internal_revenue_service number release date index number ---------------------------------------------------- ---------------------------------------- ------------------------------------------------------------ --------- ------------------------------------------------------------ ---------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact ---------------------- id no ------------------ telephone number ---------------------- refer reply to cc psi b03 plr-135986-16 date date legend x ------------------------------------------- ----------------------------------------------------- y ----------------------------------- country ----------------------- date ------------------------ dear -------------- this letter responds to a letter dated date and subsequent correspondence submitted on behalf of x requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations to file an election under sec_301_7701-3 to be treated as a disregarded_entity for federal tax purposes the information submitted states that x was organized under the laws of country on date x has been and is currently wholly-owned by y x represents that it is a foreign_entity eligible to elect to be classified as a effective date however x failed to timely file form_8832 entity classification election to be treated as a disregarded_entity for federal tax purposes effective date sec_301_7701-3 provides that a business_entity with at least two members can elect to be classified either as an association and thus a corporation under sec_301_7701-2 or a partnership and an eligible_entity with a single owner can elect to be classified as an association or to be disregarded as an entity separate from its owner plr-135986-16 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_income_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 to elect to be classified other than as provided in sec_301_7701-3 an eligible_entity must file form_8832 with the designated service_center and that an entity classification election must be filed on form_8832 and can be effective up to days prior to the date the form is filed or up to twelve 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 months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301_9100-1 defines the term regulatory election as an election whose due_date is prescribed by a regulation published in the federal_register or a revenue_ruling revenue_procedure notice or announcement 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 the election sec_301_9100-2 provides the rules governing automatic extensions of time for making certain elections sec_301_9100-3 provides the standards the commissioner will use to determine whether to grant an extension of time for regulatory elections that do not meet the requirements of sec_301_9100-2 sec_301_9100-3 provides that a request for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and granting relief will not prejudice the interests of the government based solely on the information submitted and representations made we conclude that the requirements of sec_301_9100-3 have been satisfied as a result x is granted an extension of time of days from the date of this letter to file a form_8832 with the appropriate service_center and elect to be treated as a disregarded_entity effective date a copy of this letter should be attached to the form_8832 a copy is enclosed for that purpose plr-135986-16 this ruling is contingent on x having filed all relevant tax and information returns consistent with the granted relief with the appropriate service_center within days of the date of this ruling a copy of this letter should be attached to any such late or amended returns if x fails to comply with this requirement this letter_ruling will be null and void except as expressly provided herein we express or imply no opinion concerning the federal tax consequences of any aspect of any transaction or item discussed or referenced in this letter except as specifically set forth above we express or imply no opinion concerning the federal tax consequences of the facts discussed above under any other provision of the code and the regulations thereunder in addition sec_301_9100-1 provides that the granting of an extension of time for making an election is not a determination that the taxpayer is otherwise eligible to make the election this ruling is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent the ruling contained in this letter is 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 ruling_request it is subject_to verification on examination in accordance with the power_of_attorney on file with this office a copy of this letter_ruling will be sent to your authorized representatives sincerely associate chief_counsel passthroughs special industries by _____________________________ richard t probst senior technician reviewer branch office of the associate chief_counsel passthroughs special industries enclosures copy of this letter copy of this letter for sec_6110 purposes


number release date id office uilc cca_2009030611083719 ----------- from ---------------------- sent friday march am to ------------------------- cc subject your request for assistance in consultation with the counsel collection experts below is the analysis your requested to insert in your letter to the congressman if you need further assistance let me know a taxpayer is not entitled to a refund or a credit of the overpayment after the rsed the plain language of sec_6402 provides in the case of any overpayment the secretary within the applicable_period of limitations may credit the amount of such overpayment including any interest allowed thereon against any liability in respect of an internal revenue tax on the part of the person who made the overpayment and shall subject_to subsections c d e and f refund any balance to such person sec_6402 see also sec_301_6402-1 a recent tax_court case crum v commissioner tcmemo_2008_216 is similar to the present case in crum the service processed substitute for returns for and payments both voluntary and involuntary were applied to satisfy the liabilities years later the taxpayers filed returns for those years claiming overpayments in the context of an offer-in- compromise made during a cdp hearing in connection with later years the taxpayers asserted that the overpayments were available to partially satisfy the liabilities for the cdp years the tax_court held that because the rsed had expired the taxpayers’ claimed overpayments were not available for refund or for offset against liabilities for the cdp years in keeping with the statutory requirements of sec_6402 and sec_6511 numerous irm provisions state that time-barred overpayments must be forwarded to excess collections which is what the service did in this case see eg irm irm irm irm irm and irm voluntary and involuntary payments are not treated differently because the applicable code sections do not distinguish between voluntary and involuntary payments there are certain circumstances under which it matters whether payments are voluntary or involuntary such as designation of payments but sec_6401 and sec_6402 do not differentiate between the two for example crum cited above involved overpayments that resulted from both voluntary and involuntary payments in addition we note that that the present case involves levy proceeds does not implicate sec_6343 which provides for the return of levied property to the taxpayer under certain circumstances that provision is not applicable here under sec_6343 the service is authorized to return levy proceeds under certain circumstances the levy was premature or otherwise not in accordance with the service’s administrative procedures after the levy the taxpayer entered into an installment_agreement to satisfy the liability for which the levy was made the return of proceeds will facilitate the collection of the tax_liability for which the levy was made and the return of the proceeds would be in the best interests of the taxpayer and the best interests of the united_states none of those circumstances are present here moreover money levied upon can only be returned before the expiration of nine months from the date of the levy sec_6343 sec_301_6343-3 while this case does involve levy proceeds it is not a return of property case under sec_6343 rather it is a refund credit case under sec_6402 the applicable_period of limitations is set forth in sec_6511 of the code


department of the treasury employer_identification_number contact person - id contact telephone number uil internal_revenue_service p o box cincinnati ok number release date date date legend name of scholarship program geographical area membership_organization governmental_unit x grant amount dear we have considered your request for an update to your advance approval of a grant-making program under sec_4945 g of the internal_revenue_code dated date with a postmark date of date your original our records indicate that you were recognized as exempt from federal_income_tax under sec_501 of the code and that you were classified as a private_foundation as defined in sec_509 a in application explained your grant-making program and we gave advance approval at that time at some point you changed your program and are requesting an updated approval letter your etter indicates that you will aperate a grant-making program named b that will be awarding scholarships to academically qualified graduates of c high schools each recipient must use the scholarship proceeds to pay his her tuition at a 2-year or 4-year accredited junior college college or university the amount and number of scholarships awarded will vary however generally a scholarship may not exceed x per year per recipient a successful scholarship winner may reapply four successive years for renewal of the grant the screening committee selection committee makes public announcements annually and provides information about b to guidance counselors at each public and private high schooi in c release is given to local newspapers naming the recipients of the scholarships and notifying future high school seniors how to obtain information about b in addition a press the screening committee reviews the application determines the number of scholarships that shall be awarded determines the amount of each scholarship selects the scholarship recipients and advises the trustee of your foundation which students shall receive scholarships in making its selection the screening committee considers each applicant's scholastic tecord and intellectual achievement if the scholastic record and intellectual achievement of the applicants under consideration are substantially equal the screening committee may consider an applicant's financial need all scholarships are awarded on an objective and non-discriminatory basis no scholarships may be awarded to any individual who is related by blood adoption or marriage to any member of the screening committee or any disqualified_person of your foundation as a first cousin or nearer relative also the screening committee may not benefit directly or indirectly from selecting certain scholarship recipients over other potential scholarship recipients the members of the screening committee are composed of the superintendent of schools of c the president of d and the director of e the trustee of your foundation pays the scholarship proceeds directly to the educational_institution the recipient attends the trustee provides a letter to each educational_institution specifying that the educational_institution agrees to refund any unearned portion of a scholarship if subsequent to the payment of a scholarship a scholarship recipient fails to meet any term or condition of b and i notify the trustee if a scholarship recipient fails to meet any term or condition of b the selection criteria include essay high school honors activities notice of applicants acceptance from the chosen college letters of recommendation official transcript of their high school record letter regarding financial aid you have agreed to arrange to receive and review grantee reports annually and upon completion of the purpose for which the grant was awarded investigate diversions of funds from their intended purposes and take all reasonable and appropriate steps to recover diverted funds ensure other grant funds held by a grantee are used for their intended purposes and withhold further payments fo grantees until you obtain grantees’ assurances that future diversions will not occur and that grantees will take extraordinary precautions to prevent future diversions from occurring you have agreed to maintain all records relating to individual grants including information obtained to evaiuate grantees identify whether a grantee is a disqualified_person establish the amount and purpose of each grant and establish that you undertook the supervision and investigation of grants sec_4945 and b of the code impose certain excise_taxes on ‘taxable expenditures made by a private_foundation sec_4945 of the cade provides that the term taxable_expenditure means any amount_paid or incurred by a private_foundation as a grant to an individual for travel study or other similar purposes by such individual unless such grant satisfies the requirements of subsection g sec_4945 of the code provides that sec_4945 d shall not apply to individual grants awarded on an objective and nondiscriminatory basis pursuant to a procedure approved in advance if it is demonstrated that the grant constitutes a scholarship or fellowship_grant which is subject_to the provisions of sec_117 and is to be used for study at an educational_organization described in sec_170 1a i the grant constitutes a prize or award which is subject_to the provisions of sec_74 if the recipient of such prize or award is selected from the general_public or the purpose of the grant is to achieve a specific objective produce a report or similar product or improve or enhance a literary artistic musical scientific teaching or other similar capacity skill or talent of the grantee sec_53_4945-4 of the regulations provides that to secure approval a private_foundation must demonstrate that i ___ i i its grant procedure includes an objective and nondiscriminatory selection process such procedure is reasonably calculated to result in performance by grantees of the activities that the grants are intended to finance and the foundation plans to obtain reports to determine whether the grantees performed activities that the grants are intended to finance based on the information submitted and assuming your award programs will be conducted as proposed with a view to provide objectivity and nondiscrimination in making the awards we have determined that your procedures for granting the awards comply with the requirements contained in sec_4945 of the code and that awards granted in accordance with such procedures will not constitute taxable_expenditures within the meaning of sec_4945 in addition we have determined that awards made under your procedures are excludable from the gross_income of the recipients subject_to the limitations provided by sec_117 of the code this determination is conditioned on the understanding that there will be no material_change in the facts upon which it is based it is further conditioned on the premise that no grants will be awarded to foundation managers or members of the selection committee or for a purpose that is inconsistent with the purpase described in sec_176 b of the code the approval of your award program procedures herein constitutes a one- time approval of your system standards and procedures designed to result in awards which meet the requirements of sec_4945 of the code this determination only covers the grant programs described above thus approval shall apply to subsequent award programs only as long as the standards and procedures under which they are conducted do not differ materially from those described in your request any funds you distribute to individuals must be made on a true charitable basis in furtherance of the purposes for which you are organized therefore you should maintain adequate_records and case histories so that any or all award distributions can be substantiated upon request by the internal_revenue_service this determination is directed only to the organization that requested it sec_6110 of the code provides that it may not be used or cited as a precedent you must report any future changes in your grant making procedures please keep a copy of this letter in your permanent records we have sent a copy of this letter to your representative as indicated in your power_of_attorney if you have any questions please contact the person whose name and telephone number are shown above sincerely yours robert choi director exempt_organizations rulings and agreements


t c summary opinion united_states tax_court amanda n vu petitioner v commissioner of internal revenue respondent docket no 21661-14s filed date amanda n vu pro_se miles b fuller and stephen i josephy for respondent summary opinion ashford judge this case was heard pursuant to the provisions of sec_7463 of the internal_revenue_code in effect when the petition was filed unless otherwise indicated all section references are to the internal_revenue_code in effect at all relevant times and all rule references are to the tax_court rules_of_practice and procedure 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 this case is before the court on respondent’s motion to dismiss for lack of jurisdiction on the ground that the petition herein was not timely filed within the periods prescribed by sec_6015 as explained below we will grant respondent’s motion to dismiss background the petition underlying this proceeding was filed on date with the envelope in which the petition was mailed bearing a u s postal service postmark of date petitioner signed and dated the petition date petitioner resided in new mexico at the time the petition was filed with the court in her petition petitioner alleged disagreement with a notice_of_determination that she claimed was issued by respondent’s office in albuquerque new mexico on date attached to the petition was respondent’s innocent spouse relief lead sheet dated date with respect to the joint federal_income_tax return joint_return for petitioner and her then husband vincent t nguyen mr nguyen and designated workpaper the document reads in part conclusion reflects the final_determination on the issue conclusion for b note a summary of your conclusion should go here ensure that reference is made as to what factors are met if allowing or granting partial relief and what factors are not met it was concluded that the taxpayer does not meet innocent spouse relief under sec_6015 conclusion for c note a summary of your conclusion should go here ensure that reference is made as to what factors are met if allowing or denying partial relief and what factors are not met if disallowing or granting partial relief it was concluded that the taxpayer does not meet innocent spouse relief under sec_6015 conclusion for f note a summary of your conclusion should go here it was concluded that the taxpayer does not meet innocent spouse relief under sec_6015 according to the document petitioner and mr nguyen married in and divorced in conclusion for c it was concluded that the taxpayer does not meet innocent spouse relief under sec_66 in her petition petitioner stated that she disagreed with respondent’s determination to deny her relief from joint_and_several_liability on a joint_return and requested that the court grant her relief under sec_6015 c or f because she had no knowledge of the understatement_of_tax on the date the joint_return was filed mr nguyen handled all business and household finances and did not want her involved it would be inequitable to hold her liable for the deficiency and she would suffer economic hardship if equitable relief is not granted thereafter on date respondent filed a motion to dismiss for lack of jurisdiction on the ground that as of the date the petition herein was filed no notice_of_determination notice_of_deficiency or any other document required to form the basis for a petition in this court had been sent to petitioner with respect to the taxable_year shown in the petition in support of his motion respondent attached a copy of his certified mailing list ie the substitute u s postal service form_3877 reflecting that on date he mailed to petitioner at an mr nguyen did not intervene pursuant to sec_6015 and rule despite being given notice of the filing of the petition address in albuquerque new mexico letter designated final_determination which denied her relief from joint_and_several_liability under sec_6015 c and f for the taxable_year the certified mailing list also reflects that on the same day a joint notice_of_deficiency was mailed to petitioner and mr nguyen for the taxable_year to the same albuquerque new mexico address and to an address in rio rancho new mexico petitioner did not respond to respondent’s motion to dismiss despite an order of this court directing her to do so pursuant to notice this matter was called for hearing when the case was called from the calendar for the trial session in his answer filed date respondent denied that a notice_of_determination was issued by his albuquerque new mexico office on date and alleged that a notice_of_determination ie the above-referenced letter was issued by his phoenix arizona office on date attaching a copy of this document to his answer at the hearing on respondent’s motion petitioner admitted having received letter and having filed nothing further with the court in response to this letter on date in response to the joint notice_of_deficiency only mr nguyen filed a petition with this court disputing respondent’s determination for the taxable_year of a deficiency in petitioner and mr nguyen’s federal_income_tax of dollar_figure and an accuracy-related_penalty pursuant to sec_6662 of dollar_figure on date the court entered a stipulated decision ordering that pursuant to the agreement of the parties there is a deficiency in income_tax due from mr nguyen of dollar_figure and an accuracy-related_penalty under sec_6662 of dollar_figure for the taxable_year of the court at albuquerque new mexico on date petitioner and counsel for respondent appeared and were heard with regard to respondent’s motion to dismiss admitted into evidence at the hearing was a copy of petitioner’s form_8857 request for innocent spouse relief signed and dated by petitioner date and stamped received by respondent on date petitioner testified that a friend had assisted her with completing the form and that to her knowledge the friend who did not testify at the hearing mailed it out within like a week or so petitioner acknowledged that she should have mailed the form herself to have a record of when it was actually mailed but she did not do so regarding the innocent spouse relief lead sheet dated date the evidentiary record is silent as to this document except that respondent’s counsel at the hearing referred to it as the examiner’s report with respect to the issue of petitioner’s entitlement to relief from joint_and_several_liability neither petitioner nor respondent addressed how or when this document was provided to petitioner and when she actually received it petitioner also made no mention of the date notice_of_determination she claimed to be disputing instead she testified that she filed her petition with the court after having waited six months from the date she signed her request for relief date and not see ing any mail from the irs about their determination discussion this court is a court of limited jurisdiction sec_7442 85_tc_527 we may exercise our jurisdiction only to the extent expressly provided by statute 77_tc_1255 66_tc_61 nevertheless we have jurisdiction to determine in any case whether we have jurisdiction over that case 83_tc_309 69_tc_999 jurisdiction must be shown affirmatively and petitioner as the party invoking our jurisdiction has the burden of proving that we have jurisdiction over her case see eg 140_tc_210 holding that jurisdiction is determined at the time a petition is filed 140_tc_193 114_tc_268 aff’d 22_fedappx_837 9th cir 65_tc_346 la naval stores inc v commissioner 18_bta_533 15_bta_645 sec_6015 vests the court with jurisdiction to review actions for determination of relief from joint_and_several_liability under sec_6015 see rule b as with our jurisdiction over deficiency actions see sec_6213 congress has set specific time limits within which petitions for such review must be filed for this court to exercise jurisdiction over them sec_6015 132_tc_21 specifically sec_6015 provides as follows in general --in the case of an individual against whom a deficiency has been asserted and who elects to have subsection b or c apply or in the case of an individual who requests equitable relief under subsection f -- a in general --in addition to any other remedy provided by law the individual may petition the tax_court and the tax_court shall have jurisdiction to determine the appropriate relief available to the individual under this section if such petition is filed-- i at any time after the earlier of-- i the date the secretary mails by certified or registered mail to the taxpayer’s last_known_address notice of the secretary’s final_determination of relief available to the individual or ii the date which is months after the date such election is filed or request is made with the secretary and ii not later than the close of the 90th day after the date described in clause i i in other words there are two possible times within which a taxpayer can petition the tax_court and consequently the tax_court shall have jurisdiction to determine what sec_6015 relief if any is available to the taxpayer within days of the commissioner’s mailing of a notice of his final_determination of relief to the taxpayer or if the commissioner has not yet mailed such a notice at any point after six months has transpired since the taxpayer’s request for relief was filed or made with the commissioner assessing whether petitioner has met the requirements of sec_6015 thus requires us to determine two dates the date on which respondent mailed the notice of his final_determination to petitioner and the date on which petitioner’s request for relief from joint_and_several_liability on the form_8857 was filed or made with respondent mailing date of respondent’s notice of final_determination respondent presents clear evidence regarding the first date providing a copy of his certified mailing list showing that on date respondent mailed a final_determination letter to petitioner in her petition however petitioner alludes to two other possible dates stating therein that she disagrees with a notice_of_determination she claims that respondent issued on date and attaching to her petition respondent’s innocent spouse relief lead sheet dated date for her and mr nguyen’ sec_2011 taxable_year of these dates only a conclusion that date is the correct date could potentially confer jurisdiction on this court over the petition herein that is because although the petition was filed on date it bore a u s postal service postmark mailing date of date and under rule and sec_7502 it would have been treated as timely filed on its mailing date date the 88th day after date for the date date to be the correct date this would have required the petition to be filed or deemed filed on or before date and the date date makes the petition nearly a month premature as for the date date petitioner however did not present any evidence whatsoever showing that any relevant action occurred on date and has specifically failed to establish that respondent provided her the requisite final_determination notice on that date in particular petitioner failed to establish that respondent mailed by certified or registered mail to her last_known_address such a notice as is required by sec_6015 but we have stopped short of saying that improper mailing alone would invalidate an otherwise proper valid notice_of_determination and thus deprive this court of jurisdiction 130_tc_248 n because petitioner has not established that respondent mailed her any document on date that could feasibly constitute the requisite final_determination notice we need not address whether respondent’s innocent spouse relief lead sheet constitutes notice of respondent’s final_determination of relief under 130_tc_248 neither the statute nor the regulations prescribe the exact form or content of a notice of final_determination of relief under sec_6015 however a key factor is whether a claimed notice purport s to be a final notice_of_determination under sec_6015 consequently we hold that respondent’s final_determination letter dated date is the only such notice established in the record and the relevant date for purposes of sec_6015 is date filing or making date of petitioner’s sec_6015 request petitioner asserts that the second date should be date or some date shortly thereafter reflecting the date as of which she signed her sec_6015 request ie the form and her belief that the request was mailed not long after she signed it respondent on the other hand argues that by the terms of if we were to consider whether this document constitutes such notice though we would consider potentially persuasive that the document states that it r eflects the final_determination on the issue emphasis added and is written in the past tense implying that respondent’s consideration of petitioner’s form_8857 had been completed at that time sec_6015 and in the absence of other evidence date the date on which respondent received petitioner’s request is the operative second date the determination of which date controls here requires interpreting the use in sec_6015 of the words filed and made in general a document is filed when it is delivered to the proper official and by him received and filed 241_us_73 see 16_tc_262 sec_7502 enacted in provides an exception to that general_rule for documents subject_to a filing period or deadline that are mailed to the commissioner under sec_7502 such documents will be deemed filed on the postmark date see 65_tc_528 aff’d 546_f2d_725 7th cir see also 383_f3d_1187 10th cir discussing evidence necessary to invoke sec_7502 however this exception applies only to documents subject_to a filing period that the commissioner receives after the expiration of the filing period not documents that the commissioner otherwise receives on time 73_tc_249 see also 669_f2d_1342 9th cir a taxpayer’s sec_6015 request is subject_to a particular filing period based on the type of relief sought--full or partial relief under subsection b proportionate relief under subsection c or equitable relief under subsection f if relief is not available under subsection b or c a taxpayer seeking full or partial relief under subsection b must do so not later than the date which i sec_2 years after the date the secretary has begun collection activities against the taxpayer with respect to the joint liability sec_6015 a taxpayer seeking proportionate relief under subsection c may do so at any time after a deficiency for such year is asserted but not later than years after the date on which the secretary has begun collection activities with respect to the taxpayer sec_6015 a taxpayer seeking equitable relief under subsection f must do so before the expiration of the applicable_period of limitations either on collection if he or she is claiming relief from a liability generally years sec_6502 or on a refund claim generally years after he or she has filed the the internal_revenue_service has defined collection activities as the issuance of a sec_6330 notice an offset of an overpayment of the requesting spouse against a liability under sec_6402 the filing of a suit by the united_states against the requesting spouse for the collection of the joint tax_liability or the filing of a claim by the united_states in a court_proceeding in which the requesting spouse is a party or which involves property of the requesting spouse see sec_1_6015-5 income_tax regs applicable return or years after he or she has paid the applicable tax sec_6511 revproc_2013_34 sec_4 2013_43_irb_397 and against this backdrop together with the prescribed manner for requesting sec_6015 relief it is apparent that the words filed and made in sec_6015 are used interchangeably see sec_1_6015-5 income_tax regs we thus consider these words to have equivalent effect and hold that sec_7502 applies to the word made in sec_6015 in the same way as it applies to the word filed because petitioner’s form_8857 relates to her taxable_year and was filed before respondent initiated any collection action with respect to that year indeed before respondent even issued the joint notice_of_deficiency to petitioner and mr nguyen with respect to that year we find that respondent timely received the form on date sec_7502 therefore does not apply and the relevant date for sec_6015 is not six months after the alleged sec_1_6015-5 income_tax regs sets forth the manner for requesting relief providing that a requesting spouse must file form_8857 ‘request for innocent spouse relief’ or other specified form submit a written_statement containing the same information required on form_8857 which is signed under penalties of perjury or submit information in the manner prescribed by the treasury and irs in forms relevant revenue rulings revenue procedures or other published guidance emphasis added mailing date of the form but six months after the date of receipt of the form or date consequently we can exercise jurisdiction over the petition herein only if it was filed at any time after the earlier of date or date see sec_6015 and not later than date see sec_6015 because the petition was filed with the court on date it does not meet this requirement and we thus lack jurisdiction over it while we acknowledge that this is an inequitable result as petitioner filed her petition believing in good_faith that it was timely and her opportunity to file another petition has now expired we are unfortunately constrained by the statute and our role is to apply the tax laws as written see 85_tc_168 dollar_figure upon the court’s questioning at the hearing respondent’s counsel noted the existence of the doctrine_of substantial compliance see 132_tc_336 the substantial compliance doctrine is a narrow equitable doctrine that courts may apply to avoid hardship where a party establishes that the party intended to comply with a provision did everything reasonably possible to comply with the provision but did not comply with the provision because of a failure to meet the provision’s specific requirements see also 143_tc_83 premising application of doctrine on intent to comply with applicable_provision however we have applied this doctrine almost exclusively in cases where taxpayers intended to make an election in accordance with applicable procedural regulatory requirements but failed to comply precisely with those requirements see estate of chamberlain v continued accordingly we will dismiss this case for lack of jurisdiction to reflect the foregoing an order will be entered granting respondent’s motion to dismiss for lack of jurisdiction continued commissioner tcmemo_1999_181 and cases cited therein aff’d 9_fedappx_713 9th cir and have held that the doctrine does not apply where a requirement goes to the essence of a statute and must be met 69_tc_837 because the timing requirements of sec_6015 are jurisdictional 132_tc_21 they are unequivocally essential to the statute and we cannot set them aside out of equity


internal_revenue_service index number telephone number refer reply to cc dom fi p -plr-104957-99 date may legend company trust fund fund fund fund fund fund year a year b plr-104957-99 year c year d year e year f state dear this is in reply to a letter dated date seeking consent to revoke for year d and subsequent calendar years a previous election made by fund fund fund fund fund and fund collectively the funds under section e a of the internal_revenue_code additionally the funds request that the calculation of each of their required distributions of capital_gain_net_income under sec_4982 and e for the calendar_year ending december year d be determined on the basis of capital_gains_and_losses realized and recognized during the ten-month period from january year d through october year d trust is organized as a state business_trust and is registered with the securities_and_exchange_commission as an open-end management investment_company organized under the investment_company act of u s c sec_80a-1 et seq the’1940 act as a result of trust’s registration under the act each of the funds is also registered as an open-end management investment_company under the act securities act of u s c sec_77a et seq the act and each has elected and intends to continue to qualify for treatment as a regulated_investment_company ric under subchapter_m of the code in addition each of the funds has registered its shares pursuant to the the funds use an accrual_method of accounting for tax and financial_accounting purposes and use a calendar_year for tax purposes each of the funds elected pursuant to sec_4982 to use its tax_year ending on december in lieu of the 1-year period ending on october for purposes of calculating the required_distribution under sec_4982 and sec_4982 except for fund each of the funds made its election pursuant to sec_4982 on its initial return fund made its election in the first taxable_year in which an election under sec_4982 was made available the funds and the year in which they made their respective elections are as follows sb plr-104957-99 fund fund fund fund fund fund fund year election made year a year b year b year b year b year c each fund pursues its respective investment objectives by investing in a specified group of company's mutual funds representing different combinations of stocks bonds and cash investments and reflecting varying degrees of potential investment risk and reward the funds do not invest directly in a portfolio of securities except for temporary cash investments but rather in order to meet their objectives the funds invest in shares of other of company's mutual funds the funds do not employ investment advisors the determination of how each of the fund’s assets will be invested in certain of company’s mutual funds is made by the officers of each fund under the supervision of the board_of trustees pursuant to each fund’s investment objectives and policies at the time the funds originally made their respective elections each believed that the election under sec_4982 would relieve the administrative burdens associated with dual calculations of capital_gains_and_losses under the excise_tax and subchapter_m provisions of the code each fund’s experience however has been that the sec_4982 election has created additional administrative burdens and complexities primarily by limiting the fund's ability to buy and sell securities in the underlying funds in the normal course of business during the last part of december after the dividend declaration date losses for november and december to compute its required distributions for excise_tax purposes these gains and losses primarily arise from shareholder transactions that cannot be predicted with any reasonable degree of accuracy shareholder redemptions during the last part of december between the dividend declaration date and december may require a fund to sell its underlying fund investments to maintain the fund's targeted investment weightings in each underlying fund such sales result in gains or losses that affect the required_distribution for excise_tax purposes after the distribution has been declared additional net gains may result in an underdistribution that creates an excise_tax liability each fund must estimate its capital_gains and further the promulgation of treasury regulations coordinating the excise_tax and subchapter_m rules has greatly reduced the administrative burden referred to above accordingly each fund seeks consent to revoke its respective election to use its taxable_year the calendar_year for purposes of sec_4982 b and e of plr-104957-99 each fund represents that the desire to revoke its sec_4982 election is due to administrative and non-tax related financial burdens caused by the election it is not seeking to revoke its election for the purpose of preserving or securing a tax benefit it will neither benefit through hindsight nor prejudice the interests of the government as a result of being permitted to revoke its election it will not make a subsequent election under sec_4982 for five calendar years following the year of the grant of revocation law and analysis sec_4982 which was enacted as part of the tax_reform_act_of_1986 and is effective for tax years beginning after date imposes an excise_tax on every ric for each calendar_year equal to percent of the excess if any of the required_distribution for the calendar_year over the distributed_amount for the calendar_year sec_4982 defines the term required_distribution to mean with respect to any calendar_year the sum of percent of the ric’s ordinary_income for such calendar_year plus percent of its capital_gain_net_income for the 1-year period ending on october of such calendar_year sec_4982 provides that the amount determined under sec_4982 for any calendar_year shall be increased by the excess if any of the grossed up required_distribution for the preceding calendar_year over the distributed_amount for such preceding calendar_year sec_4982 defines grossed up required_distribution for any calendar_year to mean the required_distribution for such year determined by applying sec_4982 to such year but substituting percent for each percentage set forth in sec_4982 sec_4982 provides that if the tax_year of a ric ends with the month of november or december the ric may elect to have its capital_gain_net_income for its tax_year applied in lieu of the 1-year period ending on october of the calendar_year for purposes of satisfying the required_distribution defined in sec_4982 sec_4982 provides that once made such election may be revoked only with the consent of the secretary plr-104957-99 based upon the information submitted and the representations made we conclude that each fund's desire to revoke its election under sec_4982 of the code is because of administrative burdens and not because of any federal tax- related financial burden caused by the election none of the funds seek to revoke their election for the purpose of preserving or securing a federal tax_benefit additionally the funds will neither benefit through hindsight nor prejudice the interests of the government as a result of being permitted to revoke their elections conclusion accordingly pursuant to sec_4982 the secretary consents to the revocation of the election made by the funds under sec_4982 effective for calendar_year d and subsequent years distribution for calendar_year d for purposes of sec_4982 and e the capital_gain_net_income of the funds will be determined on the basis of the capital_gains_and_losses taken into account during the 10-month period from january year d through october year d see sec_4982 for the effect of this ruling on the treatment of any foreign_currency gains or losses in addition in calculating the required as a condition to the secretary's consent to the revocation pursuant to sec_4982 none of the funds may make a subsequent election under sec_4982 for a period of calendar years following the year to which the grant of revocation applies that is year e through year f except as specifically ruled upon above no opinion is expressed or implied as to any other federal excise or income_tax consequences this ruling is directed only to the taxpayers requesting it sec_6110 provides that it may not be used or cited as precedent of plr-104957-99 it is important that a copy of this letter be attached to the federal income and excise_tax return filed by each of the funds for the first year to which this ruling applies sincerely assistant chief_counsel financial institutions products by é william e blanchard senior technician reviewer branch enclosure copy of this letter copy for sec_6110 purposes


internal_revenue_service department of the treasury washington dc person to contact telephone number refer reply to cc corp b02-plr-110130-00 date date number release date index numbers legend parent sub sub sub sellers target target_affiliate date a date b date c date d country e country f business h company official in-house tax professional outside tax professional authorized representatives dear plr-110130-00 this is in response to your authorized representatives’ letter dated date requesting an extension of time under sec_301_9100-1 through of the procedure and administration regulations to file an election parent as united_states_shareholder of the foreign purchasing_corporation is requesting the extension of time to file a sec_338 election under sec_338 of the internal_revenue_code and sec_1_338-1 and g of the income_tax regulations with respect to the acquisition of the stock of target and the deemed acquisition of the stock of target_affiliate on date b such election with respect to the acquisition of the stock of target and the deemed acquisition of the stock of target_affiliate is sometimes hereinafter referred to as the election all citations in this letter to regulations under sec_338 are to the regulations as in effect on date b additional information was received in a letter dated date the material information submitted is summarized below parent is the common parent of a consolidated_group that files a federal_income_tax return on the basis of a taxable_year ending april sub a country e corporation that parent has elected to treat as a disregarded_entity is a wholly-owned subsidiary of parent sub a country f corporation is a wholly owned subsidiary of sub sub is a country f corporation and a wholly-owned subsidiary of sub prior to the acquisition target was wholly-owned by sellers individuals who are citizens of country f and who are not united sates shareholders within the meaning of sec_951 and target_affiliate was wholly-owned by target target and target_affiliate were country f corporations at the time of the acquisition it is represented that neither target nor target_affiliate filed united_states income_tax returns or were subject_to united_states taxation it is also represented that neither target nor target_affiliate was a controlled_foreign_corporation within the meaning of sec_957 was a passive_foreign_investment_company for which an election under sec_1295 was in effect was a foreign_corporation the stock ownership of which is described in sec_552 or was required under sec_1_6012-2 to file a u s income_tax return on date a sellers and parent entered into a stock purchase agreement for parent or its subsidiaries to acquire all of the sellers’ stock of target including the stock of target_affiliate held by target on date b pursuant to the stock purchase agreement sub acquired all of the stock of target from the sellers for cash in a fully taxable transaction it is represented that the acquisition of the stock of target and deemed acquisition of the stock of target_affiliate each qualified as a qualified_stock_purchase as defined in sec_338 and that parent was not related to target target_affiliate or target shareholders within the meaning of sec_338 following the acquisition sub merged into target under country f law parent target and target_affiliate are all engaged in business h parent intended to file the election the election was due on date c however for various reasons a valid election was not filed on date d which is after the due plr-110130-00 date for the election in-house tax professional and outside tax professional discovered that the election had not been filed subsequently this request was submitted under sec_301_9100-1 for an extension of time to file the election the period of limitations on assessments under sec_6501 has not expired for the taxable_year in which the acquisition occurred the taxable_year in which the election should have been filed or for any taxable years that would have been affected by the election had it been timely filed further it is represented that all returns were filed as if a valid election had been made and it was disclosed on such returns that relief was being requested under sec_301_9100-3 to make such election the applicable_taxable_year s has not been examined and the service has not discovered that the election was not timely filed sec_338 permits certain stock purchases to be treated as asset purchases if the purchasing_corporation makes or is treated as having made a sec_338 election under sec_338 and the acquisition is a qualified_stock_purchase sec_338 defines a qualified_stock_purchase as any transaction or series of transactions in which stock meeting the requirements of sec_1504 of one corporation is acquired by another corporation by purchase during the month acquisition period sec_338 provides that the term purchase means any acquisition of stock but only if i the basis of the stock in the hands of the purchasing_corporation is not determined i in whole or in part by reference to the adjusted_basis of such stock in the hands of the person from whom acquired or ii under sec_1014 relating to property_acquired_from_a_decedent ii the stock is not acquired in an exchange to which sec_351 sec_354 sec_355 or sec_356 applies and is not acquired in any other transaction described in regulations in which the transferor does not recognize the entire amount of the gain_or_loss realized on the transaction and iii the stock is not acquired from a person the ownership of whose stock would under sec_318 be attributed to the person acquiring such stock sec_1_338-1 provides that a purchasing_corporation makes a sec_338 election for target by filing a statement of sec_338 election on form_8023 in accordance with the instructions on the form the sec_338 election must be filed no later than the 15th day of the ninth month beginning after the month in which the acquisition_date occurs a sec_338 election is irrevocable sec_1_338-1 provides that a united_states_shareholder as defined in sec_951 of a foreign purchasing_corporation that is a controlled_foreign_corporation as defined in sec_957 taking into account sec_953 may file a statement of sec_338 election on behalf of the purchasing_corporation if the purchasing_corporation is not required under sec_1_6012-2 other than sec_1_6012-2 to file a united_states income_tax return for its taxable_year that includes the acquisition_date form_8023 must be filed as described in the form and its instructions and also must be attached to form_5471 filed with respect to the purchasing_corporation by each united_states_shareholder for the purchasing_corporation plr-110130-00 sec_1_338-2 provides that if an election under sec_338 is made for target old target is deemed to sell target’s assets and new target is deemed to acquire those assets sec_1_338-1 provides that the term target_affiliate has the same meaning as in sec_338 applied without sec_338 thus a corporation described in sec_338 is considered a target_affiliate for all purposes of sec_338 if a target_affiliate is acquired in a qualified_stock_purchase it is also a target under sec_338 new target’s deemed purchase of stock of another corporation is a purchase for purposes of sec_338 on the acquisition_date of target if new target’s deemed purchase causes a qualified_stock_purchase of the other corporation and if a sec_338 election is made for the other corporation the acquisition_date for the other corporation is the same as the acquisition_date of target however the deemed sale and purchase of the other corporation’s assets is considered to take place after the deemed sale and purchase of target’s assets see sec_1_338-2 sec_1_1502-77 provides that the common parent for all purposes other than for several purposes not relevant here shall be the sole agent for each subsidiary in the group duly authorized to act in its own name in all matters relating to the tax_liability for the consolidated_return_year see also form_8023 and the instructions thereto under sec_301_9100-1 the commissioner has discretion to grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301_9100-1 defines the term regulatory election as including an election whose due_date is prescribed by a regulation revenue_ruling revenue_procedure notice or announcement sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make a regulatory election sec_301_9100-1 sec_301_9100-2 provides automatic extensions of time for making certain elections sec_301_9100-3 provides extensions of time for making regulatory elections that do not meet the requirements of sec_301_9100-2 requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 in this case the time for filing the election is fixed by regulation ie sec_1 d therefore the commissioner has discretionary authority under sec_301_9100-1 to grant an extension of time for parent as united_states_shareholder of the foreign purchasing_corporation to file the election provided parent shows that it acted reasonably and in good_faith the requirements of sec_301_9100-1 through are satisfied and granting relief will not prejudice the interests of the government plr-110130-00 information affidavits and representations submitted by parent company official in-house tax professional outside tax professional and authorized representatives explain the circumstances that resulted in the failure_to_file the election the information establishes that all returns were filed as if a valid election had been made and it was disclosed on such returns that relief was being requested under sec_301_9100-3 to make such election the applicable_taxable_year s has not been examined and the service has not discovered that the election was not timely filed the information also establishes that competent tax professionals were responsible for the election and were aware of all relevant facts that parent relied on the tax professionals to make the election and that the interests of the government will not be prejudiced if relief is granted see sec_301_9100-3 and sec_301 b v based on the facts and information submitted including the representations made we conclude that parent has shown that it acted reasonably and in good_faith in failing to file the election the requirements of sec_301_9100-1 through have been satisfied and that granting relief will not prejudice the interests of the government accordingly an extension of time is granted under sec_301_9100-1 until days from the date_of_issuance of this letter for parent to file the election with respect to the acquisition of the stock of target and deemed acquisition of the stock of target_affiliate as described above the above extension of time is conditioned on the taxpayers' ie parent’s sub 1's sub 2's sub 5's target 3’s target_affiliate 3’s and sellers’ tax_liability if any being not lower in the aggregate for all years to which the election applies than it would have been if the election had been timely filed taking into account the time_value_of_money no opinion is expressed as to the taxpayers' tax_liability for the years involved a determination thereof will be made by the district director's office upon audit or examination of the federal_income_tax returns involved further no opinion is expressed as to the federal_income_tax effect if any if it is determined that taxpayers’ liability is lower sec_301_9100-3 parent should file the election in accordance with sec_1_338-1 ie a new election on form_8023 must be executed on or after the date of this letter which grants an extension and filed in accordance with the instructions to the form a copy of this letter should be attached to the election forms parent target and target_affiliate must report the transactions as sec_338 transactions on their applicable returns including the applicable separate returns for target and target_affiliate if they have not already so filed and they must attach to such returns or amend the applicable returns if they have already been filed to attach thereto a copy of the election form and a copy of this letter we express no opinion regarding whether the acquisition of the stock of target and deemed acquisition of the stock of target_affiliate qualify as qualified_stock purchases under sec_338 whether the acquisition of the stock of target plr-110130-00 and deemed acquisition of the stock of target_affiliate qualify for sec_338 treatment if the acquisition of the stock of target and deemed acquisition of the stock of target_affiliate qualify for sec_338 treatment as to the amount of gain_or_loss if any recognized by target and target_affiliate on the deemed asset sale or whether for purposes of sec_338 sub or sub is the corporate purchaser assuming that there is a purchase of the stock of target -- note however that same will not by itself affect qualification for sec_338 treatment because under either alternative there will be a corporate purchaser in addition we express no opinion as to the tax treatment or consequences of filing the election late under the provisions of any other section of the code and regulations or the tax treatment of any conditions existing at the time of or effects resulting from filing the election late that are not specifically set forth in the above ruling for purposes of granting relief under sec_301_9100-1 we relied on certain statements and representations made by the taxpayer and its employees however the district_director should verify all essential facts and computations moreover notwithstanding that an extension is granted under sec_301_9100-1 to file the election any penalties and interest that would otherwise be applicable shall still apply this ruling letter is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent copies of this letter are being sent to the representatives you designated on your power_of_attorney cc sincerely yours associate chief_counsel corporate by ken cohen acting chief branch


internal_revenue_service number release date index numbers ------------------------------ --------------------------- ---------------------------------- ----------------------------------- department of the treasury washington dc person to contact ------------------ id no ------------- telephone number --------------------- refer reply to cc corp b06 - plr-148678-03 date date --------------------------------------------------- ----------------------------------- ------------------------------ --------------------- legend distributing --------------------------------------------------------------- ----------------------------------------------------------- controlled ------------------------------------------------------ business x business y b c d e f x y a ------------------------------------------------------------- ---------------------- ---------- -------- --------- --------- ------- -------- ----- plr-148678-03 -------------------------- ---------------------- ------------------------- b c ------------------------------------------------------------- ------------------------ d ------------------------------------------------------------- dear -------------------- this letter responds to your letter dated date requesting rulings under sec_368 and sec_355 additional information was received in a letter dated date the information submitted is summarized below distributing is a corporation engaged in business x and business y a and b each own y c shares of the stock c and d each own x b shares of the stock a and b are brothers a is the father of c and b is the father of d the taxpayer has supplied financial information that indicates that each of business x and business y had gross_receipts and operating_expenses representative of the active_conduct_of_a_trade_or_business for each of the past five years a and c on the one hand and b and d on the other hand have divergent views as to the current operations and future direction of business x and business y in order to allow each shareholder to devote his undivided attention to the business in which he is more interested and proficient the parties have devised the following plan distributing will transfer all of the assets of business y to controlled in exchange for f shares of the controlled stock and the assumption by controlled of the associated liabilities the contribution distributing will distribute d shares of the controlled stock to b in exchange for all of his distributing stock distributing will distribute e shares of the controlled stock to d in exchange for all of his distributing stock the exchanges described in steps and are collectively characterized as the exchange the following representations have been made in connection with the proposed transaction a the total adjusted bases and the fair_market_value of the assets transferred to controlled by distributing each equals or exceeds the sum of the liabilities plr-148678-03 assumed by controlled plus any liabilities to which the transferred assets are subject as determined under sec_357 the liabilities assumed by controlled in the transaction and the liabilities to which the transferred assets are subject as determined under sec_357 were incurred in the ordinary course of business and are associated with the assets being transferred certain of the assets to be transferred to controlled may be sec_46 property as that phrase is defined in the internal_revenue_code the income_tax_liability for the taxable_year in which investment_credit_property including any building to which sec_47 applies is transferred will be adjusted pursuant to sec_50 or a or sec_47 as in effect before amendment by public law title 104_stat_1388 if applicable to reflect an early disposition of the property distributing neither accumulated its receivables nor made extraordinary payments of its payables in anticipation of the exchange no intercorporate debt will exist between distributing and controlled at the time of or subsequent to the exchange payments made in connection with continuing transactions if any between distributing and controlled will be for fair_market_value based on terms and conditions arrived at by the parties bargaining at arm’s-length no two parties to the transaction are investment companies as defined in sec_368 and iv no part of the consideration to be distributed by distributing will be received by a shareholder of distributing as a creditor employee or in any capacity other than that of a shareholder of distributing the fair_market_value of controlled stock to be received by b and d will be approximately equal to the fair_market_value of the distributing stock surrendered by them in the exchange the five years of financial information submitted on behalf of distributing is representative of its present operations and with regard to such corporation there have been no substantial operational changes since the date of the last financial statements submitted following the exchange distributing and controlled will each continue independently and with its separate employees the active_conduct of its respective businesses b c d e f g h i j k plr-148678-03 the distribution of controlled is primarily carried out for the following corporate business_purpose to permit each of the shareholders to devote his undivided attention to the business in which he is more interested and proficient thus enhancing the operation of each business the exchange is motivated in whole or substantial part by this corporate business_purpose there is no plan or intention by the shareholders of distributing or controlled to sell exchange transfer by gift or otherwise dispose_of any stock in or securities of either distributing or controlled after the exchange b and d will not acquire any distributing stock after the exchange b and d will not be shareholders employees officers or directors of distributing after the exchange a and c will not acquire any controlled stock after the exchange a and c will not be shareholders employees officers or directors of controlled after the exchange there is no plan or intention by either distributing or controlled directly or through any subsidiary_corporation to purchase any of its outstanding_stock after the exchange other than possibly upon the retirement disability or death of a shareholder for which there are no current plans or expectations there is no plan or intention to liquidate either distributing or controlled to merge either corporation with any other corporation or to sell or otherwise dispose_of the assets of either corporation after the exchange except in the ordinary course of business the gross assets of business x relied on to the satisfy the active_trade_or_business_requirement of section b to be conducted by distributing immediately_after_the_exchange will have a fair_market_value that is greater than five percent of the total fair_market_value of distributing’s gross assets at that time the gross assets of business y relied on to the satisfy the active_trade_or_business_requirement of section b to be conducted by controlled immediately_after_the_exchange will have a fair_market_value that is greater than five percent of the total fair_market_value of controlled’s gross assets at that time for purposes of sec_355 immediately_after_the_exchange no person or persons determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of distributing stock entitled to vote or percent or more of the total value of shares of all classes of distributing stock that was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the exchange l m n o p q r s plr-148678-03 t u v for purposes of sec_355 immediately_after_the_exchange no person or persons determined after applying sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of controlled stock entitled to vote or percent or more of the total value of shares of all classes of controlled stock that was either i acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the exchange or ii attributable to distributions on distributing stock that was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the exchange the exchange is not a part of a plan or series of related transactions within the meaning of sec_355 pursuant to which one or more persons will acquire directly or indirectly stock possessing percent or more of the total combined voting power of all classes of stock of either distributing or controlled entitled to vote or stock possessing percent or more of the total value of all classes of stock of either distributing or controlled distributing is not an s_corporation within the meaning of sec_1361 and there is no plan or intention by distributing or controlled to make an s_corporation_election pursuant to sec_1362 after the exchange based solely on the information submitted and the representations made we have concluded that the contribution followed by the exchange will constitute a reorganization within the meaning of sec_368 of the internal_revenue_code distributing and controlled will each be a party to the reorganization within the meaning of sec_368 no gain_or_loss will be recognized by distributing upon its receipt of f shares of the controlled stock in exchange for the transfer of assets to and the assumption_of_liabilities by controlled sec_361 and b and sec_357 no gain_or_loss will be recognized by controlled upon its receipt of assets in exchange for its issuance of f shares of the controlled stock sec_1032 controlled's basis in the assets received from distributing will equal the basis of such assets in the hands of distributing immediately prior to the transfer sec_362 the holding_period of each asset received by controlled from distributing will include the period during which distributing held such asset sec_1223 distributing will not recognize gain_or_loss on the exchange sec_361 plr-148678-03 no gain_or_loss will be recognized by and no amounts will be included in the income of b and d on the exchange sec_355 the basis of the controlled stock in the hands of b and d will in each case be the same as the basis of the distributing stock surrendered in exchange therefor sec_358 the holding_period of the controlled stock received by b and d will in each case include the holding_period of the distributing stock surrendered in exchange therefor provided that the distributing stock is held as a capital_asset on the day of the exchange sec_1223 distributing and controlled must properly allocate earnings_and_profits in accordance with sec_312 and sec_1_312-10 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 a copy of this letter must be attached to any income_tax return to which it is relevant 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 mary e goode mary e goode senior counsel branch office of associate chief_counsel corporate


id office uilc cca_2013020513424137 ---------- number release date from ------------------- sent tuesday february pm to ------------------------- cc -------------------------------------------------------------------------- subject re who can sign for a disregarded llc state law provides for who can sign for an llc ie a manager member usually state law says the members have management authority unless the operating_agreement provides otherwise husband is the sole owner and manager of the llc there would be no reason to have anyone else sign for the llc if the if you get the husband and wife to sign for themselves you don't need any agreement from the llc the case of a form 870-lt this is the better course of action since a pass-thru cannot bind indirect partners as to partner-level items in


internal_revenue_service department of the treasury number release date index number u i l no washington dc person to contact telephone number refer reply to cc psi plr-115071-00 date date legend company state shareholders a dear this letter responds to a letter dated date and subsequent correspondence requesting a ruling on behalf of company under sec_1362 of the internal_revenue_code the information submitted discloses that company was incorporated on a in state company has two shareholders shareholders it is represented that company has intended to be an s_corporation since its incorporation however company discovered that its s election had not been timely filed company requests a ruling under sec_1362 that its sec_1362 election will be treated as timely made for its taxable_year that begins on a sec_1362 provides that a small_business_corporation may elect to be an s_corporation sec_1362 explains when an s election will be effective generally if an s election is made within the first two and one half months of a corporation's taxable_year then that corporation will be treated as an s_corporation for the year in which the election is made sec_1362 provides that if an s election is made after the first two and one half months of a corporation's taxable_year then that corporation will not be treated as an s_corporation until the taxable_year following the year in which the s election is made plr-115071-00 sec_1362 provides that if no sec_1362 election is made for any taxable_year and the secretary determines that there was reasonable_cause for the failure to timely make such election then the secretary may treat such an election as timely made for such taxable_year and sec_1362 shall not apply applying the relevant law to the facts submitted and representations made we rule that company's sec_1362 election will be treated as timely made for its taxable_year that begins on a however this ruling is contingent on company filing form_2553 election by a small_business_corporation with an effective date of a with the appropriate service_center within days from the date of this ruling a copy of this letter should be attached to the form_2553 the rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination except as specifically set forth above we express no opinion concerning the federal tax consequences of the foregoing facts specifically we express no opinion on whether company otherwise qualifies as an s_corporation under a power_of_attorney on file with this office a copy of this letter is being sent to company’s authorized representative this ruling is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent sincerely yours mary beth collins assistant to the chief branch office of the associate chief_counsel passthroughs and special industries enclosure copy for sec_6110 purposes


department of the treasury internal_revenue_service number release date index number person to contact telephone number refer reply to cc psi - plr-165579-01 date date washington dc x a b d1 year dear this letter responds to a letter dated date and subsequent correspondence submitted on behalf of x requesting a ruling under sec_1362 of the internal_revenue_code the information submitted states that x was incorporated on d1 of year a and b are the shareholders of x the shareholders of x intended for x to be an s_corporation beginning in year however no timely completed form_2553 election by a small_business_corporation was filed on behalf of x for year sec_1362 of the code provides that if -- a an election under sec_1362 is made for any taxable_year after the date prescribed by sec_1362 for making such election for such taxable_year or no such election is made for any taxable_year and b the secretary determines that there was reasonable_cause for the failure to timely make such election the secretary may treat such an election as timely made for such taxable_year based solely on the facts and the representations submitted we conclude that x has established reasonable_cause for failing to make a timely election to be an s_corporation for x's year taxable_year accordingly provided that x makes an election to be an s_corporation by filing a completed form_2553 with the appropriate service plr-165579-01 center effective for its year taxable_year within days following the date of this letter then such election will be treated as timely made for x’s year taxable_year a copy of this letter should be attached to the form_2553 except as specifically set forth above no opinion is expressed concerning the federal tax consequences of the facts described above under any other provision of the code including whether x was or is a small_business_corporation under sec_1361 of the code this ruling is directed only to the taxpayer who requested it sec_6110 of the code provides that it may not be used or cited as precedent pursuant to a power_of_attorney on file with this office a copy of this letter is being sent to x and x’s other authorized representative sincerely yours matthew lay senior technician reviewer associate chief_counsel passthroughs and special industries branch enclosures copy of this letter copy for sec_6110 purposes


t c summary opinion united_states tax_court edward atlee howes petitioner v commissioner of internal revenue respondent docket no 262-04s filed date edward atlee howes pro_se julia l wahl for respondent armen special_trial_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 unless otherwise indicated all subsequent section references are to the internal_revenue_code in effect for the taxable years in issue and all rule references are to the tax_court rules_of_practice and procedure other court and this opinion shall not be treated as precedent for any other case respondent determined deficiencies in petitioner’s federal income taxes for and of dollar_figure dollar_figure and dollar_figure respectively the deficiencies stem generally from the disallowance of depreciation_deductions under sec_167 and the disallowance of disabled access credits under sec_44 on date after the parties had filed a comprehensive stipulation of facts this court issued an order to show cause why respondent’s determination as to the denial of the depreciation_deductions and the disabled access credits should not be sustained for the reasons discussed below we now make that order absolute a procedural history background this case commenced in date has been continued for trial on three separate occasions because of the pendency of related litigation sometimes referred to herein as the alpha telcom cases the related litigation has now been concluded and the decisions entered in those cases have become final in every instance the court has sustained the commissioner’s deficiency determination and in each of the cases in which the taxpayer appealed a u s court_of_appeals has affirmed the decision of this court see 124_tc_244 affd 469_f3d_436 5th cir 453_f3d_653 6th cir no court has held to the contrary in short this court and the courts of appeals have consistently held that a taxpayer’s investment in an arrangement involving pay telephones marketed by alpha telcom inc alpha telcom and its wholly owned subsidiary american telecommunications co inc atc did not support either a deduction for depreciation because the taxpayer did not have the requisite benefits_and_burdens_of_ownership to support a depreciable_interest in the pay telephones or a disabled_access_credit under sec_44 because such investment was not an eligible_access_expenditure on date the parties in the instant case filed a comprehensive stipulation of facts consisting of numbered paragraphs and exhibits the stipulation of facts and accompanying exhibits provide an evidentiary record for this case discussed more fully below that does not materially differ from the facts presented in the alpha telcom cases already decided by this court and the courts of appeal therefore on date we ordered the parties to show cause in writing why the court should not enter a decision sustaining respondent’s determination as to the denial of deductions for depreciation on the telephones and the denial of disabled access credits under sec_44 both pursuant to arevalo v commissioner supra and other relevant case law petitioner submitted a response to our order completely devoid of any factual analysis it contained only irrelevant statements and naked unsupported assertions that his case is somehow different from all of the other alpha telcom cases such a response is insufficient to persuade us that the order should not be made absolute see rule d requiring that a party must present specific facts showing that there is a genuine issue for trial in the summary_judgment context b the stipulated facts the following facts have been stipulated and they are so found we incorporate by reference the parties’ stipulation of facts and accompanying exhibits at the time the petition was filed edward atlee howes petitioner resided in naples florida on date petitioner entered into a contract with atc a wholly owned subsidiary of alpha telcom entitled telephone equipment purchase agreement atc pay telephone agreement under the terms of the atc pay telephone agreement petitioner paid dollar_figure to atc and atc provided petitioner with in the exhibits attached to the stipulation of facts atc sometimes refers to american telecommunications inc and sometimes to alpha telcom legal_title to two pay telephones the atc pay telephone agreement also included the following provision bill of sale and delivery a delivery by seller shall be considered complete upon delivery of the equipment to such place designated by owner b owner agrees to take delivery of installed equipment and location on site c upon delivery owner shall acquire all rights title and interest in and to the equipment purchased d owner authorizes atc to enter into such site agreement as may be deemed necessary to secure site e phones have approved installation under the american sic with disabilities act ada on the same day petitioner entered into a telephone services agreement alpha telcom service agreement under which petitioner agreed that alpha telcom would manage the two pay telephones because petitioner did not feel able to maintain the telephones himself he elected level iiii sic service this election meant that alpha telcom agreed to service and maintain the pay telephones for an initial term of years in exchange for percent of the pay telephones’ monthly adjusted gross revenue in the event that a pay telephone’s adjusted gross revenue was less than dollar_figure for the month alpha telcom would waive or reduce the 70-percent fee and pay petitioner at least dollar_figure so long as the equipment generated at least that amount in the event that a pay telephone’s adjusted gross revenue was less than dollar_figure for the month petitioner would receive percent of the revenue notwithstanding this formula alpha telcom made it a practice to pay dollar_figure per telephone regardless of the income actually produced additionally alpha telcom agreed to be bound by the buy back election to the alpha telcom service agreement the buy back election stated buy back election owner shall have the right to sell to alpha telcom inc each payphone upon the following terms and conditions in the first six months between the equipment delivery date and the exercise date for the buy back election the sale price shall be the owner’s original purchase_price less dollar_figure in months through it shall be the purchase_price less dollar_figure in months through it shall be the purchase_price less dollar_figure in month sec_25 through it shall be the purchase_price less dollar_figure and after months it shall be the full purchase_price under the alpha telcom service agreement alpha telcom negotiated the site agreement with the owner or leaseholder of the premises where the pay telephones were to be installed alpha telcom installed the telephones paid the insurance premiums on them collected and accounted for the revenues generated by the telephones paid vendor commissions and fees at some point atc sent petitioner an undated letter informing him that one of the telephones assigned to him and located at a business called art’s cafe had been replaced with one located at a black angus restaurant petitioner had no affiliation with either art’s café or black angus petitioner did not initiate this change and it was made without his prior knowledge or assent obtained all licenses needed to operate the telephones and took all actions necessary to keep the telephones in working order on date petitioner entered into a second telephone equipment purchase agreement contract with atc ostensibly purchasing two more telephones for dollar_figure each he again signed a services agreement and selected the level service again alpha telcom was responsible for all maintenance and petitioner was to receive dollar_figure per month per telephone petitioner was later informed that these two pay telephones were placed at an amateur baseball field in west warwick rhode island as was true with all of the pay telephones assigned to petitioner under this scheme alpha telcom negotiated for the placement of the telephones and petitioner was not involved in any way with those negotiations alpha telcom modified the pay telephones to be accessible to the disabled by adjusting the cord length so that the telephones would be accessible to the wheelchair bound and or by installing volume controls to make them more useful to the hearing impaired and or by reducing the height at which the telephones were installed alpha telcom represented to investor sec_4 the telephone equipment bill of sale and purchase agreement was left blank it did not actually identify in any way the telephones that would be assigned to petitioner additionally though the buy back election was slightly modified from its earlier form it still provided for a repurchase price of dollar_figure per telephone that the modifications made to the pay telephones complied with the requirements of the americans with disabilities act of ada publaw_101_336 104_stat_327 petitioner was not provided with a list of the modifications that were made to the pay telephones assigned to him and he did not know the cost of these modifications petitioner received monthly payments of dollar_figure per telephone in and from alpha telcom alpha telcom grew rapidly through its pay telephone program but was poorly managed and ultimately operated at a loss on date alpha telcom filed for bankruptcy under chapter of the bankruptcy code in the u s bankruptcy court for the southern district of florida the matter was later transferred to the u s bankruptcy court for the district of oregon on date on date petitioner filed a proof_of_claim with the bankruptcy court aside from alpha telcom’s own representations petitioner received a flyer from an entity named tax audit protection inc the flyer provided information about alpha telcom pay telephones it stated that owners of alpha telcom pay telephones qualified for tax_credits for compliance with the ada the flyer identified a person named george mariscal as the president of the company the payments in were prorated according to when alpha telcom installed the telephones the bankruptcy matter was dismissed on date by motion of alpha telcom the bankruptcy court held that it was in the best interest of creditors and the estate to dismiss the continued the securities_and_exchange_commission brought a civil suit against alpha telcom in alleging that the pay telephone scheme was a security and that the company was in violation of federal securities law the decision was affirmed by the u s court_of_appeals for the ninth circuit in see 350_f3d_1084 9th cir in the notice_of_deficiency that gave rise to the instant case respondent disallowed the depreciation_deductions petitioner claimed because petitioner did not have a depreciable_interest in the telephones respondent also disallowed the disabled access credits petitioner claimed because petitioner had not demonstrated that he was in a trade_or_business that the expenses were reasonable or that the expenses were enabling a business to comply with the ada discussion a depreciation_deductions sec_167 allows as a depreciation deduction a reasonable allowance for the exhaustion wear_and_tear of property used in a trade_or_business or held_for_the_production_of_income sec_167 and continued bankruptcy matter so that proceedings could continue in federal district_court where there was a pending receivership involving debtors depreciation_deductions are based on an investment in and actual ownership of property rather than the possession of bare_legal_title see arevalo v commissioner t c pincite 91_tc_322 75_tc_53 affd 670_f2d_855 9th cir the supreme court has repeatedly stressed that in examining transactions for the purpose of determining their tax consequences substance governs over form arevalo v commissioner f 3d pincite see also 435_us_561 77_tc_1221 if the benefits and burdens reflecting ownership have not passed from seller to purchaser we disregard the transfer of formal legal_title when determining ownership of an asset for tax purposes see arevalo v commissioner f 3d pincite in other words when a taxpayer never actually owns the property in question the taxpayer is not allowed to claim a deduction for depreciation see arevalo v commissioner t c pincite grodt mckay realty inc v commissioner supra pincite8 see also schwartz v commissioner tcmemo_1994_320 affd without published opinion 80_f3d_558 d c cir whether the benefits_and_burdens_of_ownership with respect to property have passed to the taxpayer is a question of fact that must be ascertained from the intention of the parties as established by the written agreements read in light of the attending facts and circumstances see arevalo v commissioner t c pincite grodt mckay realty inc v commissioner supra pincite the denial of depreciation_deductions in the other alpha telcom cases has routinely been supported by the examination of eight factors whether legal_title passes the manner in which the parties treat the transaction whether the purchaser acquired any equity in the property whether the purchaser has any control_over the property and if so the extent of such control whether the purchaser bears the risk of loss or damage to the property and whether the purchaser will receive any benefit from the operation and disposition of the property see eg arevalo v commissioner f 3d pincite crooks v commissioner f 3d pincite just as we concluded in arevalo and crooks we conclude here that the factors clearly work against petitioner and no depreciation deduction is warranted the stipulation of facts and accompanying documents reveal that here as in the related litigation alpha telcom was responsible for the installation location selection site negotiation and maintenance of the pay telephones alpha telcom bore the risk of loss if the telephones did not generate sufficient revenue because petitioner was guaranteed to be paid at least dollar_figure per month per pay telephone regardless of the revenues actually generated and it was alpha telcom who received the majority of any profit from the telephones further limiting petitioner’s risk of loss was the combination of the atc pay telephone agreement and the alpha telcom service agreement allowing petitioner to sell legal_title to the telephones back to atc for a fixed formula price because petitioner never owned a depreciable_interest in the pay telephones he is not entitled to claim depreciation_deductions under sec_167 with respect to them see crooks v commissioner supra arevalo v commissioner supra b ada tax_credits for purposes of the general_business_credit under sec_38 sec_44 provides a disabled_access_credit for certain small businesses the amount of this credit is equal to percent of the eligible_access_expenditures of an eligible_small_business that exceed dollar_figure but that do not exceed dollar_figure for the year sec_44 in order to claim the disabled_access_credit a taxpayer must demonstrate the taxpayer is an eligible_small_business for the year in which the credit is claimed and the taxpayer has made eligible_access_expenditures during that year if the taxpayer cannot fulfill both of these requirements the taxpayer is not eligible to claim the credit for that year for purposes of sec_44 the term eligible_small_business is defined as any person who had gross_receipts of no more than dollar_figure million for the preceding year or not more than full-time employees during the preceding year and elects the application of sec_44 for the year sec_44 the term eligible_access_expenditure is defined as an amount_paid or incurred by an eligible_small_business for the purpose of enabling the eligible_small_business to comply with the applicable_requirements under the ada sec_44 such expenditures include amounts paid_or_incurred for the purpose of removing architectural communication physical or transportation barriers that prevent a business from being accessible to or usable by individuals with disabilities to provide qualified interpreters or other effective methods of making aurally delivered materials available to individuals with hearing impairments to acquire or modify equipment or devices for individuals with disabilities or to provide other similar services modifications materials or equipment see sec_44 however eligible_access_expenditures do not include expenditures that are unnecessary to accomplish such purposes see sec_44 additionally eligible_access_expenditures do not include amounts that are paid_or_incurred for the purpose of removing architectural communication physical or transportation barriers that prevent a business from being accessible to or usable by individuals with disabilities with respect to any facility first placed_in_service after date see sec_44 in order for an expenditure to qualify as an eligible_access_expenditure within the meaning given that term by sec_44 it must have been made to enable an eligible_small_business to comply with the applicable_requirements under the ada see arevalo v commissioner t c pincite 117_tc_32 consequently a person who does not have an obligation to become compliant with the requirements set forth in the ada could never make an eligible_access_expenditure petitioner like the taxpayers in the other alpha telcom cases had no obligation to become compliant with the ada as relevant here the requirements set forth in the ada apply only to persons who own lease lease to or operate certain public accommodations and common carriers of telephone voice transmission services see u s c sec a see also u s c sec c petitioner did not own lease lease to or operate a public accommodation during the taxable years at issue nor was he a common carrier of telephone voice transmission services during those years accordingly petitioner was under no obligation to become compliant with the requirements set forth in the ada see u s c sec b a ii and iii u s c sec_153 u s c sec a and c because petitioner did not own the pay telephones in which he invested and had no involvement in their operation petitioner was not actively engaged in the provision of services to anyone as a result of his investment in the pay telephones therefore petitioner’s investments in the telephones were not eligible_access_expenditures and petitioner is not entitled to claim the disabled_access_credit under sec_44 for his investments in the telephones to reflect our disposition of the disputed issues and to make our order to show cause absolute as well as for such other proceedings as may be necessary an appropriate order will be issued