internal_revenue_service number release date index number 2032a ------------------------------------ ------------------------------------------- ---------------------- -------------------------- - 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 b09 plr-159333-04 date march legend decedent ------------------------------------------------------------------------------------------------- ------------------------- ----------------------- ------------------ ----------- ------------------------- ------------- ------------- --------------------------- --------- -------------------------- date date y date date date date z date dear --------------- this is in response to your authorized representative’s letter dated date submitted on behalf of decedent’s estate requesting an extension of time under sec_301_9100-1 and sec_301_9100-3 of the procedure and administration regulations to perfect a protective_election made under sec_2032a of the internal_revenue_code decedent died on date decedent’s gross_estate included farmland that was being farmed by decedent’s family members the executor of decedent’s estate retained the services of an attorney to assist with the probate of decedent’s estate the attorney hired an accountant to determine whether decedent’s estate qualified for special_use_valuation under sec_2032a and to prepare and file decedent’s federal and state estate_tax returns on date the accountant filed decedent’s federal estate_tax_return together with a payment of dollar_figurey decedent’s federal estate_tax_return also included a protective_election to specially value decedent’s farmland under sec_2032a the facts submitted and representations made are summarized as follows on date the accountant filed decedent’s supplemental federal estate_tax decedent’s estate has requested an extension of time under sec_301_9100-1 and on date the internal_revenue_service issued an estate_tax closing letter to the plr-159333-04 executor of decedent’s estate computing an estate_tax liability of dollar_figurey it is represented that at no time did the accountant notify the executor of decedent’s estate or the estate’s attorney that the protective sec_2032a election had to be perfected within days after issuance of the estate_tax closing letter between date and date the accountant communicated with decedent’s personal representative and qualified heirs in order to gather the necessary information to file a supplemental federal estate_tax_return for purposes of perfecting the estate’s protective_election under sec_2032a return attempting to perfect the sec_2032a protective_election and requesting a refund of dollar_figurez on date the internal_revenue_service informed decedent’s estate that it could not consider the estate’s attempt to perfect the protective_election for special_use_valuation under sec_2032a because the estate failed to perfect the election within days after issuance of the estate_tax closing letter to perfect the protective_election made under sec_2032a with respect to decedent’s farmland his death a citizen or resident_of_the_united_states and the executor elects the application of this section and files the agreement referred to in sec_2032a then for purposes of chapter the value of qualified_real_property shall be its value for the use under which it qualifies under sec_2032a as qualified_real_property sec_2032a provides that the election under sec_2032a shall be made on the return of the tax imposed by sec_2001 such election shall be made in such manner as the secretary shall by regulations prescribe such an election once made shall be irrevocable protective_election may be made to specially value qualified_real_property the availability of special_use_valuation pursuant to this election is contingent upon values as finally determined or agreed to following examination of a return meeting the requirements of sec_2032a the protective_election is to be made by a notice of election filed with a timely estate_tax_return stating that a protective_election under sec_2032a is being made pending final_determination of values if it is found that the estate qualifies for special_use_valuation based upon values as finally determined or agreed to following examination of a return an additional notice of election must be filed within days after the date of such determination under sec_301_9100-1 the commissioner may grant a reasonable extension of time to make a regulatory election or a statutory election but no more than months sec_2032a provides generally that if the decedent was at the time of sec_20_2032a-8 of the estate_tax regulations provides in part that a sec_301_9100-3 provides that a taxpayer is deemed to have acted plr-159333-04 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_9100-3 provides the standards used to determine whether to grant an extension of time to make an election whose due_date is prescribed by a regulation and not expressly provided by statute requests for relief under sec_301_9100-3 will be granted when the taxpayer provides the evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and the grant of relief will not prejudice the interests of the government sec_301_9100-3 provides that a taxpayer is deemed to have acted reasonably and in good_faith if the taxpayer failed to make the election because after exercising reasonable diligence taking into account the taxpayer’s experience and the complexity of the return or issue the taxpayer was unaware of the necessity for the election reasonably and in good_faith if the taxpayer reasonably relied on a qualified_tax professional including a tax professional employed by the taxpayer and the tax professional failed to make or advise the taxpayer to make the election the taxpayer acted reasonably and in good_faith and the grant of relief will not prejudice the interests of the government consequently an extension of time is granted until days from the date of this letter for perfecting the protective_election under sec_2032a to specially value qualified_real_property however the burden is on the estate to establish to the service’s satisfaction that all of the requirements of sec_2032a are met requirements of sec_20_2032a-8 and made on a supplemental form_706 united_states estate and generation-skipping_transfer_tax return filed with the cincinnati service_center a copy of this letter should be attached to the supplemental form_706 a copy is enclosed for this purpose the ruling contained in this letter is based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the ruling_request it is subject_to verification on examination tax consequences of the transaction under the cited provisions or under any other provisions of the code of the code provides that it may not be used or cited as precedent except as specifically ruled herein we express or imply no opinion on the federal this ruling is directed only to the taxpayer who requested it sec_6110 based on the facts submitted and the representations made we conclude that the protective sec_2032a election must be perfected in accordance with the plr-159333-04 in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative sincerely heather c maloy associate chief_counsel passthroughs special industries enclosures copy for sec_6110 purposes copy of letter


department of the treasury internal_revenue_service te_ge eo examinations commerce street tax_exempt_and_government_entities_division number release date dallas tx date date taxpayer_identification_number person to contact employee identification_number employee telephone number uil certified mail - return receipt requested dear this is a final adverse determination_letter as to your exempt status under sec_501 of the internal_revenue_code your exemption from federal_income_tax under sec_501 of the code is hereby revoked effective january 20xx our adverse determination was made for the following reasons organizations described in sec_501 and exempt under sec_501 must be both organized and operated exclusively for exempt purposes you have failed to produce documents or otherwise establish that you are operated exclusively for exempt purposes and that no part of your net_earnings inures to the benefit of private shareholders or individuals you failed to respond to repeated reasonable requests to allow the internal_revenue_service to examine your records regarding your receipts expenditures or activities as required by sec_6001 sec_6033 and revrul_59_95 1959_1_cb_627 contributions to your organization are no longer deductible under sec_170 of the internal_revenue_code you are required to file federal_income_tax returns on form_1120 if you have not already filed these returns and the agent has not provided you instructions for converting your previously filed form_990 to form_1120 you should file these income_tax returns with the appropriate service_center for the tax_year ending december 20xx and for all tax years thereafter in accordance with the instructions of the return processing of income_tax returns and assessments of any taxes due will not be delayed should a petition for declaratory_judgment be filed under sec_7428 of the internal_revenue_code if you decide to contest this determination you may file an action for declaratory_judgment under the provisions of sec_7428 of the code in one of the following three venues united_states tax_court the united_states court of federal claims or the united_states district_court for the district of columbia a petition or complaint in one of these three courts must be filed before the 91st day after the date this determination was mailed to you if you wish to seek review of our determination please contact the clerk of the respective court for rules and the appropriate forms regarding filing petitions for declaratory_judgment by referring to the enclosed publication please note that the united_states tax_court is the only one of these courts where a declaratory_judgment action can be pursued without the services of a lawyer you may write to the courts at the following addresses united_states tax_court second street nw washington dc us court of federal claims madison place nw washington dc u s district_court for the district of columbia constitution ave n w washington dc the taxpayer_advocate_service tas is an independent organization within the irs that can help protect you taxpayer rights we can offer you help if your tax problem is causing a hardship or you’ve tried but haven’t been able to resolve your problem with the irs if you qualify for our assistance which is always free we will do everything possible to help you visit taxpayeradvocate irs gov or call if you have any questions please contact the person whose name and telephone number are shown in the heading of this letter maria hooke director eo examinations enclosures publication sincerely yours ch department of the treasury internal_revenue_service tax exempt and government entities irs exempt_organizations examinations date date taxpayer_identification_number form tax_year s ended person to contact id number contact numbers telephone fax manager's name id number manager's contact number response due_date certified mail - return receipt requested dear why you are receiving this letter we propose to revoke your status as an organization described in sec_501 of the internal_revenue_code code enclosed is our report of examination explaining the proposed action what you need to do if you agree if you agree with our proposal please sign the enclosed form_6018 consent to proposed action - sec_7428 and return it to the contact person at the address listed above unless you have already provided us a signed form we'll issue a final revocation letter determining that you aren’t an organization described in sec_501 after we issue the final revocation letter we'll announce that your organization is no longer eligible for contributions deductible under sec_170 of the code if we don't hear from you if you don’t respond to this proposal within calendar days from the date of this letter we'll issue a final revocation letter failing to respond to this proposal will adversely impact your legal standing to seek a declaratory_judgment because you failed to exhaust your administrative remedies effect of revocation status if you receive a final revocation letter you'll be required to file federal_income_tax returns for the tax_year s shown above as well as for subsequent tax years what you need to do if you disagree with the proposed revocation letter rev catalog number 34809f if you disagree with our proposed revocation you may request a meeting or telephone conference with the supervisor of the irs contact identified in the heading of this letter you also may file a protest with the irs appeals_office by submitting a written request to the contact person at the address listed above within calendar days from the date of this letter the appeals_office is independent of the exempt_organizations division and resolves most disputes informally for your protest to be valid it must contain certain specific information including a statement of the facts the applicable law and arguments in support of your position for specific information needed for a valid protest please refer to page one of the enclosed publication how to appeal an irs decision on tax-exempt status and page six of the enclosed publication the examination process publication also includes information on your rights as a taxpayer and the irs collection process please note that fast track mediation referred to in publication generally doesn’t apply after we issue this letter you also may request that we refer this matter for technical_advice as explained in publication please contact the individual identified on the first page of this letter if you are considering requesting technical_advice if we issue a determination_letter to you based on a technical_advice_memorandum issued by the exempt_organizations rulings and agreements office no further irs administrative appeal will be available to you contacting the taxpayer_advocate office is a taxpayer right you have the right to contact the office_of_the_taxpayer_advocate their assistance isn't a substitute for established irs procedures such as the formal appeals process the taxpayer_advocate can't reverse a legally correct_tax determination or extend the time you have fixed by law to file a petition in a united_states court they can however see that a tax matter that hasn't been resolved through normal channels gets prompt and proper handling you may call toll-free and ask for taxpayer_advocate assistance if you prefer you may contact your local taxpayer_advocate at internal_revenue_service office_of_the_taxpayer_advocate letter rev catalog number 34809f for additional information if you have any questions please call the contact person at the telephone number shown in the heading of this letter if you write please provide a telephone number and the most convenient time to call if we need to contact you thank you for your cooperation sincerely margaret von lienen director eo examinations enclosures report of examination form_6018 publication publication public administrative record select check for verification of december 20xx 990n letter rev catalog number 34809f schedule number or exhibit form 886-a rev date explanations of items name of taxpayer issue tax identification_number 20xx year period ended whether internal_revenue_code irc qualifies for exemption under sec_501 of the facts exhibit a provides copies of the internal_revenue_service correspondence requesting that incorporation purpose clause provide financial statements and minutes submit documentation to amend their articles of the revenue_agent sent the march 20xx request via certified mail the organization signed for the letter on april 20xx see exhibit b failed to respond to the internal_revenue_service law sec_6001 provides that every person liable for any_tax imposed by the irc or for the collection thereof shall keep adequate_records as the secretary_of_the_treasury or_his_delegate may from time to time prescribe sec_6033 provides except as provided in sec_6033 every organization exempt from tax under sec_501 shall file an annual return stating specifically the items of gross_income receipts and disbursements and such other information for the purposes of carrying out the internal revenue laws as the secretary may by forms or regulations prescribe and keep such records render under oath such statements make such other returns and comply with such rules and regulations as the secretary may from time to time prescribe sec_1_6001-1 in conjunction with sec_1_6001-1 provides that every organization exempt from tax under sec_501 and subject_to the tax imposed by sec_511 on its unrelated_business_income must keep such permanent books or accounts or records including inventories as are sufficient to establish the amount of gross_income deduction credits or other matters required to be shown by such person in any return of such tax such organization shall also keep such books_and_records as are required to substantiate the information required by sec_6033 sec_1_6001-1 states that the books_or_records required by this section shall be kept at all times available for inspection by authorized internal revenue officers or employees and shall be retained as long as the contents thereof may be material in the administration of any internal revenue law sec_1_6033-1 provides that every organization which has established its right to exemption from tax whether or not it is required to file an annual return of information shall submit such additional information as may be required by the district_director for the purpose of form 886-a catalog number 20810w page publish no irs gov department of the treasury-internal revenue service schedule number or exhibit form 886-a rev date explanations of items name of taxpayer enabling him to inquire further into its exempt status and to administer the provisions of subchapter_f sec_501 and the following chapter of the code and sec_6033 tax identification_number 20xx year period ended revrul_59_95 1959_1_cb_627 concerns an exempt_organization that was requested to produce a financial statement and statement of its operations for a certain year however its records were so incomplete that the organization was unable to furnish such statements the service held that the failure or inability to file the required information_return or otherwise to comply with the provisions of sec_6033 and the regulations which implement it may result in the termination of the exempt status of an organization previously held exempt on the grounds that the organization has not established that it is observing the conditions required for the continuation of exempt status in accordance with the above cited provisions of the code and regulations under sec_6001 and sec_6033 organizations recognized as exempt from federal_income_tax must meet certain reporting requirements these requirements relate to the filing of a complete and accurate annual information and other required federal tax forms and the retention of records sufficient to determine whether such entity is operated for the purposes for which it was granted tax- exempt status and to determine its liability for any unrelated_business_income_tax tax payers position unknown- the taxpayer has not responded to the service’s request for documentation regarding their exempt status and correcting their purpose clause despite numerous attempts made by the service vernm ition failed to meet the it is the internal revenue service's position that inspection requirements under sec_6001 and sec_6033 to be recognized as exempt from federal_income_tax under sec_501 accordingly the organization's exempt status is revoked effective january 20xx conclusion december 20xx must file form_1120 for the tax periods ending on or after form 886-a catalog number 20810w page _publish no irs gov department of the treasury-internal revenue service


of f i c e of c h i ef c ou n sel department of the treasury i n t e r n al r e v e n u e s e r v i c e w ashington d c april cc ita b01 plr-p-101523-09 number info release date uil --------------- ------------------------------ ------------------------------------ ---------------------------- dear ------------- this letter responds to your request for information dated date in your request you asked for information regarding two situations related to the contribution of a term life_insurance_policy in situation you asked whether consistent with the partial interest rule a taxpayer holding a term life_insurance_policy may turn in his old policy to the insurance_company and in exchange receive two brand new policies one of which the taxpayer will donate to charity in situation you asked whether consistent with the partial interest rule a taxpayer holding a term life_insurance_policy may ask the insurance_company to reduce the death_benefit of the existing term policy and in exchange issue a brand new second policy that the taxpayer will donate to charity a taxpayer is allowed a deduction for certain charitable_contributions made during the taxable_year however a charitable_contribution_deduction is disallowed if the contribution violates the partial interest rule that is a charitable_contribution_deduction is generally disallowed if the taxpayer contributes less than his or her entire_interest in the donated property moreover a taxpayer may not divide his or her property in order to avoid the partial interest rule for example if a taxpayer wants to contribute to a charitable_organization an income_interest in property and if the taxpayer then transfers a remainder_interest in that property to his son and immediately thereafter contributes the income_interest to a charitable_organization no deduction will be allowed for the contribution of the income_interest this would be a situation where the taxpayer divided his property to avoid the partial interest rule if a taxpayer exchanges an insurance_policy for two new separate and distinct insurance policies and donates one to charity that contribution would generally not plr-p-101523-09 violate the partial interest rule likewise if a taxpayer has his or her insurer reduce the old policy’s death_benefits in exchange for the insurer issuing a new policy that is then contributed to charity that contribution would generally not violate the partial interest rule this letter has called your attention to certain general principles of the law it is intended for informational purposes only and does not constitute a ruling see dollar_figure of revproc_2009_1 sec_2 2009_1_irb_7 date if you have additional questions please contact me or ---------------------------------------- at -------------------- sincerely karin gross senior technician reviewer branch income_tax accounting


internal_revenue_service number release date index number ---------------------- --------------------------------------- ------------------- --------------------------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact --------------- id no ------------------ telephone number ---------------------- refer reply to cc psi b01 plr-132965-12 date date legend x ------------------------------------------- --------------------------------- a ---------------------- b -------------------------------------------- ------------------- trust ------------------------------------------- -------------------------------- date ---------------------- date -------------------------- date ------------------ date ------------------ state ----------------- dear --------------- this responds to a letter dated date submitted on behalf of x by x’s authorized representative requesting a ruling under sec_1362 of the internal_revenue_code plr-132965-12 facts according to the information submitted x was incorporated under the laws of state effective date x elected to be taxed as an s_corporation on date a a shareholder of x died pursuant to a’s will a’s x shares were transferred to trust on date trust was an eligible shareholder of x until date as of date trust was intended to be treated as a qualified_subchapter_s_trust qsst however b the beneficiary of trust did not file a timely election to treat trust as a qsst therefore causing x’s s_corporation_election to terminate as of date x represents that trust qualified as a qsst under sec_1361 as of date and thereafter x further represents that the circumstances resulting in the failure_to_file a qsst election for trust was inadvertent and was not motivated by tax_avoidance or retroactive tax planning x and its shareholders have agreed to make such adjustments consistent with the treatment of x as an s_corporation as may be required by the secretary law and analysis sec_1361 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 defines a small_business_corporation as a domestic_corporation which is not an ineligible_corporation and which does not a have more than shareholders b have as a shareholder a person other than an estate a_trust described in sec_1361 or an organization described in sec_1361 who is not an individual c have a nonresident_alien as a shareholder and d have more than class of stock sec_1361 provides that for purposes of sec_1361 a_trust all of which is treated under subpart e as owned by an individual who is a citizen or resident_of_the_united_states may be a shareholder sec_1361 provides that in the case of a qsst with respect to which a beneficiary makes an election under sec_1361 the trust is treated as a_trust described in sec_1361 and for purposes of sec_678 the beneficiary of the trust is treated as the owner of that portion of the trust which consists of stock in a s_corporation with respect to which the election under sec_1361 is made sec_1361 provides that a_trust with respect to stock transferred to it pursuant to a will but only for the 2-year period beginning on the day on which such is plr-132965-12 transferred to it sec_1362 provides in relevant part that if an election under sec_1362 by any corporation was terminated under sec_1362 or or sec_1361 the secretary determines that the circumstances resulting in such termination were inadvertent no later than a reasonable period of time after discovery of the circumstances resulting in such termination steps were taken so that the corporation for which the termination occurred is a small_business_corporation and the corporation for which the termination occurred and each person who was a shareholder in such corporation at any time during the period specified pursuant to sec_1362 agrees to make the adjustments consistent with the treatment of such corporation as an s_corporation as may be required by the secretary with respect to such period then notwithstanding the circumstances resulting in such termination such corporation shall be treated as an s_corporation during the period specified by the secretary conclusion based solely on the facts submitted and the representations made we conclude that x’s s_corporation_election terminated on date as a result of the failure to make a timely qsst election for trust we further conclude that the termination of x’s s election on date was inadvertent within the meaning of sec_1362 pursuant to the provisions of sec_1362 x will be treated as continuing to be an s_corporation as of date and thereafter provided that b files a qsst election for trust with an effective date of date with the appropriate service_center within days from the date of this letter and x’s s_corporation_election is not otherwise terminated under sec_1362 a copy of this letter must be attached to the qsst election accordingly x’s shareholders in determining their respective income_tax liabilities must include their pro_rata share of the separately and non-separately computed items of x as provided in sec_1366 make any adjustments to stock basis as provided in sec_1367 and take into account distributions made by x as of provided by sec_1368 except as specifically ruled upon above we express or imply no opinion concerning the federal tax consequences of the facts of this case under any other provision of the code specifically we express or imply no opinion regarding x’s eligibility to be an s_corporation further no opinion is expressed or implied concerning whether trust meets the requirements of a qsst under sec_1361 this ruling is directed only to the taxpayer who requested it according to sec_6110 this ruling may not be used or cited as precedent plr-132965-12 pursuant to the power_of_attorney on file with this office we are sending a copy of this letter to your authorized representative sincerely faith colson faith colson senior counsel branch office of the associate chief_counsel passthroughs special industries enclosures copy of this letter copy of this letter for sec_6110 purposes cc


t c summary opinion united_states tax_court thomas a wagoner petitioner v commissioner of internal revenue respondent docket no 5654-11s filed date thomas a wagoner pro_se joline m wang for respondent summary opinion vasquez judge this case was heard pursuant to the provisions of sec_7463 of the internal_revenue_code in effect when the petition was filed pursuant unless otherwise indicated all section references are to the internal_revenue_code in effect for the years in issue all rule references are to the tax continued to sec_7463 the decision to be entered is not reviewable by any other court and this opinion shall not be treated as precedent for any other case respondent determined deficiencies of dollar_figure and dollar_figure and sec_6662 accuracy-related_penalties of dollar_figure and dollar_figure in petitioner’s federal_income_tax for and respectively after concessions the issues remaining for decision are whether petitioner is entitled to deduct car and truck expenses for and whether with respect to his federal_income_tax liabilities for to petitioner is entitled to deduct interest and penalties for and whether petitioner is liable for accuracy-related_penalties for and continued court rules_of_practice and procedure all amounts are rounded to the nearest dollar petitioner concedes that he failed to report income of dollar_figure on schedule f profit or loss from farming for petitioner further concedes that he is not entitled to deduct interest_expenses for and travel_expenses for and on schedule c profit or loss from business respondent concedes that petitioner is entitled to deduct insurance expenses of dollar_figure each year for and and tax and license expenses of dollar_figure for and dollar_figure for on schedule c the remaining adjustments in the notice_of_deficiency are computational and will be resolved under rule background some of the facts have been stipulated and are so found the stipulation of facts and the accompanying exhibits are incorporated herein by this reference at the time he filed his petition petitioner resided in nebraska petitioner a self-employed attorney failed to pay his federal_income_tax for to after notice_and_demand for payment consequently liens in favor of the united_states arose and attached to all his property including his personal_residence the internal_revenue_service irs filed notices of federal_tax_lien on date date and date in hall county nebraska and on date and date in hitchcock county nebraska on date petitioner made a payment of dollar_figure to the irs which included interest of dollar_figure and penalties of dollar_figure with respect to the unpaid tax_liabilities during and petitioner operated a law practice in nebraska as a sole_proprietorship he drove a bmw in and the first six months of on date he traded in the bmw for a lexus which he drove for the second half of the year he used the automobiles in his law practice and for his personal needs but he did not keep any records separating the uses for each year in issue petitioner filed a form_1040 u s individual_income_tax_return and attached a schedule c for his law practice for he claimed a deduction on schedule c of dollar_figure for car and truck expenses for he claimed deductions on schedule c of dollar_figure for car and truck expenses dollar_figure for interest and dollar_figure for penalties respondent disallowed these deductions in a notice_of_deficiency mailed to petitioner on date petitioner timely filed a petition with the court contesting respondent’s determinations i general rules discussion the commissioner’s determinations are generally presumed correct and the taxpayer bears the burden of proving the determinations erroneous rule a the taxpayer bears the burden of proving that he or she is entitled to any deduction claimed and this includes the burden of substantiation id 65_tc_87 aff’d per curiam 540_f2d_821 5th cir petitioner admitted at trial that the amounts of the deductions he claimed on his return for interest and penalties were in error and he contended that he is entitled to deduct dollar_figure for interest and dollar_figure for penalties petitioner has neither claimed nor established that he satisfies the requirements of sec_7491 to shift the burden_of_proof to respondent with regard to any factual issue a taxpayer must substantiate amounts claimed as deductions by maintaining the records necessary to establish he or she is entitled to the deductions sec_6001 sec_162 provides a deduction for certain business_expenses in order to qualify for the deduction under sec_162 an item must be ‘paid or incurred during the taxable year’ be for ‘carrying on any trade or business’ be an ‘expense’ be a ‘necessary’ expense and be an ‘ordinary’ expense 403_us_345 see also 383_us_687 the term necessary imposes only the minimal requirement that the expense be ‘appropriate and helpful’ for ‘the development of the taxpayer’s business’ alteration in original quoting 290_us_111 308_us_488 to qualify as ordinary the expense must relate to a transaction of common or frequent occurrence in the type of the business involved whether an expense is ordinary is determined by time place and circumstance welch v helvering u s pincite if a taxpayer establishes that he or she paid_or_incurred a deductible business_expense but does not establish the amount of the expense we may approximate the amount of the allowable deduction bearing heavily against the taxpayer whose inexactitude is of his or her own making 39_f2d_540 2d cir however for the cohan_rule to apply there must be sufficient evidence in the record to provide a basis for the estimate 85_tc_731 certain expenses may not be estimated because of the strict substantiation requirements of sec_274 see sec_280f 50_tc_823 aff’d per curiam 412_f2d_201 2d cir ii car and truck expenses generally passenger automobiles and any other_property used as a means of transportation are listed_property see sec_280f and ii and these expenses are subject_to the strict substantiation requirements of sec_274 sec_274 requires a taxpayer to substantiate the expenses by adequate_records or other corroborating evidence of the amount of each use ie the mileage the time and place of the use and the business purposes of the use see fessey v commissioner tcmemo_2010_191 slip op pincite sec_1_274-5t c temporary income_tax regs fed reg date to satisfy the adequate_records requirement of sec_274 a taxpayer must maintain records and documentary_evidence that in combination are sufficient to establish each element of an expenditure or use sec_1_274-5t temporary income_tax regs supra although a contemporaneous log is not required corroborative evidence to support a taxpayer’s reconstruction of the elements of the expenditure or use must have a high degree of probative value to elevate such statement and evidence to the level of credibility of a contemporaneous record sec_1_274-5t temporary income_tax regs fed reg date in the absence of adequate_records to substantiate each element of an expense a taxpayer may alternatively establish an element by his own statement whether written or oral containing specific information in detail as to such element and by other corroborative evidence sufficient to establish such element sec_1_274-5t temporary income_tax regs fed reg date sec_274 overrides the cohan_rule with respect to sec_280f listed_property and thus specifically precludes the court from allowing automobile expenses on the basis of any approximation or the taxpayer’s uncorroborated testimony petitioner claimed deductions of dollar_figure and dollar_figure for car and truck expenses on schedule c for and respectively he testified that he incurred expenses each year of approximately dollar_figure for depreciation dollar_figure for fuel dollar_figure for insurance and dollar_figure for maintenance he further testified that he drove approximately big_number miles per year and figured just slightly more than half of the miles are driven for work the only documents that he introduced into evidence to substantiate the expenses are copies of the sales invoices for the bmw and the lexus and a sales_tax receipt for the lexus except for some vague testimony he did not introduce any evidence to establish the elements of time and place or business_purpose furthermore his testimony as to the mileage is just an approximation and is not corroborated by any other evidence we do not doubt that petitioner incurred car and truck expenses for the years in issue however we find that he has not met the strict substantiation requirements of sec_274 accordingly petitioner is not entitled to deduct the car and truck expenses for and iii interest and penalties with respect to federal_income_tax liabilities sec_163 allows a deduction for all interest_paid or accrued within the taxable_year on indebtedness however sec_163 disallows deductions of personal_interest paid_or_accrued during the taxable_year in the case of a taxpayer other than a corporation personal_interest is any interest allowable as a deduction other than interest listed in sec_163 qualified_residence_interest is excluded from the definition of personal_interest and thus is deductible under sec_163 see sec_163 qualified_residence_interest is any interest that is paid_or_accrued during the taxable_year on acquisition_indebtedness or home_equity_indebtedness see sec_163 acquisition_indebtedness means any indebtedness which is incurred in acquiring constructing or substantially improving any qualified_residence of the taxpayer and is secured_by such residence sec_163 home_equity_indebtedness means any indebtedness other than acquisition_indebtedness secured_by a qualified_residence to the extent the aggregate amount of such indebtedness does not exceed the fair_market_value of such qualified_residence reduced by the amount of acquisition_indebtedness with respect to such residence sec_163 a debt will not be considered to be secured_by a qualified_residence if it is secured solely by virtue of a lien upon the general assets of the taxpayer or by a security_interest such as a mechanic’s lien or judgment lien that attaches to the property without the consent of the debtor sec_1_163-10t flush language temporary income_tax regs fed reg date petitioner contends that the interest with respect to his federal_income_tax liabilities for to is deductible under sec_163 as interest_paid on home_equity_indebtedness because a federal_tax_lien with respect to those liabilities attached to his personal_residence however his argument is erroneous insofar as neither a federal_tax_lien nor the filing of a notice_of_federal_tax_lien caused his tax indebtedness to be secured_by a qualified_residence see sec_1 10t o flush language temporary income_tax regs supra furthermore sec_1_163-9t temporary income_tax regs fed reg date specifically provides that interest_paid on income_tax liabilities of individuals regardless of the source of the income or other adjustments to which the tax_liabilities relate is to be treated as personal_interest we find that the interest petitioner paid with respect to his federal_income_tax liabilities is nondeductible personal_interest and not interest_paid on home_equity_indebtedness petitioner ha sec_5 a federal_tax_lien under sec_6321 arises by operation of law when a taxpayer fails to pay an assessed tax_liability after receiving a notice_and_demand for payment sec_6322 134_tc_280 the lien attaches to all property and rights to property belonging to the taxpayer ie his general assets sec_6321 the irs files a notice_of_federal_tax_lien to preserve priority and put other creditors on notice see sec_6323 in 119_tc_44 we concluded that sec_1_163-9t temporary income_tax regs fed reg date is valid that pre- sec_163 caselaw was inapplicable that we would no longer follow our opinion in 106_tc_31 rev’d 141_f3d_936 9th cir and that interest_paid on individual tax_liabilities relating to income from a sole_proprietorship is to be treated as nondeductible personal_interest failed to cite any authority for his position that the penalties are deductible accordingly petitioner is not entitled to deduct the interest and penalties for iv accuracy-related_penalties sec_6662 and b imposes a penalty equal to of the amount of any underpayment attributable to negligence or disregard of rules or regulations the term negligence includes any failure to make a reasonable attempt to comply with the tax laws and disregard includes any careless reckless or intentional disregard of rules or regulations sec_6662 negligence also includes any failure to keep adequate books_and_records or to substantiate items properly sec_1 b income_tax regs sec_6664 provides an exception to the imposition of the accuracy-related_penalty if the taxpayer establishes that there was reasonable_cause for and the taxpayer acted in good_faith with respect to the underpayment sec_1_6664-4 income_tax regs the determination of whether the taxpayer acted with reasonable_cause and in good_faith is made on a case-by-case basis taking into petitioner bears the burden of proving that he is entitled to any deduction claimed see rule a he seemed to argue at trial that the penalties are also deductible as having been paid on home_equity_indebtedness however we likewise reject this argument additionally sec_162 specifically prohibits a business_expense deduction under sec_162 for any fines_or_penalties paid to a government for the violation of any law account the pertinent facts and circumstances sec_1_6664-4 income_tax regs with respect to a taxpayer’s liability for any penalty sec_7491 places on the commissioner the burden of production thereby requiring the commissioner to come forward with sufficient evidence indicating that it is appropriate to impose the penalty 116_tc_438 once the commissioner meets his burden of production the taxpayer must come forward with persuasive evidence that the commissioner’s determination is incorrect see id pincite see also rule a welch v helvering u s pincite petitioner failed to keep adequate_records and to properly substantiate the car and truck expenses and the expenses that he conceded he failed to report income on schedule f and he disregarded rules or regulations in claiming a deduction for the interest and penalties with respect to his federal_income_tax liabilities for to therefore we find that respondent has met his burden of production petitioner offered no evidence that he acted with reasonable_cause and in good_faith accordingly we find that petitioner is liable for the accuracy-related_penalty for and in reaching our holdings herein we have considered all arguments made and to the extent not mentioned above we conclude they are moot irrelevant or without merit to reflect the foregoing decision will be entered under rule


number release date id office uilc cca-916134-10 ------------- from ------------------ sent thursday pm to ---------------- cc -------------------------------------- subject lpg credits you asked questions regarding the alternative_fuel credit for lpg used in fork lifts for the periods when the credit was in effect you first asked whether the claim can be made on just a form_4136 or whether cents per gallon needed to be made on form_720 and the remainder taken on form_4136 you also asked if the claimant needed to be registered at the time the fuel was used or whether could it register later and file amended returns first if the claimant is a form_720 filer for any sec_4041 tax then it has to offset that liability first on the form_720 and may take the remainder on either the form_8849 or the form_4136 if the claimant is not a form_720 filer for any sec_4041 tax it can claim the whole amount on the form_4136 second it can make a claim for any open_year for which the credit was available after it gets a registration number


internal_revenue_service department of the treasury number release date index number washington dc person to contact telephone number refer reply to cc tege eoeg teb-plr-109842-03 date date legend authority state city x city y port x port y railroads street date date date year year plr-109842-03 a b c d e f g h dear this is in response to your request for a supplemental ruling that the authority may continue to rely on the following conclusions reached in the private_letter_ruling issued to the authority on date the prior ruling despite the factual changes that have occurred since date the authority’s allocation of of the trench costs to the street improvements will not cause the bonds or the new bonds as defined below to be private_activity_bonds under sec_141 the facts and circumstances weigh against application of the anti-abuse rule_of sec_1_141-14 of the income_tax regulations to reallocate the proceeds of the bonds or the new bonds to other purposes facts and representations the facts that form the basis for the prior ruling are incorporated herein by reference to the extent such facts have not been changed by the current ruling certain facts set forth in the prior ruling are repeated below for context all terms used and not otherwise defined herein are as defined in the prior ruling background the authority is a joint powers agency formed under the laws of the state and has been expressly delegated all powers possessed in common by its members city x and city y necessary for the development and implementation of the corridor project plr-109842-03 described in detail in the prior ruling and summarized below including the power of eminent_domain and the power to issue bonds port x and port y the ports are proprietary departments of city x and city y respectively and are major seaports which provide public dock and wharf facilities to handle the shipment and transportation of international cargo the ports' revenues are derived mainly from dock and wharfage fees collected from their users most of which are transporters using the ports to import or export cargo the ports are served by the railroads prior to the construction of the corridor project the railroads each transported port-related freight between the ports and city x's central staging areas and rail-yards on their own separate tracks in response to substantial highway and rail congestion caused by an increase in the volume of cargo shipped through the ports the authority began major construction on the corridor project in year the corridor project is a grade-separated a-mile transportation corridor connecting the ports to the national railroad and interstate highway systems that is designed to decrease congestion and traffic delays reduce air and noise pollution minimize energy consumption improve vehicular and pedestrian safety in the area of the ports and in the communities along and adjacent to the corridor project and increase the efficiency and competitiveness of the ports the corridor project was officially completed on date as fully described in the prior ruling the corridor project consists of several components including the necessary railroad tracks signals rail overpasses and similar structures the rail facilities numerous improvements to the street which runs parallel to the rail facilities grade separation projects and related improvements the public improvements and several rights-of-way and other_property acquired by the ports the purchased properties on which the rail facilities were built for more than half the distance of the corridor project the rail facilities are grade separated from adjacent and crossing road traffic by the trench the trench is functionally and structurally related to both the rail facilities and the street the railroads operate on components of the rail facilities laid at the bottom of the trench while vehicular and pedestrian traffic operates at grade on the street and other adjacent roadways the construction of the trench included the construction of retaining walls embankments and other structures that provide direct physical support for the street and other public improvements as in the prior ruling the authority represents that it will not allocate any proceeds of tax-exempt_bonds to the rail facilities or to the purchased properties two components of the corridor project that will be used by the railroads in their businesses plr-109842-03 the trench was selected over alternative designs because it satisfies the major objectives of improving the efficiency of transport between the ports and the staging hub in city x with the least disruption for surrounding communities reducing train and vehicular pedestrian traffic conflicts along the corridor project improving public safety along the transport route by among other things providing the best containment for potential toxic spills and lessening motor carrier and railroad accidents reducing noise and vibration impact on local residents without the necessity of continuous and invasive soundwalls and enhancing economic development opportunities by eliminating grade crossings and improving traffic circulation the memorandum of understanding at the time of the prior ruling the operation and use of the corridor project its expected financing and the fees to be paid_by the railroads for using it were governed by the memorandum of understanding the mou which was by its terms an interim agreement under the mou the railroads pay maintenance fees use fees and container charges for use of the corridor project maintenance fees are a pro-rata portion of the annual cost of operating maintaining and repairing the rail facilities but do not cover the cost of developing the corridor project or maintaining any of the public improvements including the trench under the mou use fees were calculated on the basis of the number of railcars or container units of specified size with separate charges for certain specified cargo at the time of the issuance of the prior ruling use fees were expected to be adjusted over time the container charges were assessed against the railroads for each container unit that is loaded from a vessel at one of the ports but is not transported by the railroads on the rail facilities and therefore not subject_to a use fee the mou set the container charge at the same rate as the use fee the mou does not require the railroads to make any minimum payments to the authority other than as a function of the amount of cargo transported to the ports or on the rail facilities under the mou the ports were required to pay b of the annual debt service on all indebtedness incurred for the construction of the corridor project the annual amount from their general revenues the railroad’s obligation to pay annual use fees and container charges was capped at c of the annual amount the fee cap changes from prior ruling in year the authority received a cargo forecast projecting that the volume of cargo passing through the ports and as a result on the rail facilities will grow substantially faster than anticipated at the time of the prior ruling in addition to the projected increase in cargo moving through the corridor project the volume of vehicular traffic using the improvements to the street and other public improvements plr-109842-03 has increased and is projected to continue increasing substantially also in year the authority the ports and the railroads transformed the mou into a final use and operating_agreement the operating_agreement under the operating_agreement the railroads continue to pay annual maintenance fees use fees and container charges at the same rates set forth in the mou however due to the expected increase in the volume of cargo moving on the rail facilities the fee cap under the mou was removed unlike the mou the operating_agreement also provides for a date certain when the railroads’ obligation to pay annual use fees and container charges will cease the termination_date specifically the termination_date is the earlier of the d anniversary date of the beginning of operations of the rail facilities regardless of whether any indebtedness incurred for the corridor project is still outstanding on that date or the date on which the debt service on all indebtedness incurred to finance the corridor project is paid in full as in the mou the railroads have no requirement to make any minimum payment of use fees and container charges to the authority under the operating_agreement the annual fees paid are computed solely on the amount of cargo flowing through the ports and on the rail facilities as a result there is a degree of uncertainty regarding the amount of the railroads’ payments that will be available to pay any portion of the annual amount if during a calendar_year the railroads’ fees are not sufficient the operating_agreement requires the ports to make advance shortfall payments to the authority of up to b of the annual amount the port advances the operating_agreement also amends the costs and expenses to which the use fees and container charges may be applied for example the use fees and container charges may be applied to repay up to e of the costs incurred by the ports to acquire the purchased properties the use fees and container charges may also be used to reimburse the ports for prior-year port advances and other_amounts specified in the operating_agreement as at the time of the prior ruling the railroads do not have exclusive right to use the rail facilities and the ports may unilaterally authorize the use of the rail facilities by other railroads subject_to certain conditions further the railroads are under no legal_obligation to provide the trench financing of the corridor project the corridor project was financed through various sources including primarily a federal loan from the u s government through the department of transportation the federal loan in the amount of f g aggregate principal_amount of tax-exempt_bonds issued on date the bonds and h aggregate principal_amount of taxable bonds also issued on date the taxable bonds plr-109842-03 the proceeds of the bonds were used to finance certain portions of the public improvements specifically improvements to the street non-trench grade separation and bridge components of the corridor project the street improvements the street improvements involve improvements to streets and roads that are owned by governmental units and that will be available for use by the general_public although the prior ruling permitted the authority to allocate up to of the costs of the trench and the relocation of related utility lines trench costs to the proceeds of tax-exempt_bonds the authority did not use proceeds of the bonds to finance any of the trench costs in light of the factual changes that occurred between the issuance of the prior ruling and the actual construction the authority currently requests a supplemental ruling that it may rely on the determination of the prior ruling to refinance up to of the trench costs with one or more issues of new tax-exempt_bonds the new bonds law generally sec_103 of the internal_revenue_code the code provides that gross_income does not include interest on any state_or_local_bond sec_103 provides that this exclusion does not apply to any private_activity_bond unless it is a qualified_bond under sec_141 sec_141 provides that the term private_activity_bond means any bond issued as a part of an issue which meets the private_business_use_test of sec_141 and the private_security_or_payment_test of sec_141 or which meets the private_loan_financing_test of sec_141 under sec_141 an issue generally meets the private_business_use_test if more than percent of the proceeds of the issue are to be used for any private_business_use private_business_use is defined in sec_141 as use directly or indirectly in a trade_or_business carried on by any person other than a governmental_unit for this purpose any activity carried on by a person other than a natural_person is treated as a trade_or_business sec_141 provides in general that an issue meets the private_security_or_payment_test if the payment of the principal of or the interest on more than percent of the proceeds of the issue is under the terms of the issue or any underlying arrangement directly or indirectly a secured_by any interest in property used or to be used for a private_business_use or payments in respect of such property or b to be derived from payments whether or not to the issuer in respect of property or borrowed money used or to be used for a private_business_use sec_1_141-3 provides rules relating to the definition of private_business_use sec_1_141-3 provides in part that the use of financed property is treated as the direct use of proceeds under sec_1_141-3 in determining whether an plr-109842-03 issue meets the private_business_use_test it is necessary to look to both the indirect and direct uses of proceeds under sec_1_141-3 both actual and beneficial use by a nongovernmental person may be treated as private_business_use sec_1 b further provides that in most cases the private_business_use_test is met only if a nongovernmental person has special legal entitlements to use the financed property under an arrangement with the issuer in general a nongovernmental person is treated as a private business user of proceeds and financed property as a result of ownership actual or beneficial use of property pursuant to a lease or a management or incentive payment contract or certain other arrangements such as a take or pay or other output- type contract under sec_1_141-3 any other arrangement that conveys special legal entitlements for beneficial use of bond proceeds or of financed property that are comparable to ownership leases management contracts output contracts or research agreements results in private_business_use for example an arrangement that conveys priority rights to the use or capacity of a facility generally results in private_business_use in the case of financed property that is not available for use by the general_public sec_1_141-3 provides that private_business_use may be established solely on the basis of a special economic benefit to one or more nongovernmental persons even if those nongovernmental persons have no special legal entitlements to the use of the property in determining whether special economic benefit gives rise to private_business_use it is necessary to consider all of the facts and circumstances including one or more of the following factors a whether the financed property is functionally related or physically proximate to property_used_in_the_trade_or_business of a nongovernmental person b whether only a small number of nongovernmental persons receive the special economic benefit and c whether the cost of the financed property is treated as depreciable by any nongovernmental person under sec_1_141-3 use of financed property by nongovernmental persons in their trades_or_businesses is treated as general_public use only if the property is intended to be available and in fact is reasonably available for use on the same basis by natural persons not engaged in a trade_or_business an arrangement that conveys priority rights or other preferential benefits is not use on the same basis as the general_public sec_1_141-3 further provides that an arrangement is not treated as general_public use if the term of the arrangement is longer than days sec_1_141-3 provides rules for the measurement of private_business_use in general the amount of private_business_use of property is determined according to the average percentage of private_business_use of that property during the measurement_period sec_1_141-3 provides that in general the measurement_period of property financed by an issue begins on the later of the issue plr-109842-03 date of that issue or the date the property is placed_in_service and ends on the earlier of the last date of the reasonably expected economic life of the property or the latest maturity_date of any bond of the issue financing the property determined without regard to any optional redemption dates in general the period of reasonably expected economic life of the property for this purpose is based on reasonable expectations as of the issue_date sec_1_141-3 provides that the average percentage of private_business_use is the average of the percentages of private_business_use during the 1-year periods within the measurement_period appropriate adjustments must be made for beginning and ending periods of less than year sec_1_141-3 provides that the percentage of private_business_use of property for any 1-year period is the average private_business_use during that year this average is determined by comparing the amount of private_business_use during the year to the total amount of private_business_use and use that is not private_business_use government_use during that year sec_1_141-3 through v apply to determine the average amount of private_business_use for a 1-year period sec_1_141-3 provides in general that for a facility in which government_use and private_business_use occur simultaneously the entire facility is treated as having private_business_use for example a governmentally owned facility that is leased or managed by a nongovernmental person in a manner that results in private_business_use is treated as entirely used for a private_business_use if however there is also private_business_use and actual government_use on the same basis the average amount of private_business_use may be determined on a reasonable basis that properly reflects the proportionate benefit to be derived by the various users of the facility eg reasonably expected fair_market_value of use for example the average amount of private_business_use of a garage with unassigned spaces that is used for government_use and private_business_use is generally based on the number of spaces used for private_business_use as a percentage of the total number of spaces sec_1_141-3 provides that measurement of use of proceeds allocated to a discrete portion of a facility is determined by treating that discrete facility as a separate facility sec_1_141-3 also special provides rules for common areas the amount of private_business_use of common areas within a facility is generally based on a reasonable method that properly reflects the proportionate benefit to be derived by the users of the facility sec_1_141-1 defines common areas as portions of a facility that are equally available to all users of a facility on the same basis for uses that are incidental to the primary use of the facility for example hallways and elevators generally are treated as common areas if they are used by the different lessees of a facility in connection with the primary use of that facility plr-109842-03 sec_1_141-14 provides anti-abuse_rules that broadly permit the commissioner to reflect the substance of transactions sec_1_141-14 provides that if an issuer enters into a transaction or series of transactions with respect to one or more issues with a principal purpose of transferring to nongovernmental persons other than as members of the general_public significant benefits of tax-exempt_financing in a manner that is inconsistent with the purposes of sec_141 the commissioner may take any_action to reflect the substance of the transaction or series of transactions including reallocating proceeds to expenditures property use or bonds and reallocating payments to use or proceeds analysis issue one trench costs in the prior ruling it was determined that the railroads will be treated as users of the rail facilities and the trench but not the street improvements which are governmentally-owned and used by the general_public it was also determined that the trench is not properly treated solely as part of the rail facilities but was functionally and structurally related to both the street improvements and the rail facilities the factors cited to support this determination were that the railroads are under no legal_obligation to provide the trench and the present_value of payments by the railroads for use of the corridor project including the trench will not significantly exceed the costs of the rail facilities and the purchased properties used by the railroads although it remains true that the railroads are under no legal_obligation to provide the trench the present_value of the total use fees and container charges that the railroads are expected to pay has increased as a result of the removal of the fee cap the removal of the fee cap does not impact the determination that the trench is functionally and structurally related to both the street improvements and the rail facilities despite the modification to the use fees and container charges the general_public continues to use the trench in the same manner as before as a structural_component of the street improvements also the trench continues to function as a wall separating two distinct uses the use by the railroads of the rail facilities and the use by the general_public of the street improvements moreover the changed facts do not affect the determination of the prior ruling that the trench benefits the rail facilities and the street improvements equally a wall that separates two distinct uses benefits each use equally unless the facts and circumstances warrant a different conclusion the relevant changed fact in this case the removal of the fee cap does not warrant a different conclusion with respect to the trench any increase in fees paid_by the railroads because of the removal of the fee cap is not the result of the railroad obtaining additional rights to the trench or using the trench in a different manner rather any increase in fees reflects an increase in the volume of cargo transported on the rail facilities from that expected at the time of plr-109842-03 the prior ruling the railroads' increased use of the trench will not affect the general public's use of the trench the public continues to use the trench as a structural_component of the street and the other street improvements in fact the general public's use of the trench has also increased through increased traffic on the street while we are unable to quantify the increased use of the trench by the general_public vis-a -vis the increased use by the railroads we nevertheless conclude based on the facts and circumstances that the benefits of the trench to the railroads are not sufficiently different from the benefits of the trench to the general_public to warrant a different allocation of the uses of the trench than that approved in the prior ruling thus the authority may continue to rely on the conclusion of the prior ruling that percent of the trench costs are properly allocable to the street improvements issue anti-abuse_rules in the prior ruling it was determined that the facts and circumstances that existed at the time weighed against application of the anti-abuse rule_of sec_1 this determination was based on an analysis of nine factors only the first of the nine factors discussed in the prior ruling is impacted by the changed facts by removing the fee cap the authority no longer expects that the portion of the corridor project financed with sources other than tax-exempt_bonds to be substantially greater than the present_value of the payments that the railroads are expected to make this modification to the railroads’ payment arrangement however is not sufficient to change the determination of the prior ruling the annual use fees and container charges are not structured to reflect the tax-exempt_interest rate on either the bonds or the new bonds but are based on the amount of cargo that moves through the ports the removal of the fee cap does not change the fact that the railroads have no requirement to make any minimum payment of use fees and container charges and as a result there is no guarantee as to the amount of fees that will be available to pay debt service on either the bonds or the new bonds the principal purpose for the removal of the fee cap is not to transfer the benefits of tax-exempt_financing to the railroads but rather to more accurately reflect the amount of cargo transported by the railroads through the corridor project finally the remaining factors discussed in the prior ruling continue to weigh against application of the anti-abuse rule thus sec_1_141-14 does not apply to the unique facts and circumstances of this case conclusions based on the information submitted and representations made we conclude that plr-109842-03 the authority’s allocation of of the trench costs to the street improvements will not cause the bonds or the new bonds to be private_activity_bonds under sec_141 the unique facts and circumstances weigh against application of the anti- abuse rule_of sec_1_141-14 of the income_tax regulations to reallocate the proceeds of the bonds or the new bonds to other purposes the rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter this ruling is directed only to the taxpayer s requesting it sec_6110 of the code provides that it may not be used or cited as precedent plr-109842-03 in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to the taxpayer sincerely assistant chief_counsel exempt_organizations employment_tax government entities by ____________________________ timothy l jones senior counsel tax exempt bond branch cc