t c memo united_states tax_court albert okorogu and rita okorogu petitioners v commissioner of internal revenue respondent docket no filed date akintunde samuel akintimoye for petitioner albert okorogu renato l izquieta for petitioner rita okorogu cassidy b collins and christine a fukushima for respondent memorandum findings_of_fact and opinion cohen judge respondent determined deficiencies of dollar_figure and dollar_figure in petitioners’ federal_income_tax for and respectively respondent also determined accuracy-related_penalties pursuant to sec_6662 of dollar_figure and dollar_figure for and respectively unless otherwise indicated all section references are to the internal_revenue_code in effect for the years in issue and all rule references are to the tax_court rules_of_practice and procedure after concessions the issues for decision are whether respondent properly disallowed itemized_deductions that petitioners claimed for and whether respondent properly disallowed deductions for business_expenses that petitioner albert okorogu h claimed in connection with his self- employment for and whether petitioners received and failed to report cancellation of debt income of dollar_figure for whether h received and failed to report unemployment_compensation of dollar_figure for whether petitioners are liable for the accuracy-related_penalties under sec_6662 and whether petitioner rita okorogu w is entitled to innocent spouse relief under sec_6015 findings_of_fact some of the facts have been stipulated and the stipulated facts are incorporated in our findings by this reference h resided in nigeria and w resided in california at the time the petition was filed background on petitioners’ marriage h and w met in nigeria and married in at the time of their marriage h worked as an optical engineer in california w was a physician and worked at a teaching hospital in nigeria h returned to california after the wedding and w remained in nigeria until in w and the couple’s two young children moved to california to live with h w is and was at the time that she moved a proficient english speaker but she could not work as a physician in the united_states w was a stay-at-home mother and homemaker for several years after she moved to the united_states besides h and her children w did not have any family members or close friends living in the united_states during this time h emotionally and physically abused w throughout their marriage frequently in the presence of their children incidents of abuse h was highly controlling of w’s life inside and outside the home in particular he monitored and restricted w’s social interactions at some point in h bugged the house and he overheard w and her mother who had come from nigeria to visit her grandchildren gossiping about him when h returned home he beat w so badly that she had to be taken to the emergency room w’s back was broken and she could not walk normally for months in another incident in h examined w’s phone and discovered the phone number of a woman with whom he had forbidden w to speak h confronted w and started hitting her and choking her in front of their children w managed to get free and call the police and h was arrested on charges of domestic battery child endangerment and dissuading a witness w stated to police at this time that there had been at least separate domestic violence events in the home since following the incident w filed for and obtained a temporary restraining order against h w obtained several temporary restraining orders against h between and but she never followed up to obtain a permanent restraining order because she feared it would give h a reason to become even more violent for the incident h was charged and found guilty of misdemeanor battery by the los angeles county superior court control of family finances h controlled all decisions regarding spending and family finances h did all of the shopping for the family even picking out the clothes that w would wear before h provided w with a debit card on which he imposed a dollar_figure spending limit if w exceeded the dollar_figure limit h would take away the debit card take away w’s car keys and throw her out of the house and lock the door during this same time h purchased for himself numerous new vehicles including a dodge ram truck a range rover a mercedes gl450 and a volkswagen phaeton which he later had shipped to nigeria h was highly secretive and routinely neglected to inform or consult w about matters that significantly affected their family finances in h purchased a house in valencia california valencia house county records show that after w and the children moved into the valencia house w executed a quitclaim_deed transferring her interest in the house to h as his sole and separate_property w does not recall ever being presented with or signing that deed in date h executed a grant deed that transferred the valencia house to himself and another individual as co-trustees of the okorogu family_trust h executed two more grant deeds for the valencia house in date and date to two more individuals also designated co-trustees of the family_trust h did not inform w about the transfers and w did not know any of the individuals named in the grant deeds eventually h became unable to pay for the valencia house and h and w and the children were forced to leave w’s and h’s employment and income employment and wages for years in issue in date w began working full time at the university of california at los angeles ucla as a clinical researcher ucla paid w wages of dollar_figure and dollar_figure in and respectively w’s job at ucla ended in date when the grant providing for her employment ran out from at least until h worked as an optical engineer at the aerospace corp aerospace in el segundo california aerospace paid h wages and other compensation of dollar_figure and dollar_figure in and respectively h was laid off by aerospace in date in addition to his employment at aerospace h reported on his federal_income_tax returns for and income and losses arising from business activity that he conducted through a sole_proprietorship in connection with this business h claimed deductions for various expenses including advertising contract labor insurance office expenses supplies taxes and licenses travel utilities and other expenses h reported net losses from his business activity of dollar_figure and dollar_figure for and respectively other sources of income for years in issue in date h began receiving dollar_figure per week pursuant to an unemployment insurance claim filed with the employment development department edd of the state of california the edd issued h payments totaling dollar_figure as unemployment_compensation in on date aerospace federal credit_union credit_union sent a letter advising petitioners that they were delinquent in making payments on a visa credit card debt various attempts were made between may and october of to contact petitioners about the visa credit card debt and to set up a repayment plan for this debt on date the credit_union discharged the outstanding debt of dollar_figure on the visa credit card and issued h a form 1099-c cancellation of debt reporting that amount on date the credit_union sent h a statement of credit denial termination or change informing him that the credit_union had charged off the visa credit card debt w’s current financial difficulties in date h left the united_states and traveled back to nigeria h made at least a couple of trips to the united_states in and he also called regularly to speak to w and their children h currently resides in nigeria w still resides in california with the children h has provided money to support w and the children on only one occasion since w is currently unemployed as of the time of trial w depended on welfare and food stamps for support petitioners’ tax returns and the notice_of_deficiency before w did not know of any obligation to file a tax_return with the internal_revenue_service irs reporting her income w was not required to file formal tax returns in nigeria and h never informed her of the requirement to do so in the united_states form sec_1040 u s individual_income_tax_return electing the status of married_filing_jointly were filed timely for h and w for tax_year sec_2011 and sec_2012 although the returns for and purported to bear w’s electronic signature w did not participate in the preparation of these returns and did not sign them the returns for and reported h’s and w’s wages from their respective employment schedules c profit or loss for business attached to the returns claimed deductions for business_expenses and reported net losses for h’s business activity for both years the returns also claimed itemized_deductions for h and w totaling dollar_figure and dollar_figure for and respectively schedules a itemized_deductions attached to the returns claimed deductions for state and local_taxes personal_property_taxes charitable_contributions unreimbursed employee_expenses tax preparation fees and other expenses the return for did not report income from unemployment_compensation or cancellation of indebtedness respondent sent a notice_of_deficiency notice to petitioners on date in the notice respondent disallowed all expenses claimed as deductions on schedules c for h’s business activity for and respondent also disallowed schedule a itemized_deductions for personal_property_taxes charitable_contributions unreimbursed employee_expenses and other expenses because the sum of the itemized_deductions that respondent allowed was less than the standard_deduction for each year respondent adjusted petitioners’ joint taxable_income to allow the standard_deduction respondent also determined that petitioners had received and failed to report unemployment_compensation income of dollar_figure and cancellation of debt income of dollar_figure both for other adjustments that respondent determined in the notice were later conceded w’s amended petition on date petitioners filed a joint petition in this court that was drafted by shared counsel on date the irs received a completed form_8857 request for innocent spouse relief for w requesting relief from the tax_liabilities determined in the notice because w filed the form_8857 after her initial petition the irs did not issue a determination_letter regarding her request for innocent spouse relief see chief_counsel notice cc-2013-011 wl date on or around date w obtained new counsel shortly thereafter w moved for and was granted leave to file a separate amended petition in the amended petition w raised a claim to relief from joint_and_several_liability under sec_6015 respondent concedes that w is entitled to relief and h disputes her entitlement i deductions claimed for and opinion generally taxpayers bear the burden of proving that the adjustments set forth in the commissioner’s notice_of_deficiency are erroneous see rule a 290_us_111 specifically taxpayers must prove their entitlement to claimed deductions see 503_us_79 292_us_435 taxpayers bear the burden of maintaining the records needed to establish their entitlement see sec_6001 65_tc_87 aff’d per curiam 540_f2d_821 5th cir h alone was responsible for preparing the form sec_1040 that were the purported joint tax returns for himself and w and w had no information or evidence relating to deductions h did not attend or testify at trial and he presented no evidence to substantiate either the itemized_deductions claimed for petitioners or the expenses claimed as deductions for h’s business activity respondent’s determinations in the notice regarding the itemized_deductions and the business_expense deductions are therefore upheld because of petitioners’ failure to satisfy their burden_of_proof ii unemployment_compensation and cancellation_of_indebtedness_income gross_income includes unemployment_compensation and any discharge_of_indebtedness of the taxpayer sec_61 sec_85 in cases where the commissioner determines that the taxpayer received and failed to report some item_of_gross_income the commissioner bears the initial burden of producing at least minimal evidence linking the taxpayer to the income-producing activity or the receipt of funds 774_f2d_932 9th cir once the commissioner meets the burden of production the burden_of_proof shifts to the taxpayer to produce credible_evidence that he or she did not receive the alleged income or of proving that the commissioner’s deficiency calculations were not grounded on a minimal evidentiary foundation id see also fisher v commissioner tcmemo_2014_219 at we conclude that respondent’s determinations are based on substantive evidence linking petitioners with the unemployment_compensation and the discharge_of_indebtedness income the record contains a certified irs wage and income transcript transcript for h for tax_year the transcript reflects that in the credit_union issued h a form 1099-c reporting debt discharged of dollar_figure and the edd issued h a form 1099-g certain government payments reporting unemployment_compensation payments of dollar_figure additionally respondent at trial produced certain business records of the credit_union and the edd we received the records of the credit_union into evidence without objection h’s counsel objected to the admission into evidence of the records of the edd on the basis of authentication hearsay best evidence rule and lack of foundation h’s counsel’s primary objection to the introduction of the edd records focused on an irregularity in a cover letter that accompanied the records the cover letter is addressed to h and states that the attached summary of unemployment_compensation payments was issued in response to a request made by h respondent’s counsel stipulated at trial that the edd records were not issued in response to a request by h and argued that this irregularity was due to attempts by the edd to conform with the interagency document request made by respondent in the light of h’s objections we reserved ruling on the admissibility of the edd records and stated that h would have the opportunity to challenge the authenticity of those records as part of the posttrial briefing stage nothing in the record leads us to doubt that the edd records are genuine we accept respondent’s counsel’s explanation of the irregularity in the cover letter the records are prefaced by a certification that complies with the authentication requirements of rule of the federal rules of evidence and the records otherwise fit within the hearsay exception for records of a regularly conducted activity see fed r evid business records exception we overrule h’s objections and receive the records of the edd into evidence h has not raised a reasonable dispute as to the items of income reported on the information returns absent a reasonable dispute the transcript is sufficient to establish a minimal evidentiary foundation for respondent’s determinations that h received and failed to report cancellation of indebtedness and unemployment_compensation income see sec_6201 see also hawkins v commissioner tcmemo_2008_168 wl at the business records of the credit_union and the edd further substantiate the amounts of income and the dates that h received them because petitioners produced no evidence to contradict the records supporting respondent’s determinations we sustain the income adjustments in the notice for unemployment_compensation and discharge_of_indebtedness income iii sec_6662 accuracy-related_penalties respondent determined for each of the year sec_2011 and sec_2012 that petitioners are liable for an accuracy-related_penalty pursuant to sec_6662 sec_6662 and b and imposes a accuracy-related_penalty on any portion of an underpayment of federal_income_tax that is attributable to a taxpayer’s negligence or a substantial_understatement_of_income_tax respondent asserts that petitioners had substantial understatements of income_tax and that they were negligent in their underpayments for the years in issue under sec_7491 the commissioner bears the burden of production with regard to penalties and must come forward with sufficient evidence indicating that it is appropriate to impose penalties 116_tc_438 an understatement is defined as the excess of the tax required to be shown on the return over the tax actually shown on the return less any rebate sec_6662 an understatement of income_tax is substantial if it exceeds the greater of of the tax required to be shown on the return or dollar_figure sec d a five thousand dollars is greater than of the tax that we conclude was required to be shown on petitioners’ returns respondent has met the initial burden of production because our conclusions as to the deficiencies result in the following substantial understatements year tax shown on form_1040 tax required to be shown understatement dollar_figure big_number dollar_figure big_number dollar_figure big_number because respondent has met the burden of production by showing that the understatements are substantial we need not address the issue of negligence see sec_1_6662-2 income_tax regs once the commissioner has met the burden of production the burden_of_proof remains with the taxpayer and he or she must come forward with persuasive evidence that the penalty is inappropriate rule a higbee v commissioner t c pincite the sec_6662 penalty is inappropriate for any portion of the underpayment for which it is shown the taxpayer had reasonable_cause and acted in good_faith sec_6664 whether the taxpayer acted with reasonable_cause and in good_faith is decided on a case-by-case basis taking into account all pertinent facts and circumstances see sec_1_6664-4 income_tax regs h did not testify at trial and there is otherwise no information in the record regarding how and under what circumstances the joint returns for h and w were prepared ultimately neither petitioner put facts forward to show that the penalties should not apply accordingly respondent’s determinations of the accuracy- related penalties are upheld iv w’s request for innocent spouse relief married taxpayers may elect to file a joint federal_income_tax return sec_6013 generally after making the election each spouse is jointly and severally liable for the entire tax due for that taxable_year sec_6013 however a spouse who has made a joint_return may elect to seek relief from joint_and_several_liability under sec_6015 sec_6015 we have jurisdiction to determine a requesting spouse’s entitlement to relief under sec_6015 where as here the spouse has raised the matter as an affirmative defense in a petition invoking the court’s deficiency jurisdiction under a 119_tc_267 aff’d 360_f3d_361 2d cir at least a portion of the understatement_of_tax for each of and arises from disallowed joint itemized_deductions which are attributable in part to w also a portion of the understatement for arises from dollar_figure of interest_income that w concedes she received and failed to report the parties therefore agree that w is not entitled to full relief from the deficiencies determined in the notice under either sec_6015 or c if a requesting spouse is not eligible for relief under sec_6015 or c he or she may be eligible for relief under sec_6015 sec_6015 sec_6015 provides that a requesting spouse may be relieved from joint_and_several_liability if taking into account all the facts and circumstances it is inequitable to hold the individual liable for any unpaid tax or any deficiency or any portion of either for determinations by the commissioner the statute directs that equitable relief be granted u nder procedures prescribed by the secretary sec_6015 revproc_2013_34 2013_43_irb_397 superseding revproc_2003_61 2003_2_cb_296 provides guidelines that the commissioner follows in determining whether a requesting spouse qualifies for equitable relief under sec_6015 we consider all relevant facts and circumstances in determining whether a requesting spouse qualifies for such relief sec_6015 132_tc_203 this court has considered the factors and analysis of revproc_2013_34 supra in prior cases decided under sec_6015 see eg reilly-casey v commissioner tcmemo_2013_292 at n see also 136_tc_432 employing analogous factors from revproc_2003_61 supra w asserts and respondent concedes that she meets the criteria for relief outlined by revproc_2013_34 supra and that she should be granted full relief from the liabilities determined in the notice however before we render a determination on the merits of w’s claim for equitable relief we must determine whether the returns filed for petitioners for and were valid joint returns equitable relief can be granted only for an individual who has made a joint_return sec_6015 see also revproc_2013_34 sec_4 i r b pincite h opposes our granting of equitable relief for w on the ground that the returns that he caused to be filed for himself and w for the years in issue were not valid joint returns in support of his position h cites w’s testimony and statements made on w’s completed form_8857 that she knew nothing of the preparation or filing of the returns for the years in issue that her purported signature on the returns was a forgery and that she was unaware of any_tax reporting obligation at the time that the returns were filed h argues that because the and returns were not valid joint returns the liabilities determined for those years should be redetermined on the basis of rates and allocation of income for married persons filing separately w and respondent argue that although w did not sign and did not expressly agree to h’s filing of the returns for and the returns were valid joint returns because w tacitly consented to the filing of joint returns by h whether a joint_return has been filed is a question of fact the resolution of which depends upon the intent of the parties 27_tc_270 aff’d 251_f2d_44 8th cir to file jointly both spouses must intend to make a joint_return see 26_tc_405 weber v commissioner tcmemo_1995_125 wl128456 at the absence of the signature of one spouse does not necessarily preclude a finding of a valid joint_return where the facts otherwise indicate that an income_tax return was intended by both spouses to be a joint_return 35_tc_747 the tacit_consent_rule holds that the intent to file a joint_return may be inferred from facts demonstrating that a nonsigning spouse tacitly approved or acquiesced in the other spouse’s filing of the joint_return see eg id harris v commissioner tcmemo_1961_324 wl this court has considered a variety of factors in evaluating the issue of tacit consent especially whether the nonsigning spouse filed a separate_return whether the nonsigning spouse objected to the other spouse’s joint filing and whether the couple’s prior filing history indicates the intent to file jointly see eg heim v commissioner t c at 10_tc_859 aff’d per curiam 175_f2d_240 6th cir 29_bta_646 thus a history of reliance by the nonsigning spouse on the other spouse with respect to family financial matters including the preparation of tax returns suggests that the nonsigning spouse consented to the other spouse’s filing of the return in question see 56_tc_1 furthermore the inclusion of income and deductions attributable to the nonsigning spouse on the return generally will be taken as proof of the intent to file a joint_return even where the nonsigning spouse failed to give his or her express consent to the filing see eg 34_tc_740 aff’d 325_f2d_1 2d cir acquaviva v commissioner tcmemo_1996_542 wl at the tacit_consent_rule has been described as an extension of the presumption of correctness that generally attaches to the commissioner’s determinations specifically a determination that a joint_return was made despite the fact that one spouse failed to sign the return hennen v commissioner t c pincite the returns that h prepared for and were each submitted with what purported to be w’s electronic signature and respondent accepted and processed the returns as the valid joint returns for h and w accordingly the notice issued by respondent determined that h and w were jointly and severally liable for the deficiencies determined therein respondent has maintained the position throughout this proceeding that the returns submitted by h were valid joint returns h indisputably intended to file joint income_tax returns with w for the years in issue h was responsible for preparing the returns and for providing all of the information shown on them by electing joint filing_status h benefited from tax_rates and other items available only to joint filers and he claimed exemptions and other deductions attributable to the family unit when the original petition was filed in this court h filed it jointly with w at that time h did not contend that respondent’s deficiencies should be redetermined on the basis that he and his spouse should be treated as married persons filing separately h raised the argument that the and returns were not valid joint returns only following the filing of w’s amended petition the situation here is unusual in that the spouse whose signature is not on the return is adopting it whereas the spouse who filed the return as a joint_return attempts to disavow it w has testified that the returns for and were prepared and filed entirely without her knowledge or consent that she never looked at or signed those returns and that she was not even aware at the time that those returns were filed that she had an obligation to report her income to the irs w also testified that she is a law-abiding citizen and that she would have ensured that returns were filed for her for the years in issue had she known of the obligation to file indeed w testified that she would have signed the exact returns prepared by h had he presented them to her perhaps because the facts of this case are so unusual the parties have not cited and we have not found any authority directly in point some guidance however may be found in 412_f2d_304 2d cir aff’g on this issue and rev’g on other grounds tcmemo_1967_174 late in the history of the controversy the wife claimed that the returns in question were not joint returns this court and the court_of_appeals both recognized that the evidence was conflicting as to whether returns signed only by the husband and in his name were joint returns this court reached the conclusion and the court_of_appeals affirmed that the returns were valid joint returns after balancing the evidence and giving greater weight to the inclusion on the returns of the wife’s income the spouses’ filing of a joint petition in which they did not reject the commissioner’s joint treatment of them the belated repudiation of joint_return classification and the husband’s failure to testify although he was in a position to shed much light on his understanding of the returns and his wife’s knowledge and approval thereof id pincite w’s failure to object to h’s filing or to file separate returns for the years in issue may be explained by her ignorance at the time of any_tax reporting obligation however we do not conclude that w’s ignorance in this respect discredits her contention that she tacitly consented to h’s filing for her for the years in issue w’s ignorance was due to h’s conscious efforts to dominate family finances and to close her off from social interactions w testified convincingly that she would have acquiesced in h’s filing and signed the returns had h presented them to her at the time that he prepared them in the light of w’s testimony we cannot view her simple lack of knowledge of the filing requirement as evidence of any desire or intent not to file joint returns with h for the years in issue w’s actions following the time that she learned of a tax reporting obligation are consistent with her assertion that she tacitly consented to the joint filings made by h for and when w filed a separate_return for tax_year she elected head_of_household status for herself but she made no attempt to amend or resubmit the earlier return filed for her for or the record of w’s administrative filings and her actions before this court including her amended petition arguing that she is entitled to relief from joint_and_several_liability shows that she has consistently ratified and adopted the returns that h filed for the years in issue see ziegler v commissioner tcmemo_2003_282 wl at on balance the evidence leads us to conclude that w approved or at least acquiesced in h’s filing of joint returns for and we conclude that w tacitly consented to filing joint income_tax returns with h for and and that the returns filed for petitioners for those years were valid joint returns other than challenging the validity of the joint returns h does not advance any argument that w fails to meet the conditions for equitable relief as prescribed in revproc_2013_34 supra and as applied by this court in other cases we agree with w and respondent that those conditions are met see id sec_4 i r b pincite abuse and restricting access to necessary financial information are factors that strongly favor granting equitable relief under sec_6015 see id sec_3 d a i r b pincite see also hollimon v commissioner tcmemo_2015_157 at w’s testimony and supporting documentation that she provided establishes that she suffered from near constant emotional and physical abuse during the time that h lived with her and the children in california h strictly and secretively controlled the family’s finances and w reasonably feared his retaliation for any attempt to question or challenge his decisions after h moved to nigeria in date he continued to instill fear in and exercise control_over w and the children we accept w’s testimony that she remains fearful of his retaliation to this day h’s counsel’s attempts to discredit w’s testimony to this effect arguing that h was physically removed from the household and that w had control_over her own bank account from date onwards ignore the realities of an abusive relationship and the fact that h returned to california multiple times during this period there is no evidence supporting h’s arguments or contradicting w’s testimony his position in this case appears simply vindictive we have considered all arguments made and to the extent not mentioned we conclude that they are moot irrelevant or without merit to reflect the foregoing decision will be entered under rule


internal_revenue_service department of the treasury number release date index numbers washington dc person to contact telephone number refer reply to cc psi b09-plr-113024-01 date date legend donor date spouse trust grandchild grandchild date grandchild grandchild child year dollar_figurea year dollar_figureb year dollar_figurec year dollar_figured dear plr-113024-01 this letter is in response to your authorized representative’s letter dated date requesting a ruling regarding the automatic allocation of donor’s generation-skipping_transfer gst_exemption pursuant to sec_2632 of the internal_revenue_code this letter responds to that request the facts and representations submitted are summarized as follows on date spouse established trust an irrevocable_trust for the benefit of spouse’s grandchildren other than grandchild and grandchild article ii paragraph a of trust provides that if at i any time any contribution is made to any trust hereunder or ii any payment is made of premiums for policies of life_insurance held in trust hereunder with respect to which addition or payment the trustee has received written notice from the grantor or other transferor of such addition to the trust to the effect that such addition payment or some specified portion thereof shall be subject_to withdrawal under the provisions of this section by the beneficiary of this trust then notwithstanding any other provision hereof such thus designated_beneficiary shall thereupon have the absolute right at all times during the two month period commencing on the date of such addition or payment to withdraw from this trust in cash or in_kind as determined by the trustee that portion or all of the value of such contribution or payment determined in the same manner as such value would be determined for the transferor’s or transferors’ federal gift_tax purposes which is specified as withdrawable by such beneficiary in such notice the total value which may be withdrawn by any beneficiary on account of such additions or payments hereunder shall not be cumulative and to the extent that such a withdrawal right has not been exercised by the end of such two month period it shall lapse article ii paragraph a of trust provides that each such withdrawal right shall be exercisable only by a written instrument executed by the beneficiary having such right and delivered to the trustee of the trust involved on or before the date specified in such instrument as the effective date of such withdrawal which must be during the above specified withdrawal period if any such beneficiary is then under any legal disability of any kind execution of such instrument may be by his or her legal guardian or if no guardian has been appointed by his or her natural guardian other than the donor of such gift or the grantor in each case acting solely on behalf of such beneficiary in making such withdrawal and receiving such distribution for such beneficiary’s sole benefit distribution of the thus withdrawn value pursuant to any proper instrument of withdrawal shall be made on such effective date to this end the trustee shall at all times while any such withdrawal right is outstanding retain in the trust sufficient borrowable or transferable assets from such addition or otherwise to satisfy all such withdrawal rights then outstanding each beneficiary designated as having a withdrawal right with respect to any addition or additions or if he or she is then under legal disability his or her legal guardian or if there is none his or her natural guardian shall be kept reasonably informed by the trustee of all withdrawable additions that are made or expected to be made plr-113024-01 article ii paragraph b of trust provides that until the first to occur of i the death of the survivor of the grantor and his wife or ii date the trustee shall pay to or use for the benefit of any one or more of the grantor’s grandchildren other than grandchild and grandchild so much of the net_income and principal of this trust as the trustee determines to be in their best interests taking into account their respective incomes from all sources known to the trustee for their education including college post-graduate and professional education health maintenance and support in reasonable comfort adding any excess income to principal at the trustee’s discretion the trustee may in its discretion pay the same to or use it for the benefit of one or more of the grantor’s grandchildren other than grandchild and grandchild to the exclusion of one or more of them and may completely exhaust the principal the grantor’s concern being primarily for the health maintenance comfortable support and education of the beneficiaries article ii paragraph b of trust provides that upon the first to occur of i the death of the survivor of the grantor and his wife or ii date the trustee shall divide the trust estate as then constituted into separate equal shares so that there shall be one share for each then living grandchild of the grantor other than grandchild and grandchild or if there is no living grandchild of the grantor other than grandchild and grandchild the trustee shall divide the trust into separate shares for the then living descendants of the grantor per stirpes the trustee shall distribute each share set_aside for a great-grandchild or more remote descendant of the grantor to such descendant the trustee shall hold each share set_aside for a child or grandchild of the grantor hereinafter referred to as a beneficiary upon the following trusts a the trustee shall pay to each beneficiary or use for his or her benefit all the net_income from his or her trust in convenient installments at least as often as quarter-annually during his or her life subject however to the limitations set forth in subparagraph d of this subparagraph adding any excess income to principal in the trustee’s discretion b whenever the trustee determines that the income of the beneficiary from all sources known to the trustee is not sufficient for the support of the beneficiary for the beneficiary’s maintenance in reasonable comfort for his or her health and for his or her education including but not limited to college post-graduate and professional education the trustee may in its discretion pay to or use for the benefit of the beneficiary so much of the principal of his or her trust as the trustee determines to be reasonably required therefor subject however to the limitations set forth in subparagraph d of this subparagraph c upon the death of the beneficiary the trustee shall distribute his or her trust estate as then constituted to or in trust for the benefit of such person or persons other than the said beneficiary among the grantor’s descendants upon such conditions and estates with such powers in such manner and at such time or times as the said beneficiary may appoint or direct by will specifically referring to this power_of_appointment and to the extent that the beneficiary does not effectively exercise this power_of_appointment the trustee shall distribute the trust estate as then constituted to the then living descendants of the beneficiary per stirpes or if the beneficiary has no then living descendants the trustee shall divide his or her trust estate as then constituted into separate equal shares so that there is one plr-113024-01 share set_aside for each living grandchild of the grantor for whom there is then a_trust held hereunder and the trustee shall add each such share to the trust for the grandchild for whom it was set_aside to be held and administered as if it had been an original part thereof or if there is no trust then held for a living grandchild of the grantor the trustee shall divide the trust estate as then constituted into separate shares for the then living descendants of the grantor per stirpes the trustee shall distribute each share set_aside for a great-grandchild or more remote descendant of the grantor to such descendant the trustee shall hold each share set_aside for a child or grandchild of the grantor herein referred to as a beneficiary upon the trusts set forth in subparagraphs a b c and d of this subparagraph of this paragraph b from the establishment of trust on date until date grandchild and grandchild have been the sole beneficiaries of trust on date two successor trusts were created pursuant to article ii of trust grandchild is the sole beneficiary of one of the successor trusts and grandchild is the sole beneficiary of the other successor trust all assets from trust were distributed to these successor trusts child the mother of grandchild and grandchild has been alive since trust was first established on date during year donor transferred dollar_figurea to trust during year spouse also transferred dollar_figurea to trust donor and spouse timely reported these gifts on their respective form sec_709 united_states gift and generation-skipping_transfer_tax return donor and spouse each consented to have the gifts made by one another to third parties during the calendar_year considered as made one-half by each of them under sec_2513 on donor’s year gift_tax_return and spouse’s year gift_tax_return the transfers to trust were entered on schedule a part as gifts subject only to gift_tax during year spouse transferred cash and marketable_securities with an aggregate value of dollar_figureb to trust spouse timely reported this gift on his form_709 donor and spouse consented to have the gifts made by one another to third parties during the calendar_year considered as made one-half by each of them on spouse’s year gift_tax_return the transfer to trust was entered on schedule a part as a gift subject only to gift_tax donor did not make any transfers to trust during year on donor’s year gift_tax_return donor included one-half of the total value of gifts of made by spouse in year spouse transferred dollar_figurec to trust spouse timely reported this gift on form 709-a united_states short_form gift_tax_return donor consented to have the gifts made by spouse and herself to third parties during the calendar_year considered as made one-half by each of them donor did not make any transfers to trust during year in year spouse transferred cash and marketable_securities with an aggregate value of dollar_figured to trust spouse timely reported this gift on form 709-a donor consented to have the gifts made by spouse and herself to third parties during the calendar_year plr-113024-01 considered as made one-half by each of them donor did not make any transfers to trust during year on donor’s gift_tax returns for year and year donor did not allocate any of her available gst_exemption to trust donor did not file gift_tax returns for year or year because she consented to split spouse’s gifts on spouse’s form 709-a in addition donor did not pay any gst tax with respect to the gifts to trust a ruling has been requested that an automatic allocation of donor’s gst_exemption pursuant to sec_2632 occurred with respect to the gifts made to trust in each of the taxable years year year year and year sec_2601 imposes a tax on every generation-skipping_transfer gst sec_2611 provides that the term generation-skipping_transfer means a taxable_distribution a taxable_termination and a direct_skip sec_2612 provides that the term direct_skip means a transfer subject_to a tax imposed by chapter the estate_tax or chapter the gift_tax of an interest in property to a skip_person sec_2613 provides that the term skip_person means a natural_person assigned to a generation which i sec_2 or more generations below the generation assignment of the transferor or a_trust if all interests in such trust are held by skip persons or if there is no person holding an interest in such trust and at no time after such transfer may a distribution including distributions on termination be made from such trust to a non-skip_person sec_2631 provides that for purposes of determining the inclusion_ratio every individual shall be allowed a gst_exemption of dollar_figure which may be allocated by such individual or his executor to any property with respect to which such individual is the transferor sec_2631 provides that any allocation under sec_2631 once made shall be irrevocable sec_2632 provides that 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 provides generally that if any individual makes a direct_skip during his lifetime any unused portion of such individual’s gst_exemption shall be allocated to the property transferred to the extent necessary to make the inclusion_ratio for such property zero if the amount of the direct_skip exceeds such unused portion the entire unused portion shall be allocated to the property transferred plr-113024-01 sec_2632 provides that for purposes of paragraph the unused portion of an individual’s gst_exemption is that portion of such exemption which has not previously been allocated by such individual or treated as allocated under paragraph with respect to a direct_skip sec_2632 provides that an individual may elect to have the deemed_allocation under sec_2632 not apply to a transfer sec_2652 provides that except as provided in this subsection or sec_2653 the term transferor means a in the case of any property subject_to the tax imposed by chapter the estate_tax the decedent and b in the case of any property subject_to the tax imposed by chapter the gift_tax the donor an individual shall be treated as transferring any property with respect to which such individual is the transferor sec_2652 provides that if under sec_2513 one-half of the gift is treated as made by an individual and one-half is treated as made by that individual’s spouse then for purposes of the gst tax each spouse is treated as the transferor of one-half of the entire value of the property transferred by the donor spouse sec_2652 provides in part that a person has an interest_in_property_held_in_trust if at the time the determination is made such person has a right to receive income or corpus from the trust or is a permissible current recipient of income or corpus from the trust and is not described in sec_2055 sec_26_2632-1 of the generation-skipping_transfer_tax regulations provides generally that if a direct_skip occurs during the transferor’s lifetime the transferor’s gst_exemption not previously allocated unused gst_exemption is automatically allocated to the transferred property but not in excess of the fair_market_value of the property on the date of the transfer the transferor may prevent the automatic allocation of gst_exemption by describing on a timely-filed united_states gift and generation-skipping_transfer_tax return form_709 the transfer and the extent to which the automatic allocation is not to apply in addition a timely-filed form_709 accompanied by payment of the gst tax as shown on the return with respect to the direct_skip is sufficient to prevent an automatic allocation of gst_exemption with respect to the transferred property sec_26_2632-1 provides that a form_709 is timely filed if it is filed on or before the date required for reporting the transfer if it were a taxable gift ie the date prescribed by sec_6075 including any extensions to file actually granted the due_date except as provided in paragraph b iii of this section the automatic allocation of gst_exemption or the election to prevent the allocation if made is irrevocable after the due_date an automatic allocation of gst_exemption is effective as of the date of the transfer to which it relates except as provided above a form_709 need not be filed to report an automatic allocation plr-113024-01 in the present case because all interests in trust are held by skip persons trust qualifies as a skip_person under sec_2613 because donor and spouse consented to split the gifts under sec_2513 donor is treated as the transferor of one-half of all gifts made to trust under sec_2652 the transfers that donor is treated as making to trust were direct skips as defined in sec_2612 based on the information submitted and the representations made we conclude that an automatic allocation of donor’s unused gst_exemption occurred under sec_2632 with respect to the gifts that donor is treated as making to trust in year year year and year an automatic allocation of gst_exemption is effective as of the date of the transfer to which it relates we are expressing no opinion regarding the value of the property transferred to trust or regarding the inclusion_ratio of trust the ruling contained in this letter is based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination except as specifically ruled herein we express or imply no opinion on the federal tax consequences of the transaction under the cited provisions or under any other provisions of the code 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 pursuant to the power_of_attorney on file we are sending a copy of this letter to your authorized representatives sincerely frances schafer counsel to the associate chief_counsel passthroughs and special industries enclosures copy for sec_6110 purposes


department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division may tep ra t3 u i l xxxxxxxxxxxxxxx xxxxxxxxxxxxxxx xxxxxxxxxxxxxxx legend taxpayer a xxxxxxxxxxxxxx ira x xxxxxxxxxxxxxx account e xxxxxxxxxxxxxx credit_union f xxxxxxxxxxxxxx amount d xxxxxxxxxxxxx dear xxxxxxxxxxxx this letter is in response to your request dated date as supplemented by correspondence dated date submitted on your behalf by your authorized representative in which you request a waiver of the 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 represents that she received a distribution from ira x totaling amount d taxpayer a asserts that her failure to accomplish a rollover within the 60-day period prescribed by sec_408 of the code was due to her medical_condition during the 60-day rollover period which affected her ability to handle her financial affairs on date taxpayer a was hospitalized and the doctor told her that she may have suffered some type of amnesia following her discharge from the hospital on date taxpayer a represents that she suffered from dizziness headaches and confusion for approximately nine months after her discharge from the hospital as a result taxpayer a avoided interactions with other persons and made some irrational decisions on date taxpayer a's ira x certificates of deposit cds matured and she decided to move the funds to account e a non-ira account with credit_union f a representative of credit_union f told taxpayer a that moving the funds from ira x to account e would be a taxable transaction but taxpayer a demanded that amount d be transferred to account e documentation shows that taxpayer a did not comprehend what was happening and thought the distribution was a required_minimum_distribution when it clearly was not taxpayer a illogically noted on the withdrawal form from ira x that the distribution would be taxed on her income_tax return taxpayer a also incorrectly dated the withdrawal form as date rather than the correct date of date amount d is intact in account e with credit_union f taxpayer a represents that she first became aware of her failure to complete a timely rollover when her income taxes were being prepared based upon the facts and representations you request a ruling that the internal_revenue_service waive the 60-day rollover requirement contained in sec_408 of the code with respect to the distribution of amount d 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 received 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 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 included 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 rollover provisions of sec_408 do not apply to any amount required to be distributed under sec_408 sec_408 of the code provides that the secretary may waive the 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 occur after date are eligible for the waiver under sec_408 of the code revproc_2003_16 i 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 by a 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 and documentation submitted by taxpayer a consistent with her assertion that her failure to accomplish a timely rollover was due to her medical_condition during the 60-day rollover period which affected her ability to handle her financial affairs is therefore pursuant to sec_408 of the code the service hereby waives the 60-day rollover requirement with respect to the distribution of amount d taxpayer a is granted a period of days from the issuance of this letter_ruling to contribute amount d into a rollover ira provided all other requirements of code sec_408 except the 60-day requirement are met with respect to such contribution the contribution of amount d will be considered a rollover_contribution within the meaning of sec_408 of the code this ruling does not authorize the rollover of amounts that are required to be distributed by sec_408 of the code no opinion is expressed as to the tax treatment of the transactions described herein under the provisions of any other section of either the code or regulations which may be applicable thereto this ruling is directed only to the taxpayer that requested it sec_6110 of the code provides that it may not be used or cited by others as precedent a copy of this letter is being sent to your authorized representative pursuant to a power_of_attorney on file in this office if you have any questions concerning this ruling please contact xxxxxxxxxxxxxxx all correspondence should be addressed to se t ep ra t3 sincerely yours laura b warshawsky manager employee_plans technical group enclosures deleted copy of letter_ruling notice cc xxxxxxxxxxx


internal_revenue_service number release date index number -------------------------------- ---------------------- ------------------------ ------------------------------------------ legend 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-143373-10 date february x ----------------------------------------- ------------------------- d ------------------- state ------------ dear -------------- this responds to a letter dated date submitted on behalf of x requesting relief under sec_1362 of the internal_revenue_code facts according to the information submitted x was incorporated on d under the laws of state x intended to be treated as an s_corporation for federal tax purposes effective d but the proper election was not timely filed law and analysis sec_1362 provides that a small_business_corporation may elect to be an s_corporation sec_1362 provides the rule on when an s election will be effective sec_1362 provides in relevant part that if an s election is made within the first two and one-half months of a corporation's taxable_year then the corporation will be treated as an s_corporation for the year in which the election is made under sec_1362 however if the election is made after the first two and one-half months of plr-143373-10 a corporation's taxable_year then the corporation will not be treated as an s_corporation until the taxable_year after the year in which the s election is made sec_1362 provides that if no election is made pursuant to sec_1362 or if made the election is made after the date prescribed for making such an election and the secretary determines there was reasonable_cause for the failure to timely make the election then the secretary may treat such election as timely made for such taxable_year and effective as of the first day of that year x did not file a timely election to be treated as an s_corporation under sec_1362 effective d x has however established reasonable_cause for not making a timely election and is entitled to relief under sec_1362 conclusion based solely on the facts submitted and representations made and provided that x otherwise qualifies as a subchapter_s_corporation we conclude that x will be recognized as an s_corporation effective d if within days from the date of this letter x submits a properly completed form_2553 with a copy of this letter attached to the appropriate service_center except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter specifically no opinion is expressed or implied concerning whether x otherwise qualifies as an s_corporation for federal tax purposes 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 the taxpayer’s authorized representative sincerely barbara j campbell barbara j campbell senior technician reviewer branch office of the associate chief_counsel passthroughs special industries enclosures copy of this letter copy of this letter for sec_6110 purposes


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-118723-16 date date internal_revenue_service number release date index number ---------------------------------------- -------------------- ----------------------------- ------------------------------ legend x y state a state b date date date date date ------------------------------- ---------------------- ------------------ ----------------------------- ------------ ------------- ----------------------- ----------------------- -------------------------------- ----------------------------- -------------------------------- date --------------------------- dear ----------------- this letter responds to a letter dated date submitted on behalf of x and y requesting relief under sec_1362 of the internal_revenue_code code plr-118723-16 facts according to the information submitted x was incorporated under the laws of state a on date and made an election to be treated as an s_corporation effective date x’s s election may have terminated effective date when x issued a warrant on its stock which may have constituted a second class of stock x became aware of this problem on date and immediately took corrective action voiding the warrant on date on date incident to what was intended to qualify as a reorganization under sec_368 x’s shareholders contributed all of their stock in x to y a corporation organized under the laws of state a effective immediately afterwards y made an election to treat x as a qualified_subchapter_s_subsidiary qsub following the reorganization and also on date x converted into a limited_liability_company organized under the laws of state b on date y sold x to an unrelated party x and y represent that the potential termination was not motivated by tax_avoidance or retroactive tax planning x and y and its shareholders have agreed to make any adjustments that the commissioner may require consistent with the treatment of x as an s_corporation law 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 defines a small_business_corporation as a domestic_corporation that is not an ineligible_corporation and that does not a have more than shareholders b have as a shareholder a person other than an estate a_trust described in sec_1361 or an organization described in sec_1361 who is not an individual c have a nonresident_alien as a shareholder and d have more than one class of stock sec_1_1361-1 provides that with certain exceptions a call option warrant or similar instrument collectively call option issued by a corporation is treated as a second class of stock of the corporation if taking in account all the facts and circumstances the call option is substantially certain to be exercised by the holder or a potential transferee and has a strike_price substantially below the fair_market_value of the underlying stock on the date that the call option is issued or at certain other times sec_1362 provides that an election under sec_1362 shall be terminated whenever at any time on or after the first day of the first taxable_year for which a corporation is an s_corporation such corporation ceases to be a small_business plr-118723-16 corporation a termination of an s_corporation_election under sec_1362 is effective on and after the date of cessation sec_1362 provides in part that if an election under sec_1362 by any corporation was terminated under sec_1362 or the secretary determines that the circumstances resulting in such termination were inadvertent no later than a reasonable period of time after discovery of the event resulting in the ineffectiveness 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 sec_1362 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 ineffectiveness the corporation shall be treated as an s_corporation during the period specified by the secretary conclusion based on the information submitted and the representations made we conclude that the warrant issued on date may have caused x to have a second class of stock however we conclude that if x’s s election was terminated such termination was inadvertent within the meaning of sec_1362 of the code consequently we rule that x will be treated as continuing to be an s_corporation from date through date when x became a qsub provided that x’s s election otherwise was not terminated under sec_1362 except as specifically ruled upon above no opinion is expressed as to the federal_income_tax consequences of the facts described above under any other provision of the code in particular no opinion is expressed or implied as to whether x otherwise qualifies as a subchapter_s_corporation under sec_1361 in addition we express or imply no opinion on whether the transactions on date qualified as an f reorganization within the meaning of sec_368 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 plr-118723-16 in accordance with the power_of_attorney on file with this office a copy of this letter_ruling will be sent to x and y’s authorized representatives sincerely 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


department of the treasury internal_revenue_service washington d c a o nov tax_exempt_and_government_entities_division tep ra az re taxpayer dear’ this letter constitutes notice that approval has been granted for your request for a 5-year automatic_extension for amortizing the unfunded liabilities as of date for the above-named plan which are described in sec_431 b b and b of the internal_revenue_code code and sec_304 bx2 b and b of the employee_retirement_income_security_act_of_1974 erisa this extension is effective with the plan_year beginning date this extension applies to the eligible amortization charge bases as identified in your application submission established as of date the extension of the amortization periods of the unfunded liabilities of the plan was granted in accordance with sec_431 d of the code sec_431 d a of the code requires the secretary to extend the period of time required to amortize any unfunded_liability of a plan for a period of time not in excess of years if the plan submits an application meeting the criteria stated in sec_431 d 1b the plan has submitted the required information to meet the criteria in sec_431 including a certification from the plan’s actuary i absent the extension under subparagraph a the plan would have an accumulated_funding_deficiency in the current pian year or any of the succeeding plan years plan's funding status ii the pian sponsor has adopted a plan to improve the that iii the plan is projected to have sufficient assets to timely pay expected benefits and anticipated expenditures over the amortization period as extended and iv the notice required under paragraph 3a has been provided we have sent a copy of this letter to the to the a and to your authorized representative pursuant to a power_of_attorney on file in this office this ruling is directed only to the taxpayer that requested it sec_6110 kx3 of the internal_revenue_code provides that it may not be used or cited by others as precedent if you require further assistance in this matter please contact ' sincerely yours nn ca zx david m ziegler manager ep actuarial group


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 corp plr-107794-10 date date legend taxpayer --------------------------------------------------------------- ------------------------------------------------------------ -------------------------------------------------- subsidiary ------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------- ------------------------------------------------------------ -------------------------------------------------------------------------------- date date date ---------------------- ------- ------------------ company official ---------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------- -------------------- tax professional ------------------------------------------------ ---------------------------------------------------------- -------------------- dear ------------- this letter responds to a letter dated date submitted on behalf of taxpayer requesting an extension of time under sec_301_9100-1 through of the procedure and administration regulations to file an election the extension is being plr-107794-10 requested for taxpayer to file an election under sec_1_1502-75 of the income_tax regulations to file a consolidated federal_income_tax return with its includible subsidiary the election for the date tax_year additional information was received in letters dated date and date the material information submitted for consideration is summarized below on date taxpayer became the common parent of an affiliated_group taxpayer group with taxpayer directly owning subsidiary an election to file a consolidated_return for the date tax_year was due no later than the last day prescribed by law including extensions of time for the filing of taxpayer's return for the date tax_year however for various reasons a valid election was not made subsequently this request was submitted under sec_301_9100-3 for an extension of time to file the election the period of limitations on assessment under sec_6501 has not expired for any member of taxpayer group for the date tax_year or any subsequent year sec_1_1502-75 provides that a group which did not file a consolidated_return for the immediately preceding tax_year may file a consolidated_return in lieu of separate returns for the tax_year provided that each corporation which has been a member of the group during any part of the tax_year for which the consolidated_return is to be filed consents to the regulations under sec_1502 if a group wishes to exercise its privilege of filing a consolidated_return such consolidated_return must be filed not later than the last day prescribed by law including extensions of time for filing the common parent's return under sec_301_9100-1 the commissioner has discretion to grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the code except subtitles e g h and i sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make a regulatory election sec_301_9100-1 sec_301_9100-2 provides automatic extensions of time for making certain elections sec_301_9100-3 provides extensions of time for making 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 sec_301_9100-3 in this case the time for filing the election is fixed by the regulations ie sec_1 a therefore the commissioner has discretionary authority under sec_301_9100-3 to grant an extension of time to file the election provided it is established that taxpayer acted reasonably and in good_faith the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and granting relief will not prejudice the interests of the government plr-107794-10 information affidavits and representations submitted by or on behalf of taxpayer company official and tax professional explain the circumstances that resulted in the failure to timely file the election the information establishes that taxpayer reasonably relied on a qualified_tax professional who failed to make or advise taxpayer to make the election and that the request for relief was filed before the failure to make the election was discovered by the internal_revenue_service sec_301_9100-3 and v based on the facts and information submitted including the affidavits submitted and the representations that have been made we conclude that it has been established that taxpayer acted reasonably and in good_faith in failing to timely file the election the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and granting relief will not prejudice the interests of the government accordingly provided taxpayer group qualifies substantively to file a consolidated_return for the applicable tax_year we grant an extension of time under sec_301_9100-3 until date for taxpayer group to file the election by filing a consolidated_return for the date tax_year and including the required forms the above extension of time is conditioned on taxpayer group's tax_liability if any not being lower in the aggregate for all years to which the election applies than it would have been if the election had been made timely taking into account the time_value_of_money no opinion is expressed as to taxpayer group's tax_liability for the year involved a determination thereof will be made upon audit of the federal_income_tax returns involved further no opinion is expressed as to the federal_income_tax effect if any if it is determined that taxpayer's group's liability is lower sec_301_9100-3 we express no opinion with respect to whether taxpayer group qualifies substantively to file a consolidated_return in addition no opinion is expressed as to the tax effects or consequences of filing the election or any_tax return late under the provisions of any other section of the code or regulations or as to the tax treatment of any conditions existing at the time of or resulting from filing the election late that are not specifically set forth in the above ruling for purposes of granting relief under sec_301_9100-3 we relied on certain statements and representations made by or on behalf of taxpayer and or its representatives however all essential facts must be verified in addition notwithstanding that an extension is granted under sec_301_9100-3 to file the election penalties and interest that would otherwise be applicable if any continue to apply this ruling letter is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent a copy of this letter must be attached to any income_tax return to which it is relevant alternatively if taxpayer group files its return electronically taxpayer group may plr-107794-10 satisfy this requirement by attaching a statement to the return that provides the date and control number of this letter_ruling pursuant to a power_of_attorney on file in this office a copy of this letter is being sent to your authorized representative sincerely ken cohen senior technician reviewer branch office of associate chief_counsel corporate


chief_counsel department of the treasury internal_revenue_service washington d c date number info release date cc tege eoeg et1 - genin-116705-04 uilc memorandum for director submission processing cincinnati oh attn entity unit tax exempt and government entities cc tege eoeg et1 - genin-116705-04 railroad retirement act tax status from office of division counsel associate chief_counsel subject in accordance with the coordination procedure established between the service and the railroad retirement board rrb the rrb has provided us with its opinion that the following business is no longer an employer under the railroad retirement act and the railroad unemployment insurance act effective date we have reviewed the opinion of the rrb and based upon the information submitted to us by the rrb we also conclude that the brotherhood of locomotive engineers is no longer an employer under the railroad_retirement_tax_act effective date please take appropriate action regarding this business cc brotherhood of locomotive engineers ein mr william c walpert general secretary-treasurer standard building mezzanine ontario street cleveland oh joseph w spires