tax_exempt_and_government_entities_division department of the treasury internal_revenue_service washington d c date contact person identification_number telephone number employer_identification_number number release date uniform issue list numbers legend q _g q m e dear this responds to your request for rulings on the effect of the agreement described below on your status as an organization described in sec_501 c a and b a vi of the internal_revenue_code the i r c and on your liability for unrelated_business_income_tax under sec_511 through you are exempt from federal_income_tax under sec_501 c of the internal_revenue_code you are not a private_foundation within the meaning of sec_509 because you are described in sec_509 and sec_170 a vi your mission is to inform and educate the american public about q to advocate for _g and conduct research on g you attempt to disseminate the results of your research as broadly as possible you distribute your research results primarily through your website and through the media including print radio television and online media you maintain an archive of q data known as your e product the e product can be accessed over your website for non-commercial purposes you may allow commercial use of the e product for a fee you have entered into an agreement the agreement with m a for-profit major media organization the agreement has an initial term of three years subject_to certain early termination and renewal rights under the agreement you agree to provide substantial portions of the results of your research the information to m and m agrees to pay a periodic fixed fee to you and to make the information available to users of its electronic products and services the agreement defines the information as current data delivered on a monthly basis and a historical file of data going back several years the information shall consist of your entire e product specifically you agree to collect code and process the information and to deliver the information tom in a format and at the delivery frequency specified in the agreement you grant m a nonexclusive worldwide right to use store reproduce create derivative works from display and deliver the information or any part thereof in addition m has the right to use the information for internal business purposes to market and sell its services for research and reporting by its multimedia news operation in its generic fair value composite or theoretical prices or ratings or other similar pricing or rating models and the development and distribution of its proprietary and descriptive databases and for educational_purposes during the term of the agreement you agree not to deliver all or a substantial portion ie percent or more of the information to any of the twelve companies listed on a schedule of the agreement m acknowledges that substantial portions of the information are in the public domain and that you do not purport to grant to m any intellectual_property rights in such information that is in the public domain m represents warrants and covenants that it will use commercially reasonable efforts to incorporate the information into its product so as to support your objective of broadly disseminating the information if m exercises its right to terminate the agreement other than for cause before the expiration of the initial term it is obligated to pay you a fixed termination fee in addition upon termination of the agreement m has an option to purchase for a separate fee a perpetual license to use the information preyiously provided to it during the agreement's term rulings requested you have requested the following rulings your performance of the agreement and receipt of fees thereunder will not jeopardize your status as an organization exempt from tax under sec_501 c or as an organization that is not a private_foundation your performance of the agreement is not an unrelated_trade_or_business the periodic and termination fees that are or may be payable to you under the agreement are not royalties sec_501 a exempts from federal income_taxation organizations described in sec_501 c sec_501 c describes organizations organized and operated for charitable educational and other enumerated exempt purposes sec_511 imposes a tax on the unrelated_business_taxable_income of organizations described in sec_501 c sec_512 defines the term unrelated_business_taxable_income as the gross_income derived from any unrelated_trade_or_business as defined in sec_513 regularly carried on less certain allowable deductions that are directly connected with the carrying on of such trade_or_business both computed with the modifications provided in subsection b sec_512 excludes all royalties from unrelated_business_taxable_income sec_513 defines the term unrelated_trade_or_business as any trade_or_business the conduct of which is not substantially related aside from the need of such organization for income or funds or the use it makes of the profits derived to the exercise or performance by such organization of its charitable educational or other purpose or function constituting the basis for its exemption under sec_501 sec_1_501_c_3_-1 provides that to be exempt as an organization described in sec_501 c an organization must be both organized and operated exclusively for one or more of the purposes specified in such section sec_1_501_c_3_-1 provides that an organization will be regarded as operated exclusively for one or more exempt purposes only if it engages primarily in activities which accomplish one or more of such exempt purposes specified in sec_501 c sec_1 c -1 d i includes educational among the list of purposes for which an organization described in sec_501 may be exclusively organized and operated sec_1_501_c_3_-1 provides that an organization is not organized and operated exclusively for one or more of the purposes specified in subdivision i above unless it serves a public rather than a private interest thus to meet the requirement of this subdivision it is necessary for an organization to establish that it is not organized or operated for the benefit of private interests such as designated individuals the creator or his family shareholders of the organization or persons controlled directly or indirectly by such private interests sec_1 c -1 d i provides that the term educational as used in sec_501 c relates to a the instruction or training of the individual for the purpose of improving or developing his capabilities or b the instruction of the public on subjects useful to the individual and beneficial to the community sec_1_513-1 d provides in general that gross_income derives from unrelated_trade_or_business within the meaning of sec_513 if the conduct of the trade_or_business which produces the income is not substantially related other than through the production of funds to the purposes for which exemption is granted the presence of this requirement necessitates an examination of the relationship between the business activities which generate the particular income in question-the activities that is of producing or distributing the goods or performing the services involved-and the accomplishment of the organization's exempt purposes sec_1_513-1 d provides that a trade_or_business is related to exempt purposes in the relevant sense only where the conduct of the business activities has causal relationship to the achievement of exempt purposes other than through the production_of_income and it is substantially related for purposes of sec_513 only if the causal relationship is a substantial one thus for the conduct of trade_or_business from which a particular amount of gross_income is derived to be substantially related to purposes for which exemption is granted the production or distribution of the goods or the performance of the services from which the gross_income is derived must contribute importantly to the accomplishment of those purposes where the production or distribution of the goods or the performance of the services does not contribute importantly to the accomplishment of the exempt purposes of an organization the income from the sale of the goods or the performance of the services does not derive from the conduct of related trade_or_business whether activities productive of gross_income contribute importantly to the accomplishment of any purpose for which an organization is granted exemption depends in each case upon the facts and circumstances involved it is financed by contributions from lake front property revrul_70_186 c b concerns an organization that was formed to preserve a lake as a public recreational facility and to improve the condition of the water in the lake to enhance its recreational features owners from members of the community adjacent to the lake and from municipalities bordering the lake the organization's principal activity is to treat the water to remove algae and to otherwise improve the condition of the water for recreational purposes these activities constitute charitable activities insofar as they insure the continued use of the lake for public recreational purposes the benefits to be derived from the organization's activities flow principally to the general_public through the maintenance and improvement of public recreational activities any private benefits derived by the lake front property owners do not lessen the public benefits flowing from the organization's operations in fact it would be impossible for the organization to accomplish its purposes without providing benefits to the lake front property owners accordingly it is held that the organization is exempt from federal_income_tax under sec_501 c revrul_75_196 c b concerns an organization the principal activity of which is to maintain a law library that is located in the same building as the headquarters of the local bar association an organization described in sec_501 c the organization's support is derived primarily from contributions by the local bar association the rules of the library provide that the facilities are available for use only by members of the local bar association membership in the bar association is open to all members of the legal profession in good standing with an office or residence in the municipality the fact that access to and use of the library facilities are limited to a designated class of persons is not necessarily a bar to recognition of exemption under sec_501 c what is of importance is that the class benefited be broad enough to warrant a conclusion that the educational facility or activity is serving a broad public interest rather than a private interest and is therefore exclusively educational in nature the library facilities are available to a significant number of people the fact that attorneys who use the library may derive personal benefit in the practice of their profession from the information garnered thereby is incidental to this purpose and is in most instances a logical by-product of an educational process therefore the limitation of the use of the facilities is reasonable and does not prejudice the exclusively educational nature and purpose of the facility accordingly the organization qualifies for exemption under sec_501 c revrul_80_295 c b concerns an organization that was created as a national governing body for amateur athletics to promote systematic physical exercise and education and foster interest in amateur sports among the public at large and to encourage widespread public participation in athletics and recreational sports the organization sponsors supervises and regulates programs in a number of different amateur sports it also arranges for and coordinates open competition for amateur athletics at the local state regional and national levels the organization receives income each year from the sale of exclusive television and radio broadcasting rights to an independent_producer who contracts with a commercial network to broadcast many of the athletic events sponsored supervised and regulated by the organization the broadcasting of the athletic events promotes the various amateur sports fosters widespread public interest in the benefits of its nationwide amateur athletic program and encourages public participation therefore the organization's sale of broadcasting rights and the resultant broadcasting of its athletic events contributes importantly to the accomplishment of its exempt purposes is substantially related to the purposes constituting the basis for the organization's exemption and therefore is not unrelated_trade_or_business within the meaning of sec_513 section dollar_figure of revproc_2014_4 i r s states that t he service may decline to issue a letter_ruling or a determination_letter when appropriate in the interest of sound tax_administration or on other grounds whenever warranted by the facts or circumstances of a particular case analysis issue a whether the performance of the agreement and the receipt of fees thereunder would jeopardize your status as an organization exempt from tax under sec_501 to be described in sec_501 an organization must be operated exclusively for an exempt_purpose sec_1 c -1 a an organization is regarded as operated exclusively of exempt purposes only if it engages primarily in activities which accomplish one or more exempt purposes sec_1 c -1 c exempt purposes include educational_purposes sec_1 c -1 d f the term educational relates to the instruction of the public on subjects useful to the individual and beneficial to the community sec_1_501_c_3_-1 your exempt educational purpose is to inform and educate the american public about q and to advocate for - you achieve this purpose by tracking assembling and disseminating unbiased information regarding g your performance of the agreement serves to disseminate the information more broadly and thus helps to accomplish your educational_purposes however the agreement also benefits m by allowing it to use the information to market and sell its services for research and reporting by its news operations and to develop and distribute its proprietary databases although an organization's operations may be deemed to be beneficial to the public if they also serve private interests other than incidentally the organization is not entitled to exemption under sec_501 sec_1_501_c_3_-1 sec_1 c -1 d ii the word incidental in this context has both qualitative and quantitative connotations to be incidental in the qualitative sense the private benefit must be a necessary concomitant of the activity which benefits the public at large in other words the benefit to the public cannot be achieved without necessarily benefiting certain private individuals a benefit is quantitatively insubstantial only if it is insubstantial as measured in the context of the overall public benefit conferred by the activity see revrul_70_186 under the circumstances we conclude that the benefit conferred on m under the agreement is both qualitatively and quantitatively incidental it is qualitatively incidental because the benefits under the agreement flow primarily to the general_public by enabling you to disseminate the information to a wider audience ie the subscribers tom's services m does not have an exclusive right to or exclusive use of the information which is otherwise available to the general_public for free over your website m is merely a means by which to broaden the dissemination of the information and thereby to accomplish your exempt purposes more effectively in addition the benefit conferred on m is quantitatively incidental because the benefit derived by m in being able to include the information in its package of services is insubstantial in comparison with the benefit obtained by the users of those services in addition the agreement does not confer an impermissible private benefit on m's subscribers by their nature exempt educational activities serve public purposes by providing direct benefits to private parties the public policy sought to be effected necessitates the dissemination of information and training to individuals whose increased capabilities may generally serve to improve the public welfare further in an educational context an organization may be determined to be operating for public purposes even if the general_public does not have the same direct access to the educational program as does some smaller restricted_group see revrul_75_196 although the agreement will benefit only subscribers tom's services the population served is broad enough to warrant a conclusion that the agreement serves a broad public interest therefore your performance of the agreement and your receipt of fees thereunder furthers your exempt_purpose serves a public and not a private interest and consequently will not jeopardize your status as an organization described in sec_501 c issue whether the performance of the agreement and the receipt of fees thereunder would jeopardize your status as an organization that is not a private_foundation we decline to rule on whether the performance of the agreement and the receipt of fees thereunder would jeopardize your status as an organization that is not a private_foundation because of the factual nature of the issue see revproc_2014_4 i r s section issue whether the performance of the agreement is an unrelated_trade_or_business for purposes of the tax imposed under sec_511 on an exempt organization's unrelated_business_taxable_income as defined in sec_512 an unrelated_trade_or_business is a trade_or_business the conduct of which is not substantially related to the organization's performance of its exempt functions sec_513 a trade_or_business is substantially related to exempt purposes if the production or distribution of the goods or the performance of the services from which the gross_income is derived contributes importantly to the accomplishment of the organization's exempt purposes sec_1_513-1 d your exempt educational purpose is to inform and educate the american public about q and to advocate for g you accomplish this purpose by disseminating unbiased information on the subject of g over your website and through various media outlets m is a global news and media organization with a large subscriber base for its information services the performance of the agreement will enable you to disseminate the information to m's subscribers thus making the information more widely available and contributing importantly to the accomplishment of your exempt_purpose of informing and educating the american public about q and g see revrul_80_295 consequently the performance of the agreement is substantially related to your exempt_purpose and not an unrelated_trade_or_business issue whether the fees that are payable to you under the agreement constitute royalties within the meaning of sec_512 sec_511 imposes a tax on the unrelated_business_taxable_income of organizations described in sec_501 c sec_512 defines unrelated_business_taxable_income as gross_income derived from an unrelated_trade_or_business sec_512 excludes all royalties from unrelated_business_taxable_income thus the issue of whether the fees payable to you under the agreement constitute royalties would be relevant only if such fees were gross_income derived from an unrelated_trade_or_business since we have concluded that the performance of the agreement is not an unrelated_trade_or_business the fees payable under the agreement are not gross_income derived from an unrelated_trade_or_business consequently there is no need to address this issue rulings accordingly based on the information submitted we rule as follows 1a your performance of the agreement and receipt of fees thereunder will not jeopardize your status as an organization exempt from tax under sec_501 c of the code b because of the factual nature of the issue we decline to rule on whether your performance of the agreement and receipt of fees thereunder would jeopardize your status as an organization that is not a private_foundation your performance of the agreement is not an unrelated_trade_or_business within the meaning of sec_513 of the code insofar as the periodic and termination fees payable to you under the agreement are not gross_income derived from an unrelated_trade_or_business there is no need to rule on whether such fees are royalties this ruling will be made available for public inspection under sec_6110 of the code after certain deletions of identifying information are made for details see enclosed notice notice of intention to disclose a copy of this ruling with deletions that we intend to make available for public inspection is attached to notice if you disagree with our proposed deletions you should follow the instructions in notice this ruling is directed only to the organization that requested it sec_611 o k of the code provides that it may not be used or cited by others as precedent this ruling is based on the facts as they were presented and on the understanding that there will be no material changes in these facts this ruling does not address the applicability of any section of the code or regulations to the facts submitted other than with respect to the sections described because it could help resolve questions concerning your federal_income_tax status this ruling should be kept in your permanent records if you have any questions about this ruling please contact the person whose name and telephone number are shown in the heading of this letter in accordance with the power_of_attorney currently on file with the internal_revenue_service we are sending a copy of this letter to your authorized representative sincerely michael seta manager exempt_organizations technical enclosure notice


internal_revenue_service department of the treasury index number washington dc number release date person to contact telephone number refer reply to cc intl br1-plr-106965-99 date do ty a country b date c date d date e dear a this is in response to a letter dated date submitted by your authorized representative requesting a ruling under sec_877 of the internal_revenue_code_of_1986 code that your loss of lawful permanent u s resident status did not have for one of its principal purposes the avoidance of u s taxes under subtitle a or subtitle b of the code the information submitted for consideration is substantially as set forth below 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 request for rulings it is subject_to verification on examination a was born in country b on date c a’s spouse and a’s parents were also born in country b a moved to the united_states in date d a moved back to country b on date e and has lived there ever since she is a citizen of country b a relinquished her u s lawful permanent resident status on date e on the date of a’s expatriation a’s net_worth exceeded dollar_figure plr-106965-99 sec_877 generally provides that a citizen who loses u s citizenship or a u s long- term resident who ceases to be taxed as a lawful permanent resident individuals who expatriate within the 10-year period immediately preceding the close of the taxable_year will be subject_to the special rules of sec_877 for such taxable_year unless such loss did not have for one of its principal purposes the avoidance of u s taxes sec_2107 and sec_2501 provide special estate and gift_tax regimes respectively for individuals who expatriate with a principal purpose to avoid u s taxes a former citizen or former long-term_resident will be treated as having expatriated with a principal purpose to avoid u s taxes for purposes of sec_877 sec_2107 and sec_2501 if the individual’s average income_tax_liability or the individual’s net_worth on the date of expatriation exceed certain thresholds see sec_877 sec_2107 and sec_2501 a former u s citizen whose net_worth or average tax_liability exceeds these thresholds however will not be presumed to have a principal purpose of tax_avoidance if that former citizen is described within certain statutory categories and submits a request for a ruling within one year of the date of loss of u s citizenship for the secretary’s determination as to whether such loss had for one of its principal purposes the avoidance of u s taxes see sec_877 sec_2107 and sec_2501 under notice_98_34 1998_27_irb_30 modifying notice_97_19 1997_1_cb_394 a former long-term_resident whose net_worth or average tax_liability exceeds the applicable thresholds will not be presumed to have a principal purpose of tax_avoidance if that former resident is described within certain categories and submits a complete and good_faith request for a ruling as to whether such loss had for one of its principal purposes the avoidance of u s taxes notice_98_34 requires that certain information be submitted with a request for a ruling that an individual’s expatriation did not have for one of its principal purposes the avoidance of u s taxes a is eligible to request a ruling pursuant to notice_98_34 because she is described in three categories of individuals eligible to submit ruling requests first within a reasonable period after a’s expatriation a will be a resident fully liable to income_tax in country b the country where a was born second within a reasonable period after a’s expatriation a will be a resident fully liable to income_tax in country b the country where a’s spouse was born third a is eligible to submit a request because within a reasonable period after her expatriation a will be a resident fully liable to tax in country b the country where her parents were born a submitted all the information required by notice_98_34 including any additional information requested by the service after review of the submission plr-106965-99 accordingly based solely on the information submitted and the representations made it is held that a has made a complete and good_faith submission in accordance with sec_877 and notice_98_34 therefore a will not be presumed to have as one of her principal purposes for expatriating the avoidance of u s taxes however because the information submitted does not clearly establish the existence or lack of a principal purpose to avoid taxes under subtitle a or b of the code no opinion is expressed as to whether a’s expatriation had for one of its principal purposes the avoidance of such taxes while this ruling rebuts the presumption of tax_avoidance under sec_877 it is not conclusive as to whether a subsequently may be found to have a principal purpose of tax_avoidance under sec_877 sec_2107 and sec_2501 based on all the facts and circumstances see sec_877 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 in addition no opinion is expressed as to a’s u s tax_liability for taxable periods prior to her loss of long-term_resident status or for taxable periods after her loss of long- term resident status under sections of the code other than sec_877 sec_2107 and sec_2501 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 a copy of this letter must be attached to a’s u s income_tax return for the year in which a obtained the ruling whether or not a is otherwise required to file a return this ruling is directed only to the taxpayer s 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 a’s representative sincerely _______________________ allen goldstein reviewer office of the associate chief_counsel international


internal_revenue_service department of the treasury number release date index number ty washington dc person to contact telephone number refer reply to cc intl br1-plr-105625-00 date date legend x country a dear this is in response to a letter dated date submitted by x’s authorized representative requesting a ruling that article of the united_states - country a income_tax treaty treaty is applicable and that x’s employees are not subject_to u s income_tax the information submitted for consideration is substantially as set forth below 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 article of the treaty states in relevant part wages salaries and similar remuneration including pensions or similar benefits paid_by or out of funds to which contributions are made by country a or local authority thereof to an individual who is a national of country a for labor or personal services performed for country a or for any of its local authorities in the discharge of governmental functions shall not be subject_to united_states tax if such individual is not a citizen_of_the_united_states and does not have immigrant status in the united_states plr-105625-00 x represents that it is an instrumentality of the government of country a it is not engaged in industrial or commercial activities it does not carry out functions of a bank rather it is engaged in advertising activities making contacts in the financial community and serving as a liaison with u s government agencies the annual profits of x must be paid into the treasury of country a based on the foregoing it is concluded that x is not a bank and does not conduct banking_financing_or_similar_business in the united_states it is further concluded for purposes of article of the treaty that x performs governmental functions for country a in accordance with article of the treaty it is also concluded that wages salaries and similar remuneration for services performed for country a in the discharge of governmental functions paid_by x to its employees who are nationals of country a and who are not citizens of the united_states and do not have immigrant status in the united_states are exempt from u s income_tax this ruling is directed only to the taxpayer s 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_tax return to which it is relevant sincerely w edward williams senior technical reviewer branch office of associate chief_counsel international cc


department of the treasury internal_revenue_service washington d c contact person identification_number telephone number employer_identification_number tax_exempt_and_government_entities_division release number release date date date u i l legend association foundation union w o w o w dear we have considered your ruling_request dated date as modified by your letters of date date and date regarding the effect of a proposed restructuring from an organization tax-exempt under sec_501 into three new entities classified as tax-exempt under sec_501 and of the internal_revenue_code code facts you are a charitable and educational_organization exempt from federal taxation under sec_501 of the code and classified as not a private_foundation pursuant to sec_509 your membership includes faculty administrators researchers and related professionals at all types of american higher education institutions as well as the general_public who support your mission you were formed to promote academic freedom and freedom of expression in academia and in society in general you are a national organization although local autonomous chapters may be formed at individual institutions of higher education a primary mission is to develop policy statements on academic freedom and freedom of expression to include such related issues as quality of higher education tenure shared governance and due process professional ethics workplace discrimination and collective bargaining your activities also include mediation and litigation on an individual or group basis publishing a bi-monthly magazine and offering annual training programs making grants and awards to individuals in support of academic freedom monitoring federal and state legislation and conducting limited direct and grassroots lobbying providing incidental member benefits such as insurance and financial products and supporting collective bargaining through financial and operational assistance to collective bargaining chapters your wide-ranging activities are illustrated by your sources of annual revenues approximately eighty-five percent of your revenues come from membership dues the balance comes from grant income contributions publication subscriptions and sales meeting registrations and dues paid to a collective bargaining fund by collective bargaining chapters you have determined that you can best achieve your broad mission by restructuring to segregate activities into separate but related entities your restructuring is designed to transfer some of your current activities into the other entities you have formed three tax-exempt entities in which to restructure association a professional association exempt under sec_501 union a labor_organization tax-exempt under sec_501 and foundation a charitable and educational_organization tax-exempt under sec_501 and classified as a public charity pursuant to sec_509 you plan to transfer your existing assets and liabilities to foundation the new sec_501 public charity and dissolve as part of the proposed restructuring plan restructuring your restructuring will be guided by a memorandum of understanding mou and cost sharing_agreement agreement between you and the new entities you represent that all charitable assets will be retained in the new sec_501 foundation you will transfer all of your assets and liabilities to foundation except your office furniture equipment and computer hardware and software the entire inventory of these used items of personal_property will be sold to association at fair_market_value fmv as part of the restructuring association will provide administrative functions for association union and foundation pursuant to an agreement and mou this will include association acting as billing agent for union you will transfer to the new sec_501 association employees and liabilities going forward related to employment such as payroll retirement plans and health insurance you represent that association’s employees will be shared with foundation and union with these two entities reimbursing the association for their respective shares of the cost you represent that foundation will pay only those employment-related_expenses documented by employee timesheets for actual work on sec_501 activities a different allocation will be utilized for certain unfunded liabilities such as post-retirement health care coverage for employees who transfer from you to association as a result of the restructuring in this case foundation as the transferee charity that received your assets and liabilities will be responsible for that percentage of the employee’s post-retirement benefit attributable to his or her time as an employee of you you represent that all of association's non-501 c activities together will not constitute association's primary activities requested rulings the transfer of assets from you to the successor foundation will not adversely affect your tax-exempt status under sec_501 of the code association may act as a billing agent for union pursuant to a cost-sharing agreement without jeopardizing association‘s tax-exempt status under sec_501 of the code so long as all of association‘s non-501 c activities do not constitute association's primary activities law sec_501 provides in part for the exemption from federal_income_tax of organizations organized and operated exclusively for religious charitable scientific or educational_purposes provided no part of the net_earnings of which inures to the benefit of any private_shareholder_or_individual sec_501 provides for the exemption from federal_income_tax of labor agricultural or horticultural_organizations sec_501 provides in part for the exemption from federal_income_tax of business_leagues chambers_of_commerce real_estate boards or boards_of_trade not organized for profit and no part of the net_earnings of which inures to the benefit of any private_shareholder_or_individual sec_1_501_c_3_-1 of the income_tax regulations regulations provides that an organization is not organized exclusively for one or more exempt purposes unless its assets are dedicated to an exempt_purpose so that upon dissolution its net assets are distributed for one or more exempt purposes sec_1_501_c_3_-1 provides that an organization will be regarded as operated exclusively for one or more exempt purposes only if accomplish one or more of such exempt purposes specified in sec_501 of the code an organization will not be so regarded if more than an insubstantial part of its activities is not in furtherance of an exempt_purpose it engages primarily in activities which sec_1_501_c_3_-1 provides that an organization is not operated exclusively for one or more exempt purposes if its net_earnings inure in whole or in part to the benefit of private shareholders or individuals sec_1_501_c_5_-1 provides in part that the organizations entitled to exemption from income_tax under sec_501 have no net_earnings inuring to the benefit of any member and have as their object the betterment of the condition of those engaged in such pursuits sec_1_501_c_6_-1 provides that a business league is an association of persons having some common business_interest the purpose of which is to promote such common interest and not to engage in a regular business of a kind ordinarily carried on for profit it is an organization of the same general class as a chamber of commerce or board_of trade thus its activities should be directed to the improvement of business conditions of one or more lines of business as distinguished from the performance of particular services for individual persons in revrul_71_504 1971_2_cb_231 a medical society tax-exempt under sec_501 was denied reclassification as an organizations exempt under sec_501 because of its substantial non-charitable and non-educational purposes and activities in revrul_71_505 1971_2_cb_232 a bar association tax-exempt under sec_501 was denied reclassification as an organizations exempt under sec_501 because of its substantial non-charitable and non-educational purposes and activities in 326_us_279 the supreme court held that the presence of a single non-charitable or non-educational purpose if substantial in nature will preclude exemption under sec_501 regardless of the number or importance of truly charitable or educational_purposes analysis ruling_request no you are an association tax-exempt under sec_501 and classified as a public charity under sec_509 as such your assets are dedicated to one or more exempt purposes and may only be transferred to another public charity or to a federal state_or_local_government for such exempt purposes upon dissolution sec_1_501_c_3_-1 the transfer of your sec_501 assets and activities to foundation another public charity complies with the organizational requirements of sec_501 and will not adversely affect your tax-exempt status under sec_1_501_c_3_-1 and an organization will not be regarded as being operated exclusively for one or more exempt purposes if more than an insubstantial part of its activities is not in furtherance of an exempt_purpose or if its net_earnings are distributed in whole or in part to the benefit of private shareholders or individuals an organization may not be classified under sec_501 if activities regardless of the number or importance of truly charitable or educational_purposes it may otherwise have see 326_us_279 see also revrul_71_504 1971_2_cb_231 and revrul_71_505 1971_2_cb_232 medical society and bar association exempt as sec_501 entities may not be reclassified as organizations exempt under sec_501 because of their substantial non-charitable and non-educational purposes and activities it has substantial non-charitable and non-educational purposes and we have not evaluated nor determined whether your past activities that are not sec_501 activities are or have been more than an insubstantial part of your activities or if your net_earnings were distributed in whole or in part to the benefit of private shareholders or individuals therefore this ruling applies only to your transfer of assets to foundation and not to any other of your past present or future activities ruling_request no association is organized as a business league under sec_501 sec_1_501_c_6_-1 of the regulations defines a business league as an association of persons having a common business_interest the activities of the association must be directed to the improvement of business conditions of one or more lines of business as distinguished from the performance of particular services for individual persons thus association’s primary activities must be described as permitted activities under sec_501 of the code in order to meet the requirements for sec_501 services for individual members are not such activities among other activities association plans to act as a billing agent for union this is a business activity of a kind ordinarily carried on for profit whether this is a permitted service depends upon whether it is a primary activity of association association will also provide administrative services for union and foundation all of association's non-501 c activities taken together must not constitute association's primary activities for it to maintain its sec_501 status ruling the transfer of assets from you to the successor foundation will not adversely affect your tax-exempt status under sec_501 of the code this ruling does not address the affect on your tax-exempt status of any activities other than this transfer of assets to foundation association may act as a billing agent for union pursuant to a cost-sharing agreement without jeopardizing association‘s tax-exempt status under sec_501 of the code so long as all of association s non-501 c activities together do not constitute association‘s primary activities this ruling will be made available for public inspection under sec_6110 of the code after certain deletions of identifying information are made for details see enclosed notice notice of intention to disclose a copy of this ruling with deletions that we intend to make available for public inspection is attached to notice if you disagree with our proposed deletions you should follow the instructions in notice this ruling is directed only to the organization that requested it sec_6110 of the code provides that it may not be used or cited by others as precedent this ruling is based on the facts as they were presented and on the understanding that there will be no material changes in these facts this ruling does not address the applicability of any section of the code or regulations to the facts submitted other than with respect to the sections described because it could help resolve questions concerning your federal_income_tax status this ruling should be kept in your permanent records if you have any questions about this ruling please contact the person whose name and telephone number are shown in the heading of this letter in accordance with the power_of_attorney currently on file with the internal_revenue_service we are sending a copy of this letter to your authorized representative sincerely virginia g richardson acting manager exempt_organizations technical group enclosure notice


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 plr-161316-04 date date company -------------------------------------------------------- ----------------------------------------------------------- --------------------------------------------------------------------- ------ ------------------------------------- facility a b c d e f g h i -------------------------- ----------------- ------- -------------------------- ----------------------- ------- ------------------------- -------------------------- ---------------------- ---------------------- plr-161316-04 dear -------------- date as well as subsequent correspondence submitted on behalf of company requesting various rulings under sec_1362 of the internal_revenue_code company represents the following facts this letter responds to a letter from your authorized representative dated facts company’s assignee of the sub-lease filed for bankruptcy in e resulting in a company was incorporated under the laws of state on a and elected to be an s_corporation effective that same date company operated a facility as a sub-lessee it assigned this lease to an unrelated party in b remaining liable under the lease for the balance of its term company filed its final tax_return for the year ending c but took no affirmative action to dissolve itself state administratively dissolved company on d lawsuit against company over the lease on f after filing the necessary documents and paying the applicable fees state retroactively reinstated company as a state law corporation effective d it had a filing requirement for its tax_year ending g based on conflicting advice from several sources regarding its status under federal_law company applied for a new employer_identification_number ein receiving it on h business corporation as defined by sec_1361 in connection with expenses it incurred in the lawsuit company determined that company represents that for all applicable periods it continued to be a small law and analysis sec_1361 provides that the term s_corporation means a small effective for tax years beginning before date sec_1361 business corporation for which an election under sec_1362 is in effect provides that the term small_business_corporation means a domestic_corporation which is not an ineligible_corporation and which does not a have more than shareholders b have as a shareholder a person other than an estate a_trust described in sec_1361 or an organization described in sec_1361 who is not an individual c have a non-resident alien as a shareholder and d have more than class of stock whether an organization is to be taxed as a corporation under the code is determined by federal not state law if the conduct of the affairs of a corporation continues after the expiration of its charter or the termination of its existence it becomes an association see 305_f2d_844 plr-161316-04 cert_denied 373_us_923 a corporation is subject_to federal corporate income_taxation as long as it continues to do business in a corporate manner despite the fact that its recognized legal status under state law is terminated see 438_f2d_774 3d cir conclusions based solely on the facts submitted and the representations made we conclude as follows as long as company qualified as a small_business_corporation under sec_1361 before it was administratively dissolved under state law its status as a small_business_corporation under federal_law did not terminate upon this dissolution company ordinarily would not be required to make a new election under sec_1362 or apply for a new ein upon its retroactive reinstatement under state law however company did apply for and receive a new ein therefore within days from the date of this letter company must file a new form_2553 election by a small_business_corporation with the appropriate service_center indicating an effective date of i a copy of this ruling letter should be attached to the election form except for the specific conclusions above no opinion is expressed or implied concerning the federal_income_tax consequences of the facts of this case under any other provision of the code specifically no opinion is expressed or implied regarding company's eligibility to be an s_corporation under a power_of_attorney on file with this office we are sending a copy of this letter to your authorized representative this ruling is directed only to the taxpayer who requested it according to ' k this ruling may not be used or cited as precedent enclosures copy of this letter_ruling sincerely mary beth collins senior technician reviewer branch office of associate chief_counsel passthroughs and special industries copy for sec_6110 purposes


internal_revenue_service department of the treasury significant index no washington dc person to contact n e telephone number refer reply to cp e ep t date nov ge legend state a employer m plan x group b employees ordinance o this is in response to correspondence dated date in which you request a private_letter_ruling concerning the federal_income_tax treatment under sec_414 of the internal_revenue_code of certain contributions to plan x the following facts and representations have been submitted employer m employer m adopted plan x for the benefit of group b employees plan x x group b employees are required to make mandatory_contributions of nine percent of salary to plan x is qualified under sec_401 of the code under plan a political_subdivision of state a is ordinance o was adopted by employer m on date in accordance with ordinance employer m will pick up and pay the employee contributions under plan x group b employees do not have the option of receiving the contributed amounts directly instead of having them contributed to plan x will be made by employer m through a reduction in the cash the contributions page salary payable to the employee ordinance o provides that it not effective until the issuance of this letter_ruling by the internal_revenue_service is based on the aforementioned facts and representations you have asked for rulings that the mandatory employee contributions picked up by employer m will be excluded from the current gross_income of group b employees until distributed or otherwise made available that the picked up contributions paid_by employer m are not wages for federal_income_tax withholding purposes and federal income taxes need not be withheld on the picked up contributions sec_414 h of the code provides that contributions otherwise designated as employee contributions shall be treated as employer contributions if such contributions are made to a plan described in sec_401 established by a state government or a political_subdivision thereof and are picked up by the employing unit the federal_income_tax treatment to be accorded i in that revenue_ruling the of the code is specified in revenue contributions which are picked up by the employer within the meaning of sec_414 ruling c b employer school district agreed to assume and pay the amounts employees were required by state law to contribute to a state pension_plan revrul_77_462 concluded that the school district’s picked-up contributions to the plan are excluded from the employees’ gross_income until such time as they are distributed to the employees the revenue_ruling held further that under the provisions of sec_3401 a the school district’s contributions to the plan are excluded from wages for purposes of the collection of income_tax at source on wages therefore no withholding is required from the employees’ salaries with respect to such picked-up contributions of the code the issue of whether contributions have been picked up by c b an employer within the meaning of sec_414 is addressed in revrul_81_35 c b revrul_81_36 established that the following two criteria must be met employer must specify that the contributions although designated as employee contributions are being paid_by the employer in lieu of contributions by the employee and employee must not be given the option of choosing to receive the contributed amounts directly instead of having them paid_by the employer to the pension_plan furthermore it these revenue rulings is immaterial for of the code the the and page purposes of the applicability of sec_414 whether an employer picks up contributions through a reduction in salary an offset against future salary increases or a combination of both revrul_87_10 1987_1_cb_136 provides that in order to satisfy revenue rulings and specification of designated employee contributions must be completed before the period to which such contributions relate thus employees may not exclude from current gross_income designated employee contributions to a qualified_plan that relate to compensation earned for services prior to the date of the last governmental action necessary to effect the employer pick up the required it has been represented that under ordianace employer m will make contributions in lieu of contributions by group b employees and that the employees may not elect to receive such contributions directly therefore ordinance o satisfies the criteria set forth in revrul_81_35 and revrul_81_36 accordingly with respect to ruling_request one conclude we that the mandatory employee contributions picked up by employer m will be excluded from the current gross_income of group b employees until distributed or otherwise made available we have determined that the employee contributions paid to plan x by employer m on behalf of group b employees will be treated as picked up contributions in accordance with revrul_81_35 and revrul_81_36 pursuant to revrul_77_462 picked-up contributions are excluded from the employees’ gross_income until such time as they are distributed to the employees accordingly with respect to ruling_request two we conclude that the picked up contributions paid_by employer m are not wages for federal_income_tax withholding purposes and federal income taxes need not be withheld on the picked up contributions these rulings are based on the assumption that plan x will be qualified under sec_401 of the code at the time of the proposed contributions no opinion is expressed as to whether the amounts in question are subject_to tax under the federal insurance page contributions act no opinion is expressed as to whether the amounts in question are paid pursuant to a salary reduction agreement within the meaning of sec_3121 b code of the sincerely yours a sharece uc sloan frances v sloan chief employee_plans technical branch enclosures deleted copy of letter_ruling form_437


internal_revenue_service number release date index number -------------------------------------------- ----------------------------------------------- ----------------------- ------------------------------------ department of the treasury washington dc third party communication none date of communication not applicable_person to contact -------------------- id no -------------- telephone number ---------------------- refer reply to cc psi b02 plr-131982-13 date date x ------------------------------------------------------- ------------------------------------------------------- --------------------------------------------------- ------------------- --------------------------- ---------------------- ------------------- --------------- -------------- --------- -------------------------------------------- date date date date date date state y dear ------ --------- this responds to a letter dated date and subsequent correspondence submitted on behalf of x by its authorized representative requesting a ruling under sec_1362 of the internal_revenue_code the information submitted states that x was formed on date as a state limited_partnership x was treated as a partnership for federal tax purposes from date through date effective date x filed form_8832 entity classification election electing to be treated as an association_taxable_as_a_corporation the service accepted this election also effective date x filed form_2553 election by a small_business plr-131982-13 corporation to be treated as an s_corporation the service did not accept this election because one of x’s shareholders y a corporation was an ineligible s_corporation shareholder to remedy this problem y’s shares in x were transferred to an eligible s_corporation shareholder on date in date x was further advised by its counsel that x’s s_corporation_election may also have been invalid because was formed as a state limited_partnership with the result that x may have more than one class of stock to remedy this potential problem x converted under state law to a state limited_liability_company in date x represents that x and its shareholders did not intend to engage in tax_avoidance or retroactive tax planning x represents that the circumstances resulting in any ineffectiveness of x's election to be an s_corporation were inadvertent x represents that since date x and all of its shareholders including y have not filed federal_income_tax returns inconsistent with x's s_corporation_election x and each person who was or is a shareholder of x at any time since date agree to make such adjustments consistent with the treatment of x as an s_corporation that the secretary may require sec_1361 of the code provides that the term s_corporation means with respect to any taxable_year a small_business_corporation for which an election under sec_1362 is in effect for such year sec_1361 provides that the term small_business_corporation means a domestic_corporation which is not an ineligible_corporation and which does not have as a shareholder a person other than an estate a_trust described in sec_1361 or an organization described in sec_1361 who is not an individual sec_1362 provides that except as provided in sec_1362 a small_business_corporation may elect to be an s_corporation sec_1362 provides that if an election under sec_1362 by any corporation was not effective for the taxable_year for which made determined without regard to sec_1362 by reason of a failure to meet the requirements of sec_1361 or to obtain shareholder consents the secretary determines that the circumstances resulting in such ineffectiveness were inadvertent no later than a reasonable period of time after discovery of the circumstances resulting in such ineffectiveness steps were taken a so that the corporation is a small_business_corporation or b to acquire the required shareholder consents and the corporation and each person who was a shareholder in such corporation at any time during the period specified pursuant to sec_1362 agrees to make such adjustments consistent with the treatment of the corporation as an s_corporation as may be required by the secretary with respect to such period then notwithstanding the circumstances resulting in such ineffectiveness such corporation shall be treated as an s_corporation during the period specified by the plr-131982-13 secretary based solely on the information submitted and the representations made we conclude that x's s_corporation_election was ineffective on date because x had an ineligible shareholder we also conclude that the election was inadvertently invalid under sec_1362 furthermore x's s_corporation_election may have been ineffective on date because x was a state limited_partnership at that time we conclude that this possible ineffectiveness was also inadvertent within the meaning of sec_1362 therefore under sec_1362 x will be treated as being an s_corporation from date and thereafter provided that x's s_corporation_election was otherwise valid and was not otherwise terminated under sec_1362 except as specifically ruled above we express no opinion concerning the federal tax consequences of the transactions described above under any other provisions of the code this ruling is directed only to the taxpayer that requested it sec_6110 provides that it may not be used or cited as precedent pursuant to a power_of_attorney on file a copy of this letter is being sent to x’s authorized representatives sincerely bradford r poston senior counsel branch office of the associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes


office_of_chief_counsel internal_revenue_service memorandum number release date cc tege eoeg et1 postn-140677-05 uilc date date to director submission processing cincinnati oh attn entity unit from office of division counsel associate chief_counsel tax exempt government entities ------------------------------------- subject railroad_retirement_tax_act status in accordance with the coordination procedure established between the service and the railroad retirement board rrb the rrb has provided us with its opinion that the following business ceased to be an employer under the railroad retirement act and the railroad unemployment insurance act effective ------------------------- --------------------------------------------------- -------------------------------------------------------------------------- --------------------------------------------------------- we have reviewed the opinion of the rrb and based upon the information submitted to us by the rrb we also conclude that --------------------------------------ceased to be an employer under the railroad_retirement_tax_act effective ------------------------- at such time its unified payroll services and perhaps its employees were transferred to its new parent company --------------------- --------------------at the same address provided above please take the appropriate action regarding this business ____________________________ janine cook


t c summary opinion united_states tax_court gary d myers petitioner v commissioner of internal revenue respondent docket no 3488-04s filed date gary d myers pro_se joan e steele for respondent armen special_trial_judge this case was heard pursuant to the provisions of sec_7463 of the internal_revenue_code in effect at the time that the petition was filed the decision to be entered is not reviewable by any other court and this opinion should not be cited as authority unless otherwise indicated all subsequent section references are to the internal_revenue_code in effect for the taxable_year in issue and all rule references are to the tax_court rules_of_practice and procedure all monetary amounts are rounded to the nearest dollar respondent determined a deficiency in petitioner’s federal_income_tax for the taxable_year in the amount of dollar_figure the issue for decision by the court is whether petitioner is required to report on his individual_income_tax_return income that was required to be distributed to him as the sole beneficiary of a simple_trust whether petitioner is entitled to an earned_income_credit is a mechanical matter the resolution of which is dependent solely on our disposition of the aforementioned trust issue background none of the facts have been stipulated at the time that the petition was filed petitioner resided in the state of colorado petitioner was born in date his mother was ruth irene myers hereinafter either mrs myers or petitioner’s mother in date mrs myers created the ruth irene myers trust mrs myers retained the right to alter amend and revoke the trust during her lifetime she also retained the right to dispose_of the net_income and principal of the trust in such manner as she might direct from time to time however unless otherwise directed by her the net_income was payable to her at least quarterly mrs myers named herself and her husband carl alden myers as trustees at a time not disclosed in the record and perhaps because of the death of her husband mrs myers became the sole trustee of the trust by date the health of mrs myers had seriously deteriorated accordingly at that time mrs myers named community first national bank currently bank of the west as successor trustee the institutional trustee continued to administer the trust for the principal benefit of mrs myers on date petitioner’s mother died at that time what had been a revocable_trust became an irrevocable_trust pursuant to the trust_indenture thereupon petitioner was the sole beneficiary and the institutional trustee was required to distribute all income to him currently during the last months of the institutional trustee made distributions directly to petitioner and at petitioner’s direction to petitioner’s creditors however not all of the income required to be distributed to petitioner in was actually distributed to him in that year as the institutional trustee of the ruth irene myers irrevocable_trust community first national bank prepared a schedule_k-1 beneficiary’s share of income deductions credits pursuant to the trust_indenture the ruth irene myers irrevocable_trust terminated in the institutional trustee although required to distribute all income currently to petitioner deferred complete distribution during the winding up process for the trust etc for on the schedule_k-1 the institutional trustee identified petitioner as the beneficiary and accurately listed the following items of income allocable to him allocable share item amount interest dollar_figure ordinary dividends annuity income big_number the total of these three amounts dollar_figure was then correctly identified as petitioner’s income for regular_tax purposes petitioner filed a federal_income_tax return for on his return petitioner listed his filing_status as single petitioner reported adjusted_gross_income in the amount of dollar_figure consisting almost exclusively of wages petitioner did not report any allocable share item in respect of his late mother’s trust as disclosed by the institutional trustee on the schedule_k-1 also on hi sec_2001 return petitioner claimed an earned_income_credit petitioner claimed the credit in his own right without regard to a qualifying_child in the notice_of_deficiency respondent determined that petitioner failed to report income from his late mother’s trust in the amount of dollar_figure as disclosed by the institutional trustee on the schedule_k-1 respondent also determined that petitioner was not entitled to an earned_income_credit based on the amount of his adjusted_gross_income see sec_32 and the amount of his investment_income as derived from his late mother’s trust see sec_32 discussion3 for tax purposes trusts are either simple or complex see sec_1_651_a_-1 income_tax regs in order to be a simple_trust a_trust must be required to distribute all income currently see sec_1_651_a_-1 sec_1_652_a_-1 income_tax regs in contrast a complex_trust may distribute or accumulate income or pay or set_aside income for charitable purposes sec_1_651_a_-1 sec_1_661_a_-1 income_tax regs a simple_trust acts as a conduit with income flowing through the trust to the beneficiary therefore for income_tax purposes a beneficiary of a simple_trust is required to include in the beneficiary’s income the trust’s income that is required to be distributed to the beneficiary currently whether the trust’s income is actually distributed or not sec_652 sec_1_652_a_-1 income_tax regs the record in the present case demonstrates that the ruth irene myers irrevocable_trust was a simple_trust sec_651 sec_1_651_a_-1 income_tax regs thus all of the income that the trust was required to distribute in ie dollar_figure i sec_3 we decide the issue in this case without regard to the burden_of_proof the conduit theory of trust_taxation also instructs that the income received by a beneficiary retains the same character in the hands of the beneficiary as in the hands of the trust sec_652 includable in petitioner’s income for that year as previously indicated the fact that not all of that income was actually distributed to petitioner in is of no consequence in view of the foregoing we hold for respondent on this issue conclusion reviewed and adopted as the report of the small_tax_case division to reflect our disposition of the disputed issue decision will be entered for respondent


internal_revenue_service department of the treasury number release date index number washington dc person to contact amanda a ehrlich id telephone number refer reply to cc intl b01-plr-119835-00 date date ty legend a date b country c country d date f dear this is in response to a letter dated date submitted by your authorized representative requesting a ruling under sec_877 of the internal_revenue_code code that a’s loss of u s citizenship did not have for one of its principal purposes the avoidance of u s taxes under subtitle a or subtitle b of the code the information submitted for consideration is substantially as set forth below 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 request for a ruling it is subject_to verification upon examination a was born in the united_states on date b she also became a citizen of c at birth a continues to be a citizen of c a is a resident of d a has not resided in the united_states since infancy a plans to renounce her u s citizenship in date f sec_877 generally provides that a citizen who loses u s citizenship or a u s long term resident who ceases to be taxed as a lawful permanent resident individuals who expatriate within the 10-year period immediately preceding the close of the taxable_year will be taxed on u s source income as modified by sec_877 for such taxable_year unless such loss did not have for one of its principal purposes the avoidance of u s taxes sec_2107 and sec_2501 provide special estate and gift_tax regimes respectively for individuals who expatriate with a principal purpose to avoid u s taxes a former u s citizen will be treated as having expatriated with a principal purpose to avoid u s taxes for purposes of sec_877 sec_2107 and sec_2501 if the individual’s average income_tax_liability or the individual’s net_worth on the date of expatriation plr-119835-00 exceeds certain thresholds see sec_877 sec_2107 and sec_2501 a former u s citizen whose net_worth or average tax_liability exceeds these thresholds however will not be presumed to have a principal purpose of tax_avoidance if that former citizen is described within certain statutory categories and submits a request for a ruling within one year of the date of loss of u s citizenship for the secretary’s determination as to whether such loss had for one of its principal purposes the avoidance of u s taxes see sec_877 sec_2107 and sec_2501 under notice_98_34 1998_2_cb_29 modifying notice_97_19 1997_1_cb_394 an eligible former citizen will not be presumed to have a principal purpose of tax_avoidance if that former citizen submits a complete and good_faith request for a ruling as to whether such loss had for one of its principal purposes the avoidance of u s taxes a is eligible to request a ruling under sec_877 because she became at birth a citizen_of_the_united_states and a citizen of another country and continues to be a citizen of such other country sec_877 notice_98_34 requires that certain information be submitted with a request for a ruling that an individual’s expatriation did not have for one of its principal purposes the avoidance of u s taxes a submitted all of the information required by notice_98_34 including any additional information requested by the service after review of the submission based solely on the information submitted and the representations made we conclude that a has made a complete and good_faith submission in accordance with sec_877 we further conclude that a will not be treated under sec_877 as having as one of her principal purposes for expatriating the avoidance of u s taxes under subtitle a or b of the code accordingly a will not be subject_to the provisions of sec_877 and the applicable provisions of sec_2107 and sec_2501 a copy of this letter must be attached to a’s u s income_tax return for the year in which a obtained the ruling whether or not a is otherwise required to file a return this ruling is directed only to the taxpayer s 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 the taxpayer sincerely w edward williams senior technical reviewer branch office of the associate chief_counsel international


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 corp b02 plr-138989-16 date date in re ----------------------------- legend parent ------------------------------------------------------------- -------------------------------- x ------------------------------------------------------------- ---------------------------- y ------------------------------------------------------------- ----------------------------------- date date date date state a --------------------------- --------------------------- -------------------------- --------------------------- -------------- ----------------------------- company official ------------------------------------------------------------------- ----------------------------------------------------------------- tax professional ------------------------------------ plr-138989-16 ---------------------------------------------------- dear -------------------- this letter responds to a letter dated date and additional correspondence submitted on behalf of parent requesting an extension of time under sec_301_9100-1 and sec_301_9100-3 of the procedure and administration regulations to file an election in particular parent is requesting an extension of time for parent and the members of its affiliated_group the parent group to file a consolidated federal_income_tax return with parent as the common parent under sec_1_1502-75 of the income_tax regulations the election for the taxable_year ending date the material information submitted for consideration is summarized below parent is a domestic_corporation incorporated under the laws of state a on date y is a domestic_corporation incorporated under the laws of state a on date as a wholly-owned subsidiary of parent prior to date x was the common parent of a consolidated_group the x consolidated_group on date parent x and y entered into an agreement and plan of merger the merger plan on date under the merger plan x merged with y with x as the surviving entity as a result of the merger parent acquired of the stock issued and outstanding in x from x’s former shareholders in exchange for a right to receive cash terminating the x consolidated_group sec_1_1502-75 of the income_tax regulations provides in part that an affiliated_group_of_corporations which did not file a consolidated_return for the immediately preceding_taxable_year may file a consolidated_return in lieu of separate returns for the taxable_year provided that each corporation which has been a member of the group during any part of the taxable_year for which the consolidated_return is to be filed consents in accordance with sec_1_1502-75 of the regulations to the regulations under sec_1502 if a group wishes to exercise its privilege of filing a consolidated_return such consolidated_return must be filed not later than the last day prescribed by law including extensions of time for the filing of the common parent’s return an election for the parent group to file a consolidated_income_tax_return for the taxable_year ending date was due on the last day prescribed by law including extensions of time for the filing of parent’s return for various reasons however a valid election was not filed subsequently parent discovered that a valid the election had not been filed and submitted under sec_301_9100-3 this request for an extension of time to file the election the period of limitations on assessment under sec_6501 has not expired for the taxable_year ending date or any subsequent taxable_year parent has represented that it is not seeking to alter a return position for which an accuracy- related penalty has been or could be imposed under sec_6662 at the time of the request plr-138989-16 for relief and the new position requires or permits a regulatory election for which relief is requested 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 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 requests 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 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 the regulations ie sec_1_1502-75 therefore the commissioner has discretionary authority under sec_301_9100-3 to grant an extension of time for parent to file the election provided parent establishes to the satisfaction of the commissioner that it acted reasonably and in good_faith the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and granting relief will not prejudice the interests of the government information affidavits and representations submitted by parent company official and tax professional explain the circumstances that resulted in the failure to timely file a valid election the information establishes that parent reasonably relied on a qualified_tax professional who failed to make or advise parent to make the election and that the request for relief was filed before the failure to timely make the election was discovered by the internal_revenue_service see sec_301_9100-3 and v based on the facts and information submitted including the affidavits submitted and the representations made we conclude that parent has shown it acted reasonably and in good_faith the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and granting relief will not prejudice the interests of the government accordingly provided the parent group qualifies substantively to file a consolidated_return for the applicable_taxable_year we grant an extension of time under sec_301_9100-3 until sixty days from the date on this letter for parent to file the election by filing a consolidated_return with parent as the common parent and attaching a form_1122 for each of its affiliated subsidiaries for its taxable_year ending date the above extension of time is conditioned on the parent group’s tax_liability if any not being lower in the aggregate for all years to which the election applies than it would have been if the election had been timely made taking into account the time_value_of_money we express no opinion as to the parent group’s tax_liability for the plr-138989-16 years involved a determination thereof will be made by the director’s office upon audit of the income_tax returns involved a copy of this letter must be attached to any income_tax return to which it is relevant alternatively taxpayers filing their returns electronically may satisfy this requirement by attaching a statement to their return that provides the date on and control number of the letter_ruling except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any item discussed or referenced in this letter in particular we express no opinion with respect to whether parent qualifies substantively to make the election in addition we express no opinion as to the tax effects or consequences of filing the election late under the provisions of any other section of the internal_revenue_code or regulations or as to the tax treatment of any conditions existing at the time of or resulting from filing the election late that are not specifically set forth in this letter for purposes of granting relief under sec_301_9100-3 we relied on certain statements and representations made under penalty of perjury by parent company official and tax professional the director however should verify all essential facts in addition notwithstanding that an extension is granted under sec_301_9100-3 to file the election any penalties and interest that would otherwise be applicable continue to apply this letter_ruling is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent pursuant to the power_of_attorney on file in this office copies of this letter are being sent to your authorized representatives sincerely _________________ ken cohen chief branch office of associate chief_counsel corporate


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 corp plr-106611-15 date date legend taxpayer ---------------------------------------------------- ---------------------------- -------------- ------------------------------------- ---------------------------- ------------------------ --------------------------- state x exchange date date date dear ----------- this letter responds to your date request for rulings under sec_301 and sec_305 of the internal_revenue_code the code the information provided in that request and in later correspondence is summarized below the rulings contained in this letter are based upon information and representations submitted by taxpayer and accompanied by a penalties 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 plr-106611-15 summary of facts taxpayer is a state x corporation that files its federal_income_tax returns on a calendar_year basis taxpayer has two classes of voting common_stock outstanding class a common_stock and class b common_stock the class a common_stock is publicly traded on the exchange and is entitled to dividends and other distributions the class b common_stock is not publicly traded and is not entitled to dividends or other distributions taxpayer intends to elect under sec_856 to be treated as a real_estate_investment_trust reit beginning with the taxable_year ending date the first reit taxable_year during the last three months of the first reit taxable_year taxpayer intends to declare a dividend to be distributed no later than date to its shareholders with respect to the class a common_stock in - at the election of each shareholder - cash or class a common_stock of equivalent value subject_to proration adjustments as described below stock and cash distribution taxpayer may also make one or more stock and cash distributions during its taxable_year ending date for each stock and cash distribution the total amount of cash available will be limited to a specified percentage the cash percentage equal to percent or more of the aggregate value of the respective stock and cash distribution the cash limitation in no event will the cash limitation for any stock or cash distribution be less than percent of the aggregate value of the respective stock and cash distribution for each stock and cash distribution each shareholder will have the right to elect to receive its entire entitlement under the distribution in i cash the cash_option or ii class a common_stock of equivalent value in the event taxpayer does not receive an election from a shareholder that shareholder will default to the option determined by taxpayer in taxpayer’s sole discretion taxpayer anticipates paying cash in lieu of issuing fractional shares of stock though cash paid in lieu of fractional shares will not count against the cash limitation if the cash component of a stock and cash distribution is not oversubscribed each shareholder electing to receive the cash_option will receive its entire entitlement under the distribution in cash if the cash component of a stock and cash distribution is oversubscribed then each shareholder electing to receive the cash_option will receive a pro_rata amount of cash corresponding to the shareholder's respective entitlement under the declaration but in no event will any such shareholder receive cash in an amount less than the cash percentage corresponding to the shareholder's entire entitlement under the distribution the calculation of the number of shares to be received by any shareholder in a stock and cash distribution will be determined over a period of up to two weeks ending as plr-106611-15 close as practicable to the payment_date based upon a formula utilizing market prices that is designed to equate in value the number of shares to be received with the amount of cash that could be received instead taxpayer does not currently have a dividend_reinvestment_plan drip in effect but with respect to a stock and cash distribution and any shareholder participating in a future drip the drip will apply only to the extent that in the absence of the drip the participating shareholder would have received the distribution in cash under the stock and cash distribution rulings based solely on the information provided and representations made we rule as follows any and all of the cash and class a common_stock distributed in a stock and cash distribution as described above by taxpayer will be treated as a distribution_of_property with respect to its stock to which sec_301 applies sec_301 and sec_305 the amount of a distribution of class a common_stock received by any shareholder in a stock and cash distribution as described above will be considered to equal the amount of the cash which could have been received instead sec_1_305-1 caveats 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 in particular we express no opinion regarding whether taxpayer otherwise qualifies as a reit under part ii of subchapter_m of chapter of the code whether any stock and cash distribution will satisfy the distribution_requirements of sec_857 or whether any stock and cash distribution is to be considered preferential under sec_562 procedural statements 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 a copy of this letter must be attached to any income_tax return to which it is relevant alternatively taxpayers filing their returns electronically may satisfy this requirement by attaching a statement to their return that provides the date and control number of this ruling letter plr-106611-15 in accordance with the power_of_attorney on file in this office a copy of this ruling letter is being sent to your authorized representative sincerely ____________________________________ stephanie d floyd assistant to branch chief branch office of associate chief_counsel corporate cc


internal_revenue_service number release date index number ---------------------------------------- -------------------------- ------------------------------- ------------------------------- department of the treasury washington dc person to contact ------------------------- id no ------------- telephone number --------------------- refer reply to cc psi b01 - plr-109912-05 date date -------------------------- ------------------------- x -------------------------------------------------- date date trust trust dear ---------------- ----------------------- ------------------ -------------------------------------------- this responds to a letter dated date and additional correspondence submitted on behalf of x requesting a ruling under sec_1362 of the internal_revenue_code facts x elected to be taxed as an s_corporation effective date effective date trust an eligible s_corporation shareholder transferred stock in x to trust which was not an eligible s_corporation shareholder the income_beneficiary intended to file an election for trust to be treated as a aqualified subchapter_s_trust qsst under sec_1361 however the election was not timely filed x represents that there was no intent to terminate x s s_corporation_election and that the failure_to_file timely the qsst election for trust was not motivated by tax_avoidance or retroactive tax planning x also represents that since date and plr-109912-05 thereafter trust has complied with the requirements under sec_1361 which defines a qsst x and its shareholders agree to make any adjustments required by the secretary consistent with the treatment of x as an s_corporation law and analysis sec_1361 provides that the term s_corporation means with respect to any taxable_year a small_business_corporation for which an election under sec_1362 is in effect for such year sec_1361 defines a small_business_corporation as a domestic_corporation which is not an ineligible_corporation and which does not a have more than shareholders b have as a shareholder a person other than an estate a_trust described in sec_1361 or an organization described in sec_1361 who is not an individual c have a nonresident_alien as a shareholder and d have more than one class of stock sec_1361 provides that a qsst whose beneficiary makes an election under sec_1362 will be treated as a_trust described in sec_1361 and the qsst's beneficiary will be treated as the owner for purposes of sec_678 of that portion of the qsst's s_corporation stock to which the election under sec_1361 applies under sec_1361 a beneficiary of a qsst may elect to have sec_1361 apply under sec_1361 this election will be effective up to days and two months before the date of the election sec_1361 defines a qsst as a_trust a the terms of which require that i during the life of the current income_beneficiary there shall be only one income_beneficiary of the trust ii any corpus distributed during the life of the current income_beneficiary may be distributed only to such beneficiary iii the income_interest of the current beneficiary in the trust shall terminate on the earlier of the beneficiary's death or the termination of the trust and iv upon the termination of the trust during the life of the current income_beneficiary the trust shall distribute all of its assets to that beneficiary and b all of the income within the meaning of sec_643 of which is distributed or required to be distributed currently to one individual who is a citizen or resident_of_the_united_states sec_1362 provides that an election under sec_1362 shall be terminated whenever at any time on or after the first day of the first taxable_year for which a corporation is an s_corporation such corporation ceases to be a small_business_corporation plr-109912-05 sec_1362 provides in relevant part that if an election under sec_1362 by any corporation was not effective for the taxable_year for which made determined without regard to sec_1362 by reason of a failure to meet the requirements of sec_1361 b or to obtain shareholder consents the secretary determines that the circumstances resulting in such termination were inadvertent no later than a reasonable period of time after discovery of the circumstances resulting in ineffectiveness steps were taken so that the corporation is once more a small_business_corporation and the corporation and each person who was a shareholder of the corporation at any time during the period specified pursuant to sec_1362 agrees to make any adjustments consistent with the treatment of the corporation as an s_corporation as may be required by the secretary with respect to the period then notwithstanding the circumstances resulting in the ineffectiveness the corporation shall be treated as continuing to be an s_corporation during the period specified by the secretary conclusion based solely on the information submitted and the representations made we conclude that x's subchapter_s_election terminated because a qsst election was not filed for trust in addition we conclude that the termination was inadvertent within the meaning of sec_1362 therefore x will be treated as continuing to be an s_corporation from date and thereafter provided that the beneficiary for trust files a qsst election with the appropriate service_center within days of the date of this letter a copy of this letter should be attached to the qsst election except as specifically set forth above we express no opinion concerning the this ruling is directed only to the taxpayer s requesting it sec_6110 of federal tax consequences of the facts described above under any other provision of the code specifically no opinion is expressed concerning whether x is otherwise eligible to be treated as an s_corporation or whether trust is eligible to be treated as a qsst the code provides that it may not be used or cited as precedent letter is being sent to your representative in accordance with the power_of_attorney on file with this office a copy of this the rulings contained in this letter are based upon information and plr-109912-05 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 s dianna k miosi dianna k miosi chief branch office of associate chief_counsel passthroughs special industries enclosures copy of this letter copy for ' purposes