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 plr-101869-19 date date re request to revoke the election not to deduct the additional first year depreciation legend --------------------------------------------------------------------------------------------------- ----------------------------------------------------------------- taxpayer ------------------------------------------------------------- firm --------------------------------------------------- a -------------------------------- b ------------------------------------------------------------------------------------------- c d e f year1 ------- year2 ------- date1 ---------------------------- ------------------------------- --------------------- ------------------------- -------------------- dear ---- ----------- this letter responds to a letter dated date and subsequent correspondence submitted by your authorized representative on behalf of taxpayer requesting the consent of the commissioner of internal revenue commissioner to revoke taxpayer's election under sec_168 of the internal_revenue_code not to deduct the additional first year depreciation for certain qualified_property that was made on its federal tax_return for the taxable_year ended date1 the year1 taxable_year all references in this letter to sec_168 are treated as a reference to sec_168 as in effect i prior to amendment by the tax cuts and jobs_act pub_l_no 131_stat_2054 date tcja for property acquired before date plr-101869-19 and placed_in_service during the year1 taxable_year and ii after amendment by the tcja for property acquired and placed_in_service after date taxpayer represents that the facts are as follows facts taxpayer an s_corporation files a form_1120s u s income_tax return for an s_corporation that includes its a taxpayer files its federal tax_return on a calendar_year basis and uses an accrual_method of accounting taxpayer is principally engaged in b taxpayer maintains a c that are rented by the e of taxpayer and its a on a daily basis are for the exclusive use of the e of taxpayer and its a and are not available for use as f the d comprise the majority of taxpayer’s 5-year_property that is placed_in_service each year taxpayer typically disposes of the d prior to the end of their depreciable lives taxpayer has relied on firm to provide tax and business advice and to prepare its tax returns for many years taxpayer has historically elected out of the additional first year depreciation under sec_168 for all 5-year_property in order to reduce the amount of depreciation that would be recaptured upon disposition during year1 taxpayer placed_in_service 5-year_property that is qualified_property under sec_168 while preparing the form_1120s for taxpayer for the year1 taxable_year firm held various discussions with senior level management of taxpayer about the tax effects of tcja however there were no discussions about the additional first year depreciation deduction under sec_168 or the tax effects of the election not claim this deduction under sec_168 for taxpayer’s form_1120s for the year1 taxable_year firm prepared the election under sec_168 not to claim the additional first year depreciation deduction for all 5-year_property that taxpayer placed_in_service during year1 taxpayer timely filed the form_1120s for the year1 taxable_year which included the election statement not to claim the additional first year depreciation deduction for 5-year_property placed_in_service by taxpayer in year2 as part of a fee proposal process another firm reviewed taxpayer’s year1 form_1120s after it was filed during the review process the firm brought to taxpayer’s attention that permanent tax savings for taxpayer’s shareholders were available by not making the election under sec_168 due to the reduction of taxpayer’s shareholders’ effective tax_rates had taxpayer known of potential permanent tax savings available to its shareholders by claiming additional first year depreciation for all qualified_property placed_in_service in year1 taxpayer would not plr-101869-19 have made the election under sec_168 not to deduct the additional first year depreciation for any class of qualified_property placed_in_service by taxpayer in year1 ruling requested taxpayer requests consent to revoke its election under sec_168 not to deduct the additional first year depreciation for all 5-year_property that is qualified_property under sec_168 and placed_in_service by taxpayer during the taxable_year ended date1 law and analysis prior to amendment by the tcja sec_168 allowed in the taxable_year that qualified_property is placed_in_service a 50-percent additional first year depreciation deduction for qualified_property placed_in_service by the taxpayer before january or before january for qualified_property described in sec_168 or c as amended by the tcja sec_168 and allow in the taxable_year that qualified_property is placed_in_service a 100-percent additional first year depreciation deduction for qualified_property acquired by the taxpayer after date and placed_in_service by the taxpayer after date and before january or before january for qualified_property described in sec_168 or c sec_168 provides that a taxpayer may make an election not to deduct the additional first year depreciation for any class of property placed_in_service during the taxable_year the sec_168 election and an election under sec_168 may be revoked only with the consent of the secretary section dollar_figure of revproc_2019_33 2019_34_irb_662 provides that the sec_168 election applies to all qualified_property that is in the same class of property and placed_in_service in the same taxable_year for purposes of sec_168 as amended by the tcja section dollar_figure of revproc_2019_33 also defines the term class of property as meaning among other things each class of property described in sec_168 for example 5-year_property these rules in section dollar_figure of revproc_2019_33 are similar to the rules in section dollar_figure of revproc_2017_33 2017_19_irb_1236 for making the sec_168 election before the tcja sec_4 of revproc_2017_33 provides that in general rules similar to the rules in sec_1_168_k_-1 and apply for purposes of sec_168 sec_1_168_k_-1 defines the term class of property as meaning among other things each class of property described in sec_168 for example 5-year_property plr-101869-19 sec_1_168_k_-1 provides that an election not to deduct the additional first year depreciation for a class of property that is qualified_property once made may be revoked only with the written consent of the commissioner of internal revenue to seek the commissioner's consent the taxpayer must submit a request for a letter_ruling conclusion based solely on the facts and representations submitted we conclude that a revocation of taxpayer's election not to deduct any additional first year depreciation under sec_168 for 5-year_property placed_in_service by taxpayer in the taxable_year ended date1 is permitted under sec_1_168_k_-1 accordingly taxpayer is granted calendar days from the date of this letter to revoke such election the revocation must be made in a written_statement that is filed with taxpayer’s amended form_1120s for the taxable_year ended date1 a copy of this letter_ruling must be attached to such amended_return a copy is enclosed for that purpose alternatively a taxpayer filing its federal tax_return electronically may satisfy this requirement by attaching a statement to the return that provides the date and control number of the letter_ruling except as specifically ruled upon above no opinion is expressed or implied concerning the tax consequences of the facts described above under any other provisions of the code including other subsections of sec_168 specifically no opinion is expressed or implied on whether any item of depreciable_property placed_in_service by taxpayer in the taxable_year ended date1 is eligible for the additional first year depreciation deduction under sec_168 or whether taxpayer’s classification of any item of depreciable_property under sec_168 or revproc_87_56 1987_2_cb_674 is correct further no opinion is expressed or implied concerning the tax consequences of the use of the d by taxpayer’s a moreover this letter_ruling only applies to taxpayer and does not apply to any depreciable_property placed_in_service by taxpayer’s a during the taxable_year ended date1 in accordance with the power_of_attorney we are sending a copy of this letter_ruling to taxpayer's authorized representatives we are also sending a copy of this letter_ruling to the appropriate operating division official plr-101869-19 this letter_ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent sincerely kathleen reed kathleen reed chief branch office of associate chief_counsel income_tax and accounting enclosures copy of this letter copy for sec_6110 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 psi b01 plr-104729-11 date date legend legend x ------------------------------------------------- ---------------------------------------- state date date date date ------------ ------------------ --------------------- --------------------- -------------------- trust ----------------------------------------------------- ------------------------------------------------- trust ----------------------------------------------------- ---------------------------------------------------- dear ------------ plr-104729-11 this responds to a letter dated date and subsequent correspondence submitted on behalf of x requesting a ruling under sec_1362 of the internal_revenue_code facts according to the information submitted x was incorporated on date under the laws of state x elected to be treated as an s_corporation effective date on date trust received stock in x and on date trust received stock in x the current income beneficiaries of trust and trust failed to make elections to treat the trusts as qualified subchapter_s trusts qssts as a result of the failure to make a qsst election for trust x’s s election terminated on date x represents that trust and trust have at all times met the requirements of a qsst within the meaning of sec_1361 x also represents that all income has been reported on all affected federal tax returns of x and all of its shareholders consistent with the treatment of x as an s_corporation x represents that its s_corporation_election termination was inadvertent and was not motivated by tax_avoidance or retroactive tax planning x and its shareholders agree to make any adjustments required by the secretary consistent with the treatment of x as an s_corporation law and analysis sec_1361 defines an s_corporation as a small_business_corporation for which an election under sec_1362 is in effect for the taxable_year sec_1361 provides that a small_business_corporation cannot have as a shareholder a person other than an estate a_trust described in sec_1361 or an organization described in sec_1361 who is not an individual sec_1361 provides that a qsst whose beneficiary makes an election under sec_1361 will be treated as a_trust described in sec_1361 and the beneficiary of such trust shall be treated as the owner for purposes of sec_678 of that portion of the qsst which consists of s_corporation stock to which an election under sec_1361 applies sec_1361 provides that a beneficiary of a qsst may elect to have sec_1361 apply under sec_1361 this election will be effective up to days and months before the date of the election sec_1361 defines a qsst as a_trust a the terms of which require that i during the life of the current income_beneficiary there shall be only one income_beneficiary of the trust ii any corpus distributed during the life of the current income_beneficiary may be distributed only to such beneficiary iii the income_interest of the plr-104729-11 current beneficiary in the trust shall terminate on the earlier of the beneficiary's death or the termination of the trust and iv upon the termination of the trust during the life of the current income_beneficiary the trust shall distribute all of its assets to that beneficiary and b all of the income within the meaning of sec_643 of which is distributed or required to be distributed currently to one individual who is a citizen or resident_of_the_united_states sec_1362 provides that an election under sec_1362 shall be terminated whenever at any time on or after the first day of the taxable_year for which the corporation is an s_corporation the corporation ceases to be a small_business_corporation the termination is effective on and after the day of cessation sec_1362 sec_1362 provides that if an election under sec_1362 by any corporation a was not effective for the taxable_year for which made determined without regard to sec_1362 by reason of a failure to meet the requirements of sec_1361 or to obtain shareholder consent or b was terminated under sec_1362 or the secretary determines that the circumstances resulting in such ineffectiveness or termination were inadvertent no later than a reasonable period of time after discovery of the circumstances resulting in the termination steps were taken - a so that the corporation is a small_business_corporation or b to acquire the required shareholder consents and the corporation and each person who was a shareholder of the corporation at any time during the period specified pursuant to this subsection agrees to make such adjustments consistent with the treatment of the corporation as an s_corporation as may be required by the secretary with respect to such period then notwithstanding the circumstances resulting in such termination such corporation shall be treated as an s_corporation during the period specified by the secretary conclusion based solely on the facts submitted and the representations made we conclude that the termination of x’s s election on date constituted an inadvertent termination within the meaning of sec_1362 further we conclude that pursuant to sec_1362 x will be treated as continuing to be an s_corporation from date and thereafter assuming x’s s election is valid and not otherwise terminated under sec_1362 this ruling is contingent upon the current income beneficiaries of trust and trust within days of the date of this letter filing elections to treat the trusts as qssts effective date for trust and date for trust with the appropriate service_center a copy of this letter should be attached to the qsst elections plr-104729-11 except as specifically set forth above no opinion is expressed or implied concerning the federal tax consequences of the above-described facts under any other provision of the code including whether x was otherwise a valid s_corporation or whether trust and trust are otherwise valid qssts this ruling is directed only to the taxpayer who requested it sec_6110 of the code provides that it may not be used or cited as precedent pursuant to the power_of_attorney on file with this office a copy of this letter will be sent to x’s authorized representatives sincerely joy c spies joy c spies acting senior technician reviewer branch office of the associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 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 psi b04 plr-121694-09 date date legend decedent spouse sister a b c date date date date date trust trust -------------------------------------------------- -------------------------- --------------------- ----------- ----------- ----------- ---------------------- ------------------------- ---------------------- ------------------- ------------------ ------------------------- ---------------------------------------------------- dear ------------- this responds to your letter dated date submitted on behalf of decedent's_estate requesting an extension of time under sec_301_9100-1 and sec_301_9100-3 of the procedure and administration regulations to make a reverse qualified_terminable_interest_property qtip_election under sec_2652 of the internal_revenue_code and to allocate decedent's generation-skipping_transfer gst tax exemption the facts submitted are as follows plr-121694-09 decedent executed her will on date and a codicil to her will on date decedent died on date article sixth of decedent’s will as amended by the codicil provides in relevant part for the creation of trust the trustee of trust is to pay the net_income of trust to spouse decedent’s spouse for and during his natural lifetime in convenient installments at least as often as semi-annually upon spouse’s death the trustee of trust is to pay the net_income of trust to sister decedent’s sister for and during her natural lifetime in convenient installments at least as often as semi-annually upon sister’s death the remaining property in trust is to be allocated per stirpes among sister’s living descendants provided that any property so allocated to a descendant of sister shall instead be distributed to the trustee of the trust created by sister and known as trust to be added to the trust then held and named for that descendant on date decedent’s form_706 united_states estate and generation-skipping_transfer_tax return was timely filed on schedule m the executor elected to treat the assets of trust as qualified_terminable_interest_property qtip however the reverse_qtip_election was not made over trust it is represented that none of decedent’s dollar_figure exemption was allocated before decedent’s death it is further represented that decedent made transfers to skip persons in an amount totaling dollar_figurec thus dollar_figureb dollar_figure - dollar_figurec of decedent’s exemption was not allocated upon her death it is further represented that the value of trust on decedent’s death was dollar_figurea which is less than dollar_figureb spouse died on date you have requested the following rulings an extension of time under sec_301_9100-1 and sec_301_9100-3 for decedent’s estate to make a reverse_qtip_election under sec_2652 for trust the automatic allocation rules of sec_2632 will operate to cause the unused portion of decedent's gst_exemption to be allocated to trust law and analysis sec_2001 imposes a tax on the transfer of the taxable_estate of every decedent who is a citizen or resident_of_the_united_states sec_2056 provides that for purposes of the tax imposed by sec_2001 the value of the taxable_estate shall except as limited by sec_2056 be determined by deducting from the value of the gross_estate an amount equal to the value of any interest in property which passes or has passed_from_the_decedent to the surviving plr-121694-09 spouse but only to the extent that such interest is included in determining the value of the gross_estate sec_2056 disallows this deduction where on the lapse of time on the occurrence of an event or contingency or on the failure of an event or contingency to occur an interest passing to the surviving_spouse will terminate or fail sec_2056 provides that in the case of qualified_terminable_interest_property for purposes of sec_2056 such property shall be treated as passing to the surviving_spouse and for purposes of sec_2056 no part of such property shall be treated as passing to any person other than the surviving_spouse sec_2056 defines the term qualified_terminable_interest_property as property i which passes from the decedent ii in which the surviving_spouse has a qualifying_income_interest_for_life and iii to which an election under sec_2056 applies sec_2056 provides that the surviving_spouse has a qualifying_income_interest_for_life if i the surviving_spouse is entitled to all the income from the property payable annually or at more frequent intervals or has a usufruct interest for life in the property and ii no person has a power to appoint any part of the property to any person other than the surviving_spouse sec_2056 provides that an election under sec_2056 with respect to any property shall be made by the executor on the return of tax imposed by sec_2001 such an election once made shall be irrevocable sec_2601 imposes a tax on every generation-skipping_transfer sec_2611 provides that the term generation-skipping_transfer means a taxable_distribution a taxable_termination and a direct_skip sec_2602 provides that the amount of the gst tax is determined by multiplying the taxable_amount by the applicable_rate sec_2641 provides that the term applicable_rate means with respect to any gst transfer 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 generally defined as the excess of over the applicable_fraction the applicable_fraction as defined in sec_2642 is a fraction the numerator of which is the amount of gst_exemption under sec_2631 allocated to the trust or to property transferred in a direct_skip and the denominator is the value of the property transferred reduced by the sum of any federal estate_tax or state death_tax actually recovered from the trust attributable to such property and any charitable deduction allowable under sec_2055 or sec_2522 with respect to such property plr-121694-09 sec_2631 as in effect on decedent’s date of death provides that for purposes of determining the inclusion_ratio every individual shall be allowed a gst_exemption of dollar_figure that may be allocated by the individual or his executor to any property with respect to which the individual is the transferor sec_2631 provides that any allocation under sec_2631 once made shall be irrevocable sec_2632 provides that any allocation by an individual of his or her gst_exemption under sec_2631 may be made at any time on or before the date prescribed for filing the estate_tax_return for such individual's estate determined with regard to extensions regardless of whether such a return is required to be filed sec_2632 former sec_2632 at the time of decedent’s death provides that in general any portion of an individual's gst_exemption which has not been allocated within the time prescribed by sec_2632 shall be deemed to be allocated as follows a first to property which is the subject of a direct_skip occurring at such individual's death and b second to trusts with respect to which such individual is the transferor and from which a taxable_distribution or a taxable_termination might occur at or after such individual's death sec_26_2632-1 of the generation-skipping_transfer_tax regulations provides that a decedent's unused gst_exemption is automatically allocated on the due_date for filing the form_706 or form 706na to the extent not otherwise allocated by the decedent's executor on or before that date unused gst_exemption is allocated pro_rata subject_to the rules of sec_26_2642-2 on the basis of the value of the property as finally determined for purposes of chapter chapter value first to direct skips treated as occurring at the transferor's death the balance if any of unused gst_exemption is allocated pro_rata subject_to the rules of sec_26_2642-2 on the basis of the chapter value of the nonexempt_portion of the trust property to trusts with respect to which a taxable_termination may occur or from which a taxable_distribution may be made no automatic allocation of gst_exemption is made to a_trust that will have a new transferor with respect to the entire trust prior to the occurrence of any gst with respect to the trust the automatic allocation is irrevocable sec_2642 provides that generally the inclusion_ratio with respect to any property transferred in a gst is the excess of over the applicable_fraction with respect to a gst that is not a direct_skip sec_2642 provides that in general the applicable_fraction is a fraction the numerator of which is the amount of the gst_exemption under sec_2631 allocated to the trust and the denominator of which is the value of the property transferred to the trust sec_2652 provides that for purpose of chapter the term transferor means a in the case of any property subject_to the tax imposed by chapter the decedent and b in the case of any property subject_to the tax imposed by chapter plr-121694-09 the donor an individual shall be treated as transferring any property with respect to which such individual is the transferor sec_2652 provides in pertinent part that in the case of any trust with respect to which a deduction is allowed to the decedent under sec_2056 the estate of the decedent may elect to treat all of the property in such trust for gst tax purposes as if the election to be treated as qualified_terminable_interest_property had not been made reverse_qtip_election sec_26_2652-2 of the generation-skipping_transfer_tax regulations provides in part that a reverse_qtip_election is not effective unless it is made with respect to all of the property in the trust to which the qtip_election applies sec_26_2652-2 provides that an election under sec_2652 is made on the return on which the qtip_election is made sec_301_9100-1 provides that the commissioner has discretion to grant a reasonable extension of time under the rules set forth in sec_301_9100-2 and sec_301_9100-3 to make a regulatory election or a statutory election but no more than 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_9100-3 provides the standards used to determine whether to grant an extension of time to make an election whose due_date is prescribed by a regulation and not expressly provided by statute requests for relief under sec_301_9100-3 will be granted when the taxpayer provides the evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 provides that a taxpayer is deemed to have acted reasonably and in good_faith if the taxpayer 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 an extension of time of days from the date of this letter is granted to make a reverse_qtip_election with respect to trust as a result of the reverse_qtip_election with respect to trust decedent’s remaining gst_exemption after taking into account the amount automatically allocated to children’s trust and the direct skips will be allocated to trust under sec_2632 plr-121694-09 the reverse_qtip_election should be made on a supplemental form_706 filed with the internal_revenue_service center cincinnati ohio a copy of this letter should be attached to the form a copy is enclosed for this purpose in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representatives 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 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 this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent sincerely curt g wilson associate chief_counsel passthroughs special industries enclosures copy for sec_6110 purposes copy of this letter cc


internal_revenue_service number release date index numbers ------------------ ------------------------------------------------- --------------------------------------------- ---------------------------------------- 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-140073-12 date february legend x ----------------------------------------------------- ------------------ d country ----------------- ----------------------------- dear ------------- this is in response 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 an election under sec_301_7701-3 to be treated as a partnership for federal tax purposes facts according to the information submitted x was formed on d under the laws of country x intended to be treated as a partnership for federal tax purposes effective d however x inadvertently failed to timely file form_8832 entity classification election to be treated as a partnership for federal tax purposes law and analysis sec_301_7701-3 provides that a business_entity that is not classified as a corporation under sec_301_7701-2 or an eligible_entity can elect its classification for federal tax purposes an eligible_entity with at least two members can elect to be classified as either an association or a partnership plr-140073-12 sec_301_7701-3 provides guidance on the classification of a foreign eligible_entity for federal tax purposes generally a foreign eligible_entity is treated as an association if all members have limited_liability unless the entity makes an election to be treated otherwise a foreign eligible_entity with two or more members having limited_liability may elect to be treated as a partnership pursuant to the rules of sec_301 c sec_301_7701-3 provides that an entity classification election must be filed on form_8832 and can be effective up to days prior to the date the form is filed or up to months after the date the form 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 except subtitles e g h and i sec_301_9100-1 defines the term regulatory election as including an election whose due_date is prescribed by a regulation published in the federal_register sec_301_9100-1 through provide the standards that 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 automatic extensions of time for making certain elections sec_301_9100-3 provides rules for requesting extensions of time for regulatory 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 conclusion based solely on the facts 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 make an election to be treated as a partnership for federal tax purposes effective d x should make the election by filing a properly executed form_8832 with the appropriate service_center a copy of this letter should be attached to the form 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 plr-140073-12 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 sent to your authorized representatives sincerely curt g wilson associate chief_counsel passthroughs special industries by david r haglund david r haglund branch chief branch office of the associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes cc


internal_revenue_service appeals_office - kkkek kkkk release number release date date date kkkek kkkk kkekk certified mail dear department of the treasury taxpayer_identification_number kkkkkk person to contact thee tel fax tax period s ended kk uil this is a final adverse determination regarding your exempt status under sec_501 of the internal_revenue_code the code it is determined that you do not qualify as exempt from federal_income_tax under sec_501 of the code effective january 20xx the revocation of your exempt status was made for the following reason s you have failed to provide documentation as required by sec_6033 of the internal_revenue_code as well as sec_1_6033-2 of the income_tax regulations which provides that whether or not an exempt_organization is required to file an annual information_return it shall submit such additional information as may be required by the internal_revenue_service for the purpose of inquiring into its exempt status in addition since you carry on no charitable activities you fail the operational_test under sec_1_501_c_3_-1 of the income_tax regulations contributions to your organization are not deductible under sec_170 of the code you are required to file federal_income_tax returns on forms for the tax periods stated in the heading of this letter and for all tax years thereafter file your return with the appropriate internal_revenue_service center per the instructions of the return for further instructions forms and information please visit www irs gov if you were a private_foundation as of the effective date of revocation you are considered to be taxable private_foundation until you terminate your private_foundation_status under sec_507 of the code in addition to your income_tax return you must also continue to file form_990-pf by the 15th day of the fifth month after the end of your annual_accounting_period processing of income_tax returns and assessments of any taxes due will not be delayed should a petition for declaratory_judgment be filed under sec_7428 of the code if you decide to contest this determination you may file an action for declaratory_judgment under the provisions of sec_7428 of the code in one of the following three venues united_states tax_court the united_states court of federal claims or the united_states district_court for the district of columbia a petition or complaint in one of these three courts must be filed within days from the date this determination_letter was mailed to you please contact the clerk of the appropriate court for rules for filing petitions for declaratory_judgment to secure a petition form from the united_states tax_court write to the united_states tax_court second street n w washington d c see also publication you also have the right to contact the office_of_the_taxpayer_advocate taxpayer_advocate assistance is not a substitute for established irs procedures such as the formal appeals process the taxpayer_advocate cannot reverse a legally correct_tax determination or extend the time fixed by law that you have to file a petition in a united_states court the taxpayer_advocate can however see that a tax matters that may not have been resolved through normal channels get prompt and proper handling if you want taxpayer_advocate assistance please contact the taxpayer_advocate for the irs office that issued this letter you may call toll-free for the taxpayer_advocate or visit www irs gov advocate for more information if you have any questions please contact the person whose name and telephone number are shown in the heading of this letter sincerely yours acting appeals team manager enclosure publication internal_revenue_service department of the treasury te_ge division golden gate avenue ms sf san francisco califomia date date taxpayer_identification_number form tax_year s ended person to contact id number contact numbers telephone fax certified mail - return receipt requested dear we have enclosed a copy of our report of examination explaining why we believe revocation of your organization's exempt status is necessary if you do not agree with our position you may appeal your case the enclosed publication the examination process explains how to appeal an internal_revenue_service irs decision publication also includes information on your rights as a taxpayer and the irs collection process if you request a conference we will forward your written_statement of protest to the appeals_office and they will contact you for your convenience an envelope is enclosed if you and appeals do not agree on some or all of the issues after your appeals_conference or if you do not request an appeals_conference you may file suit in united_states tax_court the united_states court of federal claims or united_states district_court after satisfying procedural and jurisdictional requirements as described in publication you may also request that we refer this matter for technical_advice as explained in publication exempt_organization appeal procedures for unagreed issues f a determination_letter is issued to you based on technical_advice no further administrative appeal is available to you within the irs on the issue that was the subject of the technical_advice if you accept our findings please sign and return the enclosed form_6018 consent to proposed adverse action we will then send you a final letter revoking your exempt status we do not hear from you within days from the date of this letter we will process your case on the basis of the recommendations shown in the report of examination and this letter will become final shown above file these returns with the ogden service_center within days from the date of this letter unless a request for an extension of time is granted file returns for later tax years with the appropriate service_center indicated in the instructions for those returns in that event you will be required to file federal_income_tax returns for the tax period s if letter rev catalog number 34801v you have the right to contact the office_of_the_taxpayer_advocate taxpayer_advocate assistance is not a substitute for established irs procedures such as the formal appeals process the taxpayer_advocate cannot reverse a legally correct_tax determination or extend the time fixed by law that you have to file a petition in a united_states court the taxpayer_advocate can however see that a tax matter that may not have been resolved through normal channels gets prompt and proper handling you may call toll-free and ask for taxpayer_advocate assistance if you prefer you may contact your local taxpayer_advocate at oakland area office clay street suite 1030n oakland ca if you have any questions please call the contact person at the telephone number shown in the if you write please provide a telephone number and the most convenient heading of this letter time to call if we need to contact you thank you for your cooperation sincerely nanette m downing director eo examinations enclosures publication publication report of examination letter rev catalog number 34801v fe a department of the treasury - internal_revenue_service explanation of items name of taxpayer org tax identification_number ein schedule no or exhibit _ year period ended dec 20xx legend org - organization name issue xx - date ein - ein president - president is org exempt from tax under internal_revenue_code sec_5011 facts internal_revenue_service records show that org was recognized as exempt under sec_501 of the internal_revenue_code in august 20xx the internal_revenue_service received form_990 for the year ending december 20xx from org on december 20xx the internal_revenue_service has no record of receiving any forms for any years since 20xx on march 20xx the internal_revenue_service sent letter publication one and form_4564 information_document_request to org the letter set an examination appointment for march 20xx president president of org met with the internal_revenue_service on june 20xx he was interviewed but did not have any of the documents requested on march 20xx on june 20xx the internal_revenue_service sent another form_4564 information_document_request to org the form asked org to have the requested documents available at the next appointment set for july 20xx president president of org met with the internal_revenue_service on july 20xx he did not have any of the documents requested on june 20xx on july 20xx the internal_revenue_service sent another form_4564 information_document_request to org the form asked org to mail the requested documents by august 20xx on august 20xx the internal_revenue_service received some of the documents requested bank statements and cancelled checks for 20xx a copy of a loan note made to president and records of some of his payments on the note on september 20xx the internal_revenue_service sent another form_4564 information_document_request to org the documents requested were for brokerage accounts payments to a credit card and records of any additional payments made on the loan to president the form asked org to mail the requested documents by october 20xx on november 20xx the internal_revenue_service sent another copy of the september document request with the notation stating second copy of this request please respond form 886-acrev department of the treasury - intemal revenue service page -1- form 886a name of taxpayer org tax identification_number year period ended dec 20xx explanation of items department of the treasury - internal_revenue_service schedule no or exhibit ein on november 20xx the internal_revenue_service sent a letter by certified mail to org noting that it had no record that the organization had filed forms for the years 20xx and 20xx and that the returns were past due the letter asked that the organization file the returns with the examining agent within days or explain why they were not due on january 20xx the internal_revenue_service sent letter by certified mail to org with copies of the last document request letter gives the organization days to respond and noted that failure to respond would result in revocation the internal_revenue_service has no record of receiving the past due returns or the documents requested by the last form_4564 information_document_request law internal_revenue_code sec_501 provides for exemption from tax for corporations and any community chest fund or foundation organized and operated exclusively for religious charitable scientific testing for public safety literary or educational_purposes or to foster national or international amateur sports competition but only if no part of its activities involve the provision of athletic_facilities or equipment or for the prevention of cruelty to children or animals no part of the net_earnings of which inures to the benefit of any private_shareholder_or_individual no substantial part of the activities of which is carrying on propaganda or otherwise attempting to influence legislation except as otherwise provided in subsection h and which does not participate in or intervene in including the publishing or distributing of statements any political campaign on behalf of or in opposition to any candidate for public_office internal_revenue_code sec_6033 provides that' every organization_exempt_from_taxation under sec_501 shall tile an annual retum stating specifically the items of gross_income receipts and disbursements and such other information for the purpose of carrying out the internal revenue laws as the secretary may by forms or regulations prescribe and shall keep such records render under oath such statements make such other returns and comply with such rules and regulations as the secretary may from time to time prescribe sec_1_6033-2 of the income_tax regulations provides that every organization which is exempt from tax whether or not it is required to tile an annual information retum shall submit such additional information as may be required by the internal_revenue_service for the purpose of inquiring into its exempt status and administering the provisions of subchapter_f sec_501 and following chapter i of subtitle a of the code sec_6033 and chapter of subtitle d of the code revrul_59_95 1959_1_cb_627 held that failure or inability to tile the required information_return or otherwise to comply with the provision of sec_6033 of the code and the regulations which implement it may result in the termination of the exempt status of an form acrev department of the treasury - internal_revenue_service page -2- department of the treasury- intemal revenue service a name of taxpayer in nde dec 20xx ification number year pen explanation of items tax identificatio i schedule no or exhibit___ organization previously held exempt on the grounds that the organization has not established that it is observing the conditions required for the continuation of an exempt status govrnment's position despite repeated requests org has not responded to requests for information has not tiled past due returns nor has it explained why returns for 20xx or 20xx might not be due because of its failure to observe the conditions for the continuation of an exempt status its exempt status should be revoked as of january 20kx taxpayer's position org has not submitted its position conclusion exemption under sec_501 of the internal_revenue_code is revoked effective january 20xx the organization is required to file forms us corporation income_tax returns for 20xx and all subsequent years department of the treasury - intemal revenue service form 886-avrev page -3-


internal_revenue_service number info release date uil date cor-115109-00 dear commissioner charles o rossotti asked me to respond to your letter of date you requested the internal_revenue_service to raise the business standard mileage rate to reflect the recent increase in gasoline prices gasoline prices we realize increased gasoline prices are an economic burden however the cost of gasoline is only one part of the business standard mileage rate which includes fixed and operating automobile costs these costs include depreciation or lease payments maintenance and repairs insurance and license and registration fees in addition to gasoline and oil less than one-third of the cents per mile rate comes from the cost of gasoline and oil thus an immediate adjustment in the rate taking into account the recent increase in gasoline prices might not be significant setting the business standard mileage rate the rate is a national average amount determined by an annual study performed by an independent_contractor who is an expert in the cost analysis of business use of automobiles the contractor uses recent data from each state on the component costs of operating the most popular automobiles the contractor then combines this data to achieve a national composite cents-per-mile rate advantages of using the business standard mileage rate reducing a taxpayer’s record-keeping burden is the principal advantage of using the rate gasoline prices rise and fall during the year but taxpayers may continue to use the same rate without having to keep records of actual expenses although rising gasoline prices can be a disadvantage for taxpayers who use the rate falling prices can work to their advantage for example although gasoline prices fell in for all of and through date taxpayers were able to use the rate that reflected the earlier higher prices taxpayer’s options to deduct the ordinary and necessary expenses of using an automobile for business purposes a taxpayer must substantiate the cost date place and business_purpose of each use of the automobile by adequate_records for the cost the taxpayer has two options cid substantiate actual cost by keeping records or by other_sufficient_evidence cid use the business standard mileage rate using the rate gives approximate not actual costs taxpayers can deduct the actual business_expenses of using a personally-owned automobile and this may be advantageous when automobile costs are rising publication travel entertainment gift and car expenses contains further information on how taxpayers should substantiate expenses i have enclosed the relevant pages from that publication i hope this information is helpful please call john t sapienza jr at if you have any questions sincerely associate chief_counsel income_tax accounting by robert a berkovsky chief branch enclosure


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 b03 plr-120650-04 date date legend x ------------------------ ----------------------- ------------------------ ------------------------ - ---------------------- a d1 state --------------- dear--------------- this letter responds to your letter dated date and subsequent correspondence written on behalf of x by x’s authorized representative requesting a ruling under ' b of the internal_revenue_code according to the information submitted x was incorporated under state law on facts d1 x’s sole shareholder a intended for x to be an s_corporation beginning d1 however x’s form_2553 election by a small_business_corporation was not filed timely law and analysis s_corporation sec_1362 provides that a small_business_corporation may elect to be an sec_1362 provides that if an election under sec_1362 is made for any plr-120650-04 sec_1362 provides 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 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 taxable_year after the date prescribed by sec_1362 for making the election for the taxable_year or 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 the election the secretary may treat the election as timely made for the taxable_year and sec_1362 shall not apply conclusion based on the facts submitted and representations made we conclude that x has established reasonable_cause for its failing to make a timely s_corporation_election and that x is eligible for relief under sec_1362 accordingly if x makes an election to be an s_corporation by filing with the appropriate service_center a completed form_2553 effective d1 within days following the date of this letter the election will be treated as timely made a copy of this letter should be attached to the form_2553 filed with the service_center the federal tax consequences of any aspect of any transaction or item discussed or referenced in this letter specifically we express or imply no opinion concerning whether x is otherwise eligible to be an s_corporation for federal tax purposes being sent to x except as expressly provided herein we express or imply no opinion concerning pursuant to a power_of_attorney on file with this office a copy of this letter is this ruling is directed only to the taxpayer who requested it sec_6110 jeanne sullivan senior technician reviewer branch office of the associate chief_counsel passthroughs and special industries sincerely yours plr-120650-04 provides that it may not be used or cited as precedent enclosures copy of this letter copy for sec_6110 purposes cc ------------------------- s -------------------------------- --------------------------------- ---------------------------------- ------------------------------ ------------------- ------------- ------------------------- ------------------------------------------------------------- ----------------------------------------------- ---------------------------


internal_revenue_service number release date index number in re department of the treasury washington dc person to contact telephone number refer reply to cc ita - plr-104400-03 date this letter is in reference to a form_1128 application to adopt change or the taxpayer’s form_1128 requesting to adopt an accounting_period to a tax_year ein dear retain a tax_year submitted on behalf of the above-named taxpayer for permission to adopt an accounting_period for federal_income_tax purposes ending march effective date the taxpayer has requested that the form_1128 be considered timely filed under the authority contained in sec_301_9100-3 of the procedure and administration regulations ending date was due on or before date but was not timely filed however the form was filed shortly thereafter the information furnished indicates that the late filing was due to an error or misunderstanding secure the commissioner's consent to adopt an accounting_period the taxpayer must file an application on form_1128 with the commissioner on or before a the 15th day of the second calendar month following the close of the short_period or b if revproc_2002_39 i r b is applicable no later than the due_date not including extensions for filing the return for the short_period required to effect such change elections that do not meet the requirements of sec_301_9100-2 automatic extensions such as the instant case must be made under the rules of sec_301_9100-3 requests for relief subject_to 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 the granting of relief will not prejudice the interests of the government sec_301_9100-3 provides that requests for extensions of time for regulatory sec_1_442-1 of the income_tax regulations provides that in order to based on the facts and information submitted and the representations made it is plr-104400-03 held that the taxpayer has acted reasonably and in good_faith and that the granting of relief will not prejudice the interests of the government accordingly the requirements of the regulations for the granting of relief have been satisfied in this case and the taxpayer’s late-filed form_1128 requesting permission to adopt a tax_year ending march effective date is considered timely filed pursuant to appendix a of revproc_2002_1 2002_1_irb_1 an additional user_fee is required in order to process the form_1128 the user_fee will be requested in a separate correspondence we will begin processing the taxpayer's application after the user_fee is received the ruling contained in this letter is based upon facts 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 a ruling verification of the factual information representations and other data may be required as part of an examination process this ruling addresses the granting of sec_301_9100-3 relief only no opinion is expressed regarding the tax treatment of the instant transaction under the provisions of any other sections of the code or regulations that may be applicable thereto or regarding the tax treatment of any conditions existing at the time of or effects resulting from the instant transaction specifically no opinion is expressed as to whether the taxpayers are permitted under the code and applicable regulations to adopt the tax_year requested in the subject form_1128 in accordance with the provisions of a power_of_attorney currently on file with this office the original of this letter_ruling is being sent to the taxpayer's authorized representative and a copy is being sent to the taxpayer in accordance with the provisions of a power_of_attorney currently on file with this office the original of this letter_ruling is being sent to the taxpayer's authorized representative and a copy is being sent to the taxpayer plr-104400-03 this ruling is directed only to the taxpayer that requested it sec_6110 of the internal_revenue_code provides that it may not be used or cited as precedent sincerely william a jackson chief branch office of associate chief_counsel income_tax accounting enclosures copy of this letter copy for sec_6110 purposes


t vick nmac fevevue serice uniform issue list nov legend taxpayer a amount b ira c bank d ira e dear this is in response to your request of date through your authorized representative for a waiver of the 60-day rollover requirement contained in sec_408 of the internal_revenue_code the code the following facts and representations have been submitted under penalty of perjury in support of the ruling requested taxpayer a is a year old widow with no financial knowledge or experience during taxpayer a had some maturing investments that she made with the assistance of bank d' staffers taxpayer a went to bank d where ira c had been established and withdrew amount b taxpayer a intended to deposit the entire amount b into an jra page while taxpayer a was at bank d to rollover ira c she was advised by a bank d employee that because the interest rates were so low it was better for her to deposit amount b into a regular account following the investment advice of the bank d employee amount b was not deposited into an ira as taxpayer a had intended to do within the day period allowed by the internal_revenue_code the code instead amount b was deposited into a non-ira regular account it was not until taxpayer a was preparing her income_tax return when she learned that bank d’s employee had given her erroneous investment advice which caused the distribution of amount b to become taxable taxpayer a proposes to deposit amount b into ira e taxpayer a represents that no other amount was distributed from ira c within the one year period since the original distribution based on the above facts and representations taxpayer a requests that the service waive the 60-day rollover requirement with respect to the distribution of amount b because the failure to waive such requirement would be against equity or good conscience sec_408 of the code provides that except as otherwise provided in sec_408 any amount_paid or distributed out of an ira shall be included in gross_income by the payee or distributee as the case may be in the manner provided under sec_72 of the code sec_408 of the code defines and provides the rules applicable to ira_rollovers sec_408 of the code provides that sec_408 of the code does not apply to any amount_paid or distributed out of an ira to the individual for whose benefit the ira is maintained if- i ii the entire amount received including money and any other_property is paid into an ira for the benefit of such individual not later than the day after the day on which the individual receives the payment or distribution or the entire amount received including money and any other_property is paid into an eligible_retirement_plan other than an ira for the benefit of such individual not later than the day after the date on which the payment or distribution is received except that the maximum amount which may be paid into such plan may not exceed the portion of the amount received which is includible in gross_income determined without regard to sec_408 page sec_408 of the code provides that sec_408 does not apply to any amount described in sec_408 received by an individual from an ira if at any time during the 1-year period ending on the day of such receipt such individual received any other amount described in sec_408 from an ira which was not includible in gross_income because of the application of sec_408 sec_408 of the code provides a similar 60-day rollover period for partial rollovers sec_408 of the code provides that the secretary may waive the 60-day requirement under sec_408 and sec_408 of the code where the failure to waive such requirement would be against equity or good conscience including casualty disaster or other events beyond the reasonable control of the individual subject_to such requirement only distributions that occurred after date are eligible for the waiver under sec_408 of the code revproc_2003_16 r b provides that in determining whether to grant a waiver of the 60-day rollover requirement pursuant to sec_408 the service will consider all relevant facts and circumstances including errors committed bya financial_institution inability to complete a rollover due to death disability hospitalization incarceration restrictions imposed by a foreign_country or postal error the use of the amount distributed for example in the case of payment by check whether the check was cashed and the time elapsed since the distribution occurred the information presented by taxpayer a demonstrates that her inexperience in this type of financial transaction and her trust in the investment advice of a bank d employee prevented taxpayer a from depositing amount b since the distribution the failure to deposit amount b into an ira within the 60-day period was solely because of the bad investment advice of bank d and the failure to waive the 60-day requirement would be against equity or good conscience into an ira within days therefore pursuant to sec_408 of the code the service hereby waives the 60-day rollover requirement with respect to the distribution of amount b taxpayer a is granted a period of days from the issuance of this ruling letter to contribute amount b into ira e provided all other requirements of sec_408 of the code except the 60-day requirement are met with respect to such contributions these amounts will be considered rollover_contributions within the meaning of sec_408 of the code page no opinion is expressed as to the tax treatment of the transaction described herein under the provisions of any other section of either the code or regulations which may be applicable thereto this letter is directed only to the taxpayer who requested it sec_61 k of the code provides that it may not be used or cited as precedent a copy of this letter has been sent to your authorized representative in accordance with a power_of_attorney on file in this office if you wish to inquire about this ruling please contact 1d at please address all correspondence to sincerely yours ie alan c pipkin manager employee_plans technical group enclosures deleted copy of ruling letter notice of intention to disclose ce


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 intl b03 - plr-139060-03 date date tys -------------- tys -------------- legend corp x ------------------------------------------------------ corp y ----------------------------------------------------------------- corp z ----------------------------------------------------------- drc a ------------------------------------------- drc b --------------------------------------- drc c --------------------------------------------- drc d ---------------------------------------- drc e -------------------------------------------- drc f -------------------------------------- drc g ------------------------ drc h ------------------------- drc i -------------------------- drc j ------------------------------ drc k ------------------------ plr-139060-03 drc l ---------------------------- drc m ------------------------------ drc n ------------------------------- period o ----------------------------------------------------------- date p ------------------------ date q --------------------- individual r ------------------------------ individual s ----------------------- tax_year a ----------------------------------- tax_year b ----------------------------------- tax_year c ----------------------------------- tax_year d ----------------------------------- tax_year e ------------------------------- tax_year f ----------------------------------- tax_year g ----------------------------------- tax_year h ------------------------------------ tax_year i ----------------------------------- dear ------------------ this is in response to a letter dated date in which corp x requests an extension of time pursuant to sec_301_9100-1 to file the elective agreements required under sec_1_1503-2 in accordance with exhibit a which is attached to and made part of this ruling letter the annual certification statements required by sec_1_1503-2 in accordance with exhibit b which is attached to and made part of this ruling letter and the agreements described in sec_1_1503-2 for the tax years that included date p and date q the information submitted for consideration is substantially as set forth below plr-139060-03 the ruling contained in this letter is based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for a ruling it is subject_to verification on examination on date p corp z merged with and into corp y with corp y surviving on date q corp y merged with and into corp x with corp x surviving during period o corp x corp y or corp z in whole or in part owned interests in certain entities that were dual resident corporations as defined in sec_1_1503-2 including some entities that were hybrid_entity separate units as defined in sec_1_1503-2 that had incurred dual consolidated losses dcls as defined in sec_1_1503-2 c individual r was in charge of the tax preparation of the corp z corp y and corp x income_tax returns during period o individual s worked with and for individual r in preparing the corp z corp y and corp x income_tax returns during period o in an affidavit individual s stated that due to an incorrect interpretation of the dcl rules individual s did not inform individual r that the elections and certifications required by sec_1_1503-2 to validly claim the losses with respect to the corp z corp y and corp x consolidated_returns for tax_year a through tax_year h were necessary and therefore the required documents were not filed in a timely manner in addition the agreements specified in sec_1_1503-2 that should have been filed as a result of the date p and date q transactions were not filed once individual r and individual s realized their error this request for relief for an extension of time under sec_301_9100-3 to file elections and agreements in accordance with exhibit a the annual certifications in accordance with exhibit b as well as the election and agreement described in sec_1_1503-2 with respect to the transactions that took place on date p and date q was initiated sec_301_9100-1 provides that an election includes an application_for relief in respect of tax and 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_9100-1 provides that the commissioner has discretion to grant a taxpayer a reasonable extension of time under the rules set forth in sec_301_9100-3 to make a regulatory election under all subtitles in the internal_revenue_code except subtitles e g h and i 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 plr-139060-03 in the present situation the election statement described in sec_1 g i the annual certification statement described in sec_1 g vi b and the election and agreement described in sec_1 g iv b iii are regulatory elections as defined in sec_301_9100-1 therefore the commissioner has the discretionary authority under sec_301_9100-1 to grant an extension of time provided that the taxpayer satisfies the rules set forth in sec_301_9100-3 based upon the facts and circumstances submitted we conclude that corp x satisfies sec_301_9100-3 accordingly corp x is granted an extension of time of days from the date of this ruling letter to file the elections and agreements in accordance with exhibit a the annual certifications in accordance with exhibit b and the election and agreement described in sec_1_1503-2 that should have been included in the appropriate federal_income_tax returns for the tax years that included date p and date q the granting of an extension of time is not a determination that corp x is otherwise eligible to file the elections and agreements and annual certifications see sec_301_9100-1 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_attorney on file with this office a copy of this letter is being sent to your authorized representative a copy of this letter must be attached to any income_tax return to which the letter is relevant sincerely allen goldstein reviewer office of office of the associate chief_counsel international plr-139060-03 exhibit a extension of time to file the election and agreement described in sec_1_1503-2 has been requested as indicated name of entity drc a drc b drc c drc d drc e drc f drc g drc h drc i drc j drc k drc l drc m drc n tax_year for which an election and agreement is requested ty a x x x ty b x ty c x x x x x ty d x x x x x x ty e x x x x x x x ty f x x x x x x x x x ty g ty h x x x x x x x x x x x x x x x x x x x x exhibit b extension of time to file the annual certification described in sec_1_1503-2 has been requested as indicated name of entity drc g drc h drc i drc j drc k tax years for which an annual certification is requested ty d ty e ty f ty g ty h ty i x x x x x x x x x x x x plr-139060-03 drc l drc m drc n x x x x x x x x x x x x x


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 b03 plr-126524-06 date date ------------------------------------------------ -------- x --------------------------------------------------- p member --------------------------------------------------- u s parent --------------------------------------------------- country d1 dear ------------------- ------------------ ------------ --------------------------------------- -------------------------------- this letter responds to a letter dated date and subsequent correspondence submitted on behalf of x by its authorized representative requesting a ruling under sec_301_9100-1 and sec_301_9100-3 of the procedure and administration regulations that x be granted an extension of time to file an election to be classified as a disregarded_entity under sec_301_7701-3 effective d1 facts the information submitted states that x was formed on d1 as a p under the laws of country under the laws of country the owners of a p have limited_liability x was formed and wholly owned by member which was a wholly-owned disregarded_entity of u s parent u s parent intended that x be treated as a disregarded_entity for federal plr-126524-06 tax purposes effective d1 however due to inadvertence x failed to file a timely form_8832 entity classification election law and analysis sec_301_7701-3 provides that a business_entity that is not classified as a corporation under sec_301_7701-2 or an eligible_entity can elect its classification for federal tax purposes as provided in sec_301_7701-3 sec_301_7701-3 provides that unless it elects otherwise a foreign eligible_entity is a a partnership if it has two or more members and at least one member does not have limited_liability b an association if all members have limited_liability or c disregarded as an entity separate from its owner if it has a single owner that does not have limited_liability sec_301_7701-3 provides that an eligible_entity may elect to be classified other than as provided in sec_301_7701-3 or to change its classification by filing form_8832 with the service_center designated on form_8832 sec_301_7701-3 provides that an election made under sec_301 c i will be effective on the date specified by the entity on form_8832 or on the date filed if no date is specified on the election form the effective date specified on form_8832 cannot be more than days prior to the date on which the election is filed and cannot be more than months after the date on which the election is filed sec_301_9100-1 provides that the commissioner has discretion to grant a reasonable extension of time under the rules set forth in sec_301_9100-2 and sec_301_9100-3 to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the code except subtitles e g h and i sec_301_9100-1 defines a regulatory election to include an election whose due_date is prescribed by a regulation published in the federal_register sec_301_9100-2 provides the rules governing automatic extensions of time for making certain elections sec_301_9100-3 sets forth the standards the commissioner will use to determine whether to grant an extension of time for regulatory elections that do not meet the requirements of sec_301_9100-2 sec_301_9100-3 provides that requests for relief subject_to sec_301_9100-3 will be granted when the taxpayer provides evidence including affidavits described in sec_301_9100-3 to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and granting relief will not prejudice the interests of the government plr-126524-06 conclusion based on the facts submitted and the representations made we conclude that the requirements of sec_301_9100-1 and sec_301_9100-3 have been satisfied as a result x is granted an extension of time of days from the date of this letter to file form_8832 with the appropriate service_center and to elect to be classified as a disregarded_entity for federal tax purposes effective d1 a copy of this letter should be attached to the form_8832 a copy is enclosed for that purpose except as expressly set forth above no opinion is expressed or implied concerning the federal tax consequences of the facts discussed above under any other provision of the code this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent in accordance with a power_of_attorney on file with this office we are sending a copy of this letter to x’s authorized representative sincerely william p o'shea associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes


t c memo united_states tax_court susan e shores petitioner v commissioner of internal revenue respondent docket no filed date audrey j orlando for petitioner g michelle ferreira for respondent memorandum opinion panuthos chief special_trial_judge this case was heard pursuant to the provisions of sec_7443a and rule sec_180 sec_181 and sec_182 respondent determined a deficiency in petitioner's federal_income_tax in the amount of dollar_figure all section references are to the internal_revenue_code in effect for the year in issue unless otherwise indicated all rule references are to the tax_court rules_of_practice and procedure the only issue for decision is whether petitioner is entitled to deduct certain business_expenses which she claimed on schedule c of her return in excess of the amounts allowed by respondent background some of the facts have been stipulated and they are so found the stipulation of facts and the attached exhibits are incorporated herein by this reference at the time of filing the petition petitioner resided at palo alto california for clarity and convenience we have combined the findings_of_fact and discussion of pertinent legal issues in date petitioner entered into an agreement with a company named au pair in america hereinafter apia the agreement was titled community counselor letter of agreement and provided in part that the community counselor interviews potential host families to evaluate their appropriateness for the apia program matches host families with au pairs has responsibility for a cluster of area au pairs throughout the year's exchange and generally facilitates the host family au pair relationship respondent's notice_of_deficiency also reduced petitioner's total itemized_deductions from dollar_figure to dollar_figure and increased petitioner's self-employment_tax from dollar_figure to dollar_figure the parties appear to agree that these adjustments are dependent upon the other adjustments and therefore we do not separately address them to the extent that petitioner seeks an abatement of interest or review thereof she must make such a request to the commissioner and await a final_determination not to abate interest sec_6404 see 110_tc_20 petitioner described the apia program as a cultural educational exchange program apia hired individuals such as petitioner to recruit families for the program apia assigned each community counselor a geographic area for recruitment of families and performance of their responsibilities petitioner was assigned the south bay area of san francisco petitioner recruited families for apia through marketing the program at job fairs well baby classes art festivals and advertising materials that she created petitioner provided applications to the apia program counseled families on the interview process interviewed families that applied and communicated with the headquarters of apia regarding the matching of au pairs with families petitioner arranged the travel plans for au pairs to meet families and provided an orientation in a family's home before an au pair's arrival petitioner met an au pair within hours of arrival at a family's home and maintained a close relationship with au pairs that were matched with families she recruited during petitioner continued her activity with apia and also worked full time as a kindergarten teacher for ravenswood city school district she taught at a school located in menlo park which was less than half a mile from her home petitioner devoted to hours per week to her activity with apia and she used a room in her home exclusively as an office for this purpose petitioner's schedule c reflects consultant as her principal business activity and au pair in america as the business name shirley gaman prepared petitioner's income_tax return petitioner gave ms gaman her checks and credit card things and receipts and paid ms gaman dollar_figure for her services ms gaman did not execute the return as preparer ms gaman died at some point after preparation of the return petitioner reported income and claimed expenses relating to her consultant business during the year in issue as follows income gross_receipts dollar_figure dollar_figure dollar_figure dollar_figure expenses advertising car and truck expenses legal and professional services rent or lease vehicles dollar_figure other business property dollar_figure dollar_figure repairs and maintenance supplies dollar_figure travel meals and entertainment travel meals and entertainment utilities total expenses dollar_figure dollar_figure dollar_figure dollar_figure net profit dollar_figure petitioner also reported wages from employment unrelated to the schedule c activity in the amount of dollar_figure respondent does not dispute that petitioner was self- employed as a consultant for au pair in america petitioner stored her business and tax records in a shed behind the carport at her home in the fall of a combination of excessive rain and a leak in the carport caused the destruction of petitioner's tax records and other personal items in the shed after the incident petitioner notified her insurance representative and her landlord about the damage in date after the issuance of the notice_of_deficiency petitioner began reconstructing her tax records respondent determined that petitioner was not entitled to deduct any of the claimed schedule c expenses respondent does not dispute that petitioner's records were destroyed because of a casualty beyond petitioner's control further respondent does not appear to dispute that petitioner reasonably reconstructed her records for rather respondent contends that petitioner's expenses were not ordinary and necessary business_expenses discussion general sec_162 provides that there shall be allowed as a deduction all the ordinary and necessary expenses paid_or_incurred during the taxable_year in carrying on any trade_or_business necessary has been interpreted to mean that the expense must be appropriate or helpful to the taxpayer's trade_or_business 383_us_687 joseph v commissioner tcmemo_1997_447 citing 290_us_111 to be an ordinary_expense the transaction which gives rise to it must be of common or frequent occurrence in the type of business involved 308_us_488 citing welch v helvering supra pincite whether an expense is ordinary and necessary is generally a question of fact 320_us_467 72_tc_433 sec_6001 requires that a taxpayer liable for any_tax shall maintain such records render such statements make such returns and comply with such regulations as the secretary may from time to time prescribe to be entitled to a deduction under sec_162 therefore a taxpayer is required to substantiate the deduction through the maintenance of books_and_records in the event that a taxpayer establishes that he or she has incurred a deductible expense but is unable to substantiate the precise amount we may estimate the amount of the deductible expense 39_f2d_540 2d cir we cannot estimate deductible expenses however unless the taxpayer presents evidence sufficient to provide some rational basis upon which estimates may be made 85_tc_731 if an expense item comes within the parameters of sec_274 we cannot rely on cohan v commissioner supra to estimate the taxpayer's expenses with respect to that item 50_tc_823 affd per curiam 412_f2d_201 2d cir sec_274 imposes stringent substantiation requirements for certain deductions including travel entertainment_and_meal_expenses jeffers v commissioner tcmemo_1986_285 sec_1_274-5t temporary income_tax regs fed reg date thus sec_274 specifically proscribes deductions for travel or entertainment_expenses in the absence of adequate_records or of sufficient evidence corroborating the taxpayer's own statement see joseph v commissioner supra sec_274 also applies to business use of certain property such as passenger automobiles sec_274 sec_280f in general when a taxpayer's records have been lost or destroyed through circumstances beyond his control he is entitled to substantiate the deductions by reconstructing his expenditures through other credible_evidence at trial respondent conceded the record has shown today that the records--the receipts and invoices that have been presented to the government have been reconstructed in such a way that they are essentially the same as they would have been had they not been destroyed advertising petitioner claimed a deduction for advertising expenses in the amount of dollar_figure to obtain clients petitioner was required to advertise her services petitioner created materials including brochures petitioner also testified with respect to additional advertising expenses we found petitioner's testimony credible therefore we conclude that petitioner is entitled to deduct dollar_figure in advertising expenses cohan v commissioner supra car and truck petitioner claimed automobile expenses in the amount of dollar_figure petitioner estimated the business use of her automobile to be approximately percent of the total use we accept petitioner's credible testimony in this regard petitioner calculated the amount of dollar_figure on the basis of her actual expenses rather than mileage expenses in a taxpayer must establish his out-of-pocket expenses attributable to the business use of his automobile such as gasoline oil and repairs sec_1_162-1 income_tax regs automobile expenses are deductible if the automobile is used in connection with a trade_or_business sec_1_162-1 income_tax regs petitioner testified that her activities with apia required much local travel and she explained the nature of such activities a large portion of the gasoline expenditures was in cash petitioner also produced some credit card statements in support of her testimony to the extent gas purchases were made with credit petitioner produced credit card statements invoices and receipts with respect to the repairs performed on her car in ms gaman prepared an attachment for petitioner's schedule c that itemizes petitioner's actual expenses and reflects an amount of dollar_figure we conclude that petitioner is entitled to the claimed deduction for automobile expenses in the amount of dollar_figure legal professional services petitioner claimed a deduction for legal and professional services in the amount of dollar_figure petitioner testified that she wanted to engage in aggressive marketing in she met with luke bailey and paid a consulting fee for his expertise in this area on the basis of the record we conclude that petitioner is entitled to a deduction in the amount of dollar_figure for this service see cohan v commissioner supra vanicek v commissioner supra rent or lease petitioner claimed a deduction for rent or lease of other business property in the amount of dollar_figure petitioner further claimed a deduction for rent or lease of vehicles machinery and equipment in the amount of dollar_figure petitioner did not present any evidence to establish that she is entitled to the claimed expenditure thus we sustain respondent's disallowance repairs and maintenance petitioner claimed a deduction for repairs and maintenance in the amount of dollar_figure petitioner did not present any evidence to establish that she is entitled to the claimed expenditure thus we sustain respondent's disallowance supplies petitioner claimed a deduction for supplies in the amount of dollar_figure petitioner presented copies of her canceled checks and credit card statements and made notations on the statements regarding the items purchased for example petitioner claims that she purchased office supplies such as copy machine paper pens and a garbage can for her office we conclude that these items are deductible as ordinary and necessary business_expenses 320_us_467 39_f2d_540 2d cir petitioner also testified that she purchased personalized items for the au pairs such as an american flag or a little california flag petitioner offered no further evidence to establish how these items are ordinary and necessary to her business therefore we find that petitioner is not entitled to deduct these items as supply expenses on the basis of the entire record we conclude that petitioner is entitled to deduct dollar_figure in supply expenses travel taxpayers may deduct travel_expenses including expenses for meals_and_lodging that they incur while away from home if the expenses are reasonable and necessary and bear a reasonable_and_proximate_relationship to the business activity 66_tc_122 mckinney v commissioner tcmemo_1981_181 modified tcmemo_1981_377 affd 732_f2d_414 10th cir if travel_expenses are incurred for both business and other purposes the expenses are deductible only if the travel is primarily related to the taxpayer's trade_or_business sec_1_162-2 income_tax regs if a trip is primarily personal in nature the travel_expenses are not deductible even if the taxpayer engages in some business activities at the destination id whether travel is primarily business related or personal is a question of fact sec_1 b income_tax regs petitioner claimed a deduction for travel_expenses in the amount of dollar_figure petitioner presented copies of her credit card statements and marked the items associated with her travel_expenses including airfare rental car fees and lodging petitioner testified that her trips to minneapolis seattle and boston were in response to immediate concerns involving au pairs and families at those locations and gave specific information regarding the nature of the concerns associated with each trip petitioner also deducted travel_expenses for trips to st croix puerto rico disneyland and las vegas the fact that a taxpayer engaged in business during a portion of the trip is not sufficient to entitle the taxpayer to deduct travel_expenses absent a showing that business was the primary motive for the trip 35_tc_199 levine v commissioner tcmemo_1987_413 sec_1_162-2 income_tax regs petitioner offered no further evidence with respect to the business_purpose of these trips other than her testimony that the trips served an educational purpose for the au pairs we are not satisfied that these trips were primarily related to petitioner's trade_or_business on the basis of this record we conclude that petitioner is entitled to a deduction for travel_expenses associated with her trips to minneapolis seattle and boston accordingly petitioner is entitled to a deduction of dollar_figure for travel_expenses meals and entertainment a taxpayer may deduct meal and entertainment_expenses if they are directly related to the active_conduct of the taxpayer's trade_or_business sec_1_274-2 income_tax regs the deduction for meal and entertainment_expenses generally is limited to percent of the substantiated amount sec_274 petitioner claimed she incurred meal and entertainment_expenses in the amount of dollar_figure petitioner provided canceled checks and copies of her credit card statements for restaurant meals and groceries petitioner testified that she incurred expenses in entertaining au pairs and families either at restaurants or at her home we find petitioner's testimony credible and detailed with respect to the business_purpose of the meals and the business relationship of the individuals entertained petitioner testified that she kept a calendar for these events and the calendar was destroyed by water damage on the basis of this record we conclude that petitioner is entitled to a deduction in the amount of dollar_figure for meal and entertainment_expenses utilities home_office petitioner deducted utility expenses in the amount of dollar_figure sec_280a in general disallows deductions with respect to the use of a dwelling_unit that is used by the taxpayer during the taxable_year as a residence however sec_280a permits the deduction of expenses allocable to a portion of the dwelling_unit which is exclusively used on a regular basis as the principal_place_of_business for any trade_or_business of the taxpayer thus to qualify under sec_280a for a home-office deduction petitioner must establish that a portion of her dwelling is exclusively used on a regular basis and as the principal_place_of_business for her trade_or_business 94_tc_348 however sec_280a limits the amount_of_deductions to the excess of the gross_income derived from the use of the home_office over the deductions allocable to the home_office that are otherwise allowable the determination of the principal_place_of_business depends on the particular facts of each case 506_us_168 two primary considerations in deciding whether a taxpayer may deduct costs of a home_office are the relative importance of the activities performed at each business location and the time spent at each place id other than testifying that she used a room in her home exclusively as her main business office petitioner presented no evidence to establish either the nature of or the relative importance of the activity performed at this location further petitioner did not establish how much time she spent in her office therefore we conclude that petitioner is not entitled to a home_office deduction telephone petitioner also submitted copies of her telephone bills from petitioner did not maintain a separate telephone line for her business we may estimate the deductible amount of petitioner's telephone expenses 69_tc_723 sec_262 provides that the basic local_telephone_service for the first telephone line to a taxpayer's residence is a nondeductible personal_expense petitioner testified that most of her long distance calls were business related petitioner presented copies of her telephone bills from in calculating her business_expenses petitioner excluded amounts related to the basic local service on the basis of our best judgment we find that petitioner is entitled to a deduction in the amount of dollar_figure for telephone expenses id petitioner did not claim any additional deduction for or present any other evidence to substantiate expenditures_for the use of a home_office computer cost although not claimed on her schedule c petitioner contends that the dollar_figure cost of the computer she purchased is deductible under sec_179 petitioner offered a copy of her credit card statement dated date which indicates that she purchased a computer for dollar_figure petitioner testified that she used the computer exclusively for her business with apia on the basis of this record we find that petitioner purchased a computer for dollar_figure and used the computer solely for her activities with apia under sec_179 a taxpayer may elect to treat the cost of any sec_179 property as an expense which is not chargeable to capital_account taxpayers electing to do so may deduct the cost of such property in the taxable_year in which the property is placed into service the aggregate cost which may be taken into account under sec_179 cannot exceed dollar_figure sec_179 sec_179 provides that an election must a specify the items of sec_179 property to which the election applies and the portion of the cost of each of such items which is to be taken into account under subsection a and b be made on the taxpayer's return of the tax imposed by this chapter for the taxable_year such an election shall be made in such a manner as the secretary may by regulations prescribe sec_1_179-5 income_tax regs provides that the election under sec_179 shall be made on the taxpayer's first income_tax return for the taxable_year to which the election applies whether or not the return is timely or on an amended_return filed within the time prescribed by law including extensions for filing the return for such taxable_year emphasis added petitioner made no sec_179 election for the computer on her return or any amended_return filed within the time prescribed by law including extensions for filing her return alisobhani v commissioner tcmemo_1994_629 subt v commissioner tcmemo_1991_429 thus pursuant to sec_1_179-5 income_tax regs petitioner should have filed an amended_return no later than date assuming valid extensions in order for petitioner to have properly elected sec_179 treatment thus petitioner is not entitled to an expense deduction under sec_179 for the computer starr v commissioner tcmemo_1995_190 affd without published opinion 99_f3d_1146 9th cir to reflect the foregoing decision will be entered under rule


id office uilc cca_2009100710053037 ---------- number release date from ------------------- sent wednesday october am to ------------------- cc ----------- subject re questions circular_230 conflict of interest issue a poa authorized by the tmp represents only the tmp and perhaps the partnership the poa appointed by the tmp does not represent the other partners so the other partners have no standing to object to the poa acting for the tmp they are neverthess free to participate on their own see i r c b and hire their own poa to participate in the proceeding i am free all day if you want to discuss