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 tege eoeg eo1 plr-136346-15 date march legend foundation -------------------------------------------------- company disc x y ---------------------------------------------- --------------------------------------- ------------ ---------------- dear ------------ this letter responds to company’s date request for a ruling that a corporate redemption will not be self-dealing under sec_4941 facts company is a closely-held corporation owned by members of the x family and various related entities foundation is a private_foundation under sec_501 and sec_509 and it is a shareholder of company foundation was funded by certain x family members who are current or former shareholders of company and it is managed by certain x family members who are current shareholders of company disc is a domestic_international_sales_corporation formed to export products the shareholders of disc are identical to the shareholders of company except company is also a shareholder of disc the shareholders of disc entered into a shareholder agreement which requires any transfer of company stock to be accompanied by a transfer of an equal amount of disc stock company represents that company and disc are disqualified persons with respect to foundation plr-136346-15 company has one class of voting common_stock and one class of nonvoting common_stock disc has only one class of voting common_stock foundation owns nonvoting common_stock in company and voting common_stock in disc the board_of directors for company and the board_of directors for disc have each authorized contingent on obtaining a favorable letter_ruling a redemption regarding certain stock from any shareholder the proposed redemptions involve company’s nonvoting common_stock and disc’s voting common_stock any shareholder that participates in the redemption with company must also participate in the redemption with disc in accordance with the disc shareholder agreement foundation intends to participate in the proposed redemptions for various reasons including liquidity to facilitate its charitable endeavors company represents that the redemption price in both proposed redemptions will be equal to the fair_market_value of the stock on the redemption date payable in cash the fair_market_value of the stock on the redemption date will be determined by an independent_appraiser who is not a disqualified_person with respect to foundation and who is competent to conduct the appraisal the appraiser will not derive a benefit economic or otherwise from the value assigned to the stock the proposed company redemption will be subject_to a maximum aggregate redemption price of dollar_figurey if multiple shareholders participate in the redemption and if the total fair_market_value of the stock offered for redemption by the shareholders on the redemption date exceeds dollar_figurey the number of shares redeemed from each participating shareholder will equal the number of shares offered by the shareholder multiplied by a fraction containing a numerator equal to the maximum number of shares to be redeemed and a denominator equal to the total number of shares offered by all participating shareholders such that the total redemption price will not exceed dollar_figurey no shareholder will receive any preferential treatment compared to any other shareholder regarding any aspect of either proposed redemption ruling requested company requests a ruling that its proposed redemption of nonvoting common_stock will not constitute an act of self-dealing under sec_4941 law sec_4941 imposes an excise_tax on each act of self-dealing between a disqualified_person and a private_foundation paid_by the disqualified_person that participates in the act of self-dealing sec_4941 defines an act of self-dealing as including a sale_or_exchange of property between a private_foundation and a disqualified_person plr-136346-15 sec_4941 provides that a transaction between a private_foundation and a corporation which is a disqualified_person as defined in sec_4946 pursuant to a redemption shall not be an act of self-dealing if all of the securities of the same class as that held by the foundation are subject_to the same terms and such terms provide for receipt by the foundation of no less than fair_market_value sec_4946 defines the term disqualified_person as including among other things a substantial_contributor to the foundation and corporations where certain disqualified persons own more than percent of the total combined voting power of such corporation sec_53_4941_d_-3 of the foundation and similar excise_taxes regulations provides that under sec_4941 any transaction between a private_foundation and a corporation that is a disqualified_person will not be an act of self- dealing if such transaction is engaged in pursuant to a redemption so long as all the securities of the same class as that held prior to the transaction by the foundation are subject_to the same terms and such terms provide for receipt by the foundation of no less than fair_market_value the regulation further provides that the securities will not be subject_to the same terms unless pursuant to such transaction the corporation makes a bona_fide offer on a uniform basis to the foundation and every other person who holds such securities the regulation explains that it will be evidence that such offer was not made on a uniform basis if a private_foundation receives property such as debentures while all other persons holding securities of the same class receive cash for their interests sec_53_4941_d_-3 of the foundation and similar excise_taxes regulations illustrates the redemption exception in sec_4941 with two examples not repeated here analysis under the proposed redemption by company all nonvoting common_stock is subject_to the same terms and such terms provide for receipt by foundation as a shareholder of no less than fair_market_value company will make a bona_fide offer on a uniform basis to all shareholders of nonvoting common_stock including foundation all shareholders participating in the redemption will receive cash for their interests the fact that the redemption offer is limited to a fixed dollar amount and the fact that the redemption offer by company is in tandem with an equivalent offer by disc does not detract from the uniform nature of the offer by company under the facts presented ruling based solely on the facts and representations submitted by company we rule that the proposed redemption of shares of nonvoting common_stock of company will not constitute an act of self-dealing under sec_4941 plr-136346-15 the rulings contained in this letter are based upon information and representations submitted by or on behalf of company accompanied by a penalty of perjury statement executed by an individual with authority to bind company and upon the understanding that there will be no material changes in the facts this office has not verified any of the material submitted in support of the request for rulings and such material is subject_to verification on examination 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 specifically described and except as expressly provided in this letter no opinion is expressed or implied concerning the federal_income_tax consequences of any aspects of any transaction or item_of_income set forth above because it could help resolve questions concerning federal_income_tax status this ruling should be kept in company’s permanent records company must attach a copy of this letter to any_tax return to which it is relevant alternatively if company files its return electronically this requirement may be satisfied by attaching a statement to the return that provides the date and control number of this letter this ruling will be made available for public inspection under sec_6110 after certain deletions of identifying information are made for details see the enclosed notice notice of intention to disclose a copy of this ruling showing the deletions that we intend to make on the version that will be made available to the public is attached to the notice if company disagrees with our proposed deletions it should follow the instructions in the notice in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to each of company’s authorized representatives this letter is directed only to company sec_6110 provides that it may not be used or cited as precedent by anyone else including foundation disc and any disqualified_person other than company plr-136346-15 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 sincerely kenneth m griffin chief exempt_organizations branch tax exempt government entities cc


department of the treasury internal_revenue_service washington d c contact person identification_number contact number fax number employer_identification_number uil no tax_exempt_and_government_entities_division release number release date date date legend board member treasurer cfo board member president ceo board member board member secretary applicant thoroughbred racing circuit d m o o z z o v h a h h c state date - county county county state state state dear we have considered your hereinafter m’s appli 2n for recognition of exemption from federal_income_tax under internal_revenue_code sec_501 based on the information provided we have concluded that m does not qualify for exemption under code sec_501 we have also considered whether m qualifies for any other subsection under sec_501 and have determined it does not the basis for our conclusion is set forth below does m qualify for tax exemption under sec_501 of the code letter cg catalog number 47630w facts articles of incorporation were filed with the state of n on o date m's operations will be conducted in a state different from its state of incorporation article third of m's articles states that one of its purposes is to solicit donations to sponsor race horses with all of the net_proceeds after expenses supporting charities article fifth contains the following the corporation shall be a membership corporation and shall have no authority issue capital stock the conditions of membership in the corporation and the voting powers of the members shall be as set forth in the by-laws of the corporation a review of m’s bylaws indicates no requirements for membership in m article il sec_2 of m’s bylaws state the purpose or purposes of the corporation to solicit donations to sponsor race horses with all net_proceeds after expenses shall be supporting charities an attachment to m’s form_1023 application states under its mission statement that _ m seeks to raise money in order sic increase public awareness for thoroughbred horse racing while simultaneously raising capital for philanthropic purposes the attachment goes on to say m will seek to rally public support by creating a thoroughbred racing team which will participate in the p racing circuit and donors will have the unique opportunity to have all or part of the racing team operation named in their honor for a specific period of time for instance sponsors donating to m will have their names prominently displayed on all racing team wardrobe equipment and training facilities this racing team concept has already proven successful in nascar racing and indy racing and is the same concept that m will employ except in this case all net revenue including purse revenue racing and to support and horse sales will be used to promote the sport of thoroughbred public charitable organizations emphasis added attachment 3c of the application states that m will participate in gaming activities in the southern u region in the following counties q r and s stables will be operated in t u and vv m's fund raising program is to focus on types of donors corporate donors vip private donors general_public donors and thoroughbred breeder donors corporate donors have the opportunity to have their name and or products incorporated into the daily activity of m’s racing stable the larger the financial support the more visibility corporate donors will have for their products and or services in addition corporate sponsors will be allowed to attend all training race day and special event functions letter cg catalog number 47630w vip private donors are similar to corporate donors except they wish to remain discreet about their public visibility they are also invited to attend training race day and special event functions general_public donors will only have an opportunity to attend selected race day activities and special event functions thoroughbred breeder donors are those that wish to donate their own thoroughbreds to the racing team m will manage and train the horses riominate them into appropriate races which may maximize subsequent income potential for the breeder through award programs attachment 4d to the application indicates that fundraising will be conducted on a nation-wide basis although the majority of donations are expected to originate from southem u m has chosen organizations currently exempt under section sec_501 to receive donations m’s board_of directors consist of a b c and d ais the treasurer and cfo of m bis the president and ceo of m and has more than years experience in the thoroughbred racing d is the secretary of m a industry and will be overseeing m’s operations c is a director of m b and c are brothers b and d are husband is the father of b and c and the father-in-law of d and wife when asked by the service to consider expanding its board_of directors to ensure that public interests are placed above private interests m responded by saying the organization has been unable to recruit unrelated individuals to serve on the board_of directors and probably will not be able to do so until the exemption application is approved in short outside parties are reluctant to commit their efforts to a charitable_organization that does not have tax-exempt status in correspondence from m dated date it states the goal of the organization this amount would is to distribute at a minimum of the projected revenue thus in be approximately dollar_figure and dollar_figure in supplemental information sent with the same correspondence shows the following total total expenses of over dollar_figure year of over dollar_figure revenues for the leaving an excess of revenues over expenses of dollar_figure the revenues being dedicated to the payment of expenses with approximately one half of the excess of revenues over expenses being dedicated to charity of over dollar_figure dollar_figure dollar_figure revenues of over dollar_figure donations other revenues’ of the estimated revenue is projected to be from the sale of horses just under jg projected to be from racing income purse revenue’ is shown as public a total of around dollar_figure this computes to around of of the total projected also nearly _ total revenues forthe revenues over expenses of over dollar_figure vear of over dollar_figure with an excess of which also computes to around of the letter cg catalog number 47630w revenues being dedicated to the payment of expenses with approximately of the excess of revenues over expenses being dedicated to charity computed in the same manner as the a total of around none of other sources of revenue noted year of the total projected revenues of overs is shown as other revenues donations relate to contributions from the general_public law sec_501 of the code of provides for the exemption from federal_income_tax of organizations organized and operated exclusively for charitable and educational_purposes sec_502 of the code states that an organization operated for the primary purpose of carrying_on_a_trade_or_business for profit shall not be exempt under sec_501 on the ground that all of its profits are payable to one or more organizations exempt under sec_501 from taxation sec_6110 of the code states that a written_determination may not be used or cited as precedent sec_1_501_c_3_-1 of the income_tax regulations states that in order to be exempt as an organization described in sec_501 of the code an organization must be both organized and operated exclusively for one or more of the purposes specified in such section not exempt if an organization fails to meet either the organizational_test or the operational_test it is sec_1_501_c_3_-1 of the regulations provides that an organization will be regarded as operated exclusively for one or more exempt purposes only if in activities which accomplish one or more of such exempt purposes specified in sec_501 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 sec_1_501_c_3_-1 of the regulations provides in part that an organization is organized and operated for exempt may be exempt under sec_501 of the code if purposes however under sec_1_501_c_3_-1 an organization is not organized and operated exclusively for an exempt_purpose unless it serves a public as opposed to a private interest thus an organization must establish that it is not operated for the benefit of designated individuals it sec_1_502-1 of the income_tax regulations states that in determining the primary purpose of an organization all the circumstances must be considered including the size and extent of the trade_or_business and the size and extent of those activities in 326_us_279 the supreme court of the united_states held that the presence of a single non-exempt purpose if substantial in letter cg catalog number 47630w nature will destroy a claim for exemption regardless of the number or importance of truly exempt purposes in 77_tc_1087 the court held that the petitioner organized and operated to educate the public and the skydiving community with respect to team skydiving was operated for the for a substantial nonexempt purpose to further the recreational interests of its creators the court stated _ we are convinced that the predominate motivation underlying petitioner's activities was to further the recreational interests of its creators although petitioner was operated in a manner that may have incidentally furthered educational_purposes and advanced amateur athletics we must conclude that petitioner primarily served the private interests of its creators all three creators were on petitioner's board_of directors each of them was an avid skydiver and had it is clear thait they wanted to pursue their developed a keen interest in the sport personal interests in skydiving and used petitioner for that purpose in revrul_64_182 1964_1_cb_186 the service published the commensurate test in this ruling an organization was organized exclusively for charitable purposes by which it derived its income principally from the rental of space in a large commercial office building which it owned maintained and operated the charitable purposes of the corporation were carried out by aiding other charitable organizations selected in the discretion of its governing body through contributions and grants to such organizations for charitable purposes in the ruling the service held that the organization was deemed to meet the primary purpose test of sec_1 c - e of the income_tax regulations and was to be erititied to exemption from federal_income_tax as a corporation organized and operated exclusively for charitable purposes within the meaning of sec_501 of the code where it was shown to be carrying on through such contributions and grants a charitable program commensurate in scope with its financial resources in revrul_68_505 1928_2_cb_248 the service ruled on whether an activity of an organization was subject-to the unrelated_business_income_tax under sec_513 of the code the organization conducted a two-week horse racing meet that featured pari-mutuel betting the races were conducted in the same general manner as at commercial tracks under the pari- mutuel system the organization received a commission on the total amount wagered other race income is derived from gate admissions and the sale of programs disbursements are for purses and race expenses the net_income from the races was used for the exempt purposes of the organization the service ruled that since the races with pari-mutuel betting were carried on in a manner similar to commercial race tracks they constituted a trade_or_business furthermore the business was regularly carried on because it is usual to carry on such trade_or_business only during a particular season racing meet with pari-mutuel betting was not related to the organization's exempt_purpose because it neither contributed importantly to the educational objectives of the fair sec_1 d of the regulations nor was it the type of recreational activity that is intended to attract the public to the fairs educational features therefore the conduct of the horse racing meet with pari-mutuel betting by the organization constituted unrelated_trade_or_business under the service further stated that the conduct of the letter cg catalog number 47630w sec_513 of the code and the organization was subject_to the tax imposed by sec_511 of the code on unrelated taxable_income with respect to the income derived from said activity application of law thoroughbred racing is a for-profit commercial industry m's stated intent in its mission statement to raise public awareness for thoroughbred horse racing is not an exempt_purpose under sec_501 of the code and its thoroughbred racing activities are more than an also the fact that approximately of all revenues insubstantial part of its total activities collected will be used to support the horse racing team and that just over half of the remaining excess of revenues over expenses will be dedicated to charitable work demonstrates m has not provided that m’s primary activities are not dedicated to charitable purposes evidence that its activities are dedicated to charitable purposes as was stated in both the both m’s application narrative and correspondence received during the application review dedication to raising public awareness for thoroughbred racing and the financial information presented above demonstrate that the applicant's primary activities do not meet the requirements of sec_1_501_c_3_-1 that the applicant must be operated exclusively for one or more exempt purposes and that not more than insubstantial part of its activities is not furtherance of an exempt_purpose because approximately of all revenues collected will be used to support the horse racing team and because just over half of the remaining excess of revenues over expenses will be dedicated to charitable work the planned contributions and grants will not be commensurate in scope with its financial resources which is a requirement for a sec_501 c fundraising organization as stated in revrul_64_182 the financial information contained in the file m’s proposed horse racing sales activities and the limited educational activities in proportion to the applicant's overall activities demonstrate that m is operated to further the recreational interests of its board members which is both a substantial and a nonexempt purpose further since m is operated to further the recreational interests of its board members it does not meet the regulation c -1 d ii requirement that it not be operated or organized for the benefit of private interests m’s stated intent to race horses and to share in the betting proceeds from such races constitutes participation in pari-mutuel betting which is an activity that was determined to be unrelated_business_income in revrul_68_505 and is described in sec_513 of the code since unrelated_business_income activities are not considered to be related to a sec_501 organization's tax-exempt function such activities are not considered to be described under sec_501 when considering the amount of projected income to be produced by pari- mutuel activities and the amount of the applicant's resources that will be dedicated to this activity the pari-mutuel activities are determined to be more than an insubstantial part of the part of the applicants overall activities and thus the applicant is not operated exclusively for charitable and educational_purposes as is required by sec_501 -1 c letter cg catalog number 47630w competing in horse racing events for a share of the purses and the use of the applicant organization's assets primarily for this purpose is determined to have the characteristics of a trade_or_business as these activities are involved with pari-mutuel betting which has been determined to be an unrelated_trade_or_business activity described under sec_502 and related regulations as a trade_or_business that turns over net_proceeds from its operations to charitable organizations organizations that can be described under sec_501 as such the organization is best such sec_502 organizations are not m is similar to the organization described in north american sequential sweepstakes in that case the court ruled that the petitioner was operated for the substantial nonexempt purpose of furthering the recreational interests skydiving of its creators in the case at hand m will be operating for the substantial nonexempt purpose of furthering the recreational interests thoroughbred racing of its creators as stated in better business bureau the presence of a single non-exempt purpose if substantial in nature will destroy a claim for exemption regardiess of the number or importance of truly exempt purposes m's activities do not meet the commensurate test as stated in revrul_64_182 m states that percent of its projected revenues will be donated to charitable organizations this means that nearly percent of its activities are to further the non-exempt purpose of furthering the recreational interests of its founders applicant’s position in correspondence dated date m stated m should qualify for tax-exempt status its secondary purpose is two sic stimulate public its primary purpose is to raise revenue for the purpose of benefiting existing c organizations especially those that are closely related to the horseracing industry awareness of thoroughbred racing as described in the organization's exemption application via the ‘meet and greet’ sessions and classes that will be conducted for the general_public the majority of the funds raised by the organization will be via donations from the general_public the use of horses by the organization in any state sanctioned race not operated in any way by the organization is essentially a way of generating public interest in the organization's charitable purpose and would be no different for instance than placing an advertisement in a local newspaper or trade publication or even creating an internet website for the purpose of raising the publics awareness and encouraging public donations m cites private_letter_ruling in support of its contention that it should be recognized as exempt under sec_501 m summarizes the facts in the plr as the organization accomplished its exempt_purpose by establishing registers of thoroughbred stallions and broodmares and by obtaining fees and contributions from owners of those thoroughbred stallions and broodmares and from others the fees and contributions in turn are used to fund purses for races for which the foals of the thoroughbred stallions and broodmares would be eligible the organization's largest activity is its efforts to create a super bowl of racing so that the general_public may become more knowledgeable about thoroughbred racing the activity consists of a series of races that offer purses the host racetrack is responsible for collecting pre-entry and entry fees and letter cg catalog number 47630w regulation the competition in no instance did the exempt_organization regulate the races the organization's second largest activity was to enhance various stakes races at racetracks and to provide a year-round promotional framework the contributions it received were used to publicize the thoroughbred industry to fund public relations programs and to pay purses and nominator awards m's correspondence states that approximately of the organization's time would be dedicated to charitable purposes to educating the public and to actually racing and selling horses which the applicant believes are activities that should qualify it for a tax-exemption letter under sec_501 m's subsequent correspondence states that its primary purpose is to raise revenue for charitable organizations and that its secondary purpose is to stimulate public awareness of the horseracing industry through educational activities such as the meet and greet sessions and classes training and selling horses produces the necessary income and the setting necessary with which to achieve its stated exempt purposes of charitable fundraising and educating the public m maintains that its planned activities to operate a horseracing team as well as m does not believe that it is participating in pari-mutuel betting since the horse races that it participates in are operated by state sanctioned tracks and because its participation in horse racing assists it in achieving its stated purposes which aire charitable religious scientific and educational that turns over its net_proceeds to charity as is described in sec_502 of the code considering this the applicant also does riot believe that it is a trade_or_business government's response to applicant's position m states in an attachment to its application that all net_revenues will be used to promote the sport of thoroughbred racing the promotion of thoroughbred racing is not an exempt_purpose as stated in sec_1_501_c_3_-1 sec_6110 of the code states a written_determination may not be used or cited as precedent nevertheless it is the government's contention that plr is not on-point with m's activities because the plr held that the organization in that ruling was held to be exempt under sec_501 of the code in this case m is applying for exemption under sec_501 of the code as a charitable and educational_organization m has not indicated it wishes to amend its application by applying under sec_501 c of the code the fact that the activities described in the letter_ruling were determined not to have an adverse effect on the tax- exempt status of an organization described under sec_501 does not indicate that the same activities will not prevent an organization from qualifying for tax-exempt status under sec_501 activities that further sec_501 purposes which relate to promoting an industry or line_of_business are not charitable or educaticnal purposes as described under sec_501 further part of the rationale for determining that the letter_ruling applicant did not have unrelated_business_income was based upon that fact that such organization was determined not to engage in pari-mutuel betting and that it merely received a donation from tracks in this case is for planning to be involved in pari-mutuel betting because a it receives purses when its m horses finish races in certain positions b fees and contributions will be used to fund purses for races for which the foals of thoroughbred stallions and broodmares would be eligible and c m letter cg catalog number 47630w plans to create a ‘super bowl’ of racing the application and the information submitted during the application review indicate that the majority of the activities will concern horseracing in addition to related training and horse sales activities which are not by themselves considered to be tax-exempt activities under sec_501 of the code the financial information submitted demonstrates that the majority of m’s revenues are used for the payment of its operating_expenses and that a small proportion of the revenues remain for charitable distribution and that approximately half of those remaining revenues will be distributed for charitable purposes also the financial information does not support m's statement that the majority of funds raised by the organization will be via donations from the general_public the meet and greet sessions to be held at the stables in addition to the plans for two to hour classes are not significant in proportion to the other activities planned by m even if determined to be educational and m’s secondary goal of stimulating public awareness of thoroughbred horseracing is not an activity described under sec_501 since it promotes thoroughbred horseracing which is a for-profit commercial industry considering all of the above m has not proven its assertion that of its activities are dedicated to charitable purposes to educating the public and to actually selling and racing horses as it has stated competing in horse racing activities which involve both betting and a share of the purse for finishing such races in a certain position constitutes participation in pari-mutuel betting which therefore the applicant's activities related to the pari- is an unrelated_trade_or_business activity mutuel are unrelated_business_income which are trade_or_business activities and turning over proceeds from those activities to charitable organizations are activities described under sec_502 of the code conclusion accordingly for the reasons stated above m does not qualify for tax exempt status under sec_501 of the code you have the right to file a protest if you believe this determination is incorrect to protest you must submit a statement of your views and fully explain your reasoning you must submit the statement signed by one of your officers within days from the date of this letter we will consider your statement and decide if the information affects our determination if your statement does not provide a basis to reconsider our determination we will forward your case to our appeals_office you can find more information about the role of the appeals_office in publication exempt_organization appeal procedures for unagreed issues an attorney certified_public_accountant or an individual enrolled to practice before the internal_revenue_service may represent you during the appeal process if you want representation during the appeal process you must file proper power_of_attorney form_2848 power_of_attorney and declaration of representative if you have not already done so you can letter cg catalog number 47630w find more information about representation in publication practice_before_the_irs and power of attomey all forms and publications meritioned in this letter can be found at www irs gov forms and publications if you do not file a protest within days you will not be able to file a suit for declaratory_judgment in court because the internal_revenue_service irs will consider the failure to appeal as a failure to exhaust available administrative remedies code sec_7428 provides in part that a declaratory_judgment or decree shall not be issued in any proceeding unless the tax_court the united_states court of federal claims or the district_court of the united_states for the district of columbia determines that the organization involved has exhausted all of the administrative remedies available to it within the irs lf you do not intend to protest this determination you do not need to take any further if we do not hear from you within days we will issue a final adverse determination action jetter that letter will provide information about filing tax returns and other matters please send your protest statement form_2848 and any supporting documents to the applicable address deliver to mail to internal_revenue_service eo determinations quality assurance room p o box cincinnati oh you may fax your statement using the fax number shown in the heading of this letter internal_revenue_service eq determinations quality assurance main street room cincinnati oh if you fax your statement please call the person identified in the heading of this letter to confirm that he or she received your fax f you have any questions please contact the person whose name and telephone number are shown in the heading of this letter sincarely enclosures robert choi director exempt_organizations rulings agreements letter cg catalog number 47630w department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division date jun contact person identification_number contact number employer_identification_number form required to be filed tax years dear this is our final_determination that you do not qualify for exemption from federal_income_tax as an organization described in internal_revenue_code sec_501 recently we sent you a letter in response to your application that proposed an adverse determination the letter explained the facts law and rationale and gave you days to file a protest since we did not receive a protest within the requisite days the proposed adverse determination is now final because you do not qualify for exemption as an organization described in code sec_501 donors may not deduct contributions to you under code sec_170 you must file federal_income_tax retums on the form and for the years listed above within days of this letter unless you request an extension of time to file instructions and do not send them to this office failure_to_file the returns timely may result in a penalty file the retums in accordance with their we will make this letter and our proposed adverse detennination letter available for public inspection under code sec_6110 after deleting certain identifying information please read the enclosed notice notice of intention to disclose and review the two attached letters that show our proposed deletions if you disagree with our proposed deletions follow the instructions in notice if you agree with our deletions you do not need to take any further action in accordance with code sec_6104 we will notify the appropriate state officials of our determination by sending them a copy of this final letter and the proposed adverse letter you should contact your state officials if you have any questions about how this determination may affect your state responsibilities and requirements if you have any questions about this letter please contact the person whose name and telephone number are shown in the heading of this letter federal_income_tax status and responsibilities please contact irs customer service pincite-829-1040 or the irs customer service number for businesses the irs customer service number for people with hearing impairments is if you have any questions about your sincerely enclosure robert choi director exempt_organizations rulings agreements


internal_revenue_service department of the treasury number release date index number washington dc person to contact telephone number refer reply to cc intl br1-plr-100184-02 date date ty a country b date c year year date d dear this is in response to a letter from your authorized representative dated date requesting a ruling that a’s surrender of his u s alien registration card expatriation did not have for one of its principal purposes the avoidance of u s taxes under subtitle a or subtitle b of the code additional information was submitted in a letter dated date 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 in year a obtained a green card a has been residing in country b since year a surrendered his green card on date d a will be subject_to country b tax on his worldwide income on the date of a’s expatriation his net_worth exceeded the applicable_amount set forth in sec_877 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 plr-100184-02 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 u s citizen or former u s 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_2_cb_29 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 because he became fully liable to tax in country b the country where he his wife and parents were born a submitted all of the information required to be submitted by notice_97_19 as modified by notice_98_34 including additional information requested by the service after review of the submission accordingly based solely on the facts submitted and the representations made we conclude 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 under sec_877 to have had as one of his principal purposes for expatriating the avoidance of u s taxes we further conclude that a will not be treated under sec_877 as having had as one of his principal purposes for expatriating the avoidance of u s taxes because the information submitted clearly establishes the lack of a principal purpose to avoid taxes under subtitle a or b of the code plr-100184-02 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 the taxable years prior to or after his expatriation under sections of the code other than sec_877 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 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 sincerely w edward williams senior technical reviewer cc intl br1


third party communication date of communication month dd yyyy cca-12111250-15 id uilc number release date from ------------------- sent friday date pm to ---------------------- cc ----------------- bcc subject employee audits ------- you asked whether employees must attend the initial interview in an employee tax audit the concern is that some employees using the provisions of sec_7521 are choosing not to appear at the initial interview and are instead sending a representative or in some cases not appearing at all you asked us to consider whether sec_7521 which states that the provisions of sec_7521 do not apply to investigations relating to the integrity of any officer_or_employee of the irs would allow the service to require the employee to be present at the initial interview as discussed below where an employee audit is an investigation relating to the integrity of that employee the employee does not have the right to send his or her representative to the interview without accompanying them moreover we believe the service may take the position that employee investigations of employees in auditable positions are investigations relating to integrity whereas investigations of employee in non-auditable positions are not necessarily investigations relating to integrity however we caution that nothing in sec_7521 allows the service to compel the employee’s cooperation sec_7521 describes the type of interviews to which sec_7521 applies and defines these as in person interviews between any officer_or_employee of the irs and any taxpayer relating to the determination or collection of any_tax it provides certain rights which taxpayers may assert in connection with these interviews sec_7521 in relevant part allows a taxpayer to be represented by an authorized representative in any interview described in subsection a and prevents the service from requiring the taxpayer to attend interviews along with that representative essentially the taxpayer may send their representative in their place sec_7521 provides that sec_7521 shall not apply to criminal investigations or investigations relating to the integrity of any officer_or_employee of the internal_revenue_service statutes should be construed so as to avoid rendering superfluous any statutory language 501_us_104 the language of sec_7521 does not provide an exception for every investigation of every irs employee instead congress limited this exception to criminal investigations and investigations relating to the integrity of irs employees if all employee audits fell within the exception there would be no reason for congress to specify integrity investigations did not apply to employees of the internal_revenue_service thus the investigations relating to the integrity of an irs employee must be a subset of all employee investigations in fact the statute could have just stated that section the service separates its employees into essentially two categories auditable positions and non-auditable positions we think this is the relevant distinction for purposes of the applicability of sec_7521 the service has already made a judgment about which employees should be considered auditable presumably that is because in positions involving tax_administration it is important that the employees enforcing and applying the tax laws be compliant with their own taxes in order to maintain public confidence and maintain the integrity of the internal_revenue_service an audit of an employee in such an auditable position therefore is an investigation relating to the integrity of that employee in a way that is less true of an employee in a non-auditable position lacking tax_administration responsibilities finally we note that this advice relates to initial interviews should you wish further guidance regarding whether an employee investigation could convert from a non- integrity investigation to an investigation relating to integrity for purposes of sec_7521 we would need to consider the facts of those specific cases or the specific policies you were looking to implement please let me know if you have any questions or concerns


t c memo united_states tax_court hung n nguyen petitioner v commissioner of internal revenue respondent docket no filed date bruce e gardner for petitioner roger w bracken for respondent memorandum opinion armen special_trial_judge this matter is before the court on petitioner’s motion for an award of administrative and litigation costs filed pursuant to sec_7430 and rules through petitioner seeks an award of dollar_figure in respect of all section references are to the internal_revenue_code as amended however references to sec_7430 are to such continued respondent’s deficiency determination of dollar_figure after concessions by respondent the issues for decision are as follows whether respondent’s position in the administrative and court proceedings was substantially justified whether petitioner unreasonably protracted the administrative and court proceedings whether the administrative and litigation costs claimed by petitioner are reasonable neither party requested an evidentiary hearing and the court concludes that such a hearing is not necessary for the proper disposition of petitioner’s motion see rule a we therefore decide the matter before us based on the record that has been developed to date background petitioner resided in hyattsville maryland at the time that his petition was filed with the court petitioner timely filed a federal_income_tax return for the continued section in effect at the time that the petition was filed unless otherwise indicated all rule references are to the tax_court rules_of_practice and procedure all amounts have been rounded respondent concedes petitioner substantially prevailed see sec_7430 and petitioner satisfies the applicable net_worth requirement see sec_7430 taxable_year on his return petitioner listed his filing_status as head_of_household and he claimed dependency_exemptions for two children lilly phan and anna phan the earned_income_credit and the child_tax_credit petitioner also claimed a refund of tax in the amount of dollar_figure petitioner’s return was selected for examination by letter dated date the examination letter respondent proposed to change petitioner’s filing_status from head_of_household to single and allow only the standard_deduction for the latter filing_status and disallow the two dependency_exemptions the earned_income_credit and the child_tax_credit concurrently respondent requested specific information and documentation from petitioner to substantiate the filing_status dependency_exemptions earned_income_credit and child_tax_credit as claimed on his return on date petitioner responded to the examination letter by mailing various documents to respondent this material included a birth registration notice not a birth certificate for lilly phan a birth certificate for anna phan a social_security card for each child a purported lease and a letter from lamont elementary_school regarding lilly phan’s enrollment neither of the birth records for the two children identified petitioner as their father after reviewing this material respondent concluded that the information submitted was insufficient to verify the items under examination in response to the documents provided by petitioner on date a second letter was sent to petitioner advising him that additional information would be required respondent enclosed with the letter a form 866-a explanation of items and requested additional information respondent indicated that petitioner was considered a foster parent because he was not identified as the father on the two birth records he provided as such respondent specifically requested in part documents to verify that the two children lived with petitioner for the entire taxable_year and that they were placed with petitioner by an authorized agency in response to respondent’s second letter petitioner provided respondent with a handwritten document which stated that petitioner was the foster father to the two children who resided in the same household as their mother and petitioner by a notice_of_deficiency dated date respondent determined a deficiency in petitioner’s federal_income_tax for in the amount of dollar_figure the deficiency was attributable to the adjustments proposed in respondent’s date letter ie change in petitioner’s filing_status from head_of_household to single with a concomitant change in the during the administrative_proceeding petitioner had also indicated to respondent that he was in fact the foster father to the two children amount of the standard_deduction and disallowance of the two dependency_exemptions the earned_income_credit and the child_tax_credit on date petitioner retained his present counsel on date petitioner filed a petition for redetermination with this court see sec_6213 petitioner placed the entire amount of the deficiency in dispute assigning error to each of the adjustments made by respondent in the notice_of_deficiency petitioner alleged among other things that he was the natural father of the two claimed dependents on date petitioner’s counsel sent additional documentation to respondent this included the same information previously sent by petitioner as well as a copy of petitioner’s tax_return petitioner also provided an uncertified affidavit of parentage5 for each child which indicated that he was their natural father the uncertified affidavits were signed by petitioner and dated date after reviewing the documentation provided by petitioner respondent did not alter his position the affidavit of parentage is a form provided by the state of maryland the annotated code of maryland family law article sec affidavit of parentage provides in part that an executed affidavit of parentage constitutes a legal finding of paternity subject_to the right of any signatory to rescind the affidavit in writing within days after execution of the affidavit on date respondent filed an answer in the answer respondent denied all of petitioner’s assignments of error including that petitioner was the natural father of the two claimed dependents on date petitioner filed a motion for summary_judgment on the ground that petitioner is the natural father of lilly phan and anna phan and that he is otherwise properly entitled to the head_of_household filing_status and the claimed dependency_exemptions earned_income_credit and child_tax_credit on date respondent filed with the court a notice of objection to petitioner’s motion for summary_judgment together with a supporting memorandum in the objection respondent maintained that petitioner had failed to substantiate that he was entitled to the head_of_household filing_status and to the claimed deductions and credits on date respondent requested a certified copy from the registrar of vital records for the state of maryland of any documents filed by petitioner with respect to the paternity of lilly phan and anna phan on date respondent received certified copies of the affidavits of parentage and birth certificates from the state of maryland for both lilly phan and anna phan a hearing was held on petitioner’s motion for summary_judgment on date following the hearing with this court respondent forwarded the certified copies of the affidavits of parentage and birth certificates to the assigned appeals officer after receiving these documents respondent settled the case within weeks on date petitioner filed his motion for an award of costs on date respondent filed an objection to petitioner’s motion for an award of costs thereafter on date petitioner filed a reply and on date respondent filed a response discussion we apply sec_7430 as amended by congress in the internal_revenue_service restructuring and reform act of rra publaw_105_206 112_stat_727 the certified copies of the affidavits of parentage are signed by the state registrar of vital records with the following declaration i hereby certify that the attached is a true copy of a record on file in the division of vital records the certified copies of the affidavits are stamped valid only with impressed seal sec_7430 was amended most recently by congress in the community renewal tax relief act of crtra publaw_106_554 sec stat 2763a-647 the amendment which is effective on the date of enactment of crtra date affects only sec_7430 and is purely clerical in nature a requirements for a judgment under sec_7430 under sec_7430 a judgment for administrative costs incurred in connection with an administrative_proceeding may be awarded under sec_7430 only if a taxpayer is the prevailing_party and did not unreasonably protract the administrative_proceeding sec_7430 and b similarly a judgment for litigation costs incurred in connection with a court_proceeding may be awarded only if a taxpayer is the prevailing_party has exhausted his or her administrative remedies within the irs and did not unreasonably protract the court_proceeding sec_7430 and b a taxpayer must satisfy each of the respective requirements in order to be entitled to an award of administrative or litigation costs under sec_7430 rule e upon satisfaction of these requirements a taxpayer may be entitled to reasonable costs incurred in connection with the administrative or court_proceeding see sec_7430 and c and to be a prevailing_party the taxpayer must substantially prevail with respect to either the amount in controversy or the most significant issue or set of issues presented and satisfy the applicable net_worth requirement sec_7430 respondent concedes that petitioner has satisfied the requirements of sec_7430 petitioner will nevertheless fail to qualify as the prevailing_party if respondent can establish that respondent’s position in the administrative and court proceedings was substantially justified sec_7430 b substantial justification the commissioner’s position is substantially justified if based on all of the facts and circumstances and the legal precedents relating to the case the commissioner acted reasonably 487_us_552 89_tc_79 affd 861_f2d_131 5th cir in other words to be substantially justified the commissioner’s position must have a reasonable basis in both law and fact pierce v underwood supra 900_f2d_655 3d cir affg in part and revg in part on other grounds 92_tc_510 a position is substantially justified if the position is justified to a degree that could satisfy a reasonable person pierce v underwood supra pincite construing similar language in the equal_access_to_justice_act thus the commissioner’s position may be incorrect but nevertheless be substantially justified ‘if a reasonable person could think it correct’ 108_tc_430 quoting pierce v underwood supra pincite n the relevant inquiry is whether the commissioner knew or should have known that his position was invalid at the onset 55_f3d_189 5th cir affg tcmemo_1994_182 we look to whether the commissioner’s position was reasonable given the available facts and circumstances at the time that the commissioner took his position maggie mgmt co v commissioner supra pincite 85_tc_927 the fact that the commissioner eventually concedes or even loses a case does not establish that his position was unreasonable 931_f2d_1044 5th cir 92_tc_760 however the commissioner's concession does remain a factor to be considered 100_tc_457 affd in part revd in part and remanded on another issue 43_f3d_172 5th cir as relevant herein the position_of_the_united_states that must be examined against the substantial justification standard with respect to the recovery_of administrative costs is the position taken by the commissioner as of the date of the notice_of_deficiency sec_7430 the position_of_the_united_states that must be examined against the substantial justification standard with respect to the recovery_of litigation costs is the position taken by the commissioner in the answer to the petition 930_f2d_759 9th cir affg an unpublished decision of this court sher v commissioner supra pincite see sec_7430 ordinarily we consider the reasonableness of each of these positions separately in order to allow the commissioner to change his position maggie mgmt co v commissioner supra pincite citing huffman v commissioner 978_f2d_1139 9th cir affg in part and revg in part on another ground t c memo in the present case however we need not follow this approach because respondent’s position was essentially the same in the administrative and court proceedings see maggie mgmt co v commissioner supra pincite more specifically respondent’s position was that petitioner had failed to substantiate his entitlement to head_of_household filing_status and the standard_deduction for that filing_status and dependency_exemption deductions earned_income_credit and child_tax_credit in respect of his children deductions and credits are matters of legislative grace 292_us_435 89_tc_816 the same may be said of a tax-favored filing_status such as head_of_household see d’anjou v commissioner tcmemo_1992_138 taxpayers are required to substantiate the deductions and credits that they claim by maintaining records necessary to establish both the taxpayers’ entitlement to such items and the proper amount thereof sec_6001 43_tc_824 sec_1_6001-1 income_tax regs see rule a 503_us_79 290_us_111 segel v commissioner supra 65_tc_87 affd per curiam 540_f2d_821 5th cir goertler v commissioner tcmemo_2003_136 commissioner’s position was substantially justified as taxpayers had failed to substantiate deductions for personal exemptions see also sec_7491 and b a taxpayer’s self-serving declaration is no ironclad substitute for the records that the law requires see weiss v commissioner tcmemo_1999_17 see also 28_tc_1034 a taxpayer's income_tax return is a self-serving declaration that may not be accepted as proof for the deduction or exclusion claimed by the taxpayer 7_tc_245 a taxpayer’s return is not self-proving as to the truth of its contents affd 175_f2d_500 2d cir factual determinations are required in order to decide whether a taxpayer is entitled to head_of_household filing_status see sec_2 a dependency_exemption deduction see sec_151 and sec_152 an earned_income_credit see sec_32 or a child_tax_credit see sec_24 we have held that whenever the resolution of adjustments requires factual determinations the commissioner is not obliged to concede those adjustments until the commissioner has received and has had a reasonable period of time to verify adequate substantiation for the matters in question see huynh v commissioner tcmemo_2002_110 gealer v commissioner tcmemo_2001_180 and cases cited therein o’bryon v commissioner tcmemo_2000_379 and cases cited therein cooper v commissioner tcmemo_1999_6 based on the facts available to respondent at the time the notice_of_deficiency was issued and the answer was filed as well as long-standing legal precedent regarding the availability of tax deductions and credits respondent’s position had a reasonable basis in both law and fact and therefore was substantially justified see maggie mgmt co v commissioner t c pincite when respondent filed his answer he had not received documentation sufficient to substantiate petitioner’s head_of_household filing_status dependency deductions and credits petitioner contends that it was unreasonable for respondent to require adequate substantiation for the adjustments in issue because so petitioner alleges sufficient substantiation had been previously provided however none of the information provided by petitioner prior to the issuance of the notice_of_deficiency identified petitioner as the natural father of the two children for instance the birth records petitioner provided did not indicate the father of the two children the social_security cards lease and elementary_school letter likewise failed to offer any indication that petitioner was the children’s natural father additionally the affidavits of parentage provided by petitioner after filing his petition and prior to respondent’s answer were uncertified and offered no indication that they had been filed by petitioner with the state of maryland thus at the time that respondent filed his answer the uncertified affidavits provided by petitioner were nothing more than self-serving assertions petitioner’s return was also merely a self-serving declaration therefore the documents provided by petitioner while helpful did not overcome respondent’s position we note further that when respondent finally received certified affidavits and birth certificates that identified see eg sec_2 an unmarried taxpayer will qualify for head_of_household status if among other requirements he maintains as his home a household that is the principal_place_of_abode of a daughter for more than one-half of the taxable_year sec_24 a qualifying_child for the purpose of the child_tax_credit includes an individual who is among other requirements the taxpayer’s daughter or an eligible_foster_child sec_32 a qualifying_child for purposes of the earned_income_credit includes an individual who is among other requirements the taxpayer’s daughter or an eligible_foster_child sec_152 a b a dependent for purposes of claiming a dependency_exemption deduction includes an individual who is among other requirements the taxpayer’s daughter an individual who has as his principal_place_of_abode the taxpayer’s home and is a member of the taxpayer’s household or the taxpayer’s foster_child petitioner as the natural father of lilly phan and anna phan the documentation was considered by respondent’s appeals_office and a basis of settlement was reached within weeks thereafter in view of the foregoing we hold that respondent’s position in the administrative and court proceedings was substantially justified in so holding we have considered other arguments made by petitioner for a contrary result and found those arguments to be without merit c remaining requirements of sec_7430 because respondent’s position in the administrative and court proceedings was substantially justified we need not decide whether petitioner exhausted his administrative remedies whether petitioner unreasonably protracted the proceedings or whether the administrative and litigation costs claimed by petitioner are reasonable in amount d conclusion in conclusion we hold that petitioner is not entitled to an award of administrative and litigation costs in order to reflect the foregoing an appropriate order and decision will be entered


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-121035-18 date february x ------------------------ ------------------------- country ------------ d1 ---------------------- dear ----------------- this letter responds to a letter dated date and subsequent correspondence submitted on behalf of x requesting a ruling under sec_301_9100-1 and sec_301_9100-3 of the procedure and administration regulations that x be granted an extension of time to file an election to be classified as a partnership under sec_301_7701-3 effective d1 facts x is an entity formed under the laws of country x is not classified as a corporation under sec_301_7701-2 or x intended that it be treated as a partnership for u s federal tax purposes effective d1 however due to inadvertence x failed to file a timely form_8832 entity classification election law and analysis sec_301_7701-3 provides that a business_entity that is not classified as a corporation under sec_301_7701-2 or an eligible_entity can elect its classification for federal tax purposes as provided in sec_301_7701-3 sec_301_7701-3 provides that unless it elects otherwise a foreign eligible_entity is a a partnership if it has two or more members and at least one member does plr-121035-18 not have limited_liability b an association if all members have limited_liability or c disregarded as an entity separate from its owner if it has a single owner that does not have limited_liability sec_301_7701-3 provides that an eligible_entity may elect to be classified other than as provided in sec_301_7701-3 by filing form_8832 with the service_center designated on form_8832 sec_301_7701-3 provides that an election made under sec_301_7701-3 will be effective on the date specified by the entity on form_8832 or on the date filed if no date is specified on the election form the effective date specified on form_8832 cannot be more than days prior to the date on which the election is filed and cannot be more than months after the date on which the election is filed sec_301_9100-1 provides that the commissioner has discretion to grant a reasonable extension of time under the rules set forth in sec_301_9100-2 and sec_301_9100-3 to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the code except subtitles e g h and i sec_301_9100-1 defines a regulatory election to include an election whose due_date is prescribed by a regulation published in the federal_register sec_301_9100-2 provides the rules governing automatic extensions of time for making certain elections sec_301_9100-3 sets forth the standards the commissioner will use to determine whether to grant an extension of time for regulatory elections that do not meet the requirements of sec_301_9100-2 sec_301_9100-3 provides that requests for relief subject_to sec_301_9100-3 will be granted when the taxpayer provides evidence including affidavits described in sec_301_9100-3 to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and granting relief will not prejudice the interests of the government conclusion based on the facts submitted and the representations made we conclude that the requirements of sec_301_9100-1 and sec_301_9100-3 have been satisfied as a result x is granted an extension of time of days from the date of this letter to file form_8832 with the appropriate service_center to elect to be classified as a partnership for federal tax purposes effective d1 a copy of this letter should be attached to the form_8832 a copy is enclosed for that purpose this ruling is contingent on x and its owners filing within days from the date of this letter any required returns including amended returns consistent with the requested plr-121035-18 relief being effective on d1 to the extent appropriate these returns or amended returns must include but are not limited to forms information_return of u s persons with respect to certain foreign_partnerships such that these forms reflect the consequences of the relief granted in this letter if this condition is not met then this ruling is null and void a copy of this letter should be attached to any such returns except as expressly set forth above we express or imply no opinion concerning the federal tax consequences of the facts discussed above under any other provision of the code this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent in accordance with a power_of_attorney on file with this office we are sending a copy of this letter to x's authorized representative sincerely by joy spies joy spies senior technical reviewer branch passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes cc