t c memo united_states tax_court james o henderson petitioner v commissioner of internal revenue respondent docket no filed date john b hinton for petitioner victor a ramirez for respondent memorandum findings_of_fact and opinion powell special_trial_judge this case was assigned pursuant to the provisions of sec_7443a and rule sec_180 sec_181 and sec_182 all section references are to the internal_revenue_code in effect for the year in issue and rule references are to the tax_court rules_of_practice and procedure respondent determined a deficiency in petitioner's federal_income_tax for in the amount of dollar_figure at the time the petition was filed petitioner resided in las vegas nevada after concessions the issue is whether petitioner is entitled to deduct expenses for travel while away from home pursuant to sec_162 findings_of_fact james o henderson petitioner graduated from college in date majoring in theatrical arts immediately after graduation petitioner was employed by the oregon shakespeare festival for months during petitioner was employed as a lighting technician for walt disney's world on ice world on ice world on ice had its headquarters in virginia however the show toured stopping in various cities for brief periods of time petitioner traveled on three tours during the first tour lasted from january to date and included stops in cities in states the second tour ran from july to date and consisted of shows exclusively in japan the third tour lasted from december to date and included stops in washington montana and north dakota petitioner was employed on a tour by tour basis signing a new respondent concedes that petitioner is entitled to a deduction in the amount of dollar_figure for miscellaneous expenses on schedule a employment contract before each tour while traveling petitioner received a per_diem_allowance of dollar_figure for expenses when petitioner was on tour he stayed in hotel rooms with other employees when not on tour petitioner stayed at his parents' house in boise idaho where he kept his car dog and other belongings he was registered to vote was licensed to drive and paid state_income_tax in idaho petitioner had no ownership_interest in his parents' house and paid no rent he did perform some work around the house when he was not traveling including painting electrical repairs installing light fixtures with motion sensors landscaping and constructing a dog house petitioner's sole financial contribution to the household consisted of approximately dollar_figure paid to obtain the supplies needed to perform these activities on his federal_income_tax return petitioner claimed deductions totaling dollar_figure for expenses_incurred while traveling on the tours in the notice_of_deficiency respondent determined that petitioner was not entitled to deduct the traveling expenses because petitioner was not away from home petitioner contends that these expenses are properly deductible as traveling expenses while away from home pursuant to sec_162 because his home was his parents' house in boise idaho and his employment was temporary opinion sec_162 allows a taxpayer to deduct traveling expenses including amounts expended for meals_and_lodging if such expenses are ordinary and necessary incurred while away from home and incurred in the pursuit of a trade_or_business 326_us_465 for purposes of sec_162 generally home or tax_home means the vicinity of the taxpayer's principal_place_of_business or employment 74_tc_578 5_bta_1181 a taxpayer's residence when different from the vicinity of his principal place of employment may be treated as his tax_home if the taxpayer's employment is temporary rather than indefinite 358_us_59 it is axiomatic that to be entitled to a deduction under sec_162 a taxpayer must have a tax_home from which to be away a taxpayer without a tax_home is deemed to have carried his home on his back and is not entitled to the deduction because he was not away from home 47_tc_71 a primary consideration in determining whether a taxpayer has a tax_home is whether or not the taxpayer incurs substantial continuous and duplicative living_expenses the duplication of expenses is a primary raison d'être for the deduction under sec_162 85_tc_462 affd without published opinion 807_f2d_177 9th cir while the meaning of the phrase substantial continuous and duplicative may lie to some extent in the eyes of the beholder we concluded in barone v commissioner supra pincite that petitioner's total_payment to his parents for_the_use_of their house amounts to dollar_figure for the taxable_year this token amount together with payments he made for his share of the electric and telephone bills does not constitute substantial continuing living_expenses fn ref omitted citation omitted the facts of this case are similar to the facts in barone petitioner argues that our decisions in 3_tc_998 and ralston v commissioner tcmemo_1968_248 are controlling we disagree while the facts of gustafson are somewhat similar the reasoning of that opinion is no longer apposite we noted in hicks v commissioner supra pincite a change in the judicial climate has sapped the gustafson opinion of much if not all of its vitality in ralston the taxpayer incurred only minimal expenses but there was a coalescence of other factors that suggested a different result the taxpayer claimed that louisville kentucky was his tax_home he was a groom for a racing stable located in louisville but spent much of the year at various racetracks around the country part of that time however was spent at keeneland race track in lexington kentucky near louisville and when he was not on the racing circuit the taxpayer was working at the home stable in louisville we concluded that where there has been a coalescence of place of abode and the performance of some work in the vicinity thereof for an employer who was based in the same vicinity the courts have generally permitted a deduction for meals_and_lodging elsewhere ralston v commissioner supra those factors are not present in this case in sum we conclude that petitioner cannot claim that boise idaho was his home for the purposes of sec_162 while he did spend his idle time there the source of hi sec_3 in 308_f2d_204 9th cir the court_of_appeals for the ninth circuit indicated that while the existence of a tax_home was a prerequisite to deducting total emphasis in the original traveling expenses an itinerant taxpayer without a tax_home might be able to deduct that portion of his traveling expenses attributable to the increased cost of meals_and_lodging associated with travel appeal in this case lies in the court_of_appeals for the ninth circuit however james was decided based on the language the entire amount in sec_23 of the internal_revenue_code_of_1939 and that language has been removed from the statute by a amendment revenue act of publaw_87_834 76_stat_960 furthermore we need not decide whether the court_of_appeals for the ninth circuit would interpret the amended statute as it did in james because petitioner as in james has not shown what portion of his traveling expenses are attributable to the increased cost associated with travel employment had no connection with boise moreover petitioner's minimal financial contribution to his parents' home does not lead to the conclusion that he incurred substantial continuous and duplicative expenses to reflect the foregoing decision will be entered under rule


internal_revenue_service number release date index number ------------------------------------- ------------------------------------------------------- ------------------------- -------------------------------------------- legend x --------------------------------------- ---------------------- 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-112208-05 date date ---------------------- ----------------------- country d dear --------------- correspondence written on behalf of x requesting an extension of time under ' and ' of the procedure and administration regulations to file an entity classification election this letter responds to the letter dated date and related facts the information submitted discloses that x was formed under the laws of country on d x failed to timely file a form_8832 entity classification election to be treated as a disregarded_entity for federal tax purposes as of d law and analysis sec_301_7701-3 provides that a business_entity that is not classified as a corporation under ' b or an eligible_entity can elect its classification for federal tax purposes elections are necessary only when an eligible_entity does not want to be classified under the default classification or when an eligible_entity chooses to change its classification plr-112208-05 sec_301_7701-3 provides that except for certain existing entities described in sec_301_7701-3 unless a foreign eligible_entity elects otherwise the 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 member that does not have limited_liability sec_301_7701-3 provides that an eligible_entity may elect to be classified other than as provided under ' b by filing form_8832 with the appropriate service_center under ' c iii this election will be effective on the date specified by the entity on form_8832 or on the date filed if no such date is specified the date specified on form_8832 cannot be more than days prior to 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 code except e g h and i sec_301_9100-1 defines the term regulatory election as including an election whose deadline is prescribed by a regulation published in the federal_register 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 making elections that do not meet the requirements of sec_301_9100-2 requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-1 through provide the standards the conclusion based solely on the facts submitted and representations made we conclude that x has satisfied the requirements of and and therefore it is granted an extension of time of sixty days from the date of this letter to file a form_8832 to elect to be treated as a disregarded_entity for federal tax purposes effective d 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 no opinion concerning the federal tax consequences of the facts described above under any other provision of the internal_revenue_code plr-112208-05 this ruling is directed only to the taxpayer requesting it sec_6110 of the code provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being mailed to your authorized representative sincerely heather c maloy associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for ' purposes cc


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 ita b03 plr-141054-10 date date ty ------- ty ------- legend taxpayer --------------------------------------------------------------------------- date -------------------------- date ---------------------- date ----------------- date ---------------------------- date ------------------ year a ----------------- year b ----------------- dear ------------------ this letter responds to a letter dated --------------------------- submitted by taxpayer requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations to file form_3115 application_for change in accounting_method on date taxpayer filed a signed duplicate copy of a form_3115 with the irs national_office changing its method_of_accounting for repair and maintenance_costs pursuant to the automatic consent procedures under section of revproc_2008_52 2008_36_irb_587 for the taxable_year ending date plr-141054-10 at the time the duplicate form_3115 was filed with the irs national_office the information needed to compute the sec_481 adjustment was not available thus the form_3115 filed with the irs national_office on date contained a statement that the sec_481 adjustment was to be determined taxpayer subsequently computed the sec_481 adjustment and on date taxpayer timely filed an update duplicate copy of the form_3115 with the irs national_office that included the required sec_481 adjustment taxpayer’s year a and year b federal_income_tax returns were under examination at the time the form_3115 was filed with the irs national_office taxpayer obtained the director’s consent to filing the form_3115 in accordance with section of revproc_2008_52 on date a copy of the form_3115 was also provided to the examining agent when taxpayer filed the duplicate copy with the irs national_office on date on date taxpayer filed an additional signed copy of the form_3115 with the irs’ ogden ut office as required by appendix sec_3 of revproc_2008_52 on date taxpayer timely filed its federal_income_tax return for the taxable_year ending date via electronic_filing the return implemented the change in taxpayer’s method_of_accounting for repair and maintenance_costs as reflected on the form_3115 taxpayer relied on one of their employed tax professionals to attach the original form_3115 to the timely filed federal tax_return to complete the filing under the procedures of revproc_2008_52 however taxpayer later discovered that the signed original of form_3115 was not attached to the timely electronically filed federal_income_tax return ruling requested accordingly taxpayer requests that the service grant an extension of time to file the signed original form_3115 in accordance with revproc_2008_52 and that the form_3115 be considered timely-filed under the authority contained in sec_301_9100-1 and sec_301_9100-3 of the procedure and administration regulations law and analysis revproc_2008_52 2008_2_cb_587 as amplified clarified and modified by revproc_2009_39 c b provides the procedures by which a taxpayer may obtain automatic consent to change certain methods_of_accounting described in the appendix thereto section of revproc_2008_52 requires a taxpayer making a change under the automatic consent procedures to complete and file an application in duplicate the original must be attached to the taxpayer's timely filed including extensions original federal_income_tax return for the year_of_change and a copy with signature of the form_3115 must be filed with the irs national_office no earlier than the first day of the year_of_change and no later than when the original is filed with the federal_income_tax return for the year_of_change plr-141054-10 section b of revproc_2008_52 provides in part that a taxpayer under examination must provide a copy of form_3115 to the director at the time it files a copy of the application with the irs national_office appendix sec_3 of revproc_2008_52 requires that a taxpayer changing its method_of_accounting under section dollar_figure must send a copy of its completed form_3115 to the irs in ogden ut under sec_301_9100-1 the commissioner has discretion to grant a reasonable extension of time under the rules set forth in sec_301_9100-2 and sec_301_9100-3 to make a regulatory election 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 making 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 evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government conclusions based solely on the facts and the representations submitted we conclude that the requirements of sec_301_9100-1 and sec_301_9100-3 have been met accordingly taxpayer is granted calendar days from the date of this letter to file the original of the form_3115 with signature in accordance with revproc_2008_52 except as specifically ruled upon above no opinion is expressed or implied concerning the federal_income_tax consequences of the facts described above specifically no opinion is expressed or implied concerning i whether taxpayer is qualified to file the form_3115 for the change in method_of_accounting for repair and maintenance_costs under revproc_2008_52 or ii whether the change in method_of_accounting that is the subject of such form_3115 qualifies under section of revproc_2008_52 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 plr-141054-10 in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representatives sincerely christopher f kane branch chief branch income_tax accounting cc


number release date id office uilc cca_2010102108385537 ---------- from ------------------- sent thursday date am to -------------------- cc --------------------------------------- subject re tefra question sec_6222 requires the partners to report the amount and allocation of liabilities consistent with the partnership return unless they file a notice of inconsistent treatment on form_8082 in the absence of such a filing we are permitted to make an assessment without issuing a fpaa sec_6222 they filed no such notice here so we do not need to conduct a tefra proceeding to make the assessment since outside_basis is an affected_item requiring partner-level determinations however we would have to issue an affected_item notice_of_deficiency in order to assess a distribution in excess of basis in the stat_notice proceeding they could arguably rely on 94_tc_853 to allege that the partnership books_and_records reflect the nonrecourse debt in issue their reporting is consistent with the actual partnership books_and_records and that the schedule_k-1 issued to them was incorrect cf sec_301_6222_b_-3 incorrect schedule provided to partner alternatively either the affected partner or the partnership or both could file aars under sec_6227 to correct the reporting of nonrecourse debt


cca_2016040111303007 id uilc number release date from sent friday april am to cc bcc subject re fpaa for review - statute hi ------- we cannot determine a partner’s outside_basis in an fpaa absent a sec_754 election because it is not a partnership_item but we can determine the partnership-level components of it ie contributions distributions etc in the fpaa thanks -------- ----------------- ---------------------- -------------- -------------------------------- ----------------------------


t c summary opinion united_states tax_court james stephen fennel petitioner v commissioner of internal revenue respondent docket nos 5360-09s 16313-09s filed date 16315-09s james stephen fennel pro_se randall b childs for respondent morrison judge these cases were heard pursuant to the provisions of sec_7463 of the internal_revenue_code in effect at the time the petition was filed pursuant to sec_7463 the decisions to be entered are not reviewable by any other court and this opinion shall not be treated as precedent for any other case unless otherwise indicated section references are to the internal_revenue_code in effect for the years in issue james stephen fennel worked as a server at carrabba’s italian grill in tallahassee florida for his services to carrabba’s fennel was paid dollar_figure in dollar_figure in and dollar_figure in os restaurant services inc reported paying wages to fennel in these same amounts for and payment for services is income that must be included in gross_income sec_61 however fennel filed form sec_1040 u s individual_income_tax_return for the and tax years showing zero taxable wages and zero taxable_income instead of attaching the forms w-2 wage and tax statement issued by os restaurant services inc showing his actual income fennel attached forms substitute for form w- wage and tax statement on which he reported zero wages tips and other compensation on line 7a and zero income_tax withheld on line 7f question of the forms asked how did you determine the amounts on lines and above fennel wrote company provided records and the statutory language behind sec_3401 and sec_3121 and others question of the forms asked explain your efforts to obtain form_w-2 form r or form w-2c corrected wage and tax statement fennel wrote none most companies will refuse to issue form sec_1the internal_revenue_service irs claims that os restaurant services inc is the parent company of carrabba’s italian grill the relationship of os restaurant services inc to carrabba’s italian grill is not important correctly listing payments of ‘wages as defined in a and a ’ for fear of irs retaliation however the amounts listed as withheld on the w-2 it submitted are correct the irs issued notices of deficiency to fennel the notices determined on the basis of his unreported income from carrabba’s that fennel had deficiencies of dollar_figure in dollar_figure in and dollar_figure in the irs also determined that fennel was liable for sec_6651 additions to tax of dollar_figure for dollar_figure for and dollar_figure for for failing to file timely tax returns the irs also determined that fennel was liable for sec_6662 accuracy-related_penalties of dollar_figure for dollar_figure for and dollar_figure for fennel filed petitions with the tax_court to redetermine the deficiencies the court consolidated the three cases for trial at the end of trial the irs moved for the imposition of a penalty under sec_6673 deficiencies in tax opinion the first issue for decision is whether fennel earned and failed to report income of dollar_figure in dollar_figure in and dollar_figure in we find that he did fennel admitted that he received payments in these amounts for his services additions to tax for filing late returns the second issue for decision is whether fennel is liable for additions to tax pursuant to sec_6651 of dollar_figure for dollar_figure for and dollar_figure for fennel is a calendar- year taxpayer income_tax returns made on the basis of a calendar_year must be filed on or before april of the following year sec_6072 the irs may extend this deadline by up to months sec_6081 fennel received a 6-month extension of the filing deadline for his and returns none of fennel’s form sec_1040 for and were filed by october of the following year fennel’s form sec_1040 for and were filed on or after date fennel’s form_1040 for was filed on or after date if a person required to file a return fails to do so timely and such failure is not due to reasonable_cause then the person is required by sec_6651 to pay an additional percent of the amount of tax required to be shown on the return an additional percent is added for each additional month that passes without a return’s being filed id the maximum amount i sec_25 percent id fennel failed to show any reasonable_cause for failing to file tax returns on time he is therefore liable for the additions to tax penalties for inaccurate returns the third issue for decision is whether fennel is liable for penalties pursuant to sec_6662 of dollar_figure for the tax_year dollar_figure for the tax_year and dollar_figure for the tax_year sec_6662 imposes a penalty on any portion of an underpayment_of_tax required to be shown on a return to which sec_6662 applies sec_6664 provides that the penalty applies only if a return of tax is filed fennel’s form sec_1040 filled with zeros were not valid returns therefore the sec_6662 penalty cannot be imposed see turner v commissioner tcmemo_2004_251 form_1040 that contained zero entries for every line regarding income was not valid for purposes of imposing the sec_6662 penalty penalty for frivolous_litigation the fourth issue for decision is whether fennel should be penalized under sec_6673 sec_6673 authorizes the tax_court to impose a penalty of up to dollar_figure if the taxpayer instituted the proceedings primarily for delay or if the taxpayer’s position is frivolous or groundless fennel’s main argument which is that he is not subject_to tax on his wage income because os restaurant services inc is a private corporation organized under the laws of delaware and has no connection with the united_states government its territories or possessions is frivolous in addition we believe that these proceedings were instituted for delay not to resolve a genuine dispute although we held that fennel was not liable for the sec_6662 penalty we did so only because we found the form sec_1040 he filed to be so frivolous as to not be valid returns we shall impose a dollar_figure penalty under sec_6673 in each case to reflect the foregoing appropriate orders and decisions will be entered


internal_revenue_service number release date index number -------------------------------------------- ----------------- --------------------------- ---------------------------- - department of the treasury washington dc third party communication none date of communication not applicable_person to contact ------------------- id no ------------- telephone number --------------------- refer reply to cc psi b01 plr-139814-04 date date legend x ------------------------------------------- d1 ------------------------ dear ------------------------ this responds to your letter dated date requesting relief under ' b of the internal_revenue_code facts x was incorporated on d1 the shareholder of x intended that x be treated as an s_corporation effective on d1 but the election to be treated as an s_corporation was not timely filed accordingly x requests a ruling that it will be treated as an s_corporation effective d1 law and analysis sec_1362 provides that a small_business_corporation may elect to be an s_corporation sec_1362 provides the rule on when an s election will be effective sec_1362 provides in relevant part that if an s election is made within the first two and one-half months of a corporation's taxable_year then the corporation will be treated as an s_corporation for the year in which the election is made under ' b however 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 after the year in which the s election is filed plr-139814-04 sec_1362 provides that if no ' a 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 ' b shall not apply x did not timely file an election to be treated as an s_corporation under ' a x has however established reasonable_cause for not making a timely s election and is entitled to relief under ' b conclusion based solely on the facts submitted and the representations made and provided that x otherwise qualifies as an s_corporation we conclude that x will be treated as an s_corporation effective d1 within days from the date of this letter x should submit a properly completed form_2553 with a copy of this letter attached to the appropriate service_center except as specifically set forth above no opinion is expressed or implied as to the federal tax consequences of the facts described above under any other provision of the code specifically no opinion is expressed concerning whether x is in fact an s_corporation for federal tax purposes provides that it may not be used or cited as precedent this ruling is directed only to the taxpayer requesting it sec_6110 s dianna k miosi sincerely dianna k miosi chief branch office of the associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for ' purposes


t c memo united_states tax_court duane b and linda l erwin et al petitioners v commissioner of internal revenue respondent docket nos filed date stuart spielman and james a kutten for respondent memorandum opinion dawson judge these related cases were assigned to special_trial_judge robert n armen jr pursuant to the provisions of the following cases are related and considered herewith duane b erwin docket no and linda l erwin docket no a related case involving angela d erwin docket no was previously dismissed for lack of jurisdiction sec_7443a and rule sec_180 sec_181 and sec_183 the court agrees with and adopts the opinion of the special_trial_judge which is set forth below opinion of the special_trial_judge armen special_trial_judge each of these cases is before the court on respondent's motion to dismiss for failure to state a claim upon which relief can be granted filed pursuant to rule petitioners resided in independence missouri at the time their petitions were filed in these cases respondent's notices of deficiency by notices dated date respondent determined deficiencies in petitioners' federal income taxes for the taxable years and as well as a penalty and additions to tax as follows docket no duane b and linda l erwin penalty year deficiency sec_6662 dollar_figure dollar_figure docket no duane b erwin additions to tax_year deficiency sec_6651 sec_6654 dollar_figure dollar_figure dollar_figure unless otherwise indicated all section references are to the internal_revenue_code in effect for the taxable years in issue and all rule references are to the tax_court rules_of_practice and procedure docket no linda l erwin additions to tax_year deficiency sec_6651 sec_6654 dollar_figure dollar_figure dollar_figure the deficiency in income_tax for is based on respondent's determination that petitioners failed to report the following items of income item_of_income amount wages hallmark cards inc dollar_figure interest united consumers credit_union ira distribution united consumer c u big_number big_number total the deficiency in income_tax includes the 10-percent additional tax imposed by sec_72 for premature distributions from qualified_retirement_plans the penalty under sec_6662 is based on respondent's determination that the underpayment_of_tax for is due to negligence or intentional disregard of rules or regulations insofar as petitioner duane b erwin is concerned the deficiency in income_tax for is based on respondent's determination that petitioner failed to report on a timely-filed income_tax return for that year wages from hallmark cards inc and income from self-employment as reconstructed by respondent the deficiency in income_tax includes the self- employment_tax the addition_to_tax under sec_6651 is based on respondent's determination that petitioner failed to file a timely income_tax return for finally the addition_to_tax under sec_6654 is based on respondent's determination that petitioner failed to pay the requisite estimated income_tax for insofar as petitioner linda l erwin is concerned the deficiency in income_tax for is based on respondent's determination that petitioner failed to report income from self- employment as reconstructed by respondent on a timely filed income_tax return for that year the deficiency in income_tax includes the self-employment_tax the addition_to_tax under sec_6651 is based on respondent's determination that petitioner failed to file a timely income_tax return for finally the addition_to_tax under sec_6654 is based on respondent's determination that petitioner failed to pay estimated income_tax for petitioners' petition at docket no petitioners filed a petition for redetermination on date in their petition petitioners admit that citizens and resident aliens of the united_states are taxed on all their net the petition filed at docket no by petitioner duane b erwin and the petition filed at docket no by petitioner linda l erwin are virtually identical to the petition filed by petitioners at docket no similarly the history of docket nos and subsequent to the filing of the petitions parallels exactly the history of docket no accordingly we shall limit our discussion in this opinion to the petition filed at docket no it should be understood however that what we say in respect of that docket applies equally to the other two dockets income regardless of its source nevertheless petitioners allege that they are not subject_to the federal_income_tax because they are without the jurisdiction of the united_states in this regard petitioners allege that they are neither united_states citizens nor resident aliens because they are state citizens of missouri not state of missouri petitioners also allege that they are not nonresident_aliens engaged_in_a_trade_or_business_within_the_united_states and that they are not nonresident_aliens who have elected to be treated as resident aliens petitioners attached a number of documents to their petition one such document is an affidavit in support of petition this document states in part that duane b erwin and linda l erwin the workmanship of god are naturally in a state of perfect freedom to order their actions and dispose_of their possessions and persons as they think fit within the bounds of the law of nature that is the law of reason and common equity without asking leave or depending upon the will of any other man that duane b erwin and linda l erwin are state citizens of missouri and have continually abode in jackson county missouri that missouri is a free and independent state united by and under the constitution of the united_states that u s c i r c and imposes no tax on the person of the state citizen within the jurisdiction of missouri a free and independent state petitioners also attached to their petition a series of documents identified as exodus documents which petitioners apparently filed with the local recorder's office in missouri and which include inter alia an abjuration of citizenship a declaration of citizenship and affidavit of pledge the abjuration of citizenship states as follows i duane b erwin linda l erwin a natural freeborn native in jackson county missouri having obtained tender mercy from god our saviour who will have all men to be saved and to come unto the knowledge of the truth for there is one god and one mediator between god and men the man christ jesus who gave himself a ransom for all to be testified in due time and i thank jesus christ son of the living god that he hath delivered me from this present evil world now having been delivered from the power of darkness and translated into the kingdom of god's dear son being of full age possessed of a sound mind and not acting under fraud duress or undue influence do solemnly swear and affirm the following that of my own free will i voluntarily intentionally and willingly abjure disavow and relinquish the citizenship of the united_states and renounce and abandon with solemnity allegiance to the united_states that the united_states is a foreign_country a private corporation i am not a member of the aforesaid foreign_corporation the united_states i am not a u s citizen and i do not elect to be a resident-alien of the united_states district of columbia its territories or possessions i freely and wholly choose to renounce and quit the united_states forever and never to return under its jurisdiction that all vows oaths anathemas obligations pledges of all names which i have vowed sworn devoted or bound myself to from birth until thi sec_3rd day of march i repent of them all they shall all be deemed forgiven abjured absolved annulled void and made of no effect and shall not stand the vows shall not be reckoned vows the obligations shall not be obligatory nor the oaths considered as oaths all signatures of the property known as duane b erwin linda l erwin that appear on all united_states federal forms contracts codicils or documents of any description are repudiated and forever cast into forgetfulness the declaration of citizenship the second of the several exodus documents states in part as follows blessed be the god and father of our lord jesus christ who according to his abundant mercy hath begotten us again unto a lively hope by the resurrection of jesus christ from the dead to an inheritance incorruptible undefiled which does not fade reserved for the saints of the most high who are kept by the power of god through faith unto salvation ready to be revealed in the last time that i duane b erwin linda l erwin a follower of god natural born citizen free person born in green county missouri of my own freewill do knowingly willingly intentionally and voluntarily vow and devote upon solemn pledge that i am a citizen of missouri and any claim to the contrary is based on fraud and is null and void and shall not stand nunc_pro_tunc the affidavit of pledge is a pledge of allegiance to the missouri republic and pledges to defend and protect this my country missouri its sovereignty and constitution from both foreign and domestic enemies respondent's rule motion and subsequent developments as indicated on date respondent filed a motion to dismiss for failure to state a claim upon which relief can be granted shortly thereafter on date the court issued an order calendaring respondent's motion for hearing and also directing petitioners to file a proper amended petition in accordance with the requirements of rule in particular the court directed petitioners to file a proper amended petition setting forth with specificity each error allegedly made by respondent in the determination of the deficiency and separate statements of every fact upon which the assignments of error are based petitioners did not file an amended petition and did not otherwise respond to the court's order respondent's motion to dismiss was called for hearing in washington d c on date and again on date counsel for respondent appeared at both hearings and presented argument and evidence in support of the pending motion petitioners did not appear at either hearing nor did they file any written_statement of their position under rule c discussion rule provides that a party may file a motion to dismiss for failure to state a claim upon which relief can be granted we may grant such a motion when it appears beyond doubt that the party's adversary can prove no set of facts in support of a claim that would entitle him or her to relief conley v gibson petitioners were reminded of the applicability of rule c in the court's order dated date calendaring respondent's motion for hearing u s 677_f2d_676 8th cir rule b requires that a petition filed in this court contain clear and concise assignments of each and every error which the taxpayer alleges to have been committed by the commissioner in the determination of the deficiency in dispute rule b further requires that the petition contain clear and concise lettered statements of the facts on which the taxpayer bases the assignments of error see 78_tc_646 the failure of a petition to conform with the requirements set forth in rule may be grounds for dismissal rule sec_34 b in general the determinations made by the commissioner in a notice_of_deficiency are presumed to be correct and the taxpayer bears the burden of proving that those determinations are erroneous rule a 290_us_111 moreover any issue not raised in the pleadings is deemed to be conceded rule b 78_tc_646 ndollar_figure 73_tc_736 the petition filed in this case does not satisfy the requirements of rule b and there is neither assignment of error nor allegation of fact in support of any justiciable claim rather there is nothing but tax_protester rhetoric and legalistic gibberish as demonstrated by the passages from the petition and the attachments thereto that we have quoted above see 82_tc_403 80_tc_1111 76_tc_1027 affd 696_f2d_1234 9th cir the court's order dated date provided petitioners with an opportunity to assign error and allege specific facts concerning their liability for the taxable_year in issue unfortunately petitioners failed to properly respond to the court's order rather petitioner elected to continue to proceed with time-worn tax_protester rhetoric see abrams v commissioner supra rowlee v commissioner supra mccoy v commissioner supra karlin v commissioner tcmemo_1990_496 we see no need to painstakingly address petitioners' basic argument the short answer to it is that petitioners are not exempt from federal_income_tax or from the imposition of appropriate penalties and additions to tax see abrams v commissioner supra pincite moreover as the court_of_appeals for the fifth circuit has remarked we perceive no need to refute these arguments with somber reasoning and copious citation of precedent to do so might suggest that these arguments have some colorable merit 737_f2d_1417 5th cir because the petition fails to state a claim upon which relief can be granted we will grant respondent's motion to dismiss for failure to state a claim see 747_f2d_478 8th cir see also nieman v commissioner tcmemo_1993_533 solomon v commissioner tcmemo_1993_509 affd without published opinion 42_f3d_1391 7th cir we turn now on our own motion to the award of a penalty against petitioners under sec_6673 as relevant herein sec_6673 authorizes the tax_court to require a taxpayer to pay to the united_states a penalty not in excess of dollar_figure whenever it appears that proceedings have been instituted or maintained by the taxpayer primarily for delay or that the taxpayer's position in such proceeding is frivolous or groundless the record in this case convinces us that petitioners were not interested in disputing the merits of either the deficiency in income_tax or the penalty determined by respondent in the notice_of_deficiency rather the record demonstrates that petitioners regard this case as a vehicle to protest the tax laws of this country and espouse their own misguided views a petition to the tax_court is frivolous if it is contrary to established law and unsupported by a reasoned colorable argument for change in the law 791_f2d_68 7th cir petitioners' position as set forth in the petition consists solely of tax_protester rhetoric and legalistic gibberish based on well established law petitioners' position is frivolous and groundless we are also convinced that petitioners instituted and maintained this proceeding primarily if not exclusively for purposes of delay having to deal with this matter wasted the court's time as well as respondent's moreover taxpayers with genuine controversies were delayed in view of the foregoing we will exercise our discretion under sec_6673 and in our decision in docket no require each petitioner to pay a penalty to the united_states in the amount of dollar_figure coleman v commissioner supra pincite crain v commissioner supra pincite8 coulter v commissioner 82_tc_580 abrams v commissioner supra pincite to reflect the foregoing orders of dismissal and decisions will be entered in each case


department of the treasury internal_revenue_service washington d c number release date date uil cc ebeo br gl-613255-98 memorandum for district_counsel from chief branch employee_benefits and exempt_organizations subject state legislators’ business_expenses legend state this is response to your request that we review your memorandum concerning whether members of state’s legislature may deduct their employee business_expenses above-the line in accordance with sec_62 of the internal_revenue_code the code conclusion it is our view that the legislators are not compensated in whole or in part with a fee for purposes of sec_62 accordingly they are not allowed to deduct their unreimbursed employee business_expenses above_the_line facts issue as we understand the facts state legislators may incur expenses in connection with their duties that are not reimbursed by the state this raises the issue of whether those expenses are deductible only as miscellaneous_itemized_deductions on schedule a subject_to the floor imposed by sec_67 or are fully deductible because the legislators are eligible for the sec_62 applicable law sec_62 was added to the code by section of the taxpayer_relief_act_of_1997 as stated in your memorandum sec_62 provides that adjusted_gross_income is computed by subtracting from gross_income deductions allowed by sec_162 which consist of expenses paid_or_incurred with respect to services performed by an official as an employee of a state or a political_subdivision thereof in a position compensated in whole or in part on a fee basis emphasis added the effect of sec_62 is that public officials compensated with fees fee basis public officials may deduct unreimbursed employee business_expenses above_the_line that is without regard to the two percent floor imposed by sec_67 in the legislative_history to the enactment of sec_62 congress articulated the following as reasons for the change the congress was aware that certain state and local_government officials are compensated in whole or in part on a fee basis to provide certain services to the government these officials hire employees and incur expenses in connection with their official duties these expenses may be subject under prior_law to the two percent floor on itemized_deductions the congress believed these expenses should be deductible congress then explained the new provisions as follows under the act employee business_expenses relating to service as an official of a state of local_government or political_subdivision thereof are deductible in computing agi above_the_line provided the official is compensated in whole or in part on a fee basis consequently such expenses are also deductible for minimum_tax purpose joint_committee on taxation general explanation of tax legislation enacted in comm print the blue_book pp as enacted sec_62 applies to public officials compensated in whole or in part with fees accordingly we must determine whether the state legislators are compensated with fees analysis the legislative_history confirms that congress intended this provision to apply to fee basis public officials not to all public officials or public employees in addition it is significant that the legislative_history does not suggest that the terms fee basis be defined other than as previously defined in internal_revenue_service guidance for other code provisions congress did not for example indicate that the definition of fee under relevant state law would apply for this purpose the phrase fee basis public official is not defined in the code or the regulations however prior to the enactment of sec_62 whether a public official was a fee basis official was relevant for determining whether the official was subject_to self-employment contributions act seca taxes on amounts received for the performance of services as a public official as discussed herein the irs has issued guidance for this purpose seca taxes are imposed pursuant to sec_1401 and sec_1402 on the gross_income less applicable deductions derived by an individual from any trade_or_business for seca purposes the term trade_or_business has the same meaning as when used in sec_162 relating to trade_or_business_expenses with certain exceptions section sec_1402 provides that the performance of the functions of a public_office is not a trade_or_business for seca purposes however an exception to this general_rule is set forth in sec_1402 and sec_1_1402_c_-2 the exception provides that the performance of the functions of a public_office is a trade_or_business with respect to fees received for functions performed in a position compensated solely on a fee basis but only if the functions are not covered by a sec_218 agreement thus amounts paid to public officials either for the performance of the functions of a public_office are not subject_to seca unless the functions or services are performed in a position compensated solely by fees that is not covered by a sec_218 agreement thus to determine whether the public official was subject_to seca it was necessary to define the terms fee and position unlike sec_1402 sec_62 does not require the public official to be in a position compensated solely with fees making it unnecessary to define position however the term fee must be defined revrul_74_608 1974_2_cb_275 addresses the meaning of fee this ruling concerns an individual elected to collect the county township and school district taxes within the individual's electoral district the individual accounted for and turned over all collections to the treasurer of each taxing authority and was compensated from state funds on the basis of a fixed percentage of each tax the ruling holds that when an elected official receives his remuneration in the form of fees directly from the members of the public with whom he does business the remuneration is fees within the meaning of sec_1402 when however a public official receive sec_1section of the social_security act was enacted in it permits states to enter into an agreement with the social_security administration to provide social_security coverage to state and local_government employees this agreement is commonly called a sec_218 agreement his remuneration or salary from a government fund and no portion of the monies collected by him belongs to or can be retained by him as compensation the remuneration is not fees under sec_1402 thus the irs position focuses on the source of the payments the irs position was adopted by the social_security administration in ssa information_release no date social_security agreed to adopt the irs position due in part to the confusion among local employing entities concerning whether a payment was a fee for tax_liability and social_security coverage a copy of ssa information_release no is enclosed we see no reason for adopting a different definition of fee for purposes of sec_62 and do not believe this position takes an overly restrictive view of the changes intended by congress rather this position allows the provision to be utilized only by true fee basis public officials and it does not invite the state and local governments to recast compensation as fees there are many state and local officials such as clerks of court justices of the peace and certain judges who are compensated in whole or in part on a fee basis as described in rev_rul and would be eligible to use sec_62 finally your memo concludes that it is not necessary for a legislator to make an election under sec_162 to take deductions above_the_line although it is our conclusion that the state legislators are not eligible for sec_62 and it may be that generally legislators are not fee basis public officials we agree that a fee basis public official who is eligible for sec_62 need not make an election under sec_162 the two sections are not interrelated if you have any questions please call me at enclosure jerry e holmes


significant index no eo department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division dec in re company this letter constitutes notice that a waiver of the minimum_funding_standard has been granted for the above-named plan for the plan_year ending date this waiver of the minimum_funding_standard has been granted in accordance with sec_412 of the internal_revenue_code and sec_303 of the employee_retirement_income_security_act_of_1974 erisa the amount for which this conditional waiver has been granted is the contribution that would otherwise be required to reduce the balance in the funding_standard_account to zero as of date the company is a manufacturer of __ its primary product is which are used to form the company sells its products with a small portion exported to other foreign domestically and in countries the company’s customers include the automotive agricultural equipment and aeronautical industries as well as small machine shops the current financial hardship was brought on by the general downturn in the economy which affected the company’s customer base particularly the automotive and aeronautical industries which in turn led to declining sales sales have declined from to in because the company's has relatively fixed manufacturing costs associated with its mostly union workforce profit margins declined dramatically as well the decrease in profit margins has affected the company’s cash_flow making it difficult for the company to fund operations and the plan at the same time and for the fiscal_year ending in both and in order to effect a recovery_of its business the company has taken a number of steps to firm up its financial situation among these steps were a reduction in payroll costs through layoffs of both union and non-union employees the replacement of its primary supplier with a new lower cost supplier and an aggressive marketing campaign to expand its customer base and increase sales these steps have allowed the company's financial situation to improve while sales dropped dramatically from to which allowed it to post a profit for the fiscal_year ended and the company has drastically reduced expenses sales leveled off in the company has also shown its determination to fund the plan by continuing to make contributions totaling despite filing for a waiver of the minimum_funding_standard furthermore on ‘o the plan for the plan_year ending the plan was merged into another plan sponsored by the company to reduce administrative expenses associated with maintaining the plans and to improve the overall funded status of the plans hence the waiver of the minimum_funding_standard for the plan_year ending -has been granted your attention is called to sec_412 of the code and sec_304 of erisa which describe the consequences that would result in the event the plan is amended to increase benefits to change the rate in the accrual_of_benefits or to change the rate of vesting while any portion of the waived_funding_deficiency remains unamortized please note that the establishment of another retirement_plan or any amendment to other retirement plans maintained by the company to increase the liabilities of those plans would be considered an amendment for purposes of sec_412 of the code and sec_304 of erisa this ruling is directed only to the taxpayer that requested it sec_6110 of the code provides that it may not be used or cited by others as precedent when filing form_5500 for the plan_year ending should be entered on schedule b actuarial information for this reason we suggest that you furnish a copy of this letter to the enrolled_actuary who is responsible for the completion of the schedule b __ the date of this letter we have sent a copy of this letter to the manager ep classification in and to your authorized representative pursuant to a power_of_attorney form on file i in this office oe if you require further assistance in this matter please contact sincerely yours l- donna m prestia manager employee_plans actuarial group


t c memo united_states tax_court earl w and marilyn l mcclaskey petitioners v commissioner of internal revenue respondent docket no filed date edward t perry for petitioners david rakonitz for respondent memorandum findings_of_fact and opinion haines judge respondent determined that petitioners are liable for additions to tax for negligence under sec_6653 of dollar_figure and dollar_figure for and respectively and 1unless otherwise indicated section references are to the internal_revenue_code in effect for the years at issue rule references are to the tax_court rules_of_practice and procedure continued under sec_6653 for percent of the interest due on dollar_figure and dollar_figure respectively the issue for decision is whether respondent timely mailed notices of the beginning of an administrative_proceeding nbaps and notices of final_partnership_administrative_adjustment fpaas with respect to contra costa jojoba research partners ccjrp for the years at issue findings_of_fact some of the facts have been stipulated and are so found the stipulation of facts and the attached exhibits are incorporated herein by this reference petitioners resided in california when their petition was filed after attending seminars in on the benefits of investing in the research_and_development of methods of growing and enhancing jojoba plants petitioners decided to invest in ccjrp a limited_partnership that purported to do work with the jojoba plant in they received a 857-percent interest in ccjrp in exchange for dollar_figure cash and a dollar_figure promissory note continued amounts are rounded to the nearest dollar 2in their pretrial memorandum petitioners raised the issue of whether they were negligent in claiming losses with respect to ccjrp on their and returns in their opening and reply briefs petitioners expressly state that the only issue for decision is whether respondent timely mailed nbaps and fpaas it is clear that petitioners intended to abandon or concede all other issues because petitioners bear the burden_of_proof on those issues see rule a we need not address them in and ccjrp provided petitioners schedules k-1 partner’s share of income credits deductions etc in which ccjrp allocated petitioners ordinary losses of dollar_figure and dollar_figure respectively in turn on their and joint form sec_1040 u s individual_income_tax_return petitioners claimed ordinary losses with respect to their interest in ccjrp of dollar_figure and dollar_figure respectively on date respondent issued fpaas for and to ccjrp’s tax_matters_partner on date a petition in the name of ccjrp charles b toepfer tax_matters_partner was filed with the court at docket no on date to settle the case at docket no the tax_matters_partner and respondent filed a stipulation to accept and be bound by the result in utah jojoba i research v commissioner utah jojoba i a test case at docket no petitioners testified that the only documents they received with respect to ccjrp were schedules k-1 and that they knew nothing of the partnership proceedings we issued our opinion in utah jojoba i on date holding that the partnership was not entitled to deduct its losses for research_and_development expenditures see utah jojoba i research v commissioner tcmemo_1998_6 on date the court entered a decision against ccjrp sustaining the partnership_item adjustments as determined and set forth in the fpaas that decision was not appealed on june and date respondent timely issued petitioners affected items notices of deficiency for the years at issue disallowing the ccjrp losses petitioners claimed petitioners timely filed a petition and trial was held on date notice of partnership proceedings required opinion the tax treatment of a partnership_item generally is determined at the partnership level pursuant to the unified_audit and litigation procedures set forth in sec_6221 through tax equity and fiscal responsibility act of publaw_97_248 96_stat_648 on the other hand nonpartnership_items are determined at the individual partner level 97_tc_575 partnership items include each partner’s proportionate share of the partnership’s aggregate items of income gain loss deduction or credit sec_6231 sec_3the limitations_period in this case expired on date year and days after the court’s date decision was entered see secs d a ghose v commissioner tcmemo_2008_80 4these procedures apply with respect to all taxable years of a partnership beginning after date 87_tc_1279 87_tc_783 n a -1 a i proced admin regs a nonpartnership item is an item which is not a partnership_item sec_6231 and sec_6223 generally provides that the commissioner shall mail to each partner an nbap with respect to a partnership_item as well as an fpaa resulting from any such proceeding sec_6223 provides that the commissioner’s failure to provide notice of partnership-level proceedings to a partner may result in that partner’s share of partnership items being treated as nonpartnership_items see sec_6231 petitioners contend that the ccjrp partnership items became nonpartnership_items by virtue of respondent’s failure to notify them of partnership-level proceedings see 102_tc_683 if respondent did not provide petitioners with proper notice of the partnership proceedings and petitioners’ share of partnership items is treated as a nonpartnership item the validity of the affected items deficiency notices is in question see id pincite the commissioner cannot issue a valid affected items deficiency_notice to a partner if that partner’s share of partnership items is entitled to nonpartnership item treatment id where the 5the parties dispute the effect of respondent’s failure to mail an nbap if an fpaa is properly mailed because we determine that nbaps were timely mailed we need not address the parties’ arguments on this point validity of an affected items deficiency_notice is questioned in this manner the commissioner must demonstrate that he complied with the notice requirements set forth in sec_6223 id pincite as is the case with a notice_of_deficiency the validity of properly mailed partnership notices is not contingent upon actual receipt by either the tax_matters_partner or a notice_partner id pincite 89_tc_806 downs v commissioner tcmemo_2000_155 mailing of the nbaps as evidence of the mailing of the nbap on date respondent introduced an nbap mailing log and the testimony of peggy allred who is familiar with the practices and procedures for mailing nbaps during the relevant period for the years at issue respondent did not mail nbaps by certified mail in respondent tracked nbap mailings using a log the nbap mailing log is dated date which matches the date on the nbap the log is initialed which shows it was reviewed for accuracy the log shows petitioners’ names address percentage interest in ccjrp and petitioner husband’s social_security_number 6respondent mailed the nbaps and fpaas to petitioners’ home address where they had lived since petitioners do not claim that the notices were sent to an incorrect address rather they claim that the notices were not mailed at all as evidence of the timely mailing of the nbap on date respondent introduced the testimony of peggy allred and a certification of nbap notices which respondent used to track the mailing of nbaps in the date of the certification matches the date on the nbap the certification shows petitioners’ names address percentage ownership in ccjrp and petitioner husband’s social_security_number it is signed and dated date the evidence indicates that respondent complied with all applicable procedures in mailing the nbaps at issue nevertheless petitioners testified that they did not receive the nbaps as with an fpaa actual receipt of the nbap is not necessary crowell v commissioner supra pincite petitioners presented no other evidence which would tend to indicate the nbaps were not properly mailed we therefore find on the preponderance_of_the_evidence that the nbaps for the years at issue were timely mailed to petitioners 7respondent’s disclosure_office was at first unable to provide petitioners copies of certain nbaps and fpaas because the examination file was missing these documents were later found we draw no inference from respondent’s temporary inability to locate the file sec_6223 provides that an nbap be mailed more than days before the date that the commissioner mails the fpaa to the tax_matters_partner respondent mailed the and nbaps on date and date respectively and the fpaas on date more than days later mailing of the fpaas as evidence of the timely mailing of the fpaas on date respondent introduced into evidence fpaa certified mail listings for the years at issue and the testimony of susan kent who is familiar with respondent’s practices and procedures for fpaa mailings in in respondent mailed fpaas by certified mail and tracked fpaa mailings by using an fpaa certified mail listing see wayne caldwell escrow pship v commissioner tcmemo_1996_401 after preparation of the mail listings respondent would correct any discrepancies between the actual mail dates and the dates on the listing as shown by postmaster stamps the postmaster reviewed the fpaa certified mail listings for accuracy the postmaster stamped both listings with the date date petitioners’ names address and ownership_interest in ccjrp are on both fpaa certified mail listings along with petitioner husband’s social_security_number an fpaa certified mail listing is highly probative evidence of the fact and date of mailing id see 94_tc_82 there is a strong presumption in the law that a properly addressed letter will be delivered or offered for delivery to the addressee 75_tc_318 affd without published opinion 673_f2d_1332 7th cir further it is clear that in general and in the absence of evidence to the contrary compliance with certified mail procedures raises a presumption of official regularity in delivery with respect to notices sent by the commissioner see 724_f2d_808 9th cir 530_f2d_781 8th cir 119_tc_183 the evidence indicates that respondent complied with all procedures in mailing the fpaas at issue petitioners testified that they did not receive the fpaas and that if delivery had been attempted they would have accepted it they further testified that they were unaware of the disallowance of ccjrp’s losses as stated previously actual receipt of the fpaas is not required crowell v commissioner supra pincite petitioners failed to present any other evidence that would indicate the fpaas were not properly mailed therefore we find on the preponderance_of_the_evidence that respondent timely mailed petitioners fpaas with respect to ccjrp for the years at issue conclusion because respondent timely mailed all notices required by sec_6223 the partnership items are not entitled to sec_6223 provides that the commissioner shall mail an fpaa to a notice_partner within days of the mailing of the fpaa to the tax_matters_partner respondent mailed the fpaas to the tax_matters_partner on date and to the notice partners on date less than days later nonpartnership item treatment under sec_6223 accordingly the notices of deficiency are valid and petitioners are liable for the additions to tax in reaching our holdings herein we have considered all arguments made and to the extent not mentioned above we find them to be moot irrelevant or without merit to reflect the foregoing decision will be entered for respondent


t c memo united_states tax_court paul n rogers petitioner v commissioner of internal revenue respondent docket no filed date larry d harvey for petitioner randall l preheim for respondent memorandum opinion vasquez judge this case is before the court on respondent’s motion for summary_judgment pursuant to rule unless otherwise indicated all rule references are to the tax_court rules_of_practice and procedure and all section references are to the internal_revenue_code in effect for the year in issue after a concession the sole issue for decision is whether petitioner can exclude from income wages earned during from working in antarctica background at the time he filed the petition petitioner resided in idaho during petitioner performed services at mcmurdo station in ross island antarctica on hi sec_2002 federal_income_tax return petitioner excluded wage income earned and received during for services performed in antarctica i summary_judgment discussion rule a provides that either party may move for summary_judgment upon all or any part of the legal issues in controversy full or partial summary_judgment may be granted only if it is demonstrated that no genuine issue exists as to any material fact and that the legal issues presented by the motion may be decided as a matter of law see rule b 98_tc_518 affd 17_f3d_965 7th cir we conclude that there is no genuine issue as to any material fact and that a decision may be rendered as a matter of law respondent concedes that no penalty pursuant to sec_6662 is due from petitioner for ii in general sec_61 provides that gross_income means all income from whatever source derived accordingly citizens of the united_states generally are taxed on income earned outside the geographical boundaries of the united_states unless the income is specifically excluded from gross_income 117_tc_95 affd sub nom 68_fedappx_44 9th cir affd sub nom 357_f3d_1108 10th cir exclusions from income are construed narrowly and taxpayers must bring themselves within the clear scope of the exclusion id iii sec_911 in 126_tc_89 473_f3d_790 7th cir arnett ii we addressed the arguments made by the parties herein regarding sec_911 the u s court_of_appeals for the seventh circuit agreed with our analysis of sec_911 and affirmed our conclusion that antarctica is not a foreign_country pursuant to sec_911 and the regulations thereunder arnett v commissioner f 3d pincite we shall not repeat our analysis from arnett i herein we follow our analysis and holding in arnett i and the analysis and holding of the court_of_appeals in arnett ii in 126_tc_89 affd 473_f3d_790 7th cir we concluded our opinion with a continued iv conclusion accordingly for the reasons stated in arnett i arnett ii and herein we conclude that petitioner cannot exclude from gross_income wages earned during from working in antarctica to reflect the foregoing an appropriate order and decision will be entered continued citation of sec_863 suggesting that sec_863 provided an additional reason to rule against the taxpayer id pincite see also sec_863 providing that income earned in antarctica by a u_s_person is sourced in the united_states in arnett v commissioner f 3d pincite the u s court_of_appeals for the seventh circuit addressed sec_863 in greater detail stating at the outset we think that it is important to note that considering antarctica not to be a foreign_country is compatible with the general statutory scheme notably sec_911 is found under subtitle a chapter subchapter_n of the irc which is designated tax based on income from sources within or without the united_states part i of this subchapter entitled source_rules and other general rules relating to foreign_income deems any activity in antarctica to be space_or_ocean_activity in turn the united_states is designated the source country of income from such activity when earned by a citizen_of_the_united_states sec_863 although this provision does not provide a definitive answer as to whether antarctica is a foreign_country it supports the conclusion that sec_911 is not intended to apply to income earned for services provided in antarctica we take this opportunity to state our agreement with the court of appeals’ conclusion set forth above see also 450_us_1


internal_revenue_service department of the treasury washington dc person to contact leslie r rubenstein id telephone number refer reply to cc intl br1-cor-102348-01 date date number release date index number dear this letter is in response to your letter dated date pertaining to the u s tax consequences of distributions from a u s 401_k_plan to an australian citizen currently residing in australia such distributions are generally entitled to benefits under the u s -australia income_tax treaty paragraph of article of the treaty provides that pensions paid to a resident of a contracting state in consideration of past employment shall be taxable only in that state thus pension distributions received by a resident of australia are taxable only in australia paragraph of article of the treaty provides that pensions and other similar remuneration means periodic_payments made by reason of retirement or death in consideration for services rendered or by way of compensation paid after retirement for injuries received in connection with past employment depending on circumstances lump sum distributions might not qualify as periodic_payments and another article of the treaty might apply in addition distributions made prior to the taxpayer reaching retirement age might not qualify for benefits under article this information_letter is advisory only and has no binding effect on the internal_revenue_service see revproc_2001_1 sec_2 2001_1_irb_1 if you wish a definitive determination you may request a ruling under the procedures set forth in revproc_2001_1 cor-102348-01 if you have any further questions please contact leslie r rubenstein of this office at not a toll-free number sincerely m grace fleeman assistant to the branch chief branch associate chief_counsel international


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 ---------------------- id no ------------ telephone number -------------------- refer reply to cc psi b04 plr-104319-15 date july ------------------ legend donor --------------------------------------------------------------------------------------------------- -------------------------- certified_public_accountant --------------------------- child ----------------------------------------------- personal_representatives -------------------------- date ---------------------- date ------ year ------------ x trust ----------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------- dear ----------------- this letter responds to the submission dated date requesting an extension of time pursuant to sec_2642 of the internal_revenue_code and sec_301_9100-3 of the procedure and administration regulations to elect out of the generation-skipping_transfer gst tax exemption automatic allocation rules on date a date after date donor transferred dollar_figurex to trust to be held irrevocably and thereupon administered for the benefit of child and child’s descendants under article vi a of trust during child’s lifetime the trustee may distribute to one or more of child and child’s descendants as much of the income and principal as the trustee in the trustee’s sole discretion may think desirable on child’s death any remaining principal and accumulated income shall be paid to child’s then- living descendants per stirpes plr-104319-15 donor reported the transfer on a gift_tax_return form_709 united_states gift and generation- skipping transfer_tax return filed for year she did not elect to allocate any portion of her gst_exemption to the dollar_figurex transfer to trust donor relied on certified_public_accountant to prepare the gift_tax_return although donor did not intend to allocate gst_exemption to the dollar_figurex gift to trust certified_public_accountant failed to prepare an election out of the automatic allocation rules of sec_2632 for the transfer donor died on date the personal_representatives of her estate now request an extension of time to elect out of the automatic allocation rules with respect to the transfer sec_2601 imposes a tax on every generation-skipping_transfer a generation- skipping transfer is defined under sec_2611 as a taxable_distribution a taxable_termination and a direct_skip sec_2602 provides that the amount of the tax imposed by sec_2601 is the taxable_amount multiplied by the applicable_rate sec_2641 defines the applicable_rate as the product of the maximum_federal_estate_tax_rate and the inclusion_ratio with respect to the transfer under sec_2642 the inclusion_ratio with respect to any property transferred in a generation-skipping_transfer is the excess if any of over the applicable_fraction the applicable_fraction as defined in sec_2642 is a fraction the numerator of which is the amount of the gst_exemption under sec_2631 allocated to the trust or to property transferred in a direct_skip and the denominator of which is the value of the property transferred to the trust or involved in the direct_skip sec_2631 as effective in the year at issue provided that for purposes of determining the inclusion_ratio every individual shall be allowed a gst_exemption of dollar_figure adjusted for inflation under sec_2631 which may be allocated by such individual or his executor to any property with respect to which such individual is the transferor sec_2631 provides that any allocation under sec_2631 once made shall be irrevocable sec_2632 provides that if any individual makes an indirect_skip during such individual's lifetime any unused portion of such individual's gst_exemption shall be allocated to the property transferred to the extent necessary to make the inclusion_ratio for such property zero if the amount of the indirect_skip exceeds such unused portion the entire unused portion shall be allocated to the property transferred sec_2632 provides that the term indirect_skip means any transfer of property other than a direct_skip subject_to the tax imposed by chapter made to a gst_trust as defined in sec_2632 under sec_2632 and ii an individual may elect to have the automatic allocation rule in sec_2632 not apply to an indirect_skip or to any or all transfers made by such individual to a particular trust plr-104319-15 sec_2632 provides that an election under sec_2632 may be made on a timely filed gift_tax_return for the calendar_year for which the election is to become effective sec_26_2632-1 of the generation-skipping_transfer_tax regulations provides in relevant part that to elect out the transferor must attach a statement election out statement to a form_709 filed within the time period provided in sec_26_2632-1 whether or not any transfer was made in the calendar_year for which the form_709 was filed and whether or not a form_709 otherwise would be required to be filed for that year the election out statement must identify the trust except for an election out under sec_26_2632-1 and specifically must provide that the transferor is electing out of the automatic allocation of gst_exemption with respect to the described transfer or transfers further unless the election out is made for all transfers made to the trust in the current_year the current-year transfers to which the election out is to apply must be specifically described or otherwise identified in the election out statement sec_26_2632-1 provides in relevant part that to elect out the form_709 with the attached election out statement must be filed on or before the due_date for timely filing within the meaning of sec_26_2632-1 of the form_709 for the calendar_year in which the first transfer to be covered by the election out was made sec_2642 provides generally that the secretary shall by regulation prescribe such circumstances and procedures under which extensions of time will be granted to make an allocation of gst_exemption described in sec_2642 or and an election under sec_2632 or c such regulations shall include procedures for requesting comparable relief with respect to transfers made before the date of the enactment of this paragraph sec_2642 provides that in determining whether to grant relief under sec_2642 the secretary shall take into account all relevant circumstances including evidence of intent contained in the trust instrument or instrument of transfer and such other factors as the secretary deems relevant for purposes of determining whether to grant relief the time for making the allocation or election shall be treated as if not expressly prescribed by statute notice_2001_50 2001_2_cb_189 provides that under sec_2642 the time for allocating the gst_exemption to lifetime transfers and transfers at death the time for electing out of the automatic allocation rules and the time for electing to treat any trust as a generation-skipping_transfer_trust are to be treated as if not expressly prescribed by statute the notice further provides that taxpayers may seek an extension of time to make an allocation described in sec_2642 or b or an election described in sec_2632 or c under the provisions of sec_301_9100-3 plr-104319-15 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_9100-1 sec_301_9100-2 provides an automatic_extension of time for making certain elections sec_301_9100-3 provides the standards used to determine whether to grant an extension of time to make an election whose date is prescribed by a regulation and not expressly provided by statute in accordance with sec_2642 and notice_2001_50 taxpayers may seek an extension of time to make an allocation described in sec_2642 or b or an election described in sec_2632 or c under the provisions of sec_301_9100-3 sec_301_9100-3 provides in part that requests for relief subject_to sec_301_9100-3 will be granted when the taxpayer provides the evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and the grant of relief will not prejudice the interests of the government sec_301_9100-3 provides in part except as provided in sec_301_9100-3 through iii that a taxpayer is deemed to have acted reasonably and in good_faith if the taxpayer reasonably relied on a qualified_tax professional including a tax professional employed by the taxpayer and the tax professional failed to make or advise the taxpayer to make the election based on the facts submitted and the representations made we conclude that the requirements of sec_301_9100-3 have been satisfied accordingly donor is granted an extension of time of days from the date of this letter to make an election under sec_2632 that the automatic allocation rules do not apply to her transfer to trust made on date the election out will be effective as of the date the return was filed the election should be made on form_709 and filed with the internal_revenue_service center cincinnati ohio a copy of this letter should be attached to the form_709 a copy is enclosed for that purpose except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter this ruling is directed only to the taxpayer requesting it sec_6110 of the code provides that it may not be used or cited as precedent in accordance with the power of plr-104319-15 attorney on file with this office a copy of this letter is being sent to your authorized representative sincerely leslie h finlow senior technician reviewer branch office of associate chief_counsel passthroughs special industries enclosures copy for sec_6110 purposes


internal_revenue_service number info release date index number ---------------------------------- ----------------------------- ------------------------------------------------- ---------------------------------------- -------------------------- - dear ---------- department of the treasury washington dc third party communication date of communication month dd yyyy person to contact -------------------- id no ------------- telephone number --------------------- refer reply to cc psi genin-114692-05 date date this letter responds to your inquiry dated date requesting information relating to a late s_corporation_election for the taxable_year based on the information provided it appears that you are ineligible for automatic relief under revproc_2003_43 because the window period has closed further you are ineligible for relief under revproc_97_48 due to the late filing of your tax_return generally to request relief for a late s_corporation_election you must request a private_letter_ruling plr from the national_office the procedures for requesting a plr are set forth in revproc_2005_1 copy enclosed the standard user_fee for a plr is dollar_figure however if the entity’s gross_income was less than dollar_figure million on the tax_return it qualifies for a reduced user_fee of dollar_figure in order for the lower fee to be accepted you must include a statement verifying the taxpayer’s gross_income for the last 12-month taxable_year otherwise you will be billed for the higher fee if you decide to submit a formal request for a plr please follow the sample format shown in appendix b of revproc_2005_1 your request must include required procedural statements a user_fee check and documents to substantiate your intent to be an s_corporation please refer your ruling_request to the following address attn cc pa t p o box ben franklin station washington dc direct to cc psi genin-114692-05 incidentally the irs has developed two compact discs cds to help educate small_business owners on their tax responsibilities publication introduction to federal taxes for small_business self-employed and publication small_business workshop these items are free and can be ordered by calling an online classroom is available at www irs gov businesses small this letter has called your attention to certain general principles of the law it is intended for informational purposes only and does not constitute a ruling please keep this letter with your tax records and feel free to provide a copy of it to your authorized representative we hope that the above information proves helpful if you have any additional questions please contact our office at sincerely s dianna k miosi dianna k miosi chief branch associate chief_counsel passthroughs special industries enclosure revproc_2005_1