internal_revenue_service number release date index numbers --------------------------------- ----------------------------------------------------- ------------- ------------------------- ------------------------------------------------------------ -------------------------------------------- department of the treasury washington dc person to contact --------------------- id no ---------------- telephone number -------------------- refer reply to cc psi b03 - plr-135466-14 date date legend x ------------------------------------------------- --------------------------------- y ------------------------------------------------- ------------------- z ------------------------------------------------- -------------------------- -------------------------------- --------------------- ------------ ----------------------- -------------------------- -------------------------- territory1 territory2 state d1 d2 d3 dear ------------ plr-135466-14 this letter responds to a letter dated date submitted on behalf of x requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations to file a corrected election under sec_301_7701-3 to be classified as a disregarded_entity effective d3 for federal tax purposes facts the information submitted discloses that x was formed on d1 under the laws of territory1 shortly thereafter y acquired all of the stock in x through a disregarded subsidiary on d2 during a reorganization of its businesses y sold all of its stock in x to a disregarded subsidiary of z a territory2 entity indirectly owned in part by y x intended to file form_8832 entity classification election to be classified as a disregarded_entity for federal tax purposes effective d3 however x mistakenly filed the classification election with an effective date of d2 x represents that y has treated x as a disregarded_entity as of d3 for federal tax purposes that neither x nor y is currently under audit and that an extension of time to file a corrected election would not prejudice the interests of the government law and analysis sec_301_7701-3 provides in part 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 an eligible_entity with at least two members can elect to be classified as either an association and thus a corporation under sec_301_7701-2 or a partnership and an eligible_entity with a single owner can elect to be classified as an association or to be disregarded as an entity separate from its owner sec_301_7701-3 provides that except as provided in sec_301 b unless the entity elects otherwise a foreign eligible_entity is a a partnership if it has two or more members and at least one member does 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 in part that for purposes of sec_301_7701-3 a member of a foreign eligible_entity has limited_liability if the member has no personal liability for the debts of or claims against the entity by reason of being a member sec_301_7701-3 provides in part that except as provided in sec_301_7701-3 and v an eligible_entity may elect to be classified other than as provided under sec_301_7701-3 or to change its classification by filing form_8832 with the service_center designated on form_8832 sec_301_7701-3 provides in part that an election made under plr-135466-14 sec_301_7701-3 will be effective on the date specified by the entity on form_8832 or on the date filed if no such date is specified on the election form the effective date specified on form_8832 can not be more than days prior to the date on which the election is filed and can not be more than months after the date on which the election is filed 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 six months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code code except subtitles e g h and i sec_301_9100-1 provides that the term regulatory election includes an election whose due_date is prescribed by a regulation published in the federal_register sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make an election sec_301_9100-2 provides automatic extensions of time for making certain elections sec_301_9100-3 provides extensions of time for regulatory elections that do not meet the requirements of sec_301_9100-2 sec_301_9100-3 provides that requests for relief under sec_301_9100-3 will be granted when the taxpayer provides the 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 the grant of relief will not prejudice the interests of the government conclusion based solely on the facts and representations submitted we conclude that x has satisfied the requirements of sec_301_9100-1 and sec_301_9100-3 consequently x is granted an extension of time of one hundred twenty days from the date of this letter to elect under sec_301_7701-3 to be treated as a disregarded_entity effective d3 x must file form_8832 within the extension period with the appropriate service_center with a copy of this letter attached except for the specific ruling 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 in addition sec_301_9100-1 provides that the granting of an extension of time for making an election is not a determination that the taxpayer is otherwise eligible to make the election this ruling is directed only to the taxpayer requesting it according to sec_6110 of the code this ruling may not be used or cited as precedent plr-135466-14 under a power_of_attorney on file with this office we are sending a copy of this letter to x’s authorized representatives 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 sincerely associate chief_counsel passthroughs special industries by s holly porter chief branch office of the associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes


internal_revenue_service number release date index number ------------------------------------------ -------------------------------- ------------------------ ------------------------------------ --------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact -------------------- id no ------------- telephone number --------------------- refer reply to cc psi b02 plr-127555-08 date december legend x ------------------------------------------ -------------------------------- country --------------------- date ------------------- dear --------------- this responds to a letter dated date and subsequent correspondence submitted on behalf of x requesting that the service grant x an extension of time under sec_301_9100-3 of the procedure and administration regulations to elect to be treated as a partnership under sec_301_7701-3 the facts submitted and representations made are summarized as follows x was formed on date under the laws of country x is a foreign_entity eligible to elect to be treated as a partnership for u s income_tax purposes however x inadvertently failed to timely file a form_8832 entity classification election electing to treat x as a partnership effective date sec_301_7701-3 provides guidance on the classification of a foreign_entity for federal_income_tax purposes generally a foreign eligible_entity is treated as an association_taxable_as_a_corporation if all members have limited_liability unless the entity makes an election to be treated otherwise if the foreign eligible_entity has more than one owner it may elect to be treated as a partnership pursuant to the rules in sec_301_7701-3 plr-127555-08 sec_301_7701-3 provides that an entity classification election must be filed on form_8832 and can be effective up to seventy-five days prior to the date the form is filed or up to twelve months after the date on which the form is filed sec_301_9100-1 provides that the commissioner may grant a reasonable extension of time to make a regulatory election or a statutory election but no more than months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301_9100-1 defines the term regulatory election as an election whose due_date is prescribed by a regulation published in the federal_register or a revenue_ruling revenue_procedure notice or announcement published in the internal_revenue_bulletin sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make the election sec_301_9100-2 provides the rules governing automatic extensions of time for making certain elections sec_301_9100-3 provides the standards the commissioner will use to determine whether to grant an extension of time for regulatory elections that do not meet the requirements of sec_301_9100-2 under sec_301_9100-3 a request for relief will be granted when the taxpayer provides evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and granting relief will not prejudice the interests of the government based solely on the information submitted and the representations made we conclude that the requirements of sec_301_9100-3 have been satisfied as a result x is granted an extension of time of days from the date of this letter to file a form_8832 with the appropriate service_center to elect to be treated as a partnership for u s income_tax purposes effective date a copy of this letter should be attached to the form_8832 a copy is enclosed for that purpose except as specifically set forth above no opinion is expressed concerning the federal tax consequences of the facts described above under any other provision of the code this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent plr-127555-08 pursuant to a power_of_attorney on file with this office copies of this letter are being sent to x’s authorized representatives sincerely curt g wilson associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes cc


contact person identification_number telephone number employer_identification_number uniform issue list number internal_revenue_service department of the treasury p o box cincinnati oh release number release date date legend f public charity that administers scholarship program b name of scholarship program c option of scholarship program d option of scholarship program e employer p private_foundation x qualifying test y standardized test dear this is in reference to your representative's letter of date requesting advance approval of your scholarship grant procedures under sec_4945 of the internal_revenue_code the information submitted shows that the grants funded by you private_foundation p will be administered and paid out by f a publicly_supported_organization under its b program organizations operating under the b program may elect the c option and or the d option in the c option p enters into an agreement with f to sponsor a specified number of college scholarships for children and or other relatives of employees of e students enter the nationwide scholarship competition by taking a test called the x those students scoring within the top one- half of one percent on a state-by-state basis are designated as semifinalists they may advance to the finalist level by confirming their scores on a second test the y and by submitting an application form that includes a high schoo record provided by their high school officials showing strong academic performance a personal essay extra-curricular accomplishments and the recommendation of their high school principal or school official designated by the principal f selects students from among those children and or other relatives of employees who attained the finalist level in the b program to receive p-sponsored scholarships the d option procedures generally parallel those of the c option procedures except that eligibility in the d program is limited to top-scoring black high school students the selection of individual grant recipients is made by selection committees designated by f the members of the selection committee are totally independent and separate from you f confirms the individual scholarship recipient's enrollment at the educational_institution makes payment of the award through the appropriate financial aid office of the educational_institution and supervises and investigates the use of the grant funds by the recipients in their educational program the scholarships will not be used as a means of inducement to recruit employees nor will a grant be terminated if an employee parent or relative leaves the company scholarships will only be awarded to students who plan to enroll in an institution that meets the requirements of sec_170 of the code and which may further be limited by f after the scholarship is awarded the recipient will not be restricted in his her course of study in rare cases sponsors may ask f to give preference in selection to individuals who propose to study in certain broad fields sec_4945 of the code provides for the imposition of taxes on each taxable_expenditure of a private_foundation sec_4945 of the code provides that the term taxable_expenditure means any amount_paid or incurred by a private_foundation as a grant to an individual for travel study or other similar purposes by such individual unless such grant satisfies the requirements of sec_4945 sec_4945 of the code provides that sec_4945 shall not apply to an individual grant awarded on an objective and nondiscriminatory basis pursuant to a procedure approved in it is demonstrated to the satisfaction of the secretary that the grant advance by the secretary if constitutes a scholarship or fellowship_grant which is subject_to the provisions of sec_117 and is to be used for study at an educational_organization described in sec_170 revrul_81_217 1981_2_cb_217 describes a situation involving a private_foundation making grants to an organization that is not a private_foundation to provide scholarships only to children of a particular employer the organization that is not a private_foundation evaluates the students according to its own criteria including student performance on a qualifying examination since grant funds are distributed only to children of employees of a particular company students who receive scholarships are not selected completely independently of the grantor accordingly any such scholarships awarded and paid after date are considered to be individual grants under sec_4945 for which advance approval of grant procedures are required under sec_4945 revproc_76_47 1976_2_cb_670 sets forth guidelines to be used in determining whether a grant made by a private_foundation under an employer-related program to a child of an employee of the particular employer to which the program relates is a scholarship grant subject_to the provisions of sec_117 if a private foundation's program satisfies the seven conditions set forth in sections dollar_figure through dollar_figure of revproc_76_47 and meets the percentage_test described in sec_4 the service will assume the grant will be subject_to the provisions of sec_117 section dollar_figure of revproc_76_47 provides a percentage_test guideline it states that in the case of a program that awards grants to children of employees of a particular employer the program meets the percentage_test if the number of grants awarded under that program in any year to such children does not exceed percent of the number of employees' children who i were eligible ii were applicants for such grants and iii were considered by the selection committee in selecting the recipients of grants in that year or percent of the number of employees’ children who can be shown to be eligible for grants whether or not they submitted an application in that year as stated in sec_4 of revproc_76_47 if a sponsor's program satisfies the seven conditions set forth in sections dollar_figure through but does not meet the percentage_test of section dollar_figure applicable to grants to employees’ children the question whether the grants are scholarship or fellowship grants subject_to the provisions of sec_117 of the code will be resolved on the basis of all the facts and circumstances in making this determination the service will consider as a substitute for the percentage_test of section dollar_figure all the relevant facts and circumstances to determine whether the primary purpose of the program is to provide extra compensation or other employment incentive or whether the primary purpose is to educate recipients in their individual capacities these facts and circumstances will be considered in the context of the probability that a grant will be available to any eligible applicant such relevant facts and circumstances could include the history of the program such as the source of the program's funding the courses of study for which the grants are available any eligibility requirements imposed by the program other than employment of the applicants or their parents and the age and grade level prerequisites for the studies for which the grants are available the publicity given the grant program the degree of independence of the selection committee the particular standards used for selection the specific means used to determine whether those standards have been met the precise nature of the employee limitation or preference the number of grants available the number of employees or their children who would be eligible for them the percentage of eligible employees or their children applying for grants who normally eg on an average basis receive grants under the program and whether and how many grants are awarded to individuals who do not qualify as employees or children of employees in your case the following facts and circumstances are considered relevant aside from the employment preference f a public charity operates its private_foundation sponsored b program in a substantially_similar manner to its nationwide college scholarship program for academically talented high school students no application is required individuals must achieve finalist status in their respective competitions recipients are chosen by selection committees totally independent of the private_foundation or the employer involved no limitations are placed on the recipients’ choice of course of study after the grant is awarded under the facts and circumstances as stated above there is only an insignificant probability that any particular employee's child and or other relative will be selected and thus the grant's primary purpose is not one of providing extra compensation or other employment incentive and the facts_and_circumstances_test of revproc_76_47 sec_4 is met accordingly based upon the information presented and assuming your scholarship program will be conducted as proposed with a view to providing objectivity and non-discrimination in the awarding of scholarship grants we rule that your grants to f for the awarding of scholarship grants to children and or other relatives of employees of e comply with the requirements of sec_4945 of the code thus such expenditures made in accordance with those procedures will not constitute taxable_expenditures within the meaning of sec_4945 of the code the recipient of the scholarship is responsible for determining whether all or part of the scholarship is includible in gross_income under sec_117 of the code we understand that f will advise the recipient that amounts granted are taxable_income if the aggregate scholarship amounts received by the recipient exceed tuition and fees not including room and board required for enrollment or attendance at the educational_institution and fees books supplies and equipment required for courses of instruction this ruling is based on the understanding that there will be no material_change in the facts upon which it is based and that no grants will be awarded to relatives of members of selection committees or for a purpose inconsistent with the purposes described in sec_170 of the code this ruling will remain in effect as long as the procedures in awarding grants under your program remain in compliance with sections dollar_figure through dollar_figure of revproc_76_47 please note that this ruling is only applicable to grants awarded under the b program before you enter into any other scholarship or educational loan program you should submit a request for advance approval of that program your procedures for awarding grants under the b program are considered to satisfy the facts_and_circumstances_test of revproc_76_47 and therefore will not be counted in determining whether the percentage_test of revproc_76_47 is met with respect to any other such program for which prior approval has been granted this ruling will be made available for public inspection under sec_6110 of the code after certain deletions of identifying information are made for details see enclosed notice notice of intention to disclose a copy of this ruling with deletions that we intend to make available for public inspection is attached to notice if you disagree with our proposed deletions you should follow the instructions in notice this ruling letter is directed only to the organization that requested it sec_6110 of the code provides that it may not be used or cited by others as precedent because this ruling letter could help to resolve any questions please keep it in your permanent records we've sent a copy of this letter to your representative as indicated in your power_of_attorney if you have any questions about this ruling letter please contact the person whose name and telephone number are shown in the heading of this letter sincerely enclosures notice copy of redacted letter director exempt_organizations


internal_revenue_service department of the treasury number release date index number u i l no washington dc person to contact telephone number refer reply to cc psi plr-117458-00 date date legend company state shareholders a dear this letter responds to a letter dated date requesting a ruling on behalf of company under sec_1362 of the internal_revenue_code the information submitted discloses that company was incorporated on a in state company has two shareholders shareholders it is represented that company has intended to be an s_corporation since its incorporation however company discovered that its s election had not been timely filed company requests a ruling under sec_1362 that its sec_1362 election will be treated as timely made for its taxable_year that begins on a sec_1362 provides that a small_business_corporation may elect to be an s_corporation sec_1362 explains when an s election will be effective generally if an s election is made within the first two and one half months of a corporation's taxable_year then that corporation will be treated as an s_corporation for the year in which the plr-117458-00 election is made sec_1362 provides that if an s election is made after the first two and one half months of a corporation’s taxable_year then that corporation will not be treated as an s_corporation until the taxable_year following the year in which the s election is made sec_1362 provides that if no sec_1362 election is made for any taxable_year and the secretary determines that there was reasonable_cause for the failure to timely make such election then the secretary may treat such an election as timely made for such taxable_year and sec_1362 shall not apply applying the relevant law to the facts submitted and representations made we rule that company's sec_1362 election will be treated as timely made for its taxable_year that begins on a however this ruling is contingent on company filing form_2553 election by a small_business_corporation with an effective date of a with the appropriate service_center within days from the date of this ruling a copy of this letter should be attached to the form_2553 except as specifically set forth above we express no opinion concerning the federal tax consequences of the foregoing facts specifically we express no opinion on whether company otherwise qualifies as an s_corporation under a power_of_attorney on file with this office a copy of this letter is being sent to company’s authorized representative this ruling is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent sincerely yours s mary beth collins assistant to the chief branch office of the associate chief_counsel passthroughs and special industries enclosure copy for sec_6110 purposes


department of the treasury internal_revenue_service washington d c nov tax_exempt_and_government_entities_division uics tep rats legend taxpayer a taxpayer b taxpayer c taxpayer d company a tra xx trust t trustee w state u date date amount amount statute sections date date date page this is in response to the letter submitted on your behalf by your authorized representative s as supplemented by correspondence dated in which they on your behalf request a series of and letter rulings under sec_401 of the internal_revenue_code code the following facts and representations support your ruling_request taxpayer a whose date of birth was date died on date a resident of state u without having attained age taxpayer a was survived by her son taxpayer b whose date of birth was date of birth was and a daughter taxpayer c whose taxpayer a was also survived by a sister taxpayer d at her death taxpayer a maintained jira x an individual_retirement_account represented to be qualified within the meaning of code sec_408 with company a the value of ira x as of the date of taxpayer a’s death was approximately amount on or about date taxpayer a named trust t as the beneficiary of ira x on or about date taxpayer a executed trust t trustee w is the current it has been represented that at all times relevant to this request for trustee of trust t letter_ruling trust t was is valid under the laws of state u that pursuant to article iv section b_trust t became irrevocable at the death of taxpayer a finally it has been represented that the documentation described in sec_1_401_a_9_-4 question and answer-6 of the final income_tax regulations was provided to the administrator custodian of ira x prior to date it has also been represented article vii of trust t lists specific gifts of trust t property to be distributed to specific beneficiaries after the death of trustor taxpayer a article vii section c of trust t provides in summary that after satisfying the trust’s specific bequests and after satisfying the requirements of article viii sections a and b the remaining trust t property is to be used to fund two sub-trusts to benefit taxpayers b and c article viii section c9 provides that the trust for each child taxpayer b and taxpayer c shall terminate when each child attain sec_45 at which time the trust property shall be distributed free of trust to said child taxpayer b and taxpayer c had each attained age prior to the death of taxpayer a it has been represented that in addition to ira x trust t was the beneficiary of other_property totaling approximately amount in value upon the death of taxpayer a it has also been represented that satisfaction of all of the bequests required under provisions of trust t including the funding of an annuity for the benefit of taxpayer d and satisfaction of all estate_taxes associated with the estate of taxpayer a were made by using assets other than ira x a representation has been made that use of non-ira x page assets was required under state u statute sections and relevant state u case law thus as aresult to conform to the requirements of state u law ira x had to be used to fund the sub-trusts set up to benefit taxpayers b and c under article viii section c of trust t it has been represented that distributions intended to satisfy the requirements of code sec_401 and sec_408 have been made from ira x since calendar_year to taxpayers a and b based on the life expectancy of taxpayer b based on the above facts and representations you through your authorized representative request the following letter rulings that trust t and the sub-trusts created under the provisions of article viii section c are see-through trusts as that term is described in sec_1_401_a_9_-4 of the final income_tax regulations question and answer-5 b that taxpayers b and c are the only individuals who have to be considered potential designated beneficiaries as that term is defined in code sec_401 for purposes of determining the payout period of distributions from ira x that distributions from ira x to taxpayer b may be based on the life expectancy of taxpayer b the elder of taxpayers b and c using his attained age in calendar_year the year after the year of death of taxpayer a and reduced by one during each subsequent calendar_year with respect to your ruling requests code sec_408 provides the rules governing iras code sec_408 provides that under regulations prescribed by the secretary rules similar to the rules of sec_401 and the incidental death_benefit requirements of sec_401 shall apply to the distribution of the entire_interest of an individual for whose benefit an ira trust is maintained code sec_401 provides in general that a_trust will not be considered qualified unless the plan provides that the entire_interest of each employee -- i will be distributed to such employee not later than the required_beginning_date or ii will be distributed beginning not later than the required_beginning_date over the life of such employee or over the lives of such employee and a designated_beneficiary or over a period not extending beyond the life expectancy of such employee or the life expectancy of such employee and a designated_beneficiary page sec_401 of the code provides in relevant part that for purposes of this paragraph the term required_beginning_date means april of the calendar_year following the calendar_year in which the ira holder attains age code sec_401 provides in general that if a plan participant ira holder dies after the distribution of his interest has begun in accordance with subparagraph a ii before his required_beginning_date his plan or ira interest remaining at his death must be distributed at least as rapidly as under the method of distribution being used under subparagraph a ii as of the date of his death code sec_401 provides in general that if a plan participant ira holder dies before the distribution of his interest has begun in accordance with subparagraph a ii prior to his required_beginning_date then his entire_interest must be distributed within years of his death code sec_401 provides an exception to the 5-year rule above in general pursuant to the exception if any portion of the interest of a deceased plan participant ira holder is payable to or for the benefit of a designated_beneficiary such portion will be distributed beginning not later than year after the date of the deceased’s death or a later date as prescribed by the secretary under regulations in accordance with regulations over the life of the designated_beneficiary or a period not extending beyond the life expectancy of the beneficiary code sec_401 defines designated_beneficiary as any individual designated as a beneficiary by the employee ira holder with respect to your ruling requests final income_tax regulations under code sec_401 and sec_408 were published in the f ederal register pincite federal_register date and in the internal_revenue_bulletin pincite lr b date the preamble to the final regulations in relevant part provide that the regulations apply for determining required minimum distributions for calendar years beginning after date sec_1_401_a_9_-4 of the final regulations q a-1 provides in relevant part that a designated_beneficiary is an individual who is designated as a beneficiary under a plan either by the terms of the plan or by an affirmative election by the employee a beneficiary designated under the plan is an individual who is entitled to a portion of an employee’s benefit contingent on the employee’s death or another specified event a designated_beneficiary need not be specified by name in the plan or by the employee to the plan in order to be a designated_beneficiary so long as the individual who is to be the beneficiary is identifiable under the plan q a-1 further provides that a person who takes under a will or otherwise under applicable state law will not be a designated_beneficiary unless that individual also takes under a plan page sec_1_401_a_9_-4 of the final regulations q a-4 provides in relevant part that in order to be a designated_beneficiary an individual must be a beneficiary as of the date of the employee's or ira holder's death generally an employee's designated_beneficiary will be determined based on the beneficiaries designated as of the date of death who remain beneficiaries as of september of the calendar_year following the calendar_year of death consequently any person who was a beneficiary as of the date of the employee’s date but is not a beneficiary as of that september eg because the person receives the entire benefit to which the person is entitled before that september is not taken into account in determining the employee’s designated_beneficiary for purposes of determining the distribution period for required minimum distributions after the employee’s death sec_1_401_a_9_-4 of the final regulations q a-3 provides that only individuals may be designated beneficiaries for purposes of sec_401 a person who is not an individual such as the employee's estate may not be a designated_beneficiary however q a-5 of sec_1_401_a_9_-4 provides that beneficiaries of a_trust with respect to the trust's interest in an employee's benefit may be treated as designated beneficiaries if the following requirements are met the trust is valid under state law or would be but for the fact there is no corpus the trust is irrevocable or will by its terms become irrevocable upon the death of the employee the beneficiaries of the trust who are beneficiaries with respect to the trust's interest in the employee's benefit are identifiable within the meaning of a-1 of this section from the trust instrument relevant documentation has been timely provided to the plan_administrator sec_1_401_a_9_-4 of the final regulations q a-6 b provides in relevant summary that at a minimum documentation sufficient to enable an ira custodian to identify beneficiaries of an ira must be provided by a trustee to the custodian by october of the calendar_year immediately following the calendar_year in which the ira owner died sec_1_401_a_9_-3 of the final regulations q a-3 a provides in general that with respect to the life expectancy exception to the 5-year rule described in code sec_401 and in a-1 distributions are required to begin to a non-spouse beneficiary on or before the end of the calendar_year immediately following the calendar_year in which the employee died this rule also applies if another individual is a designated_beneficiary in addition to the employee’s ira holder’s surviving_spouse page sec_1_401_a_9_-3 of the final regulations q a-4 a provides in relevant part that in the absence of a plan provision to the contrary with respect to an individual who dies prior to reaching his required_beginning_date if said individual has designated a beneficiary distributions from his plan or ira are to be made in accordance with the life_expectancy_rule of code sec_401 i1i and iv sec_1_401_a_9_-5 of the final regulations q a-5 b provides in general that if an employee dies before his required_beginning_date in order to satisfy the requirements of code sec_401 or iv and the life_expectancy_rule described in a-1 of sec_1_401_a_9_-3 the applicable distribution period for distribution calendar years after the distribution calendar_year containing the employee’s date of death is determined in accordance with paragraph c of this a-5 sec_1_401_a_9_-5 of the final regulations q a-5 c provides in general that with respect to a non-spouse beneficiary the applicable distribution period measured by the beneficiary’s remaining life expectancy is determined using the beneficiary’s age as of the beneficiary’s birthday in the calendar_year immediately following the calendar_year of the employee’s death in subsequent calendar years the applicable distribution period is reduced by one for each calendar_year that has elapsed after the calendar_year immediately following the calendar_year of the employee’s death sec_1_401_a_9_-5 of the final regulations q a-7 a provides in summary that except as otherwise provided in paragraph c of this a-7 not pertinent to this ruling_request if more than one individual is designated as a beneficiary with respect to an employee as of the applicable_date for determining the designated_beneficiary the named beneficiary with the shortest life expectancy will be the designated_beneficiary for purposes of determining the applicable distribution period sec_1_401_a_9_-8 of the final regulations q a- a provides the separate_account rules with respect to defined contribution plans sec_1_401_a_9_-4 of the final regulations q a- c provides in relevant part that the separate_account rules are not available to beneficiaries of a_trust with respect to the trust's interest in an employee's benefit sec_1_401_a_9_-9 of the final regulations q a-1 sets forth the single life table to be used to determine the life expectancy of an individual the single life table indicates that the life expectancy of a 47-year old i sec_37 years with specific reference to your first ruling_request it has been represented that trust t is valid under the laws of state u and became irrevocable at the death of taxpayer a furthermore it has been represented that a copy of the documentation required under the final regulations promulgated under code sec_401 was page timely given to the administrator s of ira x finally the identities of the beneficiaries of trust t each of whom is a human being may be determined by perusing its terms thus in response to your initial ruling_request we conclude as follows that trust t is a qualified see-through trust within the meaning of sec_1_401_a_9_-4 of the final income_tax regulations question and answer-5 with respect to your second and third ruling requests since trust t and its sub- trusts constitute valid see-through trusts it is necessary to determine who if anyone is the designated_beneficiary within the meaning of code sec_401 and sec_408 of taxpayer a’s ira x in this regard we note that ira x was allocated to the subtrusts created under the terms of article viii section c of trust t to conform to the requirements of state u law thus in accordance with state u law trustee w trust t’s trustee did not have the discretion to allocate ira x in such a way that it could be used to satisfy any other bequest of trust t documentation attached to this ruling_request support the representation that the allocation of ira x to the subtrusts referenced above was mandatory and not discretionary in short it has been represented and as noted above taxpayers b and c are the only beneficiaries of the two subtrusts referenced above also as noted above since both taxpayer b and taxpayer c had attained age prior to the death of taxpayer a distributions from the property used to fund said subtrusts including ira x are to be made directly to taxpayers b and c without limitation and free of trust this precludes the accumulation of any portion of said distributed amounts for the benefit of other subtrust beneficiaries after the end of the year with respect to which said distribution was made as a result taxpayers b and c are the only beneficiaries who will receive the distributed amounts and the only beneficiaries who must be considered for purposes of determining who is the designated_beneficiary within the meaning of code sec_401 of ira x as noted previously taxpayer b taxpayer b wa sec_47 years of age in calendar_year is older than taxpayer c furthermore as noted above thus with respect to your second and third ruling requests we conclude as follows that taxpayers b and c are the only individuals who have to be considered potential designated beneficiaries as that term is defined in code sec_401 for purposes of determining the payout period of distributions from ira x that distributions from ira x to taxpayer b may be based on the life expectancy of taxpayer b the elder of taxpayers b and c using his attained age in calendar_year the year after the year of death of taxpayer a and reduced by one during each subsequent calendar_year page this ruling letter assumes that ira x either was is or will be as represented qualified within the meaning of code section code sec_408 at all times relevant thereto it also assumes that trust t is valid under the laws of state u as represented additionally it assumes the correctness of all facts and representations contained therein this letter is directed only to the taxpayer that requested it and is based solely on the representations made with respect thereto sec_6110 of the code provides that it may not be used or cited as precedent pursuant to a power_of_attorney on file with the service a copy of this letter_ruling is being sent to your authorized representative any questions regarding this letter_ruling should be addressed to esquire id fax - yat202- - phone-not a toll-free number or sincerely yours vv frances v sloan employee_plans technical group ‘manager enclosures deleted copy of ruling letter notice of intention to disclose


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-153962-12 date date legend x ---------------------------------------------------- ------------------------------- a ---------------------------------------------------- ---------------------------------- date date date state state year ---------------------- --------------------------- ------------------------- ------------- ------------------ ------- dear ----------------- this responds to a letter dated date submitted on behalf of x by x’s authorized representative requesting relief pursuant to sec_301_9100-3 of the procedure and administration regulations that x be granted an extension of time to elect to treat a plr-153962-12 as a qualified_subchapter_s_subsidiary qsub under section sec_1361 of the internal_revenue_code the code facts according to the information submitted and representations within x was incorporated under the laws of state1 on date x elected to be treated as an s_corporation effective date a was incorporated under the laws of state on date x represents that at all times on and after date x has owned all of the outstanding_stock of a and intended to elect to treat a as a qsub effective date however due to inadvertence x failed to file form_8869 qualified_subchapter_s_subsidiary election law and analysis sec_1361 generally provides that a qsub shall not be treated as a separate corporation and all assets liabilities and items of income deduction and credit of a qsub shall be treated as assets liabilities and such items as the case may be of the s_corporation sec_1361 defines a qsub as a domestic_corporation which is not an ineligible_corporation if percent of the stock of the corporation is owned by the s_corporation and the s_corporation elects to treat the corporation as a qsub sec_1_1361-3 of the income_tax regulations prescribes the time and manner for making an election to be classified as a qsub sec_1_1361-3 provides that an election may be effective up to two months and days prior to the date the election is filed or not more than months after the election is filed the proper form for making the election is form_8869 qsub election section a provides that an extension of time to make a qsub election may be available under procedures applicable under sec_301_9100-1 and sec_301_9100-3 sec_301_9100-1 provides that the commissioner may grant a reasonable extension of time to make a regulatory election or a statutory election but no more than months except in the case of a taxpayer who is abroad under all subtitles of the code except subtitles e g h and i sec_301_9100-1 defines the term regulatory election as an election whose due_date is prescribed by a regulation published in the federal_register or a revenue_ruling revenue_procedure notice or announcement published in the internal_revenue_bulletin sec_301_9100-2 provides the rules governing automatic extensions of time for making certain elections sec_301_9100-3 provides the standards the commissioner will use to determine whether to grant an extension of time for regulatory elections that do not meet the plr-153962-12 requirements of sec_301_9100-2 under sec_301_9100-3 a request for relief will be granted when the taxpayer provides evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and granting relief will not prejudice the interests of the government conclusion based solely on the facts submitted and representations made we conclude that the requirements of sec_301_9100-3 have been satisfied accordingly x is granted an extension of time of days from the date of this letter to elect to treat a as a qsub effective date the election should be made by filing form_8869 with the appropriate service_center and a copy of this letter should be attached to the election a copy is enclosed for that purpose except as specifically set forth above we express or imply no opinion concerning the federal tax consequences of the facts described above under any other provision of the code specifically we express or imply no opinion concerning whether x is a valid s_corporation or whether a is eligible to be a qsub 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 the power_of_attorney on file with this office a copy of this letter is being mailed to x's authorized representative sincerely joy spies joy spies senior technician reviewer branch office of the associate chief_counsel passthroughs special industries enclosures copy of this letter copy of this letter for sec_6110 purposes cc


internal_revenue_service number release date index number ---------------------------------- - --------------- -------------------------- ---------------------------- ---------------------------- - department of the treasury washington dc person to contact -------------------- id no ------------- telephone number --------------------- refer reply to cc psi b02 - plr-146306-04 date date ------------------ -------------------------- ---------------------------------- this letter responds to your letter dated date and subsequent x -------------------------------------------- a ---------------------------------------------- d1 dear ------------------- correspondence submitted on behalf of x requesting a ruling under sec_1362 of the internal_revenue_code controller of x represents that x’s shareholders intended that x elect to be an s_corporation effective d1 however x inadvertently failed to timely file a form_2553 election by a small_business_corporation any taxable_year after the date prescribed by sec_1362 for making such election for such taxable_year or no such election is made for any taxable_year and b the secretary determines that there was reasonable_cause for the failure to timely make such election the secretary may treat such an election as timely made for such taxable_year based solely on the facts and representations submitted we conclude that x has established reasonable_cause for failing to make a timely election to be an s_corporation effective d1 accordingly provided that x makes an election to be an s_corporation by filing a completed form_2553 effective d1 along with a copy of this letter with the sec_1362 provides that if - a an election under sec_1362 is made for the information submitted states that x was incorporated on d1 a the except as specifically set forth above no opinion is expressed concerning the plr-146306-04 appropriate service_center within days from the date of this letter then such election will be treated as timely made for d1 federal tax consequences of the facts described above under any other provision of the code include whether x was or is a small_business_corporation under sec_1361 provides that it may not be used or cited as precedent this ruling is directed only to the taxpayer requesting it sec_6110 sincerely j thomas hines chief branch office of associate chief_counsel passthroughs special industries copy of this letter copy for sec_6110 purposes enclosures


internal_revenue_service number release date index number ------------------------ --------------------------------------------- -------------------------- -------------------------------------------- --------------------------------------------------- ------------------------------------------------------------ --------------------------- department of the treasury washington dc person to contact --------------- id no ------------- telephone number --------------------- refer reply to cc psi - plr-103026-04 date april legend legend ----------------------- testator ----------------------------------------- niece trust -------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------- ------------------- date corporate trustee -------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------- court x dear -------------- ------------------------------------------- ------ this is in response to the date letter submitted by your authorized representative on your behalf requesting a ruling on the generation-skipping_transfer gst tax consequences of the modification of trust the facts and representations submitted are summarized as follows testator died on date prior to date pursuant to item viii paragraph a of testator’s will the residue of testator’s estate was divided into separate equal parts plr-103026-04 trust was created as one of the separate equal parts for the benefit of the children of niece under paragraph g of item viii until the termination of trust the trustee is to make equal distributions of net_income to the children of niece who are living and to the living issue of any deceased child or children of niece per stirpes the trustee may also pay to or apply for the benefit of the income beneficiaries such amounts of principal as the trustee deems advisable for the proper maintenance support and education taking into account such other income received from other sources trust shall terminate upon the expiration of years from the date of the death of the last survivor of all the issue of niece living at the time of testator’s death upon termination of trust the principal shall be distributed to the issue then living in equal shares per stirpes the trustee of trust is corporate trustee corporate trustee has petitioned court to reform trust pursuant to the proposed reformation item viii paragraph g subparagraph will provide that the trustee will pay distribute or disburse to or for the benefit of the children of niece who are living and to the then living issue of any deceased child or children of niece for life in each calendar_year an amount equal to x percent of the average fair_market_value of the trust as of the close of the last business_day of the three previous calendar years or the net_income from trust for the calendar_year whichever is greater all payments are to be made in equal shares per stirpes under the proposed reformation the corporate trustee will have the authority to petition the court to change the x percent distribution rate in appropriate circumstances any such change must be approved by court further no individual trustee shall have any authority to determine if the rate shall be changed under item viii paragraph g subparagraph sec_2 and of the proposed reformation all computations of fair_market_value will include accounting_income and principal but no accruals are required if trust includes assets for which there is not a ready market the trustee will adopt a method of evaluation as the trustee deems reasonable in its discretion under the circumstances the distribution amount is to be paid first from net accounting_income next from net realized short-term_capital_gains then from net realized long-term_capital_gains and as necessary from principal in all other respects the terms of the reformed trust will be identical to those of the original trust you have asked us to rule that the proposed reformation of trust will not result in trust losing its grandfathered status for gst tax purposes sec_2601 of the internal_revenue_code imposes a tax on every generation- skipping transfer which is defined under sec_2611 as a taxable_distribution a taxable_termination or a direct_skip plr-103026-04 under section of the tax_reform_act_of_1986 act the gst tax is generally applicable to generation-skipping transfers made after date however under section b a of the act and sec_26_2601-1 of the generation- skipping transfer_tax regulations the tax does not apply to a transfer under a_trust that was irrevocable on date except to the extent the transfer is made out of corpus added to the trust by an actual or constructive_addition after date sec_26_2601-1 provides rules for determining when a modification judicial construction settlement agreement or trustee action with respect to a_trust that is exempt from the generation-skipping_transfer_tax under sec_26_2601-1 will not cause the trust to lose its exempt status these rules are applicable only for purposes of determining whether an exempt trust retains exempt status for generation-skipping_transfer_tax purposes the rules do not apply in determining for example whether the transaction results in a gift subject_to gift_tax or may cause the trust to be included in the gross_estate of a beneficiary or may result in the realization of capital_gain for purposes of sec_1001 sec_26_2601-1 provides that a modification will not cause an exempt trust to be subject_to the gst tax if the modification does not shift a beneficial_interest in the trust to any beneficiary who occupies a lower generation as defined in sec_2651 than the person or persons who held the beneficial_interest prior to the modification and the modification does not extend the time for vesting of any beneficial_interest in the trust beyond the period provided for in the original trust a modification of an exempt trust will result in a shift in a beneficial_interest to a lower generation beneficiary if the modification can result in either an increase in the amount of a generation-skipping_transfer or the creation of a new generation-skipping_transfer sec_26_2601-1 example illustrates a situation where a_trust that is otherwise exempt from the gst tax provides that trust income is payable to a for life and upon a's death the remainder is to pass to a's issue per stirpes in the appropriate local court approves a modification to the trust that converts a's income_interest into the right to receive the greater of the entire income of the trust or a fixed percentage of the trust assets valued annually unitrust_interest to be paid each year to a for life the example concludes that the modification does not result in a shift in beneficial_interest to a beneficiary who occupies a lower generation as defined in sec_2651 than the person or persons who held the beneficial_interest prior to the modification rather the modification can only operate to increase the amount distributable to a and decrease the amount distributable to a's issue in addition the modification does not extend the time for vesting of any beneficial_interest in the trust beyond the period provided for in the original trust therefore the modification will not subject the trust to the provisions of chapter in this case the modification of trust to provide for the distribution of the greater of trust income for the calendar_year or an amount equal to x percent of the average plr-103026-04 fair_market_value of trust as of the close of the last business_day of the three previous calendar years does not result in a shift of any beneficial_interest in trust to any beneficiary who occupies a generation lower than the persons holding the beneficial interests prior to the modification see sec_26_2601-1 example further the modification does not extend the time for vesting of any beneficial_interest in trust beyond the period provided for in the original trust accordingly based on the facts submitted and the representations made the modification to trust as proposed will not cause trust to lose its exempt status for gst tax purposes 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 we are specifically not ruling on the gift_tax and income_tax consequences of the transaction 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 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 letter is being sent to your authorized representative in accordance with the power_of_attorney on file with this office a copy of this sincerely george l masnik chief branch office of associate chief_counsel passthroughs special industries enclosure copy for sec_6110 purposes copy of this letter


internal_revenue_service number release date index number ------------------- --------------------------------------------------- ------------------------------- ------------------------------- in re --------------------------------------------------- ------------------------------- -------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact ------------------------------------------- telephone number -------------------- refer reply to cc tege eoeg teb plr-153101-04 ------------------------------- ------------------------------------------------- date date --------------------------------- ------------------------------------------ --------------------------------------------------- ------------------------------------------------------------- legend issuer ------------------------------------------------------------- state developer ------------------------------------------------------------- partnership a --------------------------------------------------------------- partnership b project -------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- --- --------------------------------------------------------------------------------------------------------------- ---------------------------------------------------- bonds -------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------- date a ------------------------------------------ --------------------------- ----- ---- plr-153101-04 b dear -------------- this is in response to your request for a ruling that ownership by multiple taxpayers of the multi-family housing project described herein will not cause the project to fail to qualify as a qualified_residential_rental_project under sec_142 of the internal_revenue_code the 1986_code facts and representations you make the following factual representations issuer is a corporate government agency created to provide safe sanitary and affordable housing to low-income persons within state developer is constructing a residential apartment building the building as part of a project the project that it intends to qualify as a qualified_residential_rental_project under sec_142 the building will be a single building with an independent foundation one set of outer walls and one roof the project will consist of a residential rental units in the building common areas grounds parking garage and parking lot at least b of the units will be low-income residential rental units the low-income units the remaining residential rental units of the project will be rented to individuals at market rates the market-rate units upon completion of construction of the project partnership a will own the market-rate units for federal_income_tax purposes and partnership b will own the low-income units for federal_income_tax purposes the low-income units will be interspersed throughout the building with the market-rate units as a result on each floor of the building there will be both low-income units and market-rate units residents of the low-income units and residents of the market-rate units will share and use on an equal basis the parking garage and the parking lot as well as all building entrances lobbies and elevator banks and project common areas all residential units of the project will be similarly constructed with separate and distinct accommodations containing complete facilities for living sleeping eating cooking and sanitation none of the units will be used_on_a_transient_basis and all of the units will be available for lease to members of the general_public the project will not be a hotel motel dormitory fraternity or sorority house rooming house hospital nursing home sanitarium or rest home issuer issued the bonds on date to finance construction of the project the bonds were issued under a single indenture and are secured_by a letter_of_credit and the project plr-153101-04 law and analysis sec_103 provides that except as provided in sec_103 gross_income does not include interest on any state_or_local_bond sec_103 provides that sec_103 shall not apply to any private_activity_bond unless it is a qualified_bond sec_141 provides that an exempt_facility_bond is a qualified_bond sec_142 provides that the term exempt_facility_bond includes any bond issued as part of an issue percent or more of the net_proceeds of which are to be used to provide qualified residential rental projects sec_142 defines a qualified_residential_rental_project as a project for residential_rental_property that at all times during a qualified_project_period defined in sec_142 meets one of two set-aside_requirements elected by the issuer on the issue_date of the issue for the project specifically sec_142 requires that either percent or more of the residential units in the project be occupied by individuals whose income i sec_50 percent or less of area_median_gross_income or percent or more of the residential units in the project be occupied by individuals whose income is percent or less of the area_median_gross_income regulations have not been promulgated under sec_142 thus the regulations promulgated pursuant to sec_103 of the internal_revenue_code of the code continue to apply to bonds issued to finance residential_rental_property except as otherwise modified by the tax_reform_act_of_1986 the act vol c b and subsequent law in the act congress reorganized sec_103 and sec_103a of the code regarding tax-exempt_bonds into sec_103 and sec_141 through of the 1986_code congress intended that to the extent not amended by the act all principles of pre-1986 act law would continue to apply to the reorganized provisions see h_r conf_rep pincite vol c b under sec_1_103-8 of the income_tax regulations a residential_rental_project is a building or structure together with any functionally related and subordinate facilities containing one or more similarly constructed units which are used on other than a transient_basis are rented or available for rental for the longer of the qualified_project_period as defined in sec_1_103-8 or term of the bonds and are available to members of the general_public substantially_all of each project must contain such units and functionally related and subordinate facilities hotels motels dormitories fraternity and sorority houses rooming houses hospitals nursing homes sanitariums rest homes and trailer parks and courts for use on a transient_basis are not residential rental projects plr-153101-04 a building or structure under sec_1_103-8 is defined as a discrete edifice or other man-made construction consisting of an independent foundation outer walls and roof a single unit which is not an entire building but is merely part of a building is not a building or structure as such while single townhouses are not buildings if their foundation outer walls and roof are not independent detached houses and rowhouses are buildings the building is a single building or structure under sec_1_103-8 because it consists of an independent foundation outer walls and roof all residential units of the project the low-income units and the market-rate units will be provided by the same issue the bonds and will thus be financed pursuant to a common plan of financing all residential units of the project will be similarly constructed and the low-income units and the market-rate units will not be separated but rather will be interspersed throughout the building finally as a further indication that the low-income units and the market-rate units are part of a single integrated project all residents of the two set of units will share and use on an equal basis the parking garage and parking lot as well as all building entrances lobbies and elevator banks and project common areas conclusion based on the facts and representations submitted we conclude that ownership of the project by partnership a and partnership b does not cause the project to fail to qualify as a qualified_residential_rental_project under sec_142 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 specifically no opinion is expressed concerning whether the project qualifies for low-income_housing credits under sec_42 whether interest on the bonds is excludable from gross_income under sec_103 or whether the project meets additional requirements for a qualified residential project under sec_142 this ruling is directed only to the taxpayer s 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 a copy of this letter is being sent to issuer’s authorized representative sincerely plr-153101-04 the ruling contained in this letter is based upon information and representations submitted by issuer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the materials submitted in support of the request for a ruling it is subject_to verification upon examination cc ----------------------------- ---------------------------------------------------------- ------------------------------------------- ---------------------------------------- --------------------------------- ------------------------------------------------------------- ------------------------------ by ___________________________ timothy l jones senior counsel tax exempt bond branch assistant chief_counsel exempt_organizations employment_tax government entities


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 intl b04 plr-128643-08 date october year taxpayer taxpayer taxpayer taxpayer taxpayer taxpayer legend -------------------------- ------------------------------ --------------------- ------------------------ ------------------------------------- ----------------------- ------------------------ -------------------------------------------- -------------------- ------------------------ -------------------------------------------- -------------------- ---------------------- ----------------------------------------------- ----------------------- ------------------------ ---------------------------------------------------------------- ----------------------- ------------------------ plr-128643-08 taxpayer taxpayer taxpayer taxpayer taxpayer taxpayer --------------------------------------------------- -------------------- ------------------------ ------------------------------- ----------------------- ------------------------ ------------------------------------------- ----------------------- ------------------------ --------------------------------------------------------------- -------------------- ------------------------ ------------------------------ ----------------------- ------------------------ ------------------------------- ----------------------- ------------------------ taxpayer --------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------- -------------------- ------------------------ taxpayer taxpayer taxpayer taxpayer ---------------------------------------- -------------------- ------------------------ -------------------------- -------------------- ------------------------ --------------------------------- ----------------------- ------------------------ ---------------------------------------- -------------------- ------------------------ plr-128643-08 taxpayer taxpayer taxpayer taxpayer taxpayer taxpayer taxpayer taxpayer taxpayer taxpayer taxpayer ------------------------------------------ -------------------- ------------------------ ------------------------------------- ----------------------- ------------------------ -------------------------------------------- -------------------- ------------------------ -------------------------------------------- -------------------- ------------------------ ------------------------------ ----------------------- ------------------------ ---------------------- ----------------------- ------------------------ ----------------------------- ----------------------- ------------------------ ------------- ----------------------- ------------------------ -------------------------- ----------------------- ------------------------ -------------------------------------- -------------------- ------------------------ -------------------------------------- -------------------- ------------------------ ----------------------------------------- ----------------------- ------------------------ ------------------------------------------- ----------------------- ------------------------ ----------------------------------------- ----------------------- ------------------------ ------------------ -------------------- ------------------------ ----------------------------------------------- -------------------- ------------------------ ----------------------------- -------------------- ------------------------ --------------------------------------- -------------------- ------------------------ ------------------------------------------------------ -------------------- ------------------------ plr-128643-08 taxpayer taxpayer taxpayer taxpayer taxpayer taxpayer taxpayer taxpayer dear ---- ---------- this replies to a letter dated date in which taxpayers by their common representative each request an extension of time under sec_301_9100-3 to satisfy the statement and notice requirements of sec_1_897-2 and sec_1 h c and b iii please note that the procedures of revproc_2008_27 apply with respect to relief for any untimely statements and notices under plr-128643-08 sec_1_897-2 and sec_1_897-2 filed after date the information submitted for consideration is substantially as set forth below the rulings contained in this letter are based upon information and representations submitted by the taxpayers and accompanied by a penalty of perjury statement executed by an appropriate party this office has not verified any of the material submitted in support of the request_for_ruling verification of the factual information representations and other data may be required as a part of the audit process prior to the transactions at issue taxpayer was the common parent of taxpayer sec_2 through in year taxpayer undertook a series of transactions to separate its legal entities into publicly traded companies taxpayer sec_2 through were among those entities involved in these separation transactions the transactions which included taxpayer sec_2 through involved either a united_states target_corporation or united_states_assets the taxpayers have represented that they met the exception from united_states_real_property_interest treatment as defined by sec_897 in that taxpayer sec_2 and the target corporations shares were not us real_property interests within the meaning of sec_897 usrpi for various reasons provided in affidavits and documents submitted by the taxpayers with respect to each transaction taxpayer sec_3 and the foreign transferors did not obtain a statement from the target_corporation that the interest in the target_corporation was not a usrpi as of the disposition date likewise with respect to each transaction the target corporations did not submit that notice that the interest was not a usrpi to the irs as required by sec_1 h finally the foreign transferors did not provide an affidavit to taxpayer sec_4 and the transferees or in the case of distributions covered by sec_1445 the foreign transferors did not receive the statement issued pursuant to sec_1_897-2 prior to the transfer 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_9100-3 to make a regulatory election under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301_9100-1 defines a regulatory election as an election whose due_date is prescribed by a regulation revenue_ruling revenue_procedure notice or announcement an election includes an application_for relief in respect of tax sec_301_9100-3 provides that requests for relief subject_to this section will be granted when the taxpayer provides evidence including affidavits described in plr-128643-08 sec_301_9100-3 to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that the grant of relief will not prejudice the interests of the government based upon the facts and circumstances of this case we conclude that the standards of sec_301_9100-3 have been satisfied accordingly the parties are granted an extension of time until days from the date of this ruling letter to satisfy the statement and notice requirements of sec_1_897-2 sec_1_897-2 sec_1_1445-2 and sec_1_1445-5 with respect to the transactions involving taxpayer sec_2 through the granting of an extension of time is not a determination that the parties are otherwise eligible to comply with the statement notice and withholding requirements sec_301_9100-1 no opinion is expressed as to the application of any other section of the code or regulations to the facts presented a copy of this ruling letter should be attached with the statements and the notices mailed to the irs this ruling is directed to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent sincerely ________________ meryl silver special counsel associate chief_counsel international cc


internal_revenue_service department of the treasury index number number release date washington dc person to contact telephone number refer reply to cc intl plr-116178-99 date date legend taxpayer date a date b year one dear this replies to a letter dated date in which taxpayer requests an extension of time under sec_301_9100-3 to make elections under sec_1 2t d for year one the information submitted for consideration is substantially as set forth below the ruling contained in this letter is predicated upon facts and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party this office has not verified any of the material submitted in support of the request for a ruling verification of the factual information representations and other data may be required as a part of the audit process you state that taxpayer’s first united_states federal_income_tax return was due on date a you further state that taxpayer was eligible for an automatic_extension of time to file its return for year one and that due to an inadvertent oversight taxpayer failed to file its request for an automatic_extension of time to file its tax_return for year one on date b which was after date a prior to filing its tax_return for year one taxpayer discovered that its failure to timely file its tax_return for year one would render invalid any election under sec_1_884-2t made with its late-filed tax_return for year one accordingly taxpayer included a statement with its tax_return for year one stating its intentions to file a request for section relief to enable it to make valid sec_884 elections for year one the irs did not discover taxpayer’s failure to timely file elections under sec_1_884-2t before this request for relief was filed plr-116178-99 sec_301_9100-1 provides that the commissioner has discretion to grant a reasonable extension of time under the standards set forth in sec_301_9100-3 to make a regulatory election under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301_9100-1 defines a regulatory election as an election whose due_date is prescribed by a regulation a revenue_ruling revenue_procedure notice or announcement sec_301_9100-3 provides standards for extensions of time for making regulatory elections when the deadline for making the election is other than a due_date prescribed by statute sec_301_9100-3 provides that requests for relief subject_to this section will be granted when the taxpayer provides the 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 the grant of relief will not prejudice the interests of the government in the present situation sec_1_884-2t fixes the time to make the elections therefore the commissioner has discretionary authority under sec_301_9100-1 to grant taxpayer an extension of time provided that taxpayer satisfies the standards set forth in sec_301_9100-3 based on the facts and circumstances of this case we conclude that taxpayer satisfies sec_301_9100-3 accordingly taxpayer is granted an extension of time until days from the date of this ruling letter to make elections under sec_1_884-2t for year one the granting of an extension of time is not a determination that taxpayer is otherwise eligible to make the elections sec_301_9100-1 no ruling has been requested and none is expressed as to the application of any other section of the code or regulations to the facts presented a copy of this ruling letter should be associated with the elections this ruling is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent pursuant to a power_of_attorney on file in this office a copy of this ruling letter is being sent to your authorized representative sincerely s allen goldstein reviewer office of the associate chief_counsel international


internal_revenue_service number release date index number 280g -------------------------- ------------------------ ------------------------------ department of the treasury washington dc third party communication none date of communication not applicable_person to contact -------------------------- ------------------ telephone number --------------------- refer reply to cc tege eb ec plr-138402-05 date date legend taxpayer director company bank date date a_trust state a b dear ----------------- --------------------------------------- -------------------- ----------------------------------- ------------------------------------------ ------------------- ---------------------- ---------- ---------------- ------------ ----------- this letter is a response to a request for a private_letter_ruling dated date submitted on behalf of taxpayer by its authorized representative in its request for a ruling taxpayer asks for rulings concerning director’s status as a disqualified_individual for purposes of sec_280g and sec_4999 of the internal_revenue_code director is the former chairman of the board_of directors of company the bank_holding_company of bank on date company merged with taxpayer in a transaction that constituted a change in ownership or control of company within the meaning of sec_280g of the code prior to the merger company was publicly traded director was a member of the board_of directors of taxpayer from date until date at which point he resigned his seat on the board_of directors and his position as chairman of the board during the 12-month_period preceding the merger director served as the chairman of the board_of directors of company and was neither a shareholder owning directly or indirectly more than one percent of the stock of plr-138402-05 company nor was he one of the top one percent highest paid employees or consultants of company or bank as chairman of company’s board_of directors director received an annual fee of dollar_figurea this fee was larger than the fee paid to other members of company’s board_of directors the difference was in consideration for director’s additional responsibilities as chairman of the board director was not on the payroll as an employee of company or bank and all compensation was reported on form 1099-misc director also received pre-determined grants of non-qualified stock_options in amounts consistent with those received by other directors of company these awards were granted pursuant to the non-employee provisions of company’s stock_option plan director received these awards annually except for in the calendar_year prior to the change in control when director declined the award in addition to serving as chairman of company’s board_of directors director also served on the board_of trustees of trust a real_estate_investment_trust organized under the laws of state a under the law of state a_trust operates as a corporation and the board_of trustees serves as the board_of directors of trust trust was formed by director and two other individuals associated with the company and the bank and the bank contributed real_estate_assets to the trust taxpayer represents that for purposes of the private_letter_ruling request the company and the trust would be considered part of an affiliated_group for purposes of sec_280g and sec_4999 of the code director received no additional compensation_for any services rendered in his capacity as a member of the trust’s board_of trustees by virtue of the change in control of the company director was entitled to certain benefits which had an aggregate value of dollar_figureb the amount by which this amount exceeded director’s base_amount for purposes of sec_280g and sec_4999 was placed in escrow the escrowed amount pending a ruling by this office on the application of sec_280g and sec_4999 to the escrowed amount sec_280g of the code provides that no deduction will be allowed for any excess_parachute_payment sec_280g defines the term excess_parachute_payment as an amount equal to the excess of any parachute_payment over the portion of the base_amount allocated to such payment sec_280g of the code defines the term parachute_payment as any payment in the nature of compensation to or for the benefit of a disqualified_individual if i such payment is contingent on a change i in the ownership or effective_control of the corporation or ii in the ownership of a substantial portion of the assets of the corporation and ii the aggregate present_value of the payments in the nature of compensation to or for the benefit of such individual which are contingent on such change equals or exceeds an amount equal to three times the base_amount plr-138402-05 sec_4999 of the code imposes on any person who receives an excess_parachute_payment a tax equal to percent of the amount of the payment sec_280g defines a disqualified_individual as an individual who is an employee independent_contractor or other person specified in the regulations who performs personal service for any corporation and is an officer shareholder or other highly_compensated_individual sec_1_280g-1 of the regulations q a provides that an individual is a disqualified_individual with respect to a corporation if at any time during the disqualified_individual determination_period the individual is an employee or independent_contractor of the corporation and is with respect to the corporation a shareholder an officer or a highly-compensated_individual according to q a taxpayers may rely on these regulations after date for the treatment of any parachute_payment sec_1_280g-1 q a provides that the disqualified_individual determination_period is the portion of the year of the corporation ending on the date of the change in ownership or control of the corporation the change in ownership period and the twelve month period immediately preceding such change in ownership period for purposes of q a a corporation may elect to use its taxable_year or the calendar_year q a provides that a shareholder is a disqualified_individual if that shareholder owns stock of a corporation during the disqualified_individual determination_period having a fair_market_value that exceed sec_1 percent of the total fair_market_value of the outstanding shares of all classes of the corporation's stock for purposes of determining the amount of stock owned by an individual the constructive_ownership rules of sec_318 shall apply sec_318 states that if a person has an option to acquire stock such stock shall be considered as owned by such person q a provides that a highly_compensated_individual with respect to a corporation is any individual who is or would be if the individual were an employee a member of the group consisting of the lesser or the highest paid percent of the employees of the corporation rounded up to the nearest integer or the highest paid employees of the corporation when ranked on the basis of the compensation as determined under q a earned during the disqualified_individual determination_period for purposes of the preceding sentence the number of employees of the corporation is the greatest number of employees the corporation has during the disqualified_individual determination_period however no individual whose annualized compensation during the disqualified_individual determination_period is less than the amount described in sec_414 of the code for the year in which the change in ownership or control occurs will be treated as a highly_compensated_employee because director during the disqualified_individual determination_period was neither a shareholder under q a nor a highly_compensated_individual under q a plr-138402-05 the sole basis for finding director to be a disqualified_individual for purposes of sec_280g and sec_4999 of the code is whether he would be considered an officer q a provides that whether an individual is an officer with respect to a corporation is determined on the basis of all the facts and circumstances in the particular case such as the source of the individual’s authority the term for which the individual is elected or appointed and the nature and extent of the individual’s duties any individual who has the title of officer is presumed to be an officer unless the facts and circumstances demonstrate that the individual does not have the authority of an officer however an individual who does not have the title of officer may nevertheless be considered an officer if the facts and circumstances demonstrate that the individual has the authority of an officer generally the term officer means an administrative executive who is in regular and continued service the term officer implies continuity of service and excludes those employed for special and single transactions in the request for a ruling it is represented that director did not have administrative executive authority over company bank or trust therefore based solely on the information and representations submitted and set forth above we rule as follows based on his role as chairman of the board_of directors of company director is not a disqualified_individual for purposes of sec_280g and sec_4999 of the code based on his role as a member of the board_of trustees of trust director is not a disqualified_individual for purposes of sec_280g and sec_4999 of the code the payment of the escrowed amount to director will not result in the disallowance of the deduction for the payment to director under sec_280g of the code the payment of the escrowed amount to director will not result in the imposition of an excise_tax on the payment of such amount under sec_4999 of the code except as specifically ruled on above no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter this ruling is directed only to the taxpayer requesting it sec_6110 of the code provides that it may not be sued or cited as precedent the taxpayer should attach a copy of this ruling to any income_tax return to which it is relevant plr-138402-05 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 ___________________________________ robert misner senior technician reviewer executive compensation branch office of division counsel associate chief_counsel tax exempt and government entities