id office uilc cca_2009022511375052 -------------- number release date from sent wednesday date am to- cc subject statue question re the service may assess the penalty imposed by sec_6672 for all periods covered in the letter the principles of agency law can give effect to a protest letter sent by the taxpayer's representative within the prescribed day period regardless of whether the letter was accompanied by a valid poa the relationship between client and representative is akin to that of principal and agent in which the representative is authorized to act for or in place of the client in order to bind the principal the agent must have either actual or apparent authority or the principal must ratify the agent’s actions for the ------ periods the representative had actual authority evidence by the form_2848 and therefore the protest is valid and operates to extend the statute_of_limitations by the amount of time provided in sec_6672 for the ------ periods the service will have to rely on the doctrines of apparent authority and ratification apparent authority and the power to bind the purported principal arises only when a third party reasonably believes that the agent has the authority to act on the principal’s behalf and the third party’s belief is based on the principal’s manifestation we cannot rely solely on the doctrine_of apparent authority under the circumstances described in your email however because it would be difficult to argue the service reasonably believed in light of the form_2848 only containing the ------ periods that the representative had authority to act for the taxpayer in addition the taxpayer never expressed the representative's role as such to the service the common_law doctrine_of ratification however applies to validate the representative's actions under the circumstances you described the taxpayer purported principal ratified the representative's actions filing the protest by providing the service with a new form_2848 covering the ------ periods as a consequence the taxpayer's legal relations are affected as they would have been had the representative been an agent acting with actual authority at the time of the act therefore if the taxpayer takes an affirmative step to ratify the agent’s action the service and taxpayer will be bound by the agent’s action as of the date of the act the date the taxpayer's representative sent the protest therefore under the doctrine_of apparent authority and ratification the protest is valid for the ------ periods and operates to extend the statute_of_limitations by the amount of time provided in sec_6672 if you have any additional questions or concerns please give me a call


internal_revenue_service number release date index number --------------------------------------- --------------------------------------------- ---------------------------------------- ------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact -------------------- id no ------------- telephone number --------------------- refer reply to cc psi b02 plr-105483-10 date july legend x ----------------------------------------------------------------------------------------- ----------------------- country -------- d1 ---------------------- dear ----------------------- this responds to a letter dated date and subsequent correspondence submitted on behalf of x by its authorized representative requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations to file an election to be classified as a partnership for federal tax purposes facts the information submitted states that x was formed under the laws of country on d1 as a foreign_entity eligible to elect to be treated as a partnership for federal tax purposes however x inadvertently failed to timely file a form_8832 entity classification election electing to treat x as a partnership effective d1 plr-105483-10 law and analysis sec_301_7701-2 generally provides that a business_entity is any entity recognized for federal tax purposes that is not properly classified as a_trust under sec_301_7701-4 or otherwise subject_to special treatment under the internal_revenue_code sec_301_7701-3 provides that an eligible_entity with at least two members can elect to be classified as either an association and thus a corporation under sec_301 b 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 further provides that so long as a business_entity is not classified as a corporation under sec_301_7701-2 or - an eligible_entity it may elect its classification for federal tax purposes sec_301_7701-3 provides guidance on the classification of a foreign eligible_entity for federal tax purposes generally a foreign eligible_entity is treated as an association_taxable_as_a_corporation if all members have limited_liability unless the entity makes an election to be treated otherwise sec_301_7701-3 provides that an eligible_entity may elect to be classified other than as provided under sec_301_7701-3 by filing a form_8832 with the appropriate service_center under sec_301_7701-3 this election will be effective on the date specified by the entity on form_8832 or on the date filed if no such date is specified on the election form the date specified on form_8832 cannot be more than days prior to the date on which the election is filed and cannot be more than months after the date on which the election is filed sec_301_9100-1 provides that the commissioner may grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the code except subtitles e g h and i sec_301_9100-1 defines the term regulatory election as including an election with a deadline prescribed by a regulation published in the internal_revenue_bulletin sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make an election sec_301_9100-2 provides automatic extensions of time for making certain elections sec_301_9100-3 provides extensions of time for making elections that do not meet the requirements of sec_301_9100-2 plr-105483-10 sec_301_9100-3 provides that request for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government conclusion based solely on the facts submitted and representations made we conclude that the requirements of sec_301_9100-3 have been satisfied accordingly x is granted an extension of days from the date of this letter to elect to be classified as a partnership for federal tax purposes effective d1 the election should be made by filing form_8832 with the appropriate service_center a copy of this letter should be attached to the election this ruling is contingent on the owners of x filing within days of this letter all required returns and amended income_tax returns consistent with the requested relief being effective d1 to the extent appropriate these returns must include but are not limited to forms return of u s persons with respect to certain foreign_partnerships such that these forms reflect the consequences of the relief granted in this letter a copy of this letter should be attached to any such return 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 internal_revenue_code provides that it may not be used or cited as precedent n accordance with the power_of_attorney on file with this office a copy of this letter will be sent to x’s authorized representative sincerely associate chief_counsel passthroughs and special industries by _____________________________ bradford r poston plr-105483-10 enclosures copy of this letter copy for sec_6110 purposes acting chief branch office of associate chief_counsel passthroughs special industries


internal_revenue_service department of the treasury index number washington dc person to contact telephone number refer reply to cc dom fi p plr-111690-98 date november legend company state x this is in response to a letter dated date requesting a ruling concerning the exclusion of income of the company from gross_income under sec_115 of the internal_revenue_code the company provides a pooling network for participating risk- facts sharing pools of political subdivisions of various states states counties municipalities and other political subdivisions have used risk-sharing pools for self-insurance pools often cover only a portion of each member’s losses the company offers reinsurance coverage for the excess losses as to commercial reinsurance these risk-sharing an alternative many the company is a nonprofit organization organized and licensed under the laws of state x industrial insured captive_insurance_company to provide various types of insurance and reinsurance coverage solely to its members company uses an accrual_method of accounting and is taxpayer the company is organized as a calendar-year a mutual the under the bylaws of the company membership is limited to non- profit risk-sharing pools of political subdivisions of states all of the income of which is excludable under authorized by a state association or with a state association to participate in the company member pool must file an application_for membership and be approved by an a risk-sharing pool that seeks membership in the company a risk-sharing pool affiliated and that are plr-111690-98 affirmative vote of the company’s board_of directors the company is not transferable and will terminate if the member pool ceases to be reinsured by the company or if the member pool is dissolved membership in the business of the company is governed by a board_of directors a resident elected by the member pools of state x management and administrative services in addition the company uses a servicing company to administer its claims and loss control services the company outsources most of its operational at least one director must be the company provides automobile liability general and product_liability workers’ compensation property liability law enforcement liability and public officials errors and omissions coverage for its members reinsuring losses of its member pools the company’s income is used to pay reinsurance claims expenses associated with such claims and expenses of administration of the company the company’s operations are limited to insuring or the company’s surplus is provided by member pools upon a percentage of the actuarially determined net becoming a member of the company each member pool contributes an amount equal to reinsurance_premium that will be charged to the member pool under the agreement between the member pool and the company for the ensuing policy year each member no part of the company’s net_earnings inures to the benefit of any private person and upon dissolution or liquidation the company's remaining assets must be distributed to either member pools or political subdivisions of states the company maintains a record of the contributions of 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 subdivision of a state a state or political when determining if sec_115 applies the service considers all the facts and circumstances relating to the organization to determine whether the organization performs an essential_governmental_function and whether the income of the organization accrues to political_subdivision of the state a state or a revrul_90_74 1990_2_cb_34 concerns an organization formed operated and funded by political subdivisions to pool their casualty risks and other risks arising from their obligations concerning public liability workers’ compensation or employees’ plr-111690-98 the ruling states that the income of such an health obligations organization is excluded from gross_income under sec_115 so long as private interests do not participate in the organization or benefit more than incidentally from the organization employees of the insurance coverage obtained by the member political subdivisions was deemed incidental to the public benefit the benefit to the revrul_77_261 1977_2_cb_45 holds that income from a fund established under a written declaration of trust by a state for the temporary investment of positive cash balances of a state and its political subdivisions is excludable from gross_income under sec_115 of the code the ruling reasons that the investment of positive cash balances by a state or political_subdivision in order to receive some yield on the funds until needed to meet expenses is a necessary incident of the power of the state or political_subdivision to collect taxes and raise revenue the company provides automobile liability general and product_liability workers’ compensation property liability law enforcement liability and public officials error and omissions coverage for its members reinsuring losses of its member pools and revrul_77_261 the company performs an essential_governmental_function within the meaning of sec_115 of the code the company’s operations are limited to insuring or based upon revrul_90_74 under sec_115 of the code income of the company must accrue to states or their political subdivisions no part of the company's net_earnings inures to the benefit of any private person addition upon distribution or liquidation the company’s remaining assets must be distributed to either member pools or political subdivisions of states political subdivisions of states and entities whose income is excludable from gross_income under sec_115 thus the income of the company accrues to in holding based on the information and representations submitted by the company we hold that the income of the company is excludable from gross_income under sec_115 except as specifically ruled upon above no opinion is expressed or implied as to the federal tax consequences of the transaction described above under any other provision of the internal_revenue_code company qualifies as an insurance_company under any provision of the code including subchapter_l of chapter specifically we express no opinion whether the plr-111690-98 this ruling is directed only to the taxpayer who requested it sec_6110 cited as precedent of the code provides that it may not be used or sincerely assistant chief_counsel financial institutions and products by heer th kennet alice m bennett chief branch enclosures copy of letter for sec_6110 purposes


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-132808-06 date november -------------------- -------------------------- ----------------------------------- ------------------------------------------ ------------------------------------------ legend legend x -------------------------------------------------- y -------------------------------------------------- z -------------------------------------------------- trust state dear -------------- this responds to a letter dated date submitted on behalf of x y and z by their authorized representatives requesting entity classification rulings under sec_7701 and sec_7704 of the internal_revenue_code the information submitted states that x is a life_insurance_company licensed in states and the district of columbia to provide various life_insurance products annuities mutual funds and other investment products y a wholly owned subsidiary of x is a life_insurance and annuity company that provides a variety of life_insurance products annuities and other investment products to individuals and businesses in all states and the district of columbia trust is an open-end management investment_company organized under the laws of state the beneficial interests in trust’s property consist of transferable shares plr-132808-06 shares in multiple segregated portfolios of assets including portfolio z each with separate investments the portfolios support x’s and y’s variable_contracts shares of the portfolios may only be purchased by domestic life_insurance_companies either directly or through separate_accounts of such companies x has nine separate_accounts and y has four separate_accounts premiums received by x and y are allocated to their respective separate_accounts collectively the accounts of x and y own all of the shares of the portfolios and have the right to purchase additional shares or have shares redeemed at any time contract holders may specify in which separate_account the premium is to be invested the benefits x and y pay to the contract holder are determined by reference to the investment return associated with and the market_value of the relevant portfolio supporting the variable_contract however the benefits under the variable_contracts can vary significantly from the value of the shares in the portfolios especially where a contract holder dies before his or her life expectancy the contract holder is typically entitled to a minimum payment regardless of the portfolio’s performance typically a variable_contract cannot be redeemed within a specified period without a penalty nor sold at face value furthermore the shares in the portfolios are owned by the insurance_company issuing the variable_contract for federal_income_tax purposes the contract holder only has claims against the insurance_company issuing the variable_contract and not against the income gains losses or distributions of the portfolios each portfolio is currently a regulated_investment_company ric within the meaning of sec_851 z proposes to elect to be treated as a partnership z requests a ruling that it will be classified as a partnership and not a publicly_traded_partnership x and y make the following representations trust is a business_trust that has never held itself out to be a state law corporation each portfolio is currently a separate ric as defined in sec_851 z will have at least two members x and y investing through their separate_accounts and will elect to be treated as a partnership for federal tax purposes if shares are sold to other insurance_companies the shares will not be held by more than domestic life_insurance_companies if shares are sold to other insurance_companies the shares will only be issued to separate_accounts of domestic life_insurance_companies x and y are and will be treated as the owners of the shares in the portfolios for federal_income_tax purposes the assets of the separate_accounts will be adequately diversified within the meaning of sec_817 and sec_1_817-5 of the income_tax regulations allocations of taxable_income gain loss deductions and credits of the portfolios will be made in accordance with sec_704 and c and except as required by sec_704 each holder of a share will be allocated its share of each portfolio’s income or loss plr-132808-06 which will be composed of a proportionate share of each item of the portfolio’s income or loss public access to z is only available through the purchase of a variable_contract the shares are not and will not be traded on an established_securities_market the shares are not and will not be regularly quoted by any person such as a broker or dealer making a market in the shares no person regularly makes available and will not make available to the public including customers or subscribers bid or offer quotes with respect to the shares or stands ready or will stand ready to effect buy or sell transactions at the quoted prices for itself or on behalf of others no holder of shares has or will have a readily available regular and ongoing opportunity to sell or exchange the shares through a public means of obtaining or providing information of offers to buy sell or exchange shares there is no plan or intention for the redemption of shares by z to be combined with the issuance of shares in z to a new partner partnership ruling sec_301_7701-3 provides that a business_entity that is not classified as a corporation under sec_301_7701-2 or an eligible_entity can elect its classification for federal tax purposes sec_301_7701-3 provides that unless it elects otherwise a domestic eligible_entity is classified as a partnership if it has two or more members x and y represent that z will have at least two members and will elect pursuant to sec_301_7701-3 to be classified as a partnership provided z ha sec_2 or more members and makes the entity classification election to be classified as a partnership z will be properly classified as a partnership for federal tax purposes publicly_traded_partnership ruling sec_7704 provides that except as provided in sec_7704 a publicly_traded_partnership will be treated as a corporation sec_7704 provides that the term publicly_traded_partnership means any partnership if interests in such partnership are traded on an established_securities_market and interests in such partnership are readily_tradable on a secondary market or the substantial equivalent thereof sec_1_7704-1 provides that for purposes of sec_7704 and sec_1_7704-1 an interest in a partnership includes a any interest in the capital or profits of the partnership including the right to partnership_distributions and b any financial_instrument or contract the value of which is determined in whole or in part by reference plr-132808-06 to the partnership including the amount of partnership_distributions the value of partnership assets or the results of partnership operations sec_1_7704-1 provides that for purposes of sec_7704 and sec_1_7704-1 a transfer of an interest in a partnership means a transfer in any form including a redemption by the partnership or the entering into of a financial_instrument or contract described in sec_1_7704-1 sec_1_7704-1 provides that for purposes of sec_7704 and sec_1_7704-1 interests in a partnership that are not traded on an established_securities_market within the meaning of sec_7704 and sec_1_7704-1 are readily_tradable on a secondary market or the substantial equivalent thereof if taking into account all of the facts and circumstances the partners are readily able to buy sell or exchange their partnership interests in a manner that is comparable economically to trading on an established_securities_market sec_1_7704-1 provides that for purposes of sec_1_7704-1 interests in a partnership are readily_tradable on a secondary market or the substantial equivalent thereof if i interests in the partnership are regularly quoted by any person such as a broker or dealer making a market in the interests ii any person regularly makes available to the public including customers or subscribers bid or offer quotes with respect to interests in the partnership and stands ready to effect buy or sell transactions at the quoted prices for itself or on behalf of others iii the holder of an interest in the partnership has a readily available regular and ongoing opportunity to sell or exchange the interest through a public means of obtaining or providing information of offers to buy sell or exchange interests in the partnership or iv prospective buyers and sellers otherwise have the opportunity to buy sell or exchange interests in the partnership in a time frame and with the regularity and continuity that is comparable to that described in the other provisions of sec_1_7704-1 sec_1_7704-1 provides that for purposes of sec_7704 and sec_1_7704-1 interests in a partnership are not traded on an established_securities_market within the meaning of sec_1_7704-1 and are not readily_tradable on a secondary market or the substantial equivalent thereof within the meaning of sec_1_7704-1 even if interests in the partnership are traded or readily_tradable in a manner described in sec_1_7704-1 or c unless the partnership participates in the establishment of the market or the inclusion of its interests thereon or the partnership recognizes any transfers made on the market by i redeeming the transferor partner in the case of a redemption or repurchase by the partnership or ii admitting the transferee as a partner or otherwise recognizing any rights of the transferee such as a right of the transferee to receive partnership_distributions directly or indirectly or to acquire an interest in the capital or profits of the partnership the shares sold by x to the segregated_asset accounts of other insurance_companies plr-132808-06 are interests in the capital or profits of the portfolios therefore the shares are partnership interests for purposes of sec_7704 see sec_1_7704-1 the sale of shares to the segregated_asset accounts of other insurance_companies does not fall within the definition of trading on an established_securities_market as defined in sec_7704 and sec_1_7704-1 additionally shares may only be sold to the segregated_asset accounts of other insurance_companies and i are not regularly quoted by any person such as a broker or dealer making a market in the interests ii no person regularly makes available to the public including customers or subscribers bid or offer quotes with respect to the shares and stands ready to effect buy or sell transactions at the quoted prices for itself or on behalf of others iii the unit holder does not have a readily available regular and ongoing opportunity to sell or exchange the interest through a public means of obtaining or providing information of offers to buy sell or exchange interests in the partnership or iv prospective buyers and sellers do not otherwise have the opportunity to buy sell or exchange shares in a time frame and with the regularity and continuity that is comparable to that described in the other provisions of sec_1_7704-1 the shares are not traded on an established_securities_market and the shares are not readily_tradable on a secondary market or substantial equivalent thereof therefore based solely on the information submitted and the representations made we conclude that after z elects to be classified as a partnership z will not be a publicly_traded_partnership except as specifically set forth above no opinion is expressed or implied 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 who requested it sec_6110 provides that it may not be used or cited as precedent plr-132808-06 pursuant to the power_of_attorney on file with this office a copy of this letter is being sent to z’s authorized representatives sincerely dianna k miosi chief branch office of the associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes


department of the treasury internal_revenue_service attn mandatory review mc dal commerce street dallas tx release number release date legend org name of organization address address of organization year xx uil date date ein person to contact id number contact numbers voice fax certified mail - return receipt requested dear in a determination_letter dated august you were held to be exempt from federal_income_tax under sec_501 of the internal_revenue_code based on recent information received we have determined you have not operated in accordance with the provisions of sec_501 of the code accordingly your exemption from federal_income_tax is revoked effective january 20xx this is a final adverse determination_letter with regard to your status under sec_501 of the code we previously provided you a report of examination explaining why we believe revocation of your exempt status is necessary at that time we informed you of your right to contact the taxpayer_advocate as well as your appeal rights on august 20xx you signed form 6018-a consent to proposed action agreeing to the revocation of your exempt status under sec_501 of the code you are therefore required to file form_1120 u s_corporation income_tax return for the years ended december 20xx and 20xx with the ogden service_center for future periods you are required to file form_1120 with the appropriate service_center indicated in the instructions for the return you have the right to contact the office_of_the_taxpayer_advocate taxpayer_advocate assistance is not a substitute for established irs procedures such as the formal appeals process the taxpayer_advocate cannot reverse a legally correct_tax determination or extend the time fixed by law that you have to file a petition in a united_states court the taxpayer_advocate can however see that a tax matter that may not have 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 if you have any questions please contact the person whose name and telephone number are shown at the beginning of this letter sincerely renee b wells acting director eo examinations form_8 a department of the treasury - internal_revenue_service explanation of items name of taxpayer org schedule no or exhibit year period ended 20xx12 20xx12 legend org name of org state name of state partner name of for-profit partner year xxx issue whether the tax exempt status of an organization that operates a golf course and engages in activities with the general_public should be revoked brief explanation of facts the organization is recognized as a sec_501 tax exempt_organization according to its statement of exempt_purpose the organization is to maintain grounds suitable for the playing of golf and to promote social relations between its members there are several classes of membership these include full full family senior monday - friday junior dependants and social the club is located in state and contains a club house snack bar banquet hall the club entered into an agreement with partner _ whereas partner is to operate the bar and banquet facilities of the club the club would still pay utilities etc partner paid the club dollar_figure _ for this use in 20xx all alcohol food hired help etc was provided by partner the majority of the organizations income is generated through green fees membership dues cart rentals and rental of the banquet hall snack bar the club advertises that golfing is open to the public no records are kept showing member or non member participation a non member use test was performed based on records provided by the club this test resulted in non member use of limited to in 20xx in 20xx and in 20xx a non member income test was also performed this test resulted in nonmember income of limited to non member income as member green fees are included in the member dues cart use is paid for by all member or non member no records are kept of this separation so all cart rental income is determined to be non member likewise as records per revproc_71_17 are not kept income from the rental to partner is also non member income in 20xx in 20xx and in 20xx green fees were determined to be all sec_1 c b department of the treasury - internal_revenue_service form 886-a ev law ae page -1- form_8 a department of the treasury - internal_revenue_service explanation of items name of taxpayer org schedule no or exhibit year period ended 20xx12 20xx12 a club which engages in business such as making its social and recreational facilities available to the general_public or by selling real_estate timber or other products is not organized and operated exclusively for pleasure recreation and other non profitable purposes and is not exempt under sec_501 solicitation by advertisement or otherwise for public patronage of its facilities is prima facie evidence that the club is engaging in business and is not being operated exclusively for pleasure recreation or social purposes however an incidental sale of property will not deprive a club of its exemption p l social clubs are permitted to receive a certain amount of income from the general_public and investments substantially_all was substituted for exclusively in sec_501 the following table explains the consequences of receiving income from outside of the club membership if the organization then receive sec_35 of its receipts from investments the organization may maintain its exemption under sec_501 the organization may maintain its exemption under sec_501 receives of its gross_receipts from outside its membership and no under sec_501 more than of its gross_receipts are derived from nonmember use of club facilities the organization may maintain its exemption the organization may maintain its exempt status if it can show through facts and circumstances that substantially_all of its activities are for pleasure recreation and other nonprofitable purposes revrul_60_324 1960_2_cb_173 use by outside organizations-a social_club exempt from federal_income_tax under sec_501 may lose its exemption if it makes its club facilities available to the general_public on a regular recurring basis since it may then no longer be considered to be organized and operated exclusively for its exempt department of the treasury - internal_revenue_service page -2- exceeds the and or limitations receives no more than of its gross_receipts from nonmember use of club facilities and or services form 886-a crev form_8 a department of the treasury - internal_revenue_service explanation of items name of taxpayer org schedule no or exhibit year period ended 20xx12 20xx12 purpose revrul_66_149 1966_1_cb_146 holds a social_club not exempt as an organization described in sec_501 where it regularly derives a substantial part of its income from nonmember sources such as for example dividends and interest on investments it owns revproc_71_17 c b nonmember use of facilities guidelines and recordkeeping requirements-revenue procedure describes the record-keeping requirements for social clubs exempt under sec_501 with respect to nonmember use of their facilities it sets forth guidelines for determining the effect of gross_receipts derived from public use of the club’s facilities on exemption and liability for unrelated_business_income_tax solicitation of the general_public to utilize club facilities will disqualify the social_club for tax exemption keystone automobile club v commissioner 345_f2d_52 polish american club inc vy commissioner 33_tcm_925 revenue derived from non members is used to benefit members since the outside revenue permits ihe club to assess lower dues than would otherwise be required to support the clubs facilities and operations pittsburgh press club v united_states f 2d pincite taxpayer’s position the treasurer of the organization agrees that there is a substantial amount of non member income received by the country club she has also stated that this income is needed to keep the club operating at a successful level the treasurer stated that with the boards approval she would agree to a revocation of exempt status and have a cpa firm prepare form 1120’s for tax years 20xx and 20xx government ’s position based on the facts of the examination the organization does not qualify for exemption because it engages in a business which makes its social and recreational facilities available to the general_public the organizations solicitation by advertisement or otherwise for public patronage of its facilities is prima facie evidence that the club is engaging in business and is not being operated exclusively for pleasure recreation or social purposes if the club exceeds the test it form 886-a ev department of the treasury - internal_revenue_service page -3- form_8 a department of the treasury - internal_revenue_service explanation of items name of taxpayer org schedule no or exhibit year period ended 20xx12 20xx12 will maintain its exempt status only if it can show through facts and circumstances that substantially_all of its activities are for pleasure recreation and other non profitable purposes facts and circumstances show that for the years of 20xx through 20xx the club has derived to of its income from non member sources conclusion based on the foregoing reasons the organization does not qualify for exemption under sec_501 and its tax exempt status should be revoked a conference with irs management was offered but declined alternative issue in the alternative if the organization qualifies for exemption under sec_501 should they be subject_to the unrelated_business_income_tax under sec_512 brief explanation of facts the country club earns non member income through the selling of green fees renting of golf carts and the renting of its banquet hall and snack bar records are not kept per revproc_71_17 concerning member and non member income all of the expenses are related to either the golfing or rental income law sec_511 of the code provides for the taxation of unrelated_business_taxable_income or organizations described in sec_501 sec_512 provides for the taxation of all income other than exempt_function_income exempt_function_income is defined in sec_512 as gross_income from dues fees charges or similar amounts paid_by members of the organization as consideration for providing such members or their dependents or guests goods facilities or services in furtherance of the purposes constituting the basis for the exemption of the organization to which such income is paid non-exempt function income is all income that is not exempt_function_income non-exempt function income includes traditional income such as income from investments and food and beverage sales to non members as well as income from non-traditional activities such as the sale of liquor to members for off premises consumption form 886-a rev department of the treasury - internal_revenue_service page -4- form_886 a department of the treasury - internal_revenue_service explanation of items name of taxpayer org schedule no or exhibit year period ended 20xx12 20xx12 taxpayer’s position the organization agrees to a revocation of exempt status however they also agree that if revocation is not upheld form 990-t’s should be prepared to disclose non member income and expenses government ’s position the country club earns non member income through the selling of green fees renting of golf carts and the renting of its banquet hall and snack bar records are not kept per revproc_71_17 concerning member and non member income as such the organization is subject_to unrelated_business_income_tax as described in sec_512 of the internal_revenue_code conclusion as an alternative position the income classified as non exempt_function_income should be unrelated_business_taxable_income reported on form 990-t department of the treasury - internal_revenue_service form 886-a crev page -5-


t c summary opinion united_states tax_court russell e and catherine i mcleod petitioners v commissioner of internal revenue respondent docket no 21991-06s filed date russell e and catherine i mcleod pro_se joline m wang for respondent morrison judge this case was heard pursuant to the provisions of sec_7463 of the internal_revenue_code in effect when the petition was filed pursuant to sec_7463 the decision to be entered is not reviewable by any other court and this opinion shall not be treated as precedent for any other case all section references are to the internal_revenue_code in effect for the years in issue and all rule references are to the tax_court rules_of_practice and procedure unless otherwise indicated russell e and catherine i mcleod the mcleods filed a petition in the tax_court challenging the deficiencies in income taxes and penalties that the irs determined for their and tax years this case was scheduled for trial during the trial session of the court at wichita kansas on date the mcleods appeared at the trial session but were unprepared for trial they moved for a continuance the court ordered a continuance on date to encourage the progress of the case the court also ordered the mcleods to submit to respondent any and all evidence on which they wished to rely by date the order of the court barred the mcleods from introducing any evidence that had not been provided to respondent by that date on date respondent advised the court that he had not received any documents from the mcleods by the court’s date deadline then on date respondent moved for summary_judgment the motion hinged on respondent’s contention that the effect of the court’s date order precludes the petitioners from introducing any evidence with respect to the and deductions that were disallowed in the notice_of_deficiency on date the court ordered the mcleods to respond to the motion for summary_judgment on date the mcleods’ response to the motion was filed no documents or affidavits were attached to the response in their response the mcleods claimed that they had mailed to respondent three letters each with attached documents that substantiated the deductions at issue the court ordered the mcleods to file with the court copies of the august letters the deadline for this supplemental filing was date the court received no such submission the parties dispute whether the mcleods met the date deadline for delivering documents to respondent the mcleods claim they sent letters and documents on date respondent claims that he received no documents to resolve the dispute the court ordered the mcleods to file the august letters that they said they sent to respondent the mcleods failed to file the august letters with the court the court finds that the mcleods failed to deliver any documents to respondent therefore the may order precludes the mcleods from relying on any documents in contesting the respondent’s motion for summary_judgment thus prohibited from introducing any documents to contest respondent’s motion for summary_judgment the mcleods have failed to defeat the motion the motion for summary_judgment and its attached documents demonstrate to us that there is no genuine issue as to any material fact and that a decision may be rendered as a matter of law see rule b when such a demonstration is made the adverse_party here the mcleods must set forth specific facts showing that there is a genuine issue for trial and if the adverse_party does not so respond then a decision if appropriate may be entered against such party see rule d despite being given the opportunity the mcleods have failed to offer any evidence that the motion for summary_judgment should not be granted nor have they offered any argument contesting the legal theories upon which the motion for summary_judgment is founded the motion for summary_judgment shall therefore be granted a decision will be entered that a there is a dollar_figure deficiency in petitioners’ income_tax for the tax_year b petitioners are liable for a dollar_figure penalty under sec_6662 for the tax_year c there i sec_1respondent sucessfully carried his burden of producing evidence that the mcleods were liable for the penalties see sec_7491 a dollar_figure deficiency in petitioners’ income_tax for the tax_year and that d petitioners are liable for a dollar_figure penalty under sec_6662 for the tax_year an appropriate order and decision will be entered


internal_revenue_service number release date index number -------------------------------------- ----------------------- ------------------------------- re ------------------------------------------ department of the treasury washington dc third party communication none date of communication not applicable_person to contact ---------------- id no ------------------ telephone number ---------------------- refer reply to cc psi plr-110405-15 date date legend trust decedent spouse state date date x y dear ------------------ --------------------------------------------------------------------- ----------------------------- ------------------------ ------------ ------------------- -------------------------- --------------- ------------ this letter responds to your letter of date and subsequent correspondence requesting a ruling that pursuant to revproc_2001_38 2001_2_cb_124 the qualified_terminable_interest_property qtip_election made with respect to trust is a nullity for federal gift estate and generation-skipping_transfer gst tax purposes the facts and representations submitted are as follows decedent died testate on date survived by spouse and their children under the terms of article of decedent’s will trust was established and was to be funded by an amount that fully utilizes the federal unified_credit but no greater amount than is necessary to reduce to zero the smallest sum possible of federal estate_tax or state estate_tax payable as a result of decedent’s death under article a and b the trustee is to pay all the net_income from trust to spouse until her death and the trustee plr-110405-15 is to pay or apply to spouse as much of the trust principal as is necessary for her proper care and support maintenance health and education during her lifetime article d provides that the trustee has the power to appoint to spouse during any calendar_year property in the value of the greater of dollar_figure or percent of the aggregate value of the trust article e provides that spouse has a special power to appoint the remainder_interest of the trust to decedent’s children then living in equal or unequal shares exercisable in an instrument referencing decedent’s will or in spouse’s own will if spouse fails to exercise the special_power_of_appointment the remainder_interest of the trust shall be divided among her living children at the time of her death in equal shares article provides that decedent gives devises and bequests the rest and residue of decedent’s property which he owned at the time of his death whether real personal or mixed community or separate and wheresoever situated to spouse in fee simple pursuant to the terms of decedent’s will spouse received dollar_figurex outright in fee simple the remaining dollar_figurey of decedent’s gross_estate funded trust spouse as the executor of decedent’s estate timely filed a form_706 united_states estate and generation-skipping_transfer_tax return all of the assets of trust were included on schedule m bequests to surviving_spouse all of the assets other than the assets that funded trust passed to spouse outright pursuant to article by listing the assets of trust on schedule m the executor made a qtip_election with respect to those assets decedent’s estate received an estate_tax closing letter on date indicating that no tax was due law and analysis sec_2001 imposes a tax on the transfer of the taxable_estate of every decedent who is a citizen or resident_of_the_united_states sec_2056 provides that except as limited by sec_2056 the value of the taxable_estate is to be determined by deducting from the value of the gross_estate an amount equal to the value of any interest in property that passes or has passed_from_the_decedent to the surviving_spouse but only to the extent that such interest is included in determining the value of the gross_estate sec_2056 provides the general_rule that a marital_deduction is not allowed for an interest passing to the surviving_spouse that is a terminable_interest an interest is a terminable_interest if the interest passing to the surviving_spouse will terminate or fail on the lapse of time or on the occurrence of an event or contingency or on the failure of an event or contingency to occur and on termination an interest in the property passes to someone other than the surviving_spouse sec_2056 provides an exception to the terminable_interest_rule in the case of qtip for purposes of sec_2056 qtip is treated as passing to the surviving_spouse plr-110405-15 and no part of the property is treated as passing to any person other than the surviving_spouse under sec_2056 qtip is property which passes from the decedent in which the surviving_spouse has a qualifying_income_interest_for_life and to which an election under sec_2056 applies sec_2056 provides that the election to treat property as qtip under sec_2056 is made by the executor on the return of tax imposed by sec_2001 the election once made is irrevocable sec_2044 provides that the value of the gross_estate includes the value of any property in which the decedent had a qualifying_income_interest_for_life and with respect to which a deduction was allowed for the transfer of the property to the decedent under sec_2056 sec_2519 and b provide that any disposition of all or part of a qualifying_income_interest_for_life in any property with respect to which a deduction was allowed under sec_2056 is treated as a transfer of all interests in the property other than the qualifying_income interest sec_2652 provides that in the case of property subject_to an election under sec_2056 the surviving_spouse will be treated as the transferor of the property for generation-skipping_transfer gst tax purposes in the absence of a reverse_qtip_election under sec_2652 in general under revproc_2001_38 a qtip_election under sec_2056 will be treated as null and void for purposes of sec_2044 sec_2056 sec_2519 and sec_2652 where the election was not necessary to reduce the estate_tax liability to zero based on values as finally determined for federal estate_tax purposes the revenue_procedure provides an example where a qtip_election was made when the taxable_estate before allowance of the marital_deduction was less than the applicable_exclusion_amount under sec_2010 another example set forth in the revenue_procedure is where the decedent’s will provides for a credit_shelter_trust to be funded with an amount equal to the applicable_exclusion_amount under sec_2010 with the balance of the estate passing to a marital trust intended to qualify under sec_2056 the estate makes qtip elections with respect to both the credit_shelter_trust and the marital trust the qtip_election for the credit_shelter_trust was not necessary because no estate_tax would have been imposed whether or not the qtip_election was made for that trust see revproc_2001_38 sec_2 in this case the election under sec_2056 to treat the assets of trust as qtip was not necessary to reduce the estate_tax to zero because no estate_tax would have been imposed on the assets in trust whether or not the election was made if relief under revproc_2001_38 is granted the estate’s federal estate_tax liability will remain at zero after applying decedent’s unified_credit amount under sec_2010 plr-110405-15 because the qtip_election in this case was not necessary to reduce the estate_tax liability to zero revproc_2001_38 applies and the service will disregard the qtip_election with respect to trust and treat it as null and void for purposes of sec_2044 sec_2056 sec_2519 and sec_2652 accordingly the property for which the election is disregarded will not be includible in the spouse’s gross_estate under sec_2044 and spouse will not be treated as making a gift under sec_2519 if spouse disposes of the income_interest with respect to that property further spouse will not be treated as the transferor of the property in trust for gst tax purposes under sec_2652 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 in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative the rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination sincerely leslie h finlow senior technician reviewer branch passthroughs special industries enclosures


department of the treasury internal_revenue_service washington d c tax exempt and - government entities division release number release date date date res uniform issue list numbers _ contact person identification_number contact number employer_identification_number form required to be filed tax years dear this is our final_determination that you do not qualify for exemption from federal_income_tax as an organization described in internal_revenue_code sec_501 recently we sent you a ‘letter in response to your application that proposed an adverse determination the letter explained the facts law and rationale and gave you days to file a protest since we did not receive a protest within the requisite days the proposed adverse determination is now final you must file federal_income_tax returns on the form and for the years listed above within days of this letter unless you request an extension of time to file with their instructions and do not send them to this office result in a penalty file the returns in accordance failure_to_file the returns timely may we will make this letter and our proposed adverse determination_letter available for public inspection under code sec_6110 after deleting certain identifying information please read the enclosed notice notice of intention to disclose and review the two attached letters that show our proposed deletions if you disagree with our proposed deletions follow the instructions in notice if you agree with our deletions you do not need to take any further action if you have any questions about this letter please contact the person whose name and telephone number are shown in the heading of this letter federal_income_tax status and responsibilities please contact irs customer service at if you have any questions about your or the irs customer service number for businesses the irs customer service number for people with hearing impairments is sincerely karen schiller acting director exempt_organizations rulings and agreements department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division date date contact person uniform issue list numbers identification_number contact number fax number employer_identification_number legend date state year1 description description2 description3 description4 descriptiond x year2 dear we have considered your application_for recognition of exemption from federal_income_tax under internal_revenue_code sec_501 based on the information provided we have concluded that you do not qualify for exemption under sec_501 the basis for our conclusion is set forth below facts you were incorporated on date in state you state that you are a research and advocacy organization committed to educating the citizens of your state about the impact and or opporiuriity of important public policy issues believe are ‘extremely significant but have not garnered the level of public attention or debate you think is appropriate you seek to facilitate education and outreach to elected officials opinion leaders and other community stakeholders to elevate these issues in the public discourse in particular you plan to focus on issues that you you state that one of your primary activities is the promotion and advocacy of open debate on contemporary federal and state public policy issues specifically you state that your staff will undertake short- and long-term projects to initiate an honest and open public policy debate among the general_public concerning a particular issue of importance to you this activity involves the participation of your staff in the public debate on this issue as well as efforts to petition state leaders congress and the executive branch you state that this activity accounts for about of your time you state that you devote another of your time to public education through mass media communication such as your website your website is primarily devoted to raising funds for political advertisements your donate now webpage states t description1 donations the webpage goes on to state that description2 your website states that you are provides the following your take action now webpage n w r a description3 description2 description4 description description candidates description2 description3 description4 and description5 all reflect your position on your primary issue description1 you state that you spend about of your time locating and appealing to new contributors in year1 one week before the election you sent out a flier to educate the public the flier was in opposition to a candidate in that election one side of the flier has a statement criticizing the candidate with respect to your primary issue descriptioni the other side of the flier states this tuesday remember description1 the candidate is a member of the u s house of representatives and was running for reelection in year1 in or near the same district in which you are located you stated that you spent approximately dollar_figurex producing and disseminating this flier in year1 you had revenue of approximately dollar_figurex you expended approximately in the updated financial data for the three years you provided you state that you had revenue in year1 and year2 the two federal election years but you had no revenue in the non-federal election_year dollar_figurex on the flier previously described approximately dollar_figurex on a script and development of a television advertisement that did not air and approximately dollar_figurex on legal accounting and administrative costs approximately dollar_figurex on compensation to one of your directors in year2 you had revenue of approximately dollar_figurex of which you spent law sec_501 of the internal_revenue_code provides for the exemption from federal_income_tax of organizations not organized for profit but operated exclusively for the promotion of social welfare sec_1_501_c_4_-1 of the regulations provides that an organization is operated exclusively for the promotion of social welfare if it is primarily engaged in promoting in some way the common good and general welfare of the people of the community sec_1_501_c_4_-1 provides that the promotion of social welfare does not include direct or indirect participation in political campaigns on behalf of or in opposition to any candidate for public_office revrul_68_656 1968_2_cb_216 concluded that an organization that informs the public on controversial subjects and attempts to influence legislation germane to its program may qualify for exemption under sec_501 the organization sought changes in the law and educated the public about a currently illegal activity by circulating printed material and legislative proposals revrul_2004_6 2004_1_cb_328 analyzes six situations to determine whether the organization described in each has expended funds for a sec_527 exempt_function as a result of an advocacy communication on a public policy issue a sec_527 exempt_function means the function of influencing or attempting to influence the selection nomination election or appointment of any individual to any federal state or local public_office or office in a political_organization or the election of presidential or vice-presidential electors whether or not such individual or electors are selected nominated elected or appointed all the facts and circumstances must be considered when making this determination factors that tend to show that an advocacy communication on a public policy issue is for a sec_527 exempt_function include but are not limited to the following the communication identifies a candidate for public_office the timing of the communication coincides with an electoral campaign the communication targets voters in a particular election tie communication identifies that candidate’s position on the public policy issue that is the subject of the communication the position of the candidate on the public policy issue has been raised as distinguishing the candidate from others in the campaign either in the communication itself or in other public communications the communication is not part of an ongoing series of substantially_similar advocacy communications by the organization on the same issue e e factors that tend to show that an advocacy communication on a public policy issue is not for a sec_527 exempt_function include but are not limited to the following e e the absence of any one or more of the factors listed above the communication identifies specific_legislation or a specific event outside the control of the organization that the organization hopes to influence e e e the timing of the communication coincides with a specific event outside the control of the organization that the organization hopes to influence such as a legislative vote or other major legislative action for example a hearing before a legislative committee on the issue that is the subject of the communication the communication identifies the candidate solely as a government_official who is in a position to act on the public policy issue in connection with the specific event such as a legislator who is eligible to vote on the legislation the communication identifies the candidate solely in the list of key or principal sponsors of the legislation that is the subject of the communication revrul_2007_41 2007_1_cb_1421 analyze sec_21 situations to determine whether the organization described in each has directly or indirectly participated in a political campaign on behalf of or in opposition to a candidate for public_office considered when making this determination when determining whether a communication results in political campaign intervention key factors include all facts and circumstances are e e e e e wheiner the statement identifies one or more candidates for a given public_office whether the statement expresses approval or disapproval for one or more candidates’ positions and or actions whether the statement is delivered close in time to the election whether the statement makes reference to voting or an election whether the issue addressed in the communication has been raised as an issue distinguishing candidates for a given office whether the communication is part of an ongoing series of communications by the organization on the same issue that are made independent of the timing of any election whether the timing of the communication and identification of the candidate are related to a non-electoral event such as a scheduled vote on specific_legislation by an officeholder who also happens to be a candidate for public_office analysis based on our analysis of the information you submitted with your application we have determined that you are not operated exclusively for the promotion of social welfare within the meaning of sec_501 c because you are not primarily engaged in activities that promote social welfare therefore you do not qualify as an organization described in sec_501 sec_1_501_c_4_-1 provides that an organization is operated exclusively for the promotion of social welfare if it is primarily engaged in promoting in some way the common good and general welfare of the people of the community you have not established that you are primarily engaged in promoting the common good and general welfare of the people of the community you stated that your activities would primarily consist of the promotion and advocacy of open debate on contemporary federal and state public policy issues and public education through mass media communication such as your website you have not provided information regarding such activities and how they would further social welfare purposes rather the information provided about your activities indicates that you do not further social welfare purposes in year1 you spent approximately of your revenue on the production and distribution on a - flier that encouraged the defeat of a candidate for public_office your activities are unlike the organization in revrul_68_656 supra because your materials are accompanied by the identification of a candidate for public_office and discourage the public from voting for that particular candidate your production and distribution of the flier has multiple factors that are indicative of participation or intervention in political campaigns as described in revrul_2004_6 supra and revrul_2007_41 supra the flier identified a candidate for public_office the timing of the communication coincided with an electoral campaign the flier referred to the election day and the flier identified the candidate’s position on the public policy issue your production and distribution of the flier constituted direct political campaign intervention in opposition of a candidate for public_office your website is devoted to raising money for political advertisements to help elect members to congress that share your values this is political campaign intervention and does not further social welfare purposes you have not provided information to show that the development of the unaired television advertisements furthered social welfare purposes in year2 you spent of your revenue compensating one of your directors for his efforts coordinating your activities website fundraising and placement of public materials concerning your mission from year1 to year2 from the information you submitted with your application your activities were the production and distribution of the flier described above the operation of your website-both of which are political campaign intervention-and the creation of the unaired television advertisement which you did not establish furthered social welfare purposes therefore the compensation of your director for these activities does not further social welfare purposes conclusion in summary you are not operated primarily to promote social welfare because you have not established that your primary activities promote social welfare accordingly you do not qualify for exemption as an organization described in sec_501 and you must file federal_income_tax returns you have the right to file a protest if you believe this determination is incorrect to protest you must submit a statement of your views and fully explain your reasoning you must submit the statement signed by one of your officers within days from the date of this letter we will consider your statement and decide if the information affects our determination - your protest statement should be accompanied by the following declaration under penaities of perjury declare that have examined this protest statement including accompanying documents and to the best of my knowledge and belief the statement contains all the relevant facts and such facts are true correct and complete you also have a right to request a conference to discuss your protest this request should be made when you file your protest statement an attorney certified_public_accountant or an individual enrolled to practice before the internal_revenue_service may represent you want representation during the conference procedures you must file a proper power_of_attorney form_2848 power_of_attorney and declaration of representative if you have not already done so and power_of_attorney all forms and publications mentioned in this letter can be found at for more information about representation see publication practice_before_the_irs if you www irs gov forms and publications if you do not intend to protest this determination you do not need to take any further action if we do not hear from you within days we will issue a final adverse determination_letter that letter will provide information about filing tax returns and other matters please send your protest statement form_2848 and any supporting documents to this address you may also fax your statement using the fax number shown in the heading of this letter if you fax your statement please call the person identified in the heading of this letter to confirm that he or she received your fax if you have any questions please contact the person whose name and telephone number are shown in the heading of this letter sincerely karen schiller acting director eo rulings and agreements


t c summary opinion united_states tax_court joseph engesser petitioner v commissioner of internal revenue respondent docket no 12283-16s filed date howard chernoff for petitioner byron m huang for respondent summary opinion colvin judge this case was heard pursuant to the provisions of sec_7463 of the internal_revenue_code in effect when the petition was filed pursuant to sec_7463 the decision to be entered is not reviewable by any other court and this opinion shall not be treated as precedent for any other case respondent determined a deficiency of dollar_figure in petitioner’s federal_income_tax for the issues for decision are whether for petitioner may claim as a dependent his minor child h e and whether he is entitled to a child_tax_credit an earned_income_tax_credit and head_of_household filing_status with respect to h e respondent concedes that petitioner will prevail on these issues if h e had the same principal_place_of_abode as petitioner for more than one-half of we hold that she did background some of the facts have been stipulated and are so found petitioner resided in new jersey when he filed the petition 1unless otherwise indicated section references are to the internal_revenue_code as amended and in effect for the year at issue and rule references are to the tax_court rules_of_practice and procedure monetary amounts are rounded to the nearest dollar 2we refer to minor children by their initials see rule a petitioner and cerice anthony lived together from until late in or early in in what we will refer to as apartment e petitioner and ms anthony are the parents of h e a minor child born in petitioner and ms anthony never married petitioner continued to live in apartment e during the year at issue around the beginning of ms anthony moved from apartment e to her mother’s nearby apartment which we will refer to as apartment s ms anthony was removed from the lease for apartment e on date during petitioner worked at lowe’s and as a custodian at middlesex county college his work schedule at middlesex county college was from p m to p m on school days when petitioner worked those hours petitioner’s parents took care of h e after school and until petitioner finished work petitioner stopped working at middlesex county college at a time not specified in the record 3the street address and city name are not needed for purposes of deciding the factual issue in dispute a letter dated date from messina pediatrics states that h e was seen in that office on date date and date and that according to the records of that office h e resided at apartment e a u s postal service usps change_of address form dated date purports to change h e ’s address from apartment s to apartment e petitioner did not prepare the change_of address form and the record does not show who prepared it and submitted it to the usps petitioner’s and ms anthony’s tax returns for petitioner timely filed a form_1040 u s individual_income_tax_return for on that return petitioner claimed h e as a dependent and he claimed head_of_household filing_status a child_tax_credit and an earned_income_tax_credit with respect to h e petitioner did not submit a form_8332 release revocation of release of claim to exemption for child by custodial_parent with his form_1040 for tax_year ms anthony also claimed h e as a dependent on her form_1040 for tax_year there is no evidence that ms anthony submitted a form_8332 with her return and a letter from old bridge township public schools dated date states that h e lived at apartment e presumably meaning in date petitioner initiated a custody proceeding in in the superior court of new jersey on date the superior court ordered joint custody over h e for petitioner and ms anthony under this schedule each parent had custody over h e about one-half of the time the date order also said that ms anthony could claim h e as a dependent for and all odd-numbered years and petitioner could claim her as a dependent for and all even- numbered years on date the superior court revised the custody schedule reducing the time h e would be with petitioner discussion the issues for decision are whether for petitioner is entitled to claim h e as a dependent and whether he is entitled to a child_tax_credit an earned_income_tax_credit and head_of_household filing_status with respect to h e applicable tax rules a taxpayer is allowed a deduction for each individual who is a dependent as defined in sec_152 of the taxpayer for the taxable_year sec_151 c sec_152 defines the term dependent to include a qualifying_child or a qualifying_relative generally a qualifying_child must bear a specified relationship to the taxpayer eg be the taxpayer’s child have the same principal_place_of_abode as the taxpayer for more than one-half of the taxable_year meet certain age requirements not have provided over one-half of such individual’s own support for the relevant period and not have filed a joint_return for that year sec_152 respondent concedes that h e satisfies the age relationship and support requirements of sec_152 the parties dispute only whether h e lived with petitioner for more than one-half of sec_24 provides a tax_credit with respect to each qualifying_child of the taxpayer for whom the taxpayer is allowed a deduction under sec_151 the term qualifying_child is defined as a qualifying_child of the taxpayer as defined in sec_152 who has not attained age sec_24 sec_32 allows an eligible_individual an earned_income_tax_credit sec_32 defines an eligible_individual as an individual who has a qualifying_child for the taxable_year the term qualifying_child means a qualifying_child of the taxpayer as defined in sec_152 determined without regard to paragraph d thereof and sec_152 sec_32 sec_1 prescribes a relatively favorable tax schedule for a taxpayer who qualifies as a head_of_household a head_of_household as relevant herein is an individual taxpayer who is unmarried as of the close of the taxable_year and is not a surviving_spouse and maintains as his home a household that constitutes for more than one-half of the taxable_year the principal_place_of_abode as a member of such household of a a qualifying_child of the individual as defined in sec_152 determined without regard to sec_152 or b any other person who is a dependent of the taxpayer if the taxpayer is entitled to a deduction for the taxable_year for such person under sec_151 sec_2 respondent concedes that petitioner is entitled to prevail on all of these issues if h e had the same principal_place_of_abode as petitioner for more than one-half of whether h e had the same principal_place_of_abode as petitioner for more than one-half of respondent points out that the letter from messina pediatrics does not say where h e lived during most of the and custody orders do not give petitioner custody over h e for more than one-half of the time after date the usps change_of address form of unknown authorship says h e ’s address changed from apartment s to apartment e in date petitioner did not include a form_8332 with his form_1040 for and there were anomalies in petitioner’s testimony petitioner’s testimony this case will be decided in part on the basis of our assessment of the credibility of petitioner’s testimony that h e had the same principal_place_of_abode as petitioner for more than one-half of we decide whether a witness’ testimony is credible by relying on objective facts the reasonableness of the testimony the consistency of statements made by the witness and the demeanor of the witness see 140_us_417 338_f2d_602 9th cir aff’g 41_tc_593 330_f2d_119 5th cir 89_tc_105 ndollar_figure we may discount testimony which we find to be unworthy of belief see 87_tc_74 but we may not arbitrarily disregard testimony that is competent relevant and uncontradicted see 39_f3d_658 6th cir aff’g and remanding 99_tc_370 and tcmemo_1992_616 petitioner testified that h e resided with him in apartment e throughout petitioner also testified that ms anthony sometimes asked whether she could take h e for a period such as one or two days and that he always agreed to those requests respondent points out that saying h e lived with him during all of is inconsistent with petitioner’s testimony that h e sometimes spent some days with ms anthony but we do not believe those two statements undermine petitioner’s contention that h e had the same principal_place_of_abode as petitioner for more than one-half of documentary_evidence the letter from messina pediatrics shows that h e lived with petitioner during november and date the letter from h e ’s school shows that h e lived with petitioner in date we do not consider the date usps change_of address form because the record does not show who provided that information respondent infers from the and joint custody orders which resulted from a custody suit brought by petitioner that h e did not have the same principal_place_of_abode as petitioner for more than one-half of and that petitioner brought the custody case in order to expand the extent of his custody for h e however petitioner testified in effect that he initiated that suit because he wanted a more formalized custody arrangement petitioner’s account is credible on the basis of this record respondent points out that ms anthony claimed h e as a dependent and did not provide a form_8332 to petitioner waiving her right to do so but this seems no more noteworthy in establishing h e ’s residence than the fact that petitioner also claimed her as a dependent and apparently did not provide a form_8332 to ms anthony the gaps in the documentary_evidence for the documentary_evidence for and the anomalies in petitioner’s testimony do not undermine petitioner’s overall testimony conclusion on this record we find that h e had the same principal_place_of_abode as petitioner for more than one-half of thus h e was petitioner’s qualifying_child as defined in sec_152 for and in the light of respondent’s concessions petitioner is entitled to the dependency_exemption the child_tax_credit the earned_income_tax_credit and head_of_household filing_status with respect to h e for to reflect the foregoing decision will be entered for petitioner


t c memo united_states tax_court alfredo dominguez petitioner v commissioner of internal revenue respondent docket no filed date alfredo dominguez pro_se nancy l spitz for respondent memorandum opinion goldberg special_trial_judge respondent determined deficiencies in petitioner's federal income taxes in the amounts of dollar_figure and dollar_figure for the taxable years and respectively unless otherwise indicated section references are to the internal_revenue_code in effect for the years in issue - - the sole issue for determination is whether petitioner is entitled to the earned_income_credit for the tax years and this case was submitted fully stipulated the stipulation of facts and the attached exhibits are incorporated herein by this reference petitioner resided in immokalee florida when the petition in this case was filed during the years at issue petitioner was incarcerated at a penal institution petitioner listed his occupation as beggar on his and federal_income_tax return in petitioner received money from family and friends in the amount of dollar_figure in petitioner received money from family and friends in the amount of dollar_figure the family and friends who provided the money to petitioner had no expectation of repayment during the years in issue petitioner did not earn any income working for the prison petitioner reported income from begging in the amount of dollar_figure on his federal_income_tax return and claimed an earned_income_credit in the amount of dollar_figure likewise on his income_tax return petitioner reported income from begging in the amount of dollar_figure and claimed an earned_income_credit in the amount of dollar_figure petitioner is not entitled to the earned_income_credit he claimed on his and tax returns an eligible_individual is allowed an earned_income_credit for the taxable_year in an amount equal to the credit percentage of so much of the taxpayer's earned_income as does not exceed the earned_income amount see sec_32 harned income includes wages salaries tips and other employee compensation see sec_32 a the money petitioner received from begging does not meet the definition of earned_income provided by sec_32 rather the money petitioner received from his family and friends was received as a gift a gift is a transfer that proceeds from a ’detached and disinterested generosity ’ out of affection respect admiration charity or like impulses 363_us_278 quoting 351_us_243 in this case petitioner's friends and family did not have an expectation of repayment or economic benefit instead petitioner's family and friends transferred money to petitioner with a detached and disinterested generosity and out of charity with respect to the earned_income_credit petitioner had no earned_income and therefore is not entitled to the earned_income_credit decision will be entered for respondent


department of the treasury internal_revenue_service washington d c -- commissioner tax exempt and government entities divisiofdex no aug ep at t legend taxpayer a taxpayer b ira x ira y ira z company m company n company o sum p dear this letter is supplemented by additional correspondence dated submitted on your behalf by your authorized in response to a letter dated _ representative in which you request relief under sec_301_9100-3 of the procedure and administration regulations the regulations the following facts and representations have been submitted taxpayer b maintained ira x an individual_retirement_arrangement described in sec_408 of the internal revenue page the code with company m the amount converted from ira x to ira y was sum p code taxpayer b converted ira x into roth_ira y also with company m taxpayer b also rolled a legitimate roth_ira into ira y date ira y was transferred in a broker-to-broker transfer to ira z maintained by company n and administered by company o in date - in in march of taxpayer b realizing she was not eligible for the conversion because her and taxpayer a’s combined adjusted_gross_income exceeded the dollar_figure limit filed a request form with company n to recharacterize her roth_ira_conversion back to a traditional_ira due to administrative errors within company n was not completed recharacterization had not occurred and taxpayers a and b filed their combined federal_income_tax return b subsequently discovered that the recharacterization had not been completed of the regulations was submitted prior to the service’s discovering taxpayer b’s ineligibility to convert ira x into a roth_ira or taxpayer b’s failure to recharacterize roth_ira z back to a traditional_ira this request for relief under section taxpayer b was unaware that the the recharacterization taxpayer based on the above facts and representations you request a ruling that pursuant to sec_301_9100-3 of the regulations taxpayer b be granted a period of not more that six months from the date of this ruling letter to recharacterize roth_ira z to a traditional_ira with respect to your request for relief under section of the of the regulations sec_408a internal_revenue_code and sec_1_408a-5 of the income_tax regulations the i t regulations provide that except as otherwise provided by the secretary a taxpayer may elect to recharacterize an ira contribution made to one type of ira as having been made to another type of ira by making a trustee- to-trustee transfer of the ira contribution plus earnings to the other type of ira contribution is treated as having been made to the transferee ira and not the transferor ira and sec_1_408a-5 this recharacterization election generally must occur on or before the date prescribed by law including extensions for filing the taxpayer’s federal_income_tax return for the year of the contribution in a recharacterization the ira under sec_408a sec_1_408a-5 question and answer-6 of the i t regulations describes how a taxpayer makes the election to recharacterize the ira contribution to recharacterize an amount that has been converted from a traditional_ira toa page a the taxpayer must notify the roth_ira trustee of roth_ira the taxpayer’s intent to recharacterize the amount taxpayer must provide the trustee and the transferee trustee if different from the transferor trustee with specified information that is sufficient to effect the recharacterization and transfer the trustee must make the the code sec_408a provides in relevant part that an individual with adjusted_gross_income in excess of dollar_figure for a taxable_year is not permitted to make a qualified_rollover_contribution to a roth_ira from an individual_retirement_plan other than a roth_ira during that taxable_year sec_1_408a-4 question and answer-2 of the i t regulations provides in summary that an individual with modified adjusted gross in excess of dollar_figure for a taxable_year is not permitted to convert an amount to a roth_ira during a taxable_year sec_301_9100-1 sec_301_9100-2 and sec_301_9100-3 of the regulations provide guidance concerning requests for relief submitted to the service on or after december sec_301_9100-1 of the regulations provides that the commissioner of the internal_revenue_service in his discretion may grant a reasonable extension of time fixed by a regulation a revenue_ruling a revenue_procedure a notice or an announcement published in the internal_revenue_bulletin for the making of an election or application_for relief in respect of tax under among others subtitle a of the code sec_301_9100-2 lists certain elections for which section automatic extensions of time to file are granted of the regulations generally provides guidance with respect to the granting of relief with respect to those elections not referenced in section requested in this case is not referenced in section the relief sec_301_9100-3 of the regulations provides that applications for relief that fall within sec_301_9100-3 will be granted when the taxpayer provides sufficient evidence including affidavits described in sec_301_9100-3 to establish that good_faith and granting relief would not prejudice the interests of the government the taxpayer acted reasonably and in sec_301_9100-3 of the regulations provides that a taxpayer will be deemed to have acted reasonably and in good page ii if the taxpayer inadvertently if its request for sec_301_9100-1 relief is faith i filed before the failure to make a timely election is discovered by the service failed to make the election because of intervening events beyond the taxpayer's control make the election because after exercising reasonable diligence the taxpayer was unaware of the necessity for the election advice of the service or on a qualified_tax professional including a tax professional employed by the taxpayer and the tax professional failed to make or advise the taxpayer to make the taxpayer reasonably relied upon written the taxpayer reasonably relied if the taxpayer failed to the election iii iv v sec_301_9100-3 ii of the regulations provides that ordinarily the interests of the government will be treated as prejudiced and that ordinarily the service will not grant relief when tax years that would have been affected by the election had it been timely made are closed by the statute_of_limitations before the taxpayer’s receipt of a ruling granting relief under this section in this case taxpayers b was not eligible to convert traditional_ira x into roth_ira y since taxpayer a s and b’s combined modified_adjusted_gross_income for exceeded dollar_figure taxpayers a and b timely filed their joint federal_income_tax return therefore it determine whether the taxpayers are eligible for relief under ‘the provisions of sec_301_9100-3 of the regulations is necessary to in this case taxpayer b was ineligible to convert her ira x to roth_ira y since taxpayer a’s and taxpayer b’s combined adjusted_gross_income exceeded dollar_figure taxpayer b requested that her roth_ira be recharacterized as a traditional non-roth ira and until she discovered otherwise believed that the recharacterization had been completed realizing that the recharacterization had not been completed in a timely manner taxpayer b requested an extension of time to perform the recharacterization calendar_year is not a closed tax_year however upon with respect to your request for relief we believe that based on the information submitted and the representations contained herein the requirements of sec_301_9100-1 and sec_301_9100-3 of the regulations have been met b has acted reasonably and in good_faith with respect to making the election to recharacterize her roth_ira z as a traditional_ira you have met the requirements of clauses i sec_301_9100-3 of the regulations specifically the service has concluded that and that taxpayer therefore you and of a page are granted an extension of six months from the date of the issuance of this letter_ruling to so recharacterize this ruling assumes that that the above iras qualify under sec_408 of the code at all relevant times no opinion is expressed as to the tax treatment of the transaction described herein under the provisions of any other section of either the code or regulations which may be applicable thereto this letter is directed only to the taxpayer who requested it may not be used or cited as precedent sec_6110 k of the code provides that it pursuant to a power_of_attorney on file with this office a copy of this ruling letter is being sent to your authorized representative -- if vou have anv questions concerning this ruling please contact at at sincerely yours joyce e floyd manager employee_plans technical group tax_exempt_and_government_entities_division enclosures deleted copy of ruling letter notice of intention to disclose cc


department of the treasury i n t e r n al r e v e n u e s e r v i c e w ashington d c date of f i c e of c h i ef c ou n sel number info release date conex-130650-09 uil ----------------------- ------------------------------- ------------------------- dear ----------------- i am responding to your email dated date which you sent to irs governmental liaison gloria sutton upon referral by ---------------------------------------------- -------------------------------------- you asked for clarification of the rules applicable to the carryover of charitable_contributions made in and specifically you asked if there is any authority for a carryover of more than five years for a taxpayer who was widowed in for contributions made in and taxpayers may carry over excess charitable_contributions to the five succeeding taxable years sec_170 of the internal_revenue_code the code an exception to the 5-year carryover rule applies only to certain conservation contributions made in taxable years beginning after date and ending on or before date sec_170 of the code i am enclosing a copy of publication charitable_contributions which contains a discussion of the carryover rules on pages page refers to a special rule for widows and widowers however this rule only affects the amount of a carryover and does not increase the period for which a widow or widower may take a carryover sec_1_170a-10 of the income_tax regulations conex-130650-09 i hope this information is helpful if you have any questions please call me --------------- ------------------ or -------------------- at -------------------- sincerely john p moriarty chief branch office of associate chief_counsel income_tax accounting enclosure


internal_revenue_service number release date index numbers ------------------- ----------------------------------------------- ----------------------------------- ---------------------------------------------------- --------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact --------------------- id no ------------------ telephone number ---------------------- refer reply to cc corp b03 plr-128984-14 date date legend taxpayer ------------------------------------------------------------- -------------------------------------------------------------------- ------------------------------------ exchange state a ------------------------------------- -------------- dear ---------------- this letter responds to a date letter requesting rulings under sec_301 and sec_305 the information provided in that request and in later correspondence is summarized below the rulings contained in this letter are based upon facts and representations submitted on behalf of the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party this office has not verified any of the materials submitted in support of the request for rulings verification of the information representations and other data may be required as part of the audit process facts taxpayer incorporated in state a is an accrual basis taxpayer that files federal_income_tax returns as a real_estate_investment_trust reit on a calendar_year basis taxpayer for all relevant periods qualifies as a reit and intends to maintain such plr-128984-14 qualification taxpayer regularly distributes its earnings_and_profits as required under sec_857 taxpayer has one class of common_stock outstanding the common_stock that is publicly traded and listed on the exchange taxpayer intends to make a special dividend distribution to its shareholders with respect to its common_stock during the year proposed distribution taxpayer will make the proposed distribution in the form of a combination of common_stock and cash each shareholder will have the right to elect to receive its portion of the proposed distribution in the form of percent common_stock percent cash or a combination of stock and cash with between to percent in cash and the rest in stock if a shareholder fails to make a valid election that shareholder will be deemed to have made an election to receive percent cash if the total number of shares of common_stock for which an election to receive cash is made would result in the payment of cash in an aggregate amount that is less than or equal to the total amount of cash available in the proposed distribution the cash amount then each shareholder electing to receive cash will receive its portion of the proposed distribution entirely in cash if the total number of shares of common_stock for which an election to receive cash is made would result in the payment of cash in an aggregate amount that is in excess of the cash amount then each shareholder electing to receive cash will receive a prorated amount of cash and will receive the remainder of its portion of the proposed distribution in common_stock in no event will the total amount of the cash amount be less than percent of the aggregate value of the proposed distribution accordingly no shareholder electing to receive cash will receive less than percent of its portion of the proposed distribution in cash any cash paid in lieu of fractional shares of common_stock will not count towards the cash amount the calculation of the number of shares to be received by any shareholder will be determined over a period of up to two weeks ending as close as practicable to the payment_date based upon a formula utilizing market prices that is designed to equate in value the number of shares to be received with the amount of money that could be received instead for any shareholder participating in the common_stock dividend_reinvestment_plan drip the drip will apply only to the extent of the cash which the shareholder would have received in the proposed distribution in the absence of the drip taxpayer has no plan or intention to undergo any corporate_reorganization or other business combination in connection with or contemporaneously with the proposed distribution although taxpayer may have stock offerings that are unrelated to the proposed distribution plr-128984-14 rulings based solely upon the information submitted and the representations made we rule as follows on the proposed distribution the cash and common_stock distributed in the proposed distribution shall be treated as a distribution_of_property with respect to the common_stock to which sec_301 applies sec_301 and sec_305 the amount of the distribution of the stock received by any holder of common_stock electing to or otherwise receiving stock will be considered to equal the amount of money which could have been received instead sec_1 b caveats except as expressly provided herein no opinion is expressed or implied concerning the tax treatment of the proposed transaction under other provisions of the code and regulations or the tax treatment of any condition existing at the time of or effects resulting from the proposed distribution that are not specifically covered by the above rulings in particular no opinion is expressed with regard to whether taxpayer qualifies as a reit under subchapter_m of the code or whether the distributions made pursuant to the ruling will satisfy the required_distribution requirement under sec_4981 procedural statements 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 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 sincerely isaac w zimbalist isaac w zimbalist senior technician reviewer branch office of associate chief_counsel corporate