t c memo united_states tax_court retail llc zeller-310 llc tax_matters_partner petitioner v commissioner of internal revenue respondent docket no filed date jeffrey h paravano jay r nanavati michelle m hervey and kevin m johnson for petitioner keith lawrence gorman and philip s yarberough for respondent memorandum opinion lauber judge this case involves a charitable_contribution_deduction claimed by retail llc llc for a conservation_easement currently before the court are cross-motions for partial summary_judgment as to whether llc sat- isfied the substantiation requirements in sec_170 for this gift llc did not receive from the donee organization a timely letter of the sort that normally acts as a contemporaneous written acknowledgment cwa within the meaning of sec_170 petitioner contends that llc nevertheless satisfied the statutory substantiation requirements and points to three documents by which it al- legedly did so relying on sec_170 petitioner initially cited two forms return of organization exempt from income_tax filed by the donee charity six years after the gift was made on these forms the donee included certain informa- tion required by sec_170 including an averment that no goods or ser- vices were provided in exchange for the gift however the parties filed their mo- tions for partial summary_judgment before this court issued its opinion in w 17th st llc v commissioner t c __ date petitioner acknow- ledges that under that opinion tax returns subsequently filed by the donee organ- ization do not relieve the donor of the obligation to have secured a cwa that meets the statutory requirements 1all statutory references are to the internal_revenue_code in effect for the year in issue and all rule references are to the tax_court rules_of_practice and procedure we round all monetary amounts to the nearest dollar the third document on which petitioner relies is the deed of easement that the donee executed contemporaneously with the gift we have previously held that a deed of easement may constitute a de_facto cwa see rp golf llc v commissioner tcmemo_2012_282 104_tcm_413 averyt v com- missioner tcmemo_2012_198 104_tcm_65 we conclude that the deed of easement in this case qualifies as a cwa under the logic of these cases we will accordingly grant petitioner’s motion for partial summary_judgment and deny respondent’s cross-motion background there is no dispute as to the following facts which are drawn from the par- ties’ summary_judgment papers and the attached exhibits when the petition was filed llc had its principal_place_of_business in illinois sometime before llc acquired a property pincite south michigan av- enue in chicago the property includes the metropolitan tower originally known as the strauss building building designed by the architectural firm of graham anderson probst and white and completed in in llc began renova- ting the building converting it from commercial office use into a residential com- plex on date llc executed a preservation deed of easement deed of easement granting the landmarks preservation council of illinois lpci an easement over the facade of the building lpci is an organization de- scribed in sec_501 and is a qualified_organization under sec_170 lpci caused the deed of easement to be recorded by the cook county recorder of deeds on date the deed of easement recited that the subject matter of this conveyance is a perpetual donation to charity which can no longer be transferred hypothecated or subjected to liens or encumbrances by grantor the granting provision stated as follows now therefore in consideration of one dollar dollar_figure and the mutual covenants and terms conditions and restrictions hereinafter set forth and other good and valuable consideration receipt of which is hereby acknowledged llc hereby does grant give con- vey bargain and sell unto lpci its successors and assigns irrevocably forever a preservation easement in perpetuity in and to the aforesaid premises for the purposes of preserving the protected elements and accomplishing the other objectives set forth herein the deed of easement provided that lpci would monitor llc’s compliance with the easement restrictions and authorized lpci to inspect the premises to en- sure compliance but it contained no reference to any goods or services being furnished by lpci to llc and recited no receipt by lpci of any consideration for providing goods or services the parties explicitly stated their understanding that t his instrument including the exhibits attached hereto reflects the entire agreement of grantor and grantee and that a ny prior or simultaneous corres- pondence understandings agreements and representations are null and void upon execution hereof unless set out in this instrument llc secured an appraisal dated date that determined a value of approximately dollar_figure million for the facade easement llc timely filed for a form_1065 u s return of partnership income claiming a dollar_figure million charitable_contribution_deduction llc attached to its return a form_8283 non- cash charitable_contributions executed by the appraiser and by lpci’s president this document contained no statement as to whether lpci had provided any goods or services to llc in exchange for llc’s gift on date more than three years after the gift was made lpci sup- plied llc with a letter stating that no goods or services have been provided to you in consideration of your prior donation this letter recited lpci’s belief that it had acknowledged this donation with a receipt letter at the time of the gift but lpci could not find a copy of such a letter in its files the internal_revenue_service irs or respondent selected llc’s return for examination in date the irs sent llc a summary report explaining that it proposed to disallow the claimed charitable_contribution_deduction for the facade easement in date almost three years later lpci filed an amended form_990 for its fiscal_year ending fye date this amended_return referred to the facade easement and stated that no goods or ser- vices had been furnished to the donor in exchange for that gift the return was unsigned and did not identify llc as the donor on date the irs issued llc a notice of final partnership ad- ministrative adjustment fpaa it disallowed the claimed charitable_contribution_deduction in full for failure to satisfy the requirements in sec_170 alternative- ly the fpaa determined that if any deduction were allowable the fair_market_value of the easement was dollar_figure million rather than dollar_figure million the fpaa also determined a gross_valuation_misstatement penalty under sec_6662 and h or in the alternative a accuracy-related_penalty under sec_6662 in date petitioner timely petitioned this court for readjustment of the partnership items under sec_6226 three months later lpci filed a form_990 for its fye this return referred to the facade easement identified llc as the donor and stated that no goods or services had been furnished to llc in exchange for that gift discussion the purpose of summary_judgment is to expedite litigation and avoid costly unnecessary and time-consuming trials see 116_tc_73 we may grant partial summary_judgment when there is no genuine dispute of material fact and a decision may be rendered as a matter of law rule b 118_tc_226 the parties agree on all questions of basic fact and have expressed that consensus by filing cross-motions for partial summary_judgment we conclude that the question presented is appropriate for summary adjudication a statutory and regulatory framework sec_170 allows a deduction for charitable_contributions made dur- ing the taxable_year generally the amount of the deduction is the value of the property contributed reduced by the value of any consideration that the taxpayer receives in exchange for the gift 118_tc_528 aff’d 374_f3d_881 9th cir payments to a charity that are made partly as a contribution and partly in consideration for goods or services provided to the donor by the donee are often called quid pro quo contributions ibid to address tax-compliance problems that had arisen in connection with quid pro quo contributions congress in enacted sec_170 captioned substantiation requirement for certain contributions congress enacted this provision to require charitable organizations that receive quid pro quo contribu- tions to inform their donors that the deduction under sec_170 is limited to the amount by which the payment exceeds the value of goods or services provided by the charity addis t c pincite sec_170 is a compliance pro- vision designed to foster disclosure of ‘dual payment’ or quid pro quo contribu- tions viralam v commissioner 136_tc_151 sec_170 provides no deduction shall be allowed for any contribution of dollar_figure or more unless the taxpayer substantiates the contribu- tion by a contemporaneous written acknowledgment of the contribution by the donee organization that meets the requirements of subparagraph b the re- quirement that a cwa be obtained for charitable_contributions of dollar_figure or more is a strict one in the absence of a cwa meeting the statute’s demands n o deduc- tion shall be allowed id see french v commissioner tcmemo_2016_53 111_tcm_1241 if a taxpayer fails to meet the strict substantiation requirements of sec_170 the entire deduction is disallowed the doc- trine of substantial compliance does not apply to excuse failure to obtain a cwa meeting the statutory requirements w 17th st llc t c at __ slip op pincite citing french t c m cch pincite the deterrence value of sec_170’s total denial of a deduction comports with the effective administration of a self-assessment and self-reporting system addis f 3d pincite sec_170 provides that a donee acknowledgment will satisfy the statutory substantiation requirements if it includes the following information i the amount of cash and a description but not value of any property other than cash contributed ii whether the donee organization provided any goods or services in consideration in whole or in part for any property de- scribed in clause i iii a description and good_faith estimate of the value of any goods or services referred to in clause ii an acknowledgment qualifies as contemporaneous only if the donee provides it to the taxpayer on or before the earlier of the date on which the taxpayer files a return for the taxable_year in which the contribution was made or the due_date including extensions for filing such return sec_170 and ii b analysis llc did not receive from lpci a cwa of the sort that charities typically furnish their donors the form_8283 executed by lpci’s president was contem- poraneous but it did not include information as to whether lpci had supplied llc with any goods or services in exchange for its gift the letter that lpci supplied in date included the latter information but it was not contemporaneous because it postdated the facade easement by more than three years lacking such documentation llc initially relied on sec_170 which provides that the cwa requirement in subparagraph a shall not apply to a contribution if the donee organization files a return on such form and in accord- ance with such regulations as the secretary may prescribe which includes the in- formation described in subparagraph b with respect to the contribution in lpci filed an amended form_990 for fye that disclosed the facade easement and stated that no goods or services were provided in exchange therefor this amended_return was unsigned and did not identify llc as the do- nor in date lpci filed a form_990 for fye that identified llc as the donor and included the same statement llc contends that by virtue of lpci’s filing of these returns--six years or more after the gift was made--it was relieved by sec_170 of the obligation to secure a cwa we rejected essentially the same argument in w 17th st llc and we reject it again here sec_170 applies only if the donee reports the nec- essary information on a return filed on such form and in accordance with such regulations as the secretary may prescribe the secretary has declined thus far to issue regulations implementing a donee reporting regime under subparagraph d as a supplement to the cwa regime that congress enacted in subparagraph a we held in w 17th st llc t c at __ slip op pincite- that subparagraph d embodies a discretionary delegation of rulemaking authority and that the statute is not self-executing in the absence of such regulations the requirement that llc secure a cwa for its gift thus re- mained in full force and effect notwithstanding lpci’s subsequent filing of a re- turn reporting the information described in subparagraph b in the alternative petitioner contends that llc did in fact receive a cwa and that the deed of easement constituted that cwa sec_170 pro- vides that a donee acknowledgment will satisfy the statutory substantiation re- quirement if it includes the following information one item of information that must be included is w hether the donee organization provided any goods or ser- vices in consideration in whole or in part for the gift sec_170 a cwa need not take any particular form and may be furnished to the do- nor for example by letter postcard or computer-generated media french t c m cch pincite schrimsher v commissioner tcmemo_2011_71 101_tcm_1329 citing legislative_history whatever form the acknowledgment takes however it must include an affirmative indication that the donee has provided no goods or services to the donor if that is the case the conference_report accompanying the statute’s enactment indicated if the donee organization provided no goods or services to the taxpayer the writ- ten substantiation is required to include a statement to that effect h_r conf rept no pincite ndollar_figure 1993_3_cb_393 our case law is consistent with the legislative_history see eg w 17th st llc t c at __ slip op pincite villareale v commissioner tcmemo_2013_74 105_tcm_1464 durden v commissioner tcmemo_2012_140 103_tcm_1762 castleton v commissioner tcmemo_2005_58 89_tcm_930 aff’d 188_fedappx_561 9th cir in several prior cases involving conservation easements we have consid- ered whether a deed of easement qualified as a cwa in simmons v commis- sioner tcmemo_2009_208 98_tcm_211 aff’d 646_f3d_6 d c cir another facade easement case we held that a deed of easement may constitute a cwa provided that it is properly executed by the donee and is con- temporaneous but in that case we did not examine the text of the deed of ease- ment or consider the contents of its granting provision nor did we address the statutory requirement that a cwa provide information as to w hether the donee organization provided any goods or services in consideration for the gift sec_170 see simmons t c m cch pincite in subsequent cases we have considered in greater detail what features a deed of easement must display in order to qualify as a cwa in schrimsher t c m cch pincite the granting provision stated that the donor conveyed a perpetual conservation_easement for and in consideration of the sum of ten dollars plus other good and valuable consideration the receipt and sufficien- cy of which are hereby acknowledged ruling on respondent’s motion for partial summary_judgment we held that the deed of easement as thus drafted did not qualify as a cwa id pincite we recognized that the phrase in consideration of the sum of ten dol- lars plus other good and valuable consideration might be regarded as boiler- plate reflecting an unfortunate if centuries-old habit of lawyers to state a pep- percorn of consideration even in contracts for the conveyance of a charitable gift see id pincite n edmund polubinski jr the peppercorn theory and the restatement of contracts wm mary l rev but even if this phrase were disregarded and the donee in fact furnished no consideration we ruled that the written acknowledgment must say so in order to satisfy the requirement of sec_170 schrimsher t c m cch pincite we held that the deed of easement did not qualify as a cwa because even if the peppercorn clause were deemed boilerplate this statement does not indicate that the donee provided no goods or services ibid emphasis in original we reached the opposite result in averyt the granting provision there stated that the donor conveyed a perpetual conservation_easement in considera- tion of the mutual covenants terms conditions and restrictions hereinunder set forth and as an absolute and unconditional gift subject_to all matters of re- cord averyt t c m cch pincite the deed of easement did not include an explicit averment that the donee had provided no goods or services to the donor in exchange for the easement however it included a merger clause stating this instrument sets forth the entire agreement of the parties with respect to the ease- ment and supercedes all prior discussions negotiations understandings or agree- ments relating to the easement all of which are merged herein ibid ruling on cross-motions for summary_judgment we held that the deed of easement as thus drafted qualified as a cwa as in simmons the deed was prop- erly executed by the donee and was contemporaneous moreover the deed stated that the conservation_easement is an unconditional gift recite d no con- sideration received in exchange for it and stipulate d that the conservation deed constitute d the entire agreement between the parties with respect to the contribution averyt t c m cch pincite by stipulating that the deed of easement constituted the parties’ entire agreement the merger clause negated the provision or receipt of any considera- tion not stated in that document we concluded that the merger clause read in conjunction with other statements in the deed of easement supplied the affirma- tive indication required by sec_170 we accordingly held that the deed of easement taken as a whole provides that no goods or services were received in exchange for the contribution ibid we followed averyt in rp golf llc the granting provision stated that the donor conveyed a perpetual conservation_easement for and in consideration of the covenants and representations contained herein and for other good and val- uable consideration the receipt and legal sufficiency of which are hereby acknow- ledged rp golf llc t c m cch pincite the deed also included a merger clause substantially identical to that in averyt providing this instru- ment sets forth the entire agreement of the parties with respect to the easement and supersedes all prior discussions negotiations understanding or agreements relating to the easement all of which are merged herein ibid ruling on a motion for summary_judgment we held in rp golf llc that the deed of easement as thus drafted qualified as a cwa as in simmons the deed was properly executed by the donee and was contemporaneous rp golf llc t c m cch pincite as in averyt the deed d id not include consideration of any value other than the preservation of the property ibid and as in averyt the deed stated that it constitute d the entire agreement between the parties regarding the contribution ibid in light of other provisions in the deed we concluded that the granting provision’s recitation of the receipt of other good and valuable consideration was boilerplate language and has no legal effect for pur- poses of sec_170 id pincite n we thus concluded as in averyt that the deed of easement taken as a whole states that no goods or services were re- ceived in exchange for the contribution id pincite the deed of easement in the instant case is similar in all material respects to the deed in rp golf llc and we reach here the same result we reached there the deed of easement was properly executed by lpci’s president and recorded by the cook county recorder of deeds on date it thus constituted a contemporaneous acknowledgment see sec_170 this acknowledgment included an affirmative indication that lpci supplied no goods or services to llc in exchange for its gift the deed explicitly stated that it represented the parties’ entire agreement and that a ny prior or simultaneous correspondence understandings agreements and representations are null and void upon execution hereof unless set out in this instrument it thus negated the provision or receipt of any consideration not stated therein apart from the charitable conveyance and the covenants attending the ease- ment the only consideration mentioned in the deed of easement is the granting provision’s reference to consideration of one dollar dollar_figure and other good and valuable consideration neither party contends that lpci actually furnished llc with any valuable goods or services in exchange for its gift evaluating this clause in the context of the deed overall we conclude that this clause constitutes boilerplate language and has no legal effect for purposes of sec_170 see rp golf llc t c m cch pincite n taken as a whole therefore the deed of easement includes the required affirmative indication that lpci supplied llc with no goods or services in exchange for its contribution because the deed of easement satisfied this and all other requirements in sec_170 it constituted a cwa sufficient to substantiate llc’s gift 2we find no legally significant distinction between the boilerplate of the granting provision in the instant case which recited receipt of one dollar dollar_figure and other good and valuable consideration and in rp golf llc which recited receipt of other good and valuable consideration without mentioning a nominal dollar amount to reflect the foregoing an appropriate order will be issued granting petitioner’s motion for partial summary_judgment and denying respondent’s cross-motion for partial summary_judgment


tcmemo_2006_140 united_states tax_court estate of john l baird deceased ellen b kirkland and j samuel baird co-executors petitioners v commissioner of internal revenue respondent estate of sarah w baird deceased ellen b kirkland and j samuel baird co-executors petitioners v commissioner of internal revenue respondent docket nos filed date william t f dykes for petitioners wanda m cohen for respondent supplemental memorandum opinion gerber judge this is the third opinion to be issued in these related cases in the first opinion we decided a valuation question with respect to property in each estate estate of baird v commissioner tcmemo_2001_258 estate of baird i the second opinion involved the question of whether the estates were entitled to litigation costs estate of baird v commissioner tcmemo_2002_299 estate of baird ii in estate of baird ii we held that respondent’s position in the proceeding was substantially justified and therefore the estates were not entitled to litigation costs because we decided that estates were not entitled to litigation costs we did not address the question of whether the litigation costs claimed by the estates were reasonable an issue raised by respondent the estates appealed and the court_of_appeals for the fifth circuit reversed our holding that the estates were not entitled to section fees and costs and remanded these cases to this court for a determination of the amount of fees and costs to be awarded to the estates 416_f3d_442 5th cir all section references are to the internal_revenue_code as modified and in effect for the periods under consideration rule references are to the tax court’s rules_of_practice and procedure following the completion of appellate proceedings there was a delay in our receipt and consideration of the record in these cases due to the effect of hurricane katrina upon the operation of the court_of_appeals for the fifth circuit’s clerk’s office discussion3 the estates by means of a second supplemental motion for award of reasonable_litigation_costs and reasonable_administrative_costs claimed litigation and administrative costs as follows estate of litigation costs administrative costs john baird dollar_figure dollar_figure sarah baird dollar_figure dollar_figure because it has been decided that the estates are entitled to litigation and administrative costs we must consider respondent’s arguments concerning the reasonableness of the claimed costs sec_7430 permits the prevailing_party to recover an award of reasonable_litigation_costs sec_7430 generally limits the hourly rate for attorney’s fees to the extent that attorney’s fees are part of the estates’ claimed litigation costs they are being claimed at the statutory hourly to the extent relevant the findings_of_fact set forth in estate of baird i and estate of baird ii are incorporated by this reference there is no need for an evidentiary hearing and the court will rule on the amount of fees and costs based on the parties’ submissions and the existing record see rule a and of the tax court’s rules_of_practice and procedure rate adjusted by the statutorily prescribed cost-of-living adjustment as provided under sec_7430 respondent generally contest sec_5 the reasonableness of the estates’ claim for fees and costs based on the following contentions attorney’s fees claimed for services of an attorney called by the estates as an expert witness are not allowable litigation fees and costs appear duplicated because the issues were the same as to both estates and the estates were billed similar amounts the quantity of hours billed for some of the tasks appears unreasonable for a single issue valuation case we address each of respondent’s contentions separately attorney’s fee claimed for attorney who was initially called as an expert witness background the estates intended to proffer at trial attorney edward b benjamin jr as an expert witness on the subject of co-ownership and partition or real_property under louisiana law respondent moved in limine to exclude attorney benjamin’s report which wa sec_4 the estates’ claim of attorney’s fees is based on the adjusted statutory hourly rate as opposed to the actual rate billed of dollar_figure for revproc_98_61 1998_2_cb_811 dollar_figure for and revproc_99_42 1999_2_cb_568 and revproc_2001_13 2001_1_cb_337 and dollar_figure for revproc_2002_59 2001_2_cb_623 respondent also contested the hourly rate claimed in the estates’ initial motions but the estates conceded that the rate should be limited to the adjusted statutory hourly rate to be offered as his direct testimony under rule f in ruling that the attorney benjamin’s report on a matter of domestic law would not be received as an expert’s opinion under rule f the court did not question attorney benjamin’s expertise or review whether he was qualified the court suggested that attorney benjamin’s opinion was in effect a legal brief that could be attached to the estates’ posttrial briefs in further support of their position on the legal questions associated with the partition of louisiana realty the estates did attach attorney benjamin’s report or opinion to their opening posttrial brief as part of its claim for litigation costs each estate included dollar_figure attributable to the law firm of jones walker waechter poitevent carrere denegre l l p jones firm for a study analysis re louisiana co-ownership and partition law the dollar_figure represents one-half of the dollar_figure for legal work by the jones firm in particular dollar_figure of the dollar_figure is represented by billings of attorney benjamin representing dollar_figure hours at dollar_figure dollar_figure dollar_figure hours at dollar_figure dollar_figure and dollar_figure hours at dollar_figure dollar_figure the remaining dollar_figure of the dollar_figure was attributable in smaller amounts to eight other individuals in the jones firm the hourly billing rates for the eight individuals other than attorney benjamin ranged from dollar_figure to dollar_figure per hour with the vast majority of billing hours exceeding dollar_figure per hour respondent makes a two-part argument with respect to attorney benjamin’s and the jones firm’s fees respondent first argues that any costs for expertise presumably legal or otherwise is not reasonable because it is well settled that expert testimony in the form of legal opinions is generally not received by courts more particularly respondent argues that the estates were aware that expert opinions on domestic law are not admissible by the tax_court the second part of respondent’s argument is that the jones firm’s fees should not be allowed as attorney’s fees because the members of that firm were hired as experts and not used for that purpose in response the estates contend that sec_7430 provides that fees for the services of an individual whether or not an attorney who is authorized to practice before the tax_court or before the internal_revenue_service shall be treated as fees for the services of an attorney the estates point out that all nine of the jones firm individuals for whom fees are claimed were either authorized to practice before the court or the internal_revenue_service there is no contention by respondent that any of the individuals in the jones firm are not qualified to be included in a fee claim under the statute or that there is excessive overhead included in the jones firm charges to the extent that any of the jones firm fees are not found to constitute reasonable_litigation_costs under sec_7430 the estates contend that they are reasonable_litigation_costs under sec_7430 which include the reasonable cost of any study analysis engineering report test or project which is found by the court to be necessary for the preparation of the party’s case we agree with the estates that the jones firm’s fees are allowable to the extent permissible under sec_7430 we do not agree that the fees would be allowable as costs under sec_7430 to the extent not allowable as attorney’s fees under sec_7430 from the court’s point of view attorney benjamin and the jones firm were acting as attorneys and not experts in the setting of this case that point of view is in accord with our ruling that attorney benjamin’s report was a legal brief and coincides with the fact that the report was not received as direct testimony under rule f there was a need for legal analysis on the legal question of co-ownership and partition in louisiana indeed the subject report was relied upon by the estates and attached to the estates’ posttrial brief as such the subject report was considered by the court and parties in connection with their legal analysis of the valuation issues which included the question of the possibility of the partition of louisiana realty there is no limitation that permissible attorney fees under sec_7430 can be recovered only for attorneys who make an entry of appearance in the controversy nor do we find that it was unreasonable for the estates to use such expertise accordingly we hold that the estates are entitled to recover reasonable attorney’s fees under sec_7430 regarding the question of reasonableness under sec_7430 the jones firm’s fees must be subjected to the adjusted statutory hourly rate unless there is a showing that the subject matter of this case involved complex matters requiring special legal skills in that regard attorney benjamin’s qualifications were not tested and he was not accepted or rejected as an expert by the court furthermore the estates have not established and or argued that the nine individuals from the jones firm had the type of expertise that would warrant fees in excess of the adjusted statutory hourly rate we accordingly hold that the reasonable or recoverable fees of the jones firm must be limited to the adjusted statutory hourly rate a task that we leave to the parties under the operation of rule the estates’ secondary or alternative approach is to claim that any portion of the jones firm’s fees not allowed as attorney fees under sec_7430 should be allowable as reasonable_litigation_costs under sec_7430 in effect the estates’ contention is that to the extent that the jones firm’s fees are not recoverable as attorney fees they should be allowed as expert witness fees or costs of a study analysis engineering report test or project which was necessary for the preparation of the estates’ cases we have held that the jones firm’s fees are allowable as attorney’s fees under sec_7430 and that such fees were limited to the adjusted statutory hourly rate to hold that amounts in excess of the adjusted statutory hourly rate are permissible under sec_7430 would thwart the statutory limit and circumvent the intent of that limitation although we hold that the jones firm’s fees were necessary to the estates’ preparation and presentation of their case they are attorney fees and not recoverable as other costs associated with the litigation in other words the estates cannot have it both ways we therefore hold that no portion of the jones firm’s fees that exceed the adjusted statutory hourly rate are permissible as costs under sec_7430 has there been a duplication of litigation fees respondent next contends that because the valuation issue involved the same assets and issues in both estates the attorney’s fees and litigation costs were duplicated respondent’s contention appears to rest on his supposition that the legal work and litigation costs were generated by one estate and then doubled without performing the same work for the second estate the estates however point out that the work was performed in connection with the preparation for and trial of both estate_tax cases which were consolidated for purposes of trial briefing and opinion the estate contends further that certain of the issues in both estates were the same so that the legal work could be performed once and one-half the cost charged to each estate the estates have shown by means of affidavits and explanations that there was no double billing for the same legal work there is nothing in the materials before the court that would support respondent’s contention nor is it apparent that the amount of the attorney fees and costs are disproportionate to the quantity of work described in the billing statements conversely the uncontradicted affidavits provided in support of the estates’ position on this aspect of the controversy are unequivocal on this point accordingly we hold that the amounts claimed for attorney’s fees and costs are not duplicate billings whether amount of hours billed or costs for litigation are reasonable in relation to the nature of the issues or the amount in controversy respondent’s final contention regarding reasonableness of the fees and costs is presented as the generality that the quantity of hours billed for some of the tasks appears unreasonable for a single issue valuation case on this point respondent does not provide any explanation that would demonstrate why the amount of hours is excessive and or the time spent was unnecessary the estates have provided detailed explanations of the need for the hours incurred and billed to the estates the estates also satisfactorily addressed each of respondent’s speculations about the purpose underlying particular costs or fees finally the estates argue that it was respondent’s contentious litigating position holding out for a nominal discount that protracted the proceeding and to some extent caused increased litigation costs and fees we have reviewed respondent’s general and specific contentions and the estates’ response and hold that the estates have adequately shown the claimed costs and fees are reasonable respondent also makes the observation that the amount of fees approaches or approximates the amount of the estate_tax deficiencies in the notices of deficiency we note however that any_tax liability would have been larger due to the interest factor in that regard we reiterate that it was the huge spread between the parties’ positions that may have protracted the litigation and exacerbated the amount of the claimed fees and costs the court is unable to reach the conclusion that the number of hours billed was unreasonable there is no per se rule that would limit the amount of fees claimed to the amount in controversy certainly as a matter of good judgment and practical economics a litigant would ordinarily be reluctant to spend more for attorney’s fees and costs than is at stake in that regard however the estates argue that it was respondent’s approach to these cases and his unreasonable position that there should be a nominal discount that protracted the proceedings and to some extent pushed the fees closer to the amounts in dispute it is that very principle the estates contend that was the basis and intent for the enactment of sec_7430 ie to reimburse a litigant’s fees and costs incurred in defending against an unreasonable position accordingly with the exception of the need to reduce claimed attorney’s fees to the statutory adjusted rate we hold that the estates’ claims for fees and costs are reasonable to reflect the foregoing appropriate orders and decisions will be entered under rule


tcmemo_2013_124 united_states tax_court kenneth a carter robert j kurek john mcfawn paul l miles adolph f rivas curlee thomas and q c williams jr commissioner of internal revenue and a finkl sons co petitioners v respondents docket no 2909-10r filed date finkl intended to terminate its defined_benefit_plan and added amendment to effect that intention providing inter alia for distributions as part of the termination process however finkl later decided termination of the plan was not feasible and added amendment to delete amendment thereby continuing the plan finkl notified the pbgc of amendment and the pbgc withdrew finkl’s planned termination finkl also filed a request for determination by the commissioner that the plan as amended continued to meet all of the qualification requirements of sec_401 the commissioner issued a favorable determination_letter ps sued finkl in district_court asserting that amendment violated the anticutback provisions of erisa the i r c and the plan’s contractual anticutback clause ps as interested parties also filed a petition with this court to review the commissioner’s favorable determination asserting that amendment violated the anticutback rule_of the i r c and the plan’s contractual anticutback clause the district_court held and the court_of_appeals affirmed that amendment did not constitute an impermissible cutback and that ps were not entitled to the benefits they claimed the period within which ps could file a petition for writ of certiorari with the u s supreme court expired held the issue of whether amendment constitutes an impermissible cutback is precluded in the instant case under the doctrine_of collateral_estoppel because that issue was previously decided by a final judgment of the court_of_appeals arthur g jaros jr for petitioners james p mcelligott jr craig d bell and bradley a ridlehoover for respondent a finkl sons co matthew m johnson for respondent commissioner of internal revenue memorandum opinion armen special_trial_judge in this declaratory_judgment action under sec_7476 petitioners challenge the commissioner’s date letter determining that the pension_plan of a finkl sons co for eligible office employees plan continued to qualify for favorable tax treatment under internal_revenue_code i r c sec_401 petitioners make the rare request that we enter a declaratory_judgment that because of a plan amendment the plan no longer qualifies for favorable tax treatment despite the commissioner of internal revenue’s commissioner determination to the contrary see rule c d at the parties’ request and by order dated date the court agreed to bifurcate the issues for decision thus the first issue for decision which is procedural in nature involves issue preclusion under the doctrine_of collateral_estoppel the second issue which is substantive in nature involves the qualified status of the plan because we hold that the doctrine_of collateral_estoppel precludes our consideration of the anticutback issue raised by petitioners in their petition with this court we sustain the commissioner’s favorable determination regarding the continuing qualification of the plan unless otherwise indicated all section references are to the internal_revenue_code_of_1986 codified in u s c and sometimes referred to herein as i r c as amended and all rule references are to the tax_court rules_of_practice and procedure background all of the facts have been stipulated and they are so found we incorporate by reference the parties’ stipulation of facts the stipulated administrative record and the accompanying exhibits a finkl sons co finkl is a delaware corporation which had its principal_place_of_business in chicago illinois at the time the petition was filed finkl decides to terminate the plan for many years finkl has been the employer sponsor and administrator of the plan the plan is a defined_benefit_plan as described under the employee_retirement_income_security_act_of_1974 erisa pub_l_no 88_stat_829 as amended the plan includes a 30-and-out early_retirement_benefit whereby participants who complete more than years of employment with finkl such as petitioners are eligible to begin receiving a pension annuity on the date they retire from the company regardless of whether they have reached the plan’s designated retirement age of in late finkl decided to voluntarily terminate the plan to that end finkl began a standard termination process in accordance with procedures set forth in erisa and the regulations promulgated thereunder in date during the termination process finkl adopted a special termination amendment to the plan amendment that stated in pertinent part i f a participant has not begun to receive a benefit under the plan at the time benefits are to be distributed on account of termination of the plan he may elect to receive his benefit under the plan in the form of an immediate_annuity or a deferred_annuity regardless of whether he remains employed by the employer during the termination process petitioners took the position that under amendment they were entitled to receive their retirement pensions pursuant to the plan’s 30-and-out provision immediately even though they remained actively employed by finkl in-service benefits in other words petitioners claimed that amendment entitled them to their full retirement pensions without being retired from finkl finkl adopts amendment in date finkl concluded that termination of the plan was not feasible finkl sent a letter to all participants informing them that the company had chosen not to terminate the plan and therefore there would be no immediate distribution of assets in addition finkl sent a letter to the pension_benefit_guaranty_corporation pbgc informing it that the company decided to withdraw the plan from the termination process finally finkl adopted a second amendment dated date amendment stating in part that amendment is hereby deleted in its entirety in date the pbgc responded to finkl’s letter accepting the company’s withdrawal from the termination process and confirming that the plan as amended continued to operate previous labor law litigation in date petitioners sued finkl in the u s district_court for the northern district of illinois eastern division alleging that finkl’s adoption of amendment and subsequent refusal to pay petitioners their claimed in-service benefits violated the anticutback provisions of erisa the i r c and the contractual anticutback provisions of the plan itself specifically petitioners argued that finkl violated erisa sec g current version pincite u s c sec_1054 sec_411 and the plan’s anticutback provisions near the end of date finkl mailed a letter to the commissioner requesting a determination that the plan as amended continued to meet all of the qualification requirements of sec_401 in the request finkl notified the commissioner of petitioners’ district_court suit sometime thereafter petitioners see carter v pension_plan of a finkl sons co no c wl n d ill date aff’d 654_f3d_719 7th cir wrote to the commissioner in opposition arguing that amendment and finkl’s subsequent refusal to pay petitioners their claimed in-service benefits violated the anticutback provisions of the i r c in date while the district_court proceedings were still pending the commissioner issued a so-called favorable determination_letter deciding that the amended plan did not violate the anticutback provisions of the i r c and had retained qualified status on date the district_court entered a memorandum opinion and order holding that amendment and the company’s subsequent refusal to pay petitioners their claimed in-service benefits did not violate the anticutback provisions of erisa or the plan’s contractual anticutback clause see carter v pension_plan of a finkl sons co no c wl n d ill date aff’d 654_f3d_719 7th cir the district_court concluded that the plan never terminated and the in-service benefits claimed by petitioners were not the type of benefits that the anticutback provisions of erisa or the plan protected id the district_court further observed that finkl’s determination is consistent with the court’s own reading of the plan and the statutory requirements id at moreover the district_court observed that erisa and the internal_revenue_code contain identical anti-cutback_provisions id at petitioners subsequently filed a motion for reconsideration with the district_court in date the district_court entered an order denying petitioners’ motion for reconsideration stating that t he court sees no basis for the conclusion that erisa’s anti-cutback_provisions protect petitioners’ claim for an in-service distribution or that erisa contemplates the distribution they seek in this lawsuit carter v pension_plan of a finkl sons co no c wl at n d ill date in addition the district_court observed that the pbgc was informed of finkl’s intent to abort the termination process and explicitly endorsed finkl’s withdrawal from termination id at petitioners appealed to the u s court_of_appeals for the seventh circuit the pbgc filed an amicus curiae brief with the court_of_appeals in support of the district court’s decision at oral arguments before the court_of_appeals and in addition to their claims as described above petitioners asserted that finkl had violated c f_r sec_4041 a a pbgc regulation dealing with the deadline for distributing plan assets in connection with plan termination on date the court_of_appeals affirmed the district court’s decision in all respects concluding that petitioners’ claimed benefits were not protected by the anticutback rules of erisa or the plan see 654_f3d_719 the court_of_appeals reiterated petitioners’ claims stating here the petitioners argue that they are entitled to relief under both erisa’s anti-cutback prohibition and the pension plan’s anti-cutback clause so there are two questions first whether amendment violated erisa’s anti-cutback provision second whether amendment violated the contract’s own anti- cutback clause id pincite petitioners subsequently filed a petition for rehearing en_banc with the court_of_appeals reiterating their allegation that finkl violated c f_r sec_4041 a and alleging that the opinion of the court_of_appeals improperly countenances a violation of this regulation and approves the unlawful refusal by finkl to complete the liquidation of the plan’s assets the court_of_appeals denied petitioners’ request for a rehearing thereafter petitioners declined to file a petition for writ of certiorari with the supreme court of the united_states petition for declaratory_judgment in date while the district_court litigation was still pending petitioners timely filed with this court a petition for declaratory_judgment retirement_plan pursuant to sec_7476 to review the commissioner’s favorable determination petitioners allege in their petition that finkl’s adoption of amendment and subsequent refusal to pay petitioners their claimed in-service benefits violated the anticutback provisions of the i r c thereby causing the plan to lose qualified status under sec_401 specifically petitioners allege that finkl’s adoption of amendment violated sec_411 the petition was filed within the period specified in sec_7476 see rule c finkl was joined as a respondent to this case by order dated date see rule a sec_411 provides in part accrued_benefit not to be decreased by amendment-- a in general --a plan shall be treated as not satisfying the requirements of this section if the accrued_benefit of a participant is decreased by an amendment of the plan other than an amendment described in sec_412 or sec_4281 of the employee_retirement_income_security_act_of_1974 b treatment of certain plan amendments --for purposes of subparagraph a a plan amendment which has the effect of-- i eliminating or reducing an early_retirement_benefit or a retirement-type subsidy as defined in regulations or continued petitioners request in their petition that we enter a declaratory_judgment that the plan is not a qualified_plan by virtue of the adoption of amendment on date notwithstanding the determination of the commissioner to the contrary petitioners also request in their petition that the court reinstate their claimed in-service benefits upon such terms and conditions as may be specified by the court after the court_of_appeals entered its opinion in the labor law proceedings finkl and the commissioner filed amended answers in this court asserting the applicability of collateral_estoppel on brief petitioners acknowledge that t he district_court and court_of_appeals determined that amendment no did not constitute an impermissible cutback of pension benefits protected by title i of erisa discussion under the doctrine_of issue preclusion or collateral_estoppel once an issue is actually and necessarily determined by a court of competent jurisdiction that determination is conclusive in subsequent suits based on a different cause of action continued ii eliminating an optional form of benefit with respect to benefits attributable to service before the amendment shall be treated as reducing accrued_benefits involving a party to the prior litigation 440_us_147 citing 439_us_322 n collateral_estoppel is a judicially created equitable doctrine whose purposes are to protect parties from unnecessary and redundant litigation to conserve judicial resources and to foster certainty in and reliance on judicial action 109_tc_235 citing montana u s pincite and 627_f2d_996 9th cir collateral_estoppel may be utilized in connection with matters of law matters of fact and mixed matters of law and fact 91_tc_273 the commissioner may assert the doctrine_of collateral_estoppel as an affirmative defense although not a party to the prior federal court_proceeding see 105_tc_141 as articulated in 90_tc_162 aff’d 904_f2d_525 9th cir this court may generally apply collateral_estoppel when the following five conditions exist the issue in the second suit is identical in all respects to the one decided in the first suit there was a final judgment entered by a court of competent jurisdiction the person against whom collateral_estoppel is asserted was a party or in privity with a party in the first suit the parties actually litigated the issue in the first suit and resolution of the issue was essential to the prior decision and the controlling facts and applicable legal rules remain unchanged from those in the first suit see also brotman v commissioner t c pincite in addition we have considered whether special circumstances exist that warrant an exception to the application of collateral_estoppel see fmc corp subs v commissioner tcmemo_2001_298 wl at treating this consideration as a sixth condition necessary for collateral_estoppel to apply see also boultbee v commissioner tcmemo_2012_ at same atkinson v commissioner tcmemo_2012_226 at same in the instant case petitioners make several alternative assertions but primarily argue that the first and fourth peck conditions have not been satisfied ie that the issue before us is not identical in all respects to any issue actually and necessarily determined by the final judgment of the court_of_appeals we disagree identity of issues and law although the instant case involves our review of the commissioner’s determination that the plan retained qualified status under sec_401 collateral_estoppel focuses on the identity of issues not the identity of legal proceedings brotman v commissioner t c pincite citing 103_tc_501 the issue decided by the district_court and affirmed by the court_of_appeals was whether finkl’s adoption of amendment and subsequent refusal to pay petitioners their claimed in-service benefits constituted an impermissible cutback in violation of the anticutback provisions of erisa the i r c and the plan’s anticutback clause it is clear and the district_court acknowledged in its opinion that the anticutback provisions in erisa and the i r c are virtually identical see cent laborers’ pension fund v heinz 541_us_739 equating the i r c anticutback provision with that of erisa thus the issue as to whether finkl’s adoption of amendment violated the anticutback provisions of erisa is substantively the same as whether the adoption of amendment violated the anticutback provisions of the i r c accordingly it is immaterial which statute was actually cited by the district_court and court_of_appeals brotman v commissioner t c pincite in their petition to this court filed during the pendency of the district_court proceedings petitioners allege that finkl’s adoption of amendment constituted an impermissible cutback of their claimed in-service benefits the same allegation made in their pleadings with the district_court the district_court and later the court_of_appeals held that no anticutback violation occurred and that petitioners were not entitled to their claimed in-service benefits indeed petitioners appear to acknowledge this result stating on brief that t he district_court and court_of_appeals determined that amendment no did not constitute an impermissible cutback of pension benefits protected by title i of erisa therefore we conclude that the issue before us is identical in all respects to the issue presented to the district_court and court_of_appeals accordingly the first peck condition is satisfied issue actually litigated and essential to the prior decision in general a n issue is decided if the issue’s determination was necessary to support the judgment entered in the prior proceeding atkinson v commissioner tcmemo_2012_226 at citing 94_tc_491 it is clear from the record that the issue before us was actually and necessarily determined by the district_court and the court_of_appeals see as to petitioners’ request in their petition that we reinstate their claimed in-service benefits upon such terms and conditions as may be specified by the court petitioners have provided no authority and we know of none to support our jurisdiction with respect to such a request in this declaratory_judgment action instead our jurisdiction under sec_7476 is narrowly defined see stevens v commissioner tcmemo_1985_192 sec_7476 is not a broad grant of jurisdiction to the tax_court to conduct a review of factual matters related to controversies over retirement plans and to fashion equitable remedies to resolve these controversies moreover even if we had jurisdiction to decide such a matter petitioners’ request would be precluded because the district_court and court_of_appeals previously decided that petitioners were not entitled to the in- service benefits they claim montana u s pincite petitioners make the same claims for in- service benefits and raise the very same anticutback issue that was actually litigated in the prior labor law litigation and that was essential to the final judgment of the court_of_appeals see peck v commissioner t c pincite accordingly the fourth peck condition is also satisfied id remaining peck conditions the second peck condition is satisfied because as stated above the court_of_appeals entered a final judgment against petitioners who did not file a petition for writ of certiorari within the 90-day period specified by rule of the rules of the supreme court of the united_states id the third peck condition is satisfied because petitioners the parties against whom collateral_estoppel is asserted in the instant case were parties in the prior labor law litigation id the fifth peck condition is satisfied because on the basis of the record we conclude that the controlling facts and applicable legal rules remain unchanged from those in the prior labor law litigation and the parties do not contend otherwise id finally we find no special circumstances that warrant an exception to the application of collateral_estoppel in this case see boultbee v commissioner tcmemo_2012_227 atkinson v commissioner tcmemo_2012_226 fmc corp subs v commissioner tcmemo_2001_298 therefore we hold that the determination of the court_of_appeals is conclusive in the instant case even though the issue involved herein is the subject of a different cause of action see montana u s pincite see also brotman v commissioner t c pincite citing bertoli v commissioner t c pincite petitioners’ pbgc regulation argument as discussed above petitioners contend that the issue before us is not identical in all respects to any issue actually and necessarily determined in the labor law litigation on brief for the first time in the instant case and after the court_of_appeals had entered a final judgment petitioners allege that the issue in this plan qualification litigation is whether finkl’s violation of c f_r sec_4041 a rendered impermissible at least for tax qualification purposes its adoption of amendment no and if so whether in that light such adoption worked an impermissible cutback for tax qualification purposes thus petitioners’ argument on brief as we understand it is that the district_court and court_of_appeals never actually and necessarily determined whether finkl violated c f_r sec_4041 a and if so whether that violation constituted an impermissible cutback for tax qualification purposes the pbgc regulation c f_r sec_4041 a cited by petitioners involves the deadline for making a distribution of assets during the termination process and generally provides that during that process unless a notice of noncompliance is issued the plan_administrator must complete the distribution of plan assets in satisfaction of plan benefits by the later of a date certain first no matter how many references petitioners make to tax qualification purposes or plan qualification litigation we reiterate that the focus of collateral_estoppel is on the identity of issues not the identity of claims or causes of action therefore so long as the issues are identical it is immaterial that the instant case involves an anticutback challenge with respect to the tax qualification of the plan in contrast to the anticutback challenge first brought in the district_court brotman v commissioner t c pincite citing bertoli v commissioner t c pincite furthermore petitioners do not mention c f_r sec_4041 a anywhere in their pleadings with this court having raised their allegation for the first time on brief and after the court_of_appeals had rendered its decision more importantly however petitioners failed to allege any violation of c f_r sec_4041 a in their written comments to the commissioner and therefore did not exhaust their administrative remedies with respect thereto accordingly petitioners have failed to establish the appropriate jurisdictional prerequisites regarding their new allegation in the instant case see sec_7476 rules c a 71_tc_32 moreover the record shows that the court_of_appeals considered and rejected the identical argument that petitioners now present to this court on brief petitioners argued that finkl violated c f_r sec_4041 a at oral arguments before the court_of_appeals when that argument was rejected petitioners raised it again in a petition for rehearing en_banc filed with the court_of_appeals in that regard petitioners even referenced the text of an amicus curiae brief filed by the pbgc with the court_of_appeals during the prior labor law litigation proceedings furthermore in their petition for rehearing en_banc petitioners alleged that the opinion of the court_of_appeals improperly countenances a violation of this regulation and approves the unlawful refusal by finkl to complete the liquidation of the plan’s assets petitioners’ allegations were again rejected by the court_of_appeals on the basis of the record we conclude that petitioners actually litigated the pbgc regulation issue and resolution of that issue was essential to the judgment of the court_of_appeals see peck v commissioner t c pincite therefore petitioners are precluded from relitigating their c f_r sec_4041 a allegation in the instant case conclusion in sum collateral_estoppel precludes petitioners from relitigating the anticutback issue they raise in their petition with this court furthermore we find no special circumstances that warrant an exception to the application of collateral_estoppel in the instant case accordingly we are unable to conclude that the commissioner erred in issuing a favorable determination_letter regarding the continuing qualification of the plan on the grounds raised by petitioners in their petition finally in reaching the conclusions described herein we have considered all arguments made by petitioners and to the extent not expressly discussed above we find them to be moot irrelevant or without merit to reflect the foregoing decision will be entered for respondents


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-129672-07 date date legend x ------------------------------------ ----------------------- ---------- ----------------------- d state dear --------------- this responds to the letter dated date and related correspondence submitted on behalf of x requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations to file a late form_8832 entity classification election to treat x as an association_taxable_as_a_corporation and under sec_1362 of the internal_revenue_code code to file a late form_2553 election by a small_business_corporation to treat x as an s_corporation facts the information submitted states that x was organized as a limited_liability_company under the laws of state on d x intended to be treated as an s_corporation for federal tax purposes effective d however x did not timely file the form_8832 and form_2553 plr-129672-07 law and analysis sec_301_7701-3 of the procedure and administration regulations provides that a business_entity that is not classified as a corporation under ' b or an eligible_entity can elect its classification for federal tax purposes elections are necessary only when an eligible_entity does not want to be classified under the default classification or when an eligible_entity chooses to change its classification sec_301_7701-3 provides that except for certain existing entities described in sec_301_7701-3 unless a domestic eligible_entity elects otherwise the entity is disregarded as an entity separate from its owner if it has a single owner sec_301_7701-3 provides that an eligible_entity may elect to be classified other than as provided under ' b by filing form_8832 with the appropriate service_center under ' c iii this election will be effective on the date specified by the entity on form_8832 or on the date filed if no such date is specified the date specified on form_8832 cannot be more than days prior to the date on which the election is filed under sec_301_9100-1 the commissioner may grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the code except e g h and i sec_301_9100-1 defines the term regulatory election as including an election whose deadline is prescribed by a regulation published in the federal_register the commissioner will use to determine whether to grant an extension of time to make an election sec_301_9100-2 provides automatic extensions of time for making certain elections sec_301_9100-3 provides extensions of time for making elections that do not meet the requirements of sec_301_9100-2 requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government through provide sec_301_9100-1 the standards sec_1362 of the code provides that a small_business_corporation may elect to be an s_corporation sec_1362 provides the rule on when an s election will be effective if an s election is made within the first two and one-half months of a corporation s taxable_year plr-129672-07 then the corporation will be treated as an s_corporation for the year in which the election is made if the election is made after the first two and one-half months of a corporation s taxable_year then the corporation will not be treated as an s_corporation until the taxable_year after the year in which the s election is made sec_1362 provides that if no election is made pursuant to ' a or if made the election is made after the date prescribed for making such an election and the secretary determines there was reasonable_cause for the failure to timely make the election then the secretary may treat such an election as timely made for such taxable_year and effective as of the first day of that tax_year conclusion based solely on the facts submitted and representations made we conclude that the requirements of sec_301_9100-3 are satisfied as a result x is granted an extension of time of days from the date of this letter to make a corporate classification election by filing a form_8832 effective d with the appropriate service_center a copy of this letter should be attached to the election a copy of this letter is attached for this purpose further we conclude that x will be recognized as an s_corporation effective d provided that x otherwise qualifies as a subchapter_s_corporation and within days from the date of this letter x submits a properly completed form_2553 with a copy of this letter attached to the relevant service_center except as specifically set forth above we express or imply no opinion concerning the federal tax consequences of the facts described above under any other provision of the code this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent plr-129672-07 in accordance with the power_of_attorney on file with this office a copy of this letter is being mailed to your authorized representative sincerely william p o’shea associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for ' purposes