraudulent_return with intent to evade tax then the service may assess the taxpayer at any time however the burden to establish fraud falls on the service it should be noted that when the service freezes the refund it may permit the taxpayer to satisfy the jurisdictional full_payment_rule set out in 362_us_145 thus the taxpayer may be able to sue for refund in the district_court or in the united_states court of federal claims if his her return is not acted upon for six months after the filing of the return that also serves as a claim_for_refund in summary when part or all of the eic is disallowed the calculation will result in a deficiency therefore the service has to send a statutory_notice_of_deficiency when disallowing the credit however if a determination is made under policy statement that civil enforcement may imperil the criminal investigation and prosecution of a case then a decision may be made to delay the issuance of a statutory_notice_of_deficiency a fraudulent w-2 is filed claiming false withholding credits to generate a refund you have asked whether the service may assess an underpayment created by the disallowance of payments withholding credits shown on the form_w-2 it should be noted that tax withheld on wages does not affect the deficiency formula sec_6211 provides that the tax imposed by subtitle a shall be determined for the purposes of sec_6211 without regard to the credit under sec_31 tax withheld on wages the service derives its ability to assess additional tax due to invalid withholding credits from sec_6201 sec_6201 provides that i f on any return or claim_for_refund of income taxes under subtitle a there is an overstatement of the credit for income_tax withheld at the source or of the amount_paid as estimated income_tax the amount so overstated which is allowed against the tax_shown_on_the_return or which is allowed as a credit or refund may be assessed by the secretary in the same manner as in the case of a mathematical_or_clerical_error appearing upon the return except that the provisions of sec_6213 relating to abatement of mathematical_or_clerical_error assessment shall not apply with regard to any assessment under this paragraph sec_6303 mandates that the service shall within days after the making of the assessment give notice of the assessment to the taxpayer thus for an underpayment created by the disallowance of payments shown on the form_w-2 withholding credits the taxpayer may be assessed under sec_6201 without issuing a notice_of_deficiency a notice of assessment under sec_6303 should be sent to the taxpayer within days of assessment in summary if the service disallowed payments withholding credits shown on the form_w-2 the taxpayer may be assessed under sec_6201 and the notice of assessment under sec_6303 should be sent to the taxpayer within days of assessment there is both a fraudulent w-2 and invalid eic claim in the situation where there is both an invalid eic claim and a fraudulent w-2 the service should send the notice_of_deficiency for the disallowed earned_income_credit and assess the underpayment created by the disallowed withholding credits under sec_6201 the service would be required to send the notice of assessment under sec_6303 for the disallowed withholding credits to the taxpayer within days of assessment ______________________________ deborah a butler


t c memo united_states tax_court caprice m teske a k a caprice m stevenson petitioner v commissioner of internal revenue respondent docket no filed date larry d harvey for petitioner randall l preheim for respondent memorandum opinion vasquez judge this case is before the court on respondent’s motion for summary_judgment pursuant to rule unless otherwise indicated all rule references are to the tax_court rules_of_practice and procedure and all section references are to the internal_revenue_code in effect for the years in issue after a concession the sole issue for decision is whether petitioner can exclude from income wages earned during and from working in antarctica background at the time she filed the petition petitioner resided in bellingham washington during and petitioner performed services at mcmurdo station in ross island antarctica on her and federal_income_tax returns petitioner excluded wage income earned and received during and for services performed in antarctica discussion i summary_judgment rule a provides that either party may move for summary_judgment upon all or any part of the legal issues in controversy full or partial summary_judgment may be granted only if it is demonstrated that no genuine issue exists as to any material fact and that the legal issues presented by the motion may be decided as a matter of law see rule b 98_tc_518 affd 17_f3d_965 7th cir we conclude that there is no genuine issue as to any material fact and that a decision may be rendered as a matter of law respondent concedes that no penalty pursuant to sec_6662 is due from petitioner for and ii in general sec_61 provides that gross_income means all income from whatever source derived accordingly citizens of the united_states generally are taxed on income earned outside the geographical boundaries of the united_states unless the income is specifically excluded from gross_income 117_tc_95 affd sub nom 68_fedappx_44 9th cir affd sub nom 357_f3d_1108 10th cir exclusions from income are construed narrowly and taxpayers must bring themselves within the clear scope of the exclusion id iii sec_911 in 126_tc_89 473_f3d_790 7th cir arnett ii we addressed the arguments made by the parties herein regarding sec_911 the u s court_of_appeals for the seventh circuit agreed with our analysis of sec_911 and affirmed our conclusion that antarctica is not a foreign_country pursuant to sec_911 and the regulations thereunder arnett v commissioner f 3d pincite we shall not repeat our analysis from arnett i herein we follow our analysis and holding in arnett i and the analysis and holding of the court_of_appeals in arnett ii in 126_tc_89 affd 473_f3d_790 7th cir we concluded our opinion with a continued iv conclusion accordingly for the reasons stated in arnett i arnett ii and herein we conclude that petitioner cannot exclude from gross_income wages earned during and from working in antarctica to reflect the foregoing an appropriate order and decision will be entered continued citation of sec_863 suggesting that sec_863 provided an additional reason to rule against the taxpayer id pincite see also sec_863 providing that income earned in antarctica by a u_s_person is sourced in the united_states in arnett v commissioner f 3d pincite the u s court_of_appeals for the seventh circuit addressed sec_863 in greater detail stating at the outset we think that it is important to note that considering antarctica not to be a foreign_country is compatible with the general statutory scheme notably sec_911 is found under subtitle a chapter subchapter_n of the irc which is designated tax based on income from sources within or without the united_states part i of this subchapter entitled source_rules and other general rules relating to foreign_income deems any activity in antarctica to be space_or_ocean_activity in turn the united_states is designated the source country of income from such activity when earned by a citizen_of_the_united_states sec_863 although this provision does not provide a definitive answer as to whether antarctica is a foreign_country it supports the conclusion that sec_911 is not intended to apply to income earned for services provided in antarctica we take this opportunity to state our agreement with the court of appeals’ conclusion set forth above see also 450_us_1


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 eb qp2 plr-114584-18 date date employer ------------------------------------------------ --------------------------------------------------------------------------------------------------- plan ------------------- date ---------------------- date amount ------------------ amount ------------------ amount ------------------ dear -------------------- this letter is in response to your request for a ruling concerning the plan which was submitted by your authorized representative on date the following facts and representations are submitted under penalties of perjury in support of your request employer represents that it is an entity that is tax exempt under sec_501 of the internal_revenue_code as an organization described in sec_501 employer has always been a tax-exempt_organization and has never been subject_to unrelated_business_taxable_income within the meaning of sec_512 on date employer established the plan a single-employer defined benefit pension_plan for the benefit of its employees benefit accruals under the plan ceased effective date employer plans to adopt resolutions to terminate the plan and pay out all participants and beneficiaries employer also plans to complete a standard termination of the plan by filing with the pension_benefit_guaranty_corporation the plan provides that upon termination of the plan if all liabilities with respect to participants and beneficiaries have been satisfied and there remains a balance in the trust due to erroneous actuarial plr-114584-18 computation such balance shall be returned to the employer this provision has been in the plan document for more than five years based on the ------- valuation the plan’s total liabilities are amount and the plan’s assets are amount after the plan is terminated and all liabilities of the plan are satisfied approximately amount will remain in the plan and trust excess_amount employer believes the excess_amount results from errors made by the plan’s actuary when calculating the amount to be contributed to the plan based on the above facts and representations you request the following rulings the return of the excess_amount to employer will not violate section the return of the excess_amount to employer will not constitute an employer a and reversion under sec_4980 sec_401 generally prohibits prior to the satisfaction of all liabilities with respect to employees and beneficiaries under the trust the diversion of trust assets for purposes other than for the exclusive benefit of the employees or beneficiaries for whom an employer maintains a qualified_pension plan sec_1_401_a_-2 of the income_tax regulations provides that sec_1_401-2 a regulation promulgated prior to the employee_retirement_income_security_act_of_1974 erisa provides rules under sec_401 which remain applicable unless otherwise provided sec_1_401-2 provides rules under sec_401 for the impossibility of diversion under the trust instrument sec_1_401-2 provides that the intent and purpose in sec_401 of the phrase prior to the satisfaction of all liabilities with respect to employees and beneficiaries under the trust is to permit the employer to reserve the right to recover at the termination of the trust and only at such termination any balance remaining in the trust which is due to erroneous actuarial computations during the previous life of the trust a balance due to an erroneous actuarial computation is the surplus arising because actual requirements differ from expected requirements even though the latter were based upon previous actuarial valuations of liabilities or determinations of costs of providing pension benefits under the plan and were made by a person competent to make such determinations in accordance with reasonable assumptions and correct procedures related to the method of funding sec_4980 provides for an excise_tax on the amount of any reversion of plan assets to the employer from a qualified_plan sec_4980 provides that the tax imposed by sec_4980 shall be paid_by the employer maintaining the plan plr-114584-18 sec_4980 provides in part that the term qualified_plan means any plan meeting the requirements of sec_401 or sec_403 other than a plan maintained by an employer if such employer has at all times been exempt from tax under subtitle a sec_4980 defines the term employer_reversion to mean the amount of cash and the fair_market_value of other_property received directly or indirectly by an employer from a qualified_plan with respect to your first ruling_request the plan’s total liabilities are amount and the total plan assets are amount as a result the excess_amount approximately amount will remain in the plan until all of the plan’s benefit liabilities are satisfied based on the facts and representations the excess_amount is the result of erroneous actuarial computations within the meaning of sec_1_401-2 the plan document permits the return of excess trust assets due to erroneous actuarial computation if all liabilities with respect to participants and beneficiaries have been satisfied in the present case the return of the excess_amount to employer will not occur until after the satisfaction of all liabilities with respect to employees and beneficiaries of the trust of the plan accordingly the return of the excess_amount to employer will not violate sec_401 with respect to your second ruling_request employer represents that it has at all times been exempt from tax under subtitle a therefore the plan is not a qualified_plan within the meaning of sec_4980 and the return to employer of amount will not constitute an employer_reversion under sec_4980 except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter this ruling is directed only to the taxpayer requesting it sec_6110 of the code provides that it may not be used or cited as precedent 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 as specified in revproc_2018_1 2018_1_irb_1 section b this office has not verified any of the material submitted in support of the request_for_ruling and such material is subject_to verification on examination the associate office will revoke or modify a letter_ruling and apply the revocation retroactively if there has been a misstatement or omission of controlling facts the facts at the time of the transaction are materially different from the controlling facts on which the ruling was based or in the case of a transaction involving a continuing action or series of actions the controlling facts change during the course of the transaction see revproc_2018_1 sec_11 plr-114584-18 in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative sincerely keith r kost senior technician reviewer qualified_plans branch office of associate chief_counsel tax exempt and government entities cc


internal_revenue_service number release date index number ------------------------- ------------------------------------------------------------ ------------------------------------------- ------------------------------------------------------------ ------------- ----------------------------------------- -------------------------------- department of the treasury washington dc person to contact ----------------------- id no ------------------- --------------------------------------------------- telephone number ------------- ------- refer reply to cc tege eoeg eo plr-105084-14 date date legend administrator municipal code city city council department department retirement board state sub-trust sub-trust trust date date dear ------------- -------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------ ----------------------------- -------------------------------------- ---------------------------------------------- ------------------------------------------- --------------------------------------------------------------------------------------- --------------------------------------------------------------------- ------------------------- ---------------------------------------------------------- ------------------------------------------------------- --------------------------------------------------------------------------------- -------------------- ------------------- this letter responds to a letter from your authorized representative dated date requesting a ruling that the trust’s income is excludable from gross_income under internal_revenue_code irc sec_115 the trust represents the facts as follows facts the city is a political_subdivision of the state the city provides health and welfare benefits to retirees and dependents of the department and the department pursuant to the terms of various health_plans approved by the city council the city established plr-105084-14 the trust to provide a funding source for the payment of its liabilities pursuant to the health_plans the trust consists of two sub-trusts the sub-trust will be used for the sole and exclusive purpose of funding health and welfare benefits for retirees and dependents of the department the sub-trust will be used for the sole and exclusive purpose of funding health and welfare benefits for retirees and dependents of the department the trust was formed by the city on date and it is effective as of date the trust's assets will be used for the sole and exclusive purpose of providing health and welfare benefits to eligible retirees and dependents and to pay reasonable expenses of administering the trust and the health_plans none of the trust's assets will be used for or diverted to any other purpose contributions to the trust will consist of amounts determined pursuant to the municipal code and applicable collective bargaining agreements the trustees of the trust consist of the members of the retirement board a nine- member board appointed by the city council the trustees serve for four-year terms and have agreed to perform the duties of the trustees as prescribed in the municipal code the trustees have the exclusive authority and control_over the administration and management of the trust the investment of the trust's assets and the distributions from the trust the trust is irrevocable and has perpetual existence unless it is dissolved by the city the municipal code provides that upon any such dissolution and only after paying or making reasonable provision for the payment of all liabilities of the trust the trustees will distribute the remaining trust assets to the city the distribution will be for the sole purpose of assisting the city in the payment of health and welfare benefits to eligible retirees and dependents upon termination or dissolution of the trust no assets shall be distributed to or revert to any entity that is not either the state a political_subdivision of the state or an entity whose income is excludable from gross_income under sec_115 law and analysis sec_115 provides that gross_income does not include income derived from any public_utility or the exercise of any essential_governmental_function and accruing to a state or any political_subdivision thereof revrul_77_261 1977_2_cb_45 holds that income generated by an investment fund that is established by a state to hold revenues in excess of the amounts needed to meet current expenses is excludable from gross_income under sec_115 because such investment constitutes an essential_governmental_function the ruling explains that the statutory exclusion is intended to extend not to the income of a state or municipality resulting from its own participation in activities but rather to the income of an entity plr-105084-14 engaged in the operation of a public_utility or the performance of some governmental function that accrues to either a state or political_subdivision of a state the ruling points out that it may be assumed that congress did not desire in any way to restrict a state’s participation in enterprises that might be useful in carrying out projects that are desirable from the standpoint of a state government and that are within the ambit of a sovereign to conduct revrul_90_74 1990_2_cb_34 holds that the income of an organization formed funded and operated by political subdivisions to pool various risks eg casualty public liability workers’ compensation and employees’ health is excludable from gross_income under sec_115 because the organization is performing an essential_governmental_function in revrul_90_74 private interests neither materially participate in the organization nor benefit more than incidentally from the organization the trust was formed to fund the costs of providing health and welfare benefits to retired employees of the city and their dependents providing health and welfare benefits to former public employees constitutes the performance of an essential_governmental_function within the meaning of sec_115 see revrul_77_261 and revrul_90_74 in addition the income of the trust accrues to the city no private interests participate in or benefit from the operation of the trust other than incidentally or as providers of goods or services the trust’s dedication of its corpus and income exclusively for the benefit of the retirees and their dependents satisfies an obligation the city has to provide health and welfare benefits to its retired employees the benefit to the city’s participating employees and their dependents is incidental to the public benefit see revrul_90_74 based on the information and representations submitted on behalf of the trust we conclude that because the income of the trust derives from the exercise of an essential_governmental_function and will accrue to a state or a political_subdivision thereof the trust’s income is excludable from gross_income under sec_115 no opinion is expressed concerning the federal tax consequences under any irc provision other than the one specifically cited above in particular no representation is made that contributions or premiums_paid on behalf of or benefits received by employees former employees retirees spouses dependents or others will be tax-free this ruling concerns only the federal tax treatment of the trust’s income and it may not be cited or relied upon as to any matter relating to the taxation of accident or health contributions or benefits plr-105084-14 except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative a copy of this letter must be attached to any income_tax return to which it is relevant alternatively taxpayers filing their returns electronically may satisfy this requirement by attaching a statement to their return that provides the date and control number of the letter_ruling 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_ruling it is subject_to verification on examination sincerely kenneth m griffin chief exempt_organizations branch_tax exempt government entities enclosure


t c memo united_states tax_court lisa h green petitioner v commissioner of internal revenue respondent docket no filed date mitchell s fuerst for petitioner brian a pfeifer for respondent memorandum opinion marvel judge this matter is before the court on respondent’s motion to dismiss for lack of jurisdiction as supplemented after concessions the issue for decision i sec_1respondent concedes that the court has jurisdiction under sec_6015 i r c to review the determination denying relief under sec_6015 i r c for and whether we have jurisdiction under sec_6015 e over petitioner’s stand-alone case asserting a claim for equitable relief under sec_6015 for and petitioner resided in florida when the petition in this case background was filed petitioner filed joint federal_income_tax returns for the years at issue with her former husband jonathan h green petitioner paid the federal_income_tax liabilities reported on the and joint returns but did not pay the tax_liabilities reported on the and joint returns respondent has not asserted a deficiency against petitioner for any year at issue on date respondent received petitioner’s form_8857 request for innocent spouse relief with a statement regarding request for equitable relief statement for through attached in the statement petitioner requested a refund of tax paid for through under sec_6015 on date respondent issued to petitioner a notice_of_determination concerning relief from joint_and_several_liability under sec_6015 for and in which he denied petitioner’s request for relief respondent however did 2unless otherwise indicated all section references are to the internal_revenue_code not issue a notice_of_determination for or petitioner timely petitioned this court asserting that respondent erred by denying her relief under sec_6015 for and on date respondent’s motion to dismiss for lack of jurisdiction was filed respondent argues that we lack jurisdiction under sec_6015 over petitioner’s sec_6015 claim for relief because respondent has not determined a deficiency for any of the years at issue petitioner filed a notice of objection to respondent’s motion in the tax relief and health care act of publaw_109_ div c sec_408 c 120_stat_3061 trhca sec_408 congress amended sec_6015 to confer jurisdiction on this court over stand-alone requests for equitable relief under sec_6015 effective for tax_liabilities arising or remaining unpaid on or after date on date respondent filed a supplement to his motion to dismiss for lack of jurisdiction respondent concedes that trhca sec_408 grants us jurisdiction to review respondent’s determination denying relief under sec_6015 for and respondent argues however that we lack jurisdiction to determine petitioner’s eligibility for relief under sec_6015 for and because the tax_liabilities for those years were fully paid before date on date the court held a hearing on respondent’s motion at its trial session in miami florida petitioner’s and respondent’s counsel appeared and were heard at the hearing we directed petitioner to submit a response to respondent’s supplement and offered respondent the opportunity to reply to petitioner’s response on date petitioner’s response to respondent’s supplement was filed on date respondent replied i sec_6015 discussion sec_6015 generally allows a spouse who has requested relief from joint_and_several_liability to contest the commissioner’s denial of relief under sec_6015 by filing a timely petition in this court before the enactment of trhca sec_408 the court had jurisdiction over such cases only if the commissioner had asserted a deficiency against the taxpayer see 127_tc_7 trhca sec_408 amended sec_6015 to confer jurisdiction on the court over stand-alone requests for equitable relief under sec_6015 but only with respect to tax_liabilities arising or remaining unpaid on or after date petitioner asserts that she is entitled to equitable relief under sec_6015 in the form of a tax_refund for each of the years and her argument reflects the fact that she paid the tax_liabilities for those years before date because petitioner’s tax_liabilities did not arise or remain unpaid on or after date the court does not have jurisdiction under sec_6015 as amended by trhca sec_408 over petitioner’s stand-alone claim for equitable relief under sec_6015 for see eg smith v commissioner tcmemo_2007_117 bock v commissioner tcmemo_2007_41 petitioner argues however that trhca sec_408 violates her equal protection and due process rights under the united_states constitution because it treats taxpayers who have paid their tax_liabilities before date differently from taxpayers who have not petitioner’s argument is unavailing it is well established that legislatures have especially broad latitude in creating classifications and distinctions in tax statutes 461_us_540 a taxpayer challenging the constitutionality of a tax classification on equal protection grounds must bear the very heavy burden of negating every conceivable basis which might support it id pincite see also durham v commissioner tcmemo_2004_125 petitioner has not argued and she has failed to demonstrate that she is a member of any suspect classification or that trhca sec_408 interferes with a fundamental right consequently we must uphold trhca sec_408 if it bears a rational relationship to a legitimate governmental purpose see regan v taxation with representation supra pincite we have held that it is especially difficult to demonstrate that no rational basis exists for a classification in a revenue act for which the presumption that an act of congress is constitutional is particularly strong see 69_tc_505 cansino v commissioner tcmemo_2001_134 moreover under the rational basis standard a statute does not violate the equal protection mandate if any state of facts rationally justifying the statute is demonstrated to or perceived by the courts 400_us_4 one obvious rational basis for congress’s choice of an effective date is administrative convenience administrative convenience has been recognized as a sufficient reason for legislative line drawing see eg n y rapid transit corp v city of 303_us_573 in enacting trhca sec_408 congress had to draw a line that would enable the internal_revenue_service and the courts to ascertain when trhca sec_408 would apply congress reasonably decided to use trhca’s enactment_date date and limited the application of trhca sec_408 to those taxpayers whose liability arose or remained unpaid on or after that date we perceive this to be a rational basis for the line drawn by congress and we reject petitioner’s argument to the contrary petitioner has also failed to demonstrate that trhca sec_408 violates her right to due process petitioner appears to argue that trhca sec_408 offends due process because it was not made retroactive to a date that would have enabled her to have her day in court with respect to the fully paid liabilities petitioner however has provided no support for her argument moreover a taxpayer who pays a tax in full and complies with other jurisdictional prerequisites can pursue a refund action in a u s district_court or in the u s court of federal claims see sec_7422 if petitioner believed that she should not have been liable for the taxes for that were reported and fully paid she could have filed a refund claim and related litigation it does not follow from the fact that petitioner is foreclosed from litigating in this court because of a rational decision on congress’s part to establish an effective date for trhca sec_408 that petitioner’s constitutional right to due process has been violated we reject petitioner’s due process argument as meritless ii equitable jurisdiction petitioner argues that the court should retain jurisdiction to determine whether petitioner was a signatory to the joint returns for and petitioner asserts that because she signed the joint returns under duress and coercion she did not have the requisite intent to file a joint_return in effect petitioner is asking this court to exercise jurisdiction over petitioner’s claims under general equitable principles petitioner has cited no statute or case that supports her argument that we can or should exercise jurisdiction independent of any conferred by sec_6015 the only cases that she cites in support of her argument that we have equitable jurisdiction to decide whether she signed her joint returns under duress are deficiency cases in which the commissioner issued notices of deficiency and the taxpayers timely petitioned this court see 81_tc_634 51_tc_116 petitioner never received a notice_of_deficiency for consequently we do not have jurisdiction to redetermine a deficiency under sec_6213 in addition for reasons described earlier in this opinion we do not have jurisdiction over petitioner’s sec_6015 claims for under sec_6015 as amended petitioner has not asserted any basis for us to exercise jurisdiction over her claims in the light of the foregoing we shall grant respondent’s motion to dismiss petitioner’s sec_6015 claims for lack of jurisdiction as supplemented an appropriate order of dismissal for lack of jurisdiction will be entered


internal_revenue_service number release date index number -------------------------------------------------------- ------------------------------------------------ ---------------------------- ------------------ ------------------------ department of the treasury washington dc third party communication none date of communication not applicable_person to contact -------------------- id no ----------------- telephone number --------------------- refer reply to cc psi b01 plr-139920-11 date date legend x --------------------------------------------------- -------------------------------------------------------- a ------------------------------------------- b -------------------------------------------------------------- ----------------------- trust ------------------------------------------------------- trust ------------------------------------------------------------ ---------------------------------------------- state date date date date ------ ------- ------- ------------------- ------------------- plr-139920-11 date ----------------------- dear ----------------- this responds to a letter dated date submitted on behalf of x from x’s authorized representative requesting inadvertent termination relief pursuant to sec_1362 of the internal_revenue_code facts the information submitted states that x was incorporated under the laws of state on date and elected to be treated as an s_corporation effective date a was a shareholder of x a established a revocable_trust trust on date on date a died pursuant to the terms of trust after a’s death the trustee of trust established several other trusts including trust shares of x stock were transferred to trust on date under the terms of trust the sole beneficiary of trust was b x represents that trust qualifies as a qualified_subchapter_s_trust qsst under sec_1361 however b did not file timely a qsst election on behalf of trust therefore x's s_corporation_election terminated on date b represents that b reported b's allocable share of trust 2's income consistent with the treatment of trust as a qsst on all affected returns x represents that the circumstances resulting in the termination of x's s_corporation_election were inadvertent x and its shareholders have agreed to make such adjustments consistent with the treatment of x as an s_corporation as may be required by the secretary law and analysis sec_1361 provides that the term s_corporation means with respect to any taxable_year a small_business_corporation for which an election under sec_1362 is in effect for such year sec_1361 defines a small_business_corporation as a domestic_corporation which is not an ineligible_corporation and which does not a have more than shareholders b have as a shareholder a person other than an estate a_trust described in sec_1361 or an organization described in sec_1361 who is not an individual c have a nonresident_alien as a shareholder and d have more than class of stock plr-139920-11 sec_1361 provides that a qsst whose beneficiary makes an election under sec_1362 will be treated as a_trust described in sec_1361 and the qsst's beneficiary will be treated as the owner for purposes of sec_678 of that portion of the qsst's s_corporation stock to which the election under sec_1361 applies under sec_1361 a beneficiary of a qsst may elect to have sec_1361 apply under sec_1361 this election will be effective up to days and two months before the date of the election sec_1361 provides that for purposes of sec_1361 the term qualified_subchapter_s_trust means a_trust a the terms of which require that - i during the life of the current income_beneficiary there shall be only income_beneficiary of the trust ii any corpus distributed during the life of the current beneficiary may be distributed only to such beneficiary iii the income_interest of the current income_beneficiary in the trust shall terminate on the earlier of such beneficiary's death or the termination of the trust and iv upon the termination of the trust during the life of the current income_beneficiary the trust shall distribute all of its assets to that beneficiary and b all of the income within the meaning of sec_643 of which is distributed or required to be distributed currently to individual who is a citizen or resident_of_the_united_states sec_1362 provides that if -- an election under sec_1362 by any corporation was terminated under sec_1362 or the secretary determines that the circumstances resulting in such termination were inadvertent no later than a reasonable period of time after discovery of the circumstances resulting in such termination steps were taken so that the corporation for which the termination occurred is a small_business_corporation and the corporation for which the termination occurred and each person who was a shareholder in the corporation at any time during the period specified pursuant to sec_1362 agrees to make such adjustments consistent with the treatment of the corporation as an s_corporation as may be required by the secretary with respect to such period then notwithstanding the circumstances resulting in such termination such corporation shall be treated as an s_corporation during the period specified by the secretary conclusion based solely on the representations made and the information submitted we conclude that x's s_corporation_election terminated under sec_1362 on date we also conclude that this termination was inadvertent within the meaning of sec_1362 accordingly pursuant to the provisions of sec_1362 x will be treated as continuing to be an s_corporation from date and thereafter provided that x's s_corporation_election was valid and was not otherwise terminated under sec_1362 this ruling is contingent upon b filing a qsst election for trust with an effective date of date with the appropriate service_center within days of the date of this letter a copy of this letter should be attached to the qsst election plr-139920-11 except as specifically ruled above we express no opinion concerning the federal tax consequences of the transactions described above under any other provision of the code specifically no opinion is expressed on whether x is otherwise eligible to be treated as an s_corporation or whether trust is eligible to be a qsst under sec_1361 this ruling letter is directed only to the taxpayer requesting it sec_6110 of the code provides that it may not be used or cited as precedent in accordance with a power_of_attorney on file with this office a copy of this letter is being sent to x's authorized representative sincerely david r haglund david r haglund chief branch office of the associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes cc


department of the treasury internal_revenue_service te_ge eo examinations commerce street mc dal dallas tx tax_exempt_and_government_entities_division release number release date uil code certified mail dear date taxpayer_identification_number person to contact identification_number contact telephone number the revocation of your exempt status was made for the following reason s this is a final adverse determination regarding your exempt status under sec_501 of the internal_revenue_code the code our favorable determination_letter to you dated date is hereby revoked and you are no longer exempt under sec_501 of the code effective january 20xx as a result of our examination for the tax_year ended december 20xx it was determined that your organization has been inactive since 20xx and that there have been no operations or regular financial activities conducted or planned as such you failed to meet the operational requirements for continued exemption under sec_501 contributions to your organization are no longer deductible under sec_170 after january 20xx you are required to file income_tax returns on form_1120 these returns should be filed with the appropriate service_center for the tax_year ending december 20xx and for all tax years thereafter in accordance with the instructions of the return processing of income_tax returns and assessments of any taxes due will not be delayed should a petition for declaratory_judgment be filed under sec_7428 of the internal_revenue_code if you decide to contest this determination under the declaratory_judgment provisions of sec_7428 of the code a petition to the united_states tax_court the united_states claims_court or the district_court of the united_states for the district of columbia must be filed before the day after the date this determination was mailed to you please contact the clerk of the appropriate court for rules regarding filing petitions for declaratory judgments these courts at the following addresses by referring to the enclosed publication you may write to united_states tax_court second street nw washington d c united_states court of federal claims madison place nw washington d c united_states district_court for the district of columbia constitution avenue nw washington d c the taxpayer_advocate_service tas is an independent organization within the irs that can help protect your taxpayer rights tas can offer you help if your tax problem is causing a hardship or you’ve tried but haven't been able to resolve your problem with the irs if you qualify for tas assistance which is always free tas will do everything possible to help you visit taxpayeradvocate irs gov or call if you have any questions please contact the person whose name and telephone number are shown in the heading of this letter sincerely margaret von lienen director eo examinations enclosure publication letter catalog number 34198j i department of the treasury internal_revenue_service irs tax_exempt_and_government_entities_division date taxpayer_identification_number broadway mdp nashville tn certified mail - return receipt requested dear form_990 tax_year s ended 20xx person to contact id number contact numbers phone number fax number manager's name id number manager's contact number phone number response due_date why you are receiving this letter we propose to revoke your status as an organization described in sec_501 of the internal_revenue_code code enclosed is our report of examination explaining the proposed action what you need to do if you agree if you agree with our proposal please sign the enclosed form_6018 consent to proposed action - sec_7428 and return it to the contact person at the address listed above unless you have already provided us a signed form we'll issue a final revocation letter determining that you aren't an organization described in sec_501 after we issue the final revocation letter we’ll announce that your organization is no longer eligible for contributions deductible under sec_170 of the code if we don't hear from you if you don't respond to this proposal within calendar days from the date of this letter we'll issue a final revocation letter failing to respond to this proposal will adversely impact your legal standing to seek a declaratory_judgment because you failed to exhaust your administrative remedies effect of revocation status if you receive a final revocation letter you'll be required to file federal_income_tax returns for the tax_year s shown above as well as for subsequent tax years what you need to do if you disagree with the proposed revocation if you disagree with our proposed revocation you may request a meeting or telephone conference with the supervisor of the irs contact identified in the heading of this letter you also may file a protest with the letter rev catalog number 34809f irs appeals_office by submitting a written request to the contact person at the address listed above within calendar days from the date of this letter the appeals_office is independent of the exempt_organizations division and resolves most disputes informally for your protest to be valid it must contain certain specific information including a statement of the facts the applicable law and arguments in support of your position for specific information needed for a valid protest please refer to page one of the enclosed publication how to appeal an irs decision on tax-exempt status and page six of the enclosed publication the examination process publication also includes information on your rights as a taxpayer and the irs collection process please note that fast track mediation referred to in publication generally doesn’t apply after we issue this letter you also may request that we refer this matter for technical_advice as explained in publication please contact the individual identified on the first page of this letter if you are considering requesting technical_advice if we issue a determination_letter to you based on a technical_advice_memorandum issued by the exempt_organizations rulings and agreements office no further irs administrative appeal will be available to you contacting the taxpayer_advocate office is a taxpayer right you have the right to contact the office_of_the_taxpayer_advocate their assistance isn’t a substitute for established irs procedures such as the formal appeals process the taxpayer_advocate can't reverse a legally correct_tax determination or extend the time you have fixed by law to file a petition in a united_states court they can however see that a tax matter that hasn't been resolved through normal channels gets prompt and proper handling you may call toll-free and ask for taxpayer_advocate assistance if you prefer you may contact your local taxpayer_advocate at internal_revenue_service office of the taxnaver advocate for additional information if you have any questions please call the contact person at the telephone number shown in the heading of this letter if you write please provide a telephone number and the most convenient time to call if we need to contact you thank you for your cooperation enclosures report of examination form_6018 publication publication sincerely margaret von lienen director eo examinations letter rev catalog number 34809f form 886a department of the treasury - internal_revenue_service name of taxpayer explanation of items schedule no or exhibit year petriod ended 20xx issue whether described in the internal_revenue_code irc sec_501 because of a lack of operation or activity since 20xx continues to qualify for exemption as an organization facts was incorporated under the laws of the state of as a for-profit corporation on 19xx there is no record of being incorporated in the state of as a non-profit on june 19xx income_tax as an organization described in sec_501 was recognized to be exempt from federal purchased a in 19xx capable of carrying been involved in other parts of central and south america they transported food and medical_supplies for the local residents in need assisted other organizations with and transported all over the world since 19xx the eo has projects in for humanitarian aid that was and and was sold in 20xx and a smaller was the was registered which is incorporated in the came from in no charitable work based on their mission statement has been conducted as of january 20xx the needed extensive repairs and was returned to in is currently still in since june of 20xx the majority of the eo’s activity has been to oversee the repair of the salaries to the board_of directors paying for their auto expenses for the travel to and paying office and other expenses their only income in 20xx was from the sale of assets the eo has been paying and in bank accounts in june 20xx the all of the funds to purchase the the purchased in may 20xx for dollar_figure under the company name traveling to and from form 886-a crev department of the treasury - internal_revenue_service page -1- porm 886a name of taxpayer explanation of items department of the treasury - internal_revenue_service schedule no or exhibit year period ended 20xx law sec_501 exempts from federal_income_tax organizations which are organized and operated exclusively for religious charitable scientific testing for public safety literary or educational_purposes or to foster national or international amateur sports competition but only if no part of its activities involve the provision of athletic_facilities or equipment or for the prevention of cruelty to children or animals no part of the net_earnings of which inures to the benefit of any private_shareholder_or_individual no substantial part of the activities of which is carrying on propaganda or otherwise attempting to influence legislation except as otherwise provided in subsection h and which does not participate in or intervene in including the publishing or distributing of statements any political campaign on behalf of or in opposition to any candidate for public_office tax reg sec_1_501_c_3_-1 of the regulations provides that in order to be exempt as an organization described in sec_501 of the code the organization must be one that is both organized and operated exclusively for one or more of the purposes specified in that section sec_1 c -1 c operational_test primary activities -an organization will be regarded as operated exclusively for one or more exempt purposes only if accomplish one or more of such exempt purposes specified in sec_501 an organization will not be so regarded if more than an insubstantial part of its activities is not in furtherance of an exempt_purpose it engages primarily in activities which distribution of earnings -an organization is not operated exclusively for one or more exempt purposes of its net_earnings inure in whole or in part to the benefit of private shareholders or individuals for the definition of the words private_shareholder_or_individual see paragraph c of sec_1_501_a_-1 revproc_90_27 1990_1_cb_514 date states that a ruling or determination_letter recognizing exemption may be revoked or modified by a notice to the taxpayer to whom the ruling or determination_letter originally was issued enactment of legislation or ratification of a tax_treaty a decision of the united_states supreme court issuance of temporary or final regulations or issuance of a revenue_ruling revenue_procedure or other statement published in the internal_revenue_bulletin the revocation or modification may be retroactive if the organization omitted or misstated a material fact operated in a manner materially different from that originally represented or in the case of organizations to which sec_503 applies form 886-a ev department of the treasury - internal_revenue_service page -2- form_886 a name of taxpayer explanation of items department of the treasury - internal_revenue_service schedule no or exhibit year period ended 20xx engaged in a prohibited_transaction with the purpose of diverting corpus or income of the organization from its exempt_purpose and such transaction involved a substantial part of the corpus or income of such organization where there is a material_change inconsistent with exemption in the character the purpose or the method of operation of an organization revocation or modification will ordinarily take effect as of the date of such material_change in cases where a ruling or determination_letter was issued in error or is no longer in accord with the holding of the service when sec_7805 relief is granted see sec_15 and of rev_proc retroactivity of the revocation or modification ordinarily will be limited to a date not earlier than that on which the original ruling or determination_letter is modified or revoked revrul_58_617 1958_2_cb_260 jan rulings and determinations letters granting exemption from federal_income_tax to an organization described in sec_501 of the internal_revenue_code of to which contributions are deductible by donors in computing their taxable_income in the manner and to the extent provided by sec_170 of the code are effective only so long as there are no material changes in the character of the organization the purposes for which it was organized or its methods of operation the district_director of internal revenue for the district in which the organization is located must be advised immediately of any such changes in order that a determination may be made as to the effect the changes may have upon the exempt status of the organization see generally sec_1_501_a_-1 and sec_1_6033-1 of the income_tax regulations failure to comply with this requirement may result in serious consequences to the organization for the reason that the ruling or determination_letter holding the organization exempt may be revoked retroactively to the date of the changes affecting its exempt status depending upon the circumstances involved and subject_to the limitations on retroactivity of revocation found in sec_503 of the code the taxpayer has agreed with this conclusion and has signed form_6018 on june 20xx agreeing to dissolution taxpayer’s position government's position and conclusion the purchase of the though the belongs to purchase the was solely funded by was registered under since june 20xx form 886-arev has been in - as a tax exempt_organization they cannot purchase property for a the even technically funds were used to department of the treasury - internal_revenue_service page -3- the service's position is that the organization has been inactive for several years now and that there have been no activities conducted this org has not conducted any charitable work since 20xx their main source for charitable work their form_8 a department of the treasury - internal_revenue_service explanation of items name of taxpayer schedule no or exhibit year period ended 20xx for-profit business that is inurement misuse of funds and taxable therefore the legally belongs to since the organization has not conducted any charitable activity since 20xx the organization’s tax exempt status is to be revoked and they may convert their returns to tax returns for all years beginning january 20xx to present fails to meet the operational requirements to continue its exemption status under sec_501 therefore the effective date of revocation will be 20xx form 886-a crev department of the treasury - internal_revenue_service page -4-


internal_revenue_service department of the treasury index nos washington d c person to contact telephone number refer reply to cc dom fi p plr-105837-99 date jul '999 legend fund state x adviser company accounting firm year date date date date date date date this responds to a letter dated date submitted on behalf of fund of the internal_revenue_code to treat dividends distributed after fund requests that its election under sec_855 a plr-105837-99 the close of taxable_year be considered timely filed pursuant to of the procedure and administration regulations a taxable_year as having been paid during that sec_301_9100-3 fund was incorporated in state x during year and is facts registered as a closed-end non-diversified investment_company under the investment_company act of seg adviser is fund's investment adviser u s c sec_80a-1 et as amended fund elected to be treated as a regulated_investment_company ric under subchapter_m of the code for its first fiscal_year ended date to qualify it accounting for tax and financial_accounting purposes and has an october year-end and has subsequently operated in a manner intended as fund uses the accrual_method of a ric fund pays income dividends on a monthly basis fund pays capital_gain dividends once a year distribution_requirements under therefore for each year since its inception that fund has had net_capital_gain as defined in requirement under sec_852 by making an election under sec_855 fund has satisfied its distribution in december to satisfy it sec_852 and sec_4982 sec_1222 these administrative services include company provides certain administrative services to fund a sub-administration contract between company and pursuant to adviser dated date providing administrative clerical and bookkeeping services to fund as well as preparing and filing fund's tax returns and extensions supervisory responsibility over the preparation and filing of fund's tax returns and extensions procedure fund's tax returns are prepared by accounting firm reviewed by an employee of company and then submitted for the treasurer's signature an administration and compliance calendar throughout the year an employee of company and has under company's internal fund's treasurer is the treasurer monitors this process using on date the treasurer received from accounting firm state on date fund's completed local and federal_income_tax extensions on the same day these forms were given to an employee of company for review result of company made this mistake because it was their date due_date the first year that company had provided administrative services to fund incorporated into the control log which lists the tax forms and filing deadlines for each fund and fund's tax filing_requirements had not yet been a mistake the extension forms had not been filed by the same employee realized that as the plr-105837-99 after the discovery of the missed filing_date accounting firm prepared fund's form 1120-ric and filed the return on date fund intended to make an election under sec_855 to treat certain dividends_paid after the close of its taxable_year as having been paid during the taxable_year effective for its taxable_year that ended date law and analysis sec_855 of the code provides that if a ric - declares a dividend prior to the time prescribed by law for the filing of its return for a taxable_year including the period for any extension of time granted for filing such return and distributes the amount of such dividend to shareholders in the 12-month_period following the close of such taxable_year and not later than the date of the first regular dividend payment made after such declaration the amount so declared and distributed shall the company elects in such return in accordance with regulations prescribed by the secretary be considered as having been paid during such taxable_year except as provided in subsections b d and c to the extent sec_1_855-1 of the income ta regulations sets forth the method of making the election and provides that the election must be made in the return filed by the ric for the taxable_year sec_301_9100-1 of the procedure and administration that the commissioner has regulations provides in part discretion to grant a reasonable extension of time to make a regulatory election defined in whose due_date is prescribed by regulations or by a revenue_ruling a revenue_procedure a notice or an announcement published in the internal_revenue_bulletin or a statutory election but no more than months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except subtitles e sec_301_9100-1 as and i g h an election plr-105837-99 sec_301_9100-3 through c i set forth rules that the internal_revenue_service generally will use to determine whether under the facts and circumstances of each situation the commissioner will 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 subject_to paragraphs b through iii for relief under this section before the failure to make the regulatory election is discovered by the service the taxpayer will be deemed to have acted reasonably and in good_faith and sec_301_9100-3 provides that the interests of the government are prejudiced if granting relief would result in the taxpayer having a lower -tax liability in the aggregate for all years to which the regulatory election applies than the taxpayer would have had if the election had been timely made taking into account the time_value_of_money sec_301_9100-3 when a taxpayer applies of based upon the facts presented and representations made by holding we hold that fund has demonstrated good cause for the fund granting of relief under sec_301_9100-3 treated as having made a timely election under sec_855 code on its federal_income_tax return filed for the tax_year that ended date accordingly fund will be of the no opinion is expressed as to whether fund's tax_liability is not lower in the aggregate for the year to which the election applies than fund's tax_liability would have been if the election had been timely made taking into account the time_value_of_money the district director's office will determine fund's tax_liabilities for the year involved office determines that fund's liability is lower that office will determine the federal_income_tax effect upon audit of the federal_income_tax returns involved if the district director's this ruling is limited to the timeliness of fund's election a result of its failure_to_file its federal_income_tax except as specifically ruled upon above -no this ruling does not relieve fund from any penalty that it may owe as returns on time opinion is expressed or implied as income_tax consequences regarding fund opinion is expressed or implied whether fund qualifies as that is taxable under subchapter_m part to any federal excise or in particular no of the code a ric plr-105837-99 this ruling is directed only to the taxpayer who requested sec_6110 of the code provides that it may not be it used or cited as precedent sincerely yours zb fa assistant chief_counsel financial institutions and products enclosures copy of this letter copy of sec_6110 purposes


department of the treasury internal_revenue_service washington d c aug number release date cc tege eoeg et1 - cor-126676-01 uilc memorandum for director internal_revenue_service center kansas city mo attn entity control from subject office of division counsel associate chief_counsel tax exempt and government entities cc tege eoeg et1 - cor-126676-01 railroad retirement act tax status in accordance with the coordination procedure established between the service and the railroad retirement board rrb the rrb has provided us with its opinion that the following business became an employer under the railroad retirement act and the railroad unemployment insurance act effective date we have reviewed the opinion of the rrb and based upon the information submitted to the rrb we also conclude that became an employer under the railroad_retirement_tax_act effective date please take the appropriate action regarding this business will e mcleod cc


number release date id office uilc cca-422130-10 ---------------- from ------------ sent thu pm to --------------------------------------- cc ----------------------------- subject nopa ------- after speaking to the author of the tams and the reviewer of the plr i have the following comments in case people do not think that we should rely on to discount arguments that rely on tams and plrs the tams predate revrul_2005_40 the analysis and the result might be different today the plr has very distinguishable facts if we were to write the plr today we would probably cite the reinsurance rev_rul rather than the off point ruling


t c summary opinion united_states tax_court keisha sampson petitioner v commissioner of internal revenue respondent docket no 2462-04s filed date keisha sampson pro_se kathryn f patterson for respondent dean special_trial_judge this case was heard pursuant to the provisions of sec_7463 of the internal_revenue_code as in effect at the time the petition was filed unless otherwise indicated subsequent section references are to the internal_revenue_code in effect for the year at issue and all rule references are to the tax_court rules_of_practice and procedure the decision to be entered is not reviewable by any other court and this opinion should not be cited as authority respondent determined a deficiency in petitioner’ sec_2002 federal_income_tax of dollar_figure the issues for decision are whether petitioner a received income from self-employment b is entitled to the earned_income_credit c is entitled to head_of_household filing_status and d is entitled to claim two dependency_exemptions some of the facts have been stipulated and are so found the stipulation of facts and exhibits received in evidence are incorporated herein by reference at the time the petition was filed petitioner resided in luling texas background petitioner timely filed her federal_income_tax return for showing her address as p o box luling texas petitioner claimed derrick mckenzie derrick and destiny sampson destiny as dependents on the return petitioner’s only income was reported on schedule c profit or loss from business the schedule c reported a principal business or profession of secretarial office administrative services pincite old lake road smithville texas petitioner reported gross_income on schedule c of dollar_figure as well as office expense of dollar_figure and phone expenses of dollar_figure resulting in a net profit from business of dollar_figure petitioner also attached to her return a schedule eic earned_income_credit claiming derrick and destiny as qualifying children petitioner signed a public housing dwelling lease for a unit located pincite e avenue i in temple texas the lease required her to pay dollar_figure per month as rent and was to run from date to date in the lease it is agreed that the unit will be occupied only by petitioner glenisha mcdonald freddick andeson destiny sampson and derrick mckenzie during the school year destiny sampson attended brown primary school brown in smithville texas smithville is about miles from temple texas destiny’s report card for has lines for parent's signature all of the signatures are those of glenda lewis destiny continued to attend brown during the school year glenda lewis’s signature is the only one on the report card for the school year a student withdrawal record transfer form for derrick mckenzie indicates that he entered brown on date and withdrew on date on date derrick was enrolled in the meridith-dunbar magnet school in temple texas at some point during the first semester of the school 1the court takes judicial_notice of the approximate distances between the various towns discussed in the opinion see fed r evid b year derrick was enrolled in hermes elementary_school hermes in la grange texas where he remained for the rest of the school year his address was listed by hermes a sec_128 e cedar street la grange texas la grange is about miles from temple discussion because petitioner failed to meet the requirements of sec_7491 the burden_of_proof does not shift to respondent in this case schedule c income respondent determined that petitioner had not earned the income reported on her schedule c petitioner testified that she had a babysitting business and was self-employed for about a year cutting yards doing odds and ends cleaning house doing several different things to earn a living she added that she poured concrete and worked for obm enterprises for the last years petitioner provided the court with two documents titled original affidavit in any fact in these documents mr o b marshall states that petitioner was engaged in the good_faith performance of principal business or profession of secretarial office administration services during the course of operations of o b marshall d ba obm enterprises inc and the related_party transactions of other business es and individual s as an employee and as a self-employed_individual for petitioner however failed to provide any documentary_evidence of any of her alleged employment activities and did not provide a satisfactory explanation for her lack of evidence mr marshall who appeared as a witness failed to produce any_tax forms pay stubs or invoices to document petitioner’s employment by him in any capacity respondent’s determination that petitioner did not have self-employment_income is sustained earned_income_credit petitioner claimed the earned_income_credit for two qualifying children destiny and derrick respondent determined that petitioner is not entitled to the earned_income_credit sec_32 allows an eligible_individual an earned_income_credit against the individual’s income_tax_liability the credit is a refundable_credit that is treated as a payment of tax sec_6401 sec_32 the credit is based on earned_income which includes wages salaries tips and earnings from self- employment sec_32 c the amount of the credit is determined by multiplying an individual’s earned_income by a percentage sec_32 sec_32 limits the credit allowed and sec_32 prescribes different percentages and amounts used to calculate the credit based on whether the eligible_individual has no qualifying children one qualifying_child or two or more qualifying children because petitioner has not shown that she had earned_income for the year she is not entitled to an earned_income_credit because petitioner has not shown that she had any income for the year she was not required to file a federal_income_tax return and the court need not reach the issues of her filing_status and her entitlement to dependency_exemptions see sec_6012 respondent’s deficiency determination is in all respects sustained reviewed and adopted as the report of the small_tax_case division to reflect the foregoing for respondent decision will be entered


internal_revenue_service number release date index numbers --------------------------------- ------------------------------------------------------------ --- ---------------------- ---------------------- ---------------- department of the treasury washington dc person to contact ---------------------- id no ------------- telephone number --------------------- refer reply to cc psi b03 - plr-123554-09 date date legend taxpayer ----------------------------------------------------------- ----------------------------------- entity country date ---------------------------------------------------------- -------------- ------------------- dear ------------------------------------------- this letter responds to a letter dated date and subsequent correspondence submitted on behalf of taxpayer requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations for taxpayer to file an election under sec_301_7701-3 to be classified as an association for federal tax purposes facts the information submitted discloses that on date taxpayer was converted to an entity under the laws of country taxpayer intended its entity classification to be an association effective date however taxpayer failed to timely file form_8832 entity classification election to elect its entity classification to be an association_taxable_as_a_corporation law and analysis plr-123554-09 sec_301_7701-3 provides in part that a business_entity that is not classified as a corporation under sec_301_7701-2 or an eligible_entity can elect its classification for federal tax purposes 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 b 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 for purposes of sec_301_7701-3 a member of a foreign eligible_entity has limited_liability if the member has no personal liability for the debts of or claims against the entity by reason of being a member sec_301_7701-3 provides in part that except as provided in sec_301_7701-3 and v an eligible_entity may elect to be classified other than as provided under sec_301_7701-3 or to change its classification by filing form_8832 with the service_center designated on form_8832 sec_301_7701-3 provides in part that an election made under sec_301_7701-3 will be effective on the date specified by the entity on form_8832 or on the date filed if no such date is specified on the election form the effective date specified on form_8832 can not be more than days prior to the date on which the election is filed and can not be more than months after the date on which the election is filed under sec_301_9100-1 the commissioner may grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code code except subtitles e g h and i sec_301_9100-1 provides that the term regulatory election includes an election whose due_date is prescribed by a regulation published in the federal_register sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make an election sec_301_9100-2 provides automatic extensions of time for making certain elections sec_301_9100-3 provides extensions of time for making elections that do not meet the requirements of sec_301_9100-2 plr-123554-09 sec_301_9100-3 provides that requests for relief under 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 on the facts and representations submitted taxpayer has established that the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied consequently taxpayer is granted an extension of time of days from the date of this letter to elect under sec_301_7701-3 to be treated as an association effective date taxpayer must file form_8832 within the extension period with the appropriate service_center with a copy of this letter attached except for the specific ruling above we express or imply no opinion concerning the federal tax consequences of the facts of this case under any other provision of the code in addition sec_301_9100-1 provides that the granting of an extension of time for making an election is not a determination that the taxpayer is otherwise eligible to make the election this ruling is directed only to the taxpayer requesting it according to sec_6110 of the code this ruling may not be used or cited as precedent pursuant to a power_of_attorney on file with this office we are sending a copy of this letter to taxpayer’s authorized representatives sincerely s curt g wilson associate chief_counsel passthroughs special industries enclosures copies of this letter copy for sec_6110 purposes