department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division nov uniform issue list 408a kk sf t’ ep’ la’ t2 legend taxpayer custodian cpa wak tee kke cpa kk attorney - amount a amount b amount c ee wie kkk eee independent auditor wee ira xx akk ira y kkk year year wr kk year year year dear t i kak aekk wee this is in response to your request dated date submitted on your behalf by your authorized representative as supplemented by correspondence dated date date date date date date date and september anda conference held on date in which you request relief under sec_301_9100-3 of the procedure and administrative regulations the regulations the following facts and representations have been submitted under penalty of perjury in support of the ruling requested taxpayer owned ira x a simplified employee plan sep ira described in sec_408 of the internal_revenue_code the code and maintained by custodian on december year custodian at taxpayer's request transferred amount a from ira x to ira y a roth_ira described in sec_408a of the code as a roth_ira_conversion ira y is also maintained by custodian taxpayer represents that he relied heavily on cpa his long time certified public _ accountant and preparer of his federal u s individual income_tax returns income_tax return s for guidance with respect to his u s individual income_tax obligations taxpayer consulted with cpa prior to his request to convert ira x to ira y during the time of the conversion cpa represents that he advised and cautioned taxpayer of the modified_adjusted_gross_income magi limitations relating to roth_ira conversions as provided by sec_408a of the code cpa also represents that at the time of the conversion he had not yet determined taxpayer’s year magi accordingly taxpayer represents that he was unaware that his magi exceeded the roth_ira_conversion magi limitation at the time of the conversion in year subsequent to the conversion taxpayer re-engaged cpa to prepare his year income_tax return cpa determined that taxpayer's magi was amount b cpa did not advise taxpayer at that time that amount b exceeded the roth_ira_conversion magi limitations and that consequently his conversion from ira x to ira y was a failed conversion under cpa represents that he does not recall whether he reviewed the issue of taxpayer's eligibility to convert ira x to ira y during the time he prepared the year income_tax return accordingly cpa prepared taxpayer's year income_tax return to include the conversion as a distribution from ira x taxpayer was not informed at this time that his conversion was a failed conversion with respect to an unrelated tax matter during year taxpayer engaged cpa to amend his year income_tax return and attorney to work on certain aspects of his amended year income_tax return cpa notified taxpayer and attorney at that time that his magi for year of amount b and the amended year magi of amount c were both greater than the allowed magi to convert his sep ira to a roth_ira and therefore his conversion from ira x to ira y was a failed conversion attorney reviewed taxpayer's original and amended year income_tax return and concurred with cpa 2’s assessment of the failed conversion attorney advised taxpayer that under appropriate circumstances a letter_ruling may be obtained that would grant a request of relief to make an election to recharacterize the conversion consequently taxpayer was not made aware of the failed conversion and the available election to recharacterize his roth_ira to a traditional_ira until december of year _ taxpayer's request for relief under sec_301 of the regulations was filed shortly after discovering that his conversion was a failed conversion under sec_1_408a-5 q a-9 a of the i t regulations in connection with this submission taxpayer provided a statement from independent auditor who reviewed the year through year income_tax returns and certified under penalties of perjury that the interests of the government would not be prejudiced under the standards set forth under sec_301 c i based on the foregoing facts and representations you have requested a ruling that pursuant to sec_301_9100-3 of the regulations taxpayer may be granted a period not to exceed days from the date_of_issuance of this ruling to make an election under sec_1_408a-5 of the i t regulations to recharacterize amount a as a contribution to a traditional_ira with respect to your request for relief under sec_301_9100-3 of the regulations sec_408a of the code and sec_1_408a-5 of the i t regulations provide that except as otherwise provided by the secretary a taxpayer may elect to recharacterize an ira contribution made to one type of ira as having been made to another type of ira by making a trustee-to-trustee transfer of the ira contribution plus earnings to the other type of ira in a recharacterization the ira contribution is treated as having been made to the transferee ira and not the transferor ira under sec_408a of the code and sec_1_408a-5 of the i t regulations this recharacterization election generally must occur on or before the date prescribed by law including extensions for filing the taxpayer's income_tax return for the year of contribution _ sec_1_408a-5 q8 a-6 of the i t regulations describes how a taxpayer makes the election to recharacterize the ira contribution to recharacterize an amount that has been converted from a sep ira to a roth_ira the taxpayer must notify the roth_ira trustee of the taxpayer's intent to recharacterize the amount the taxpayer must provide the trustee and the transferee trustee if different from the transferor trustee with specified information that is sufficient to effect the recharacterization and the trustee must make the transfer _ sec_408a of the code provides in relevant part that a taxpayer generally is hot allowed to make a rollover_contribution to a roth_ira from an individual_retirement_plan other than a roth_ira during any taxable_year if the taxpayer’s adjusted_gross_income for that year exceeds dollar_figure sec_408a of the code provides that a conversion of a sep ira to a roth_ira is treated as a rollover from the sep ira to the roth_ira sec_301_9100-1 sec_301_9100-2 and sec_301_9100-3 of the regulations in general provide guidance concerning requests for relief submitted to the internal_revenue_service the service on or after date sec_301_9100-1 provides that the commissioner of the service in his discretion may grant a reasonable extension of the time fixed by a regulation a revenue_ruling a revenue_procedure a notice or an announcement published in the internal_revenue_bulletin for the making of an election or application_for relief in respect of tax under among others subtitle a of the code sec_301_9100-2 of the regulations lists certain elections for which automatic extensions of time to file are granted sec_301_9100-3 generally provides guidance with respect to the granting of relief with respect to those elections not referenced in sec_301_9100-2 the relief requested in this case is not referenced in sec_301_9100-2 sec_301_9100-3 of the regulations provides that applications for relief that fall within sec_301_9100-3 will be granted when the taxpayer provides sufficient evidence including affidavits described in sec_301_9100-3 to establish that the taxpayer acted reasonably and in good_faith and granting relief would not prejudice the interests of the government sec_301_9100-3 of the regulations provides that a taxpayer will be deemed to have acted reasonably and in good_faith i if its request for sec_301_9100-1 relief is filed before the failure to make a timely election is discovered by the service ii if the taxpayer inadvertently failed to make the election because of intervening events beyond the taxpayer's control iii if the taxpayer failed to make the election because after exercising reasonable diligence the taxpayer was unaware of the necessity for the election iv the taxpayer reasonably relied upon the written advice of the service or v 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 sec_301_9100-3 of the regulations provides that the interests of the government are ordinarily prejudiced if the taxable_year in which the regulatory election should have been made or any taxable years that would have been affected by the election had it been timely made are closed by the period of limitations on assessment under sec_6501 of the code before the taxpayer's receipt of a ruling granting relief under this section sec_6501 of the code provides that the amount of any_tax assessed shall be assessed within three years after the return required to be filed by the taxpayer was filed sec_301_9100-3 of the regulations further provides that for closed years the service may condition a grant of relief on the taxpayer providing the service with a statement from an independent auditor other than an auditor providing an affidavit pursuant to paragraph e of sec_301_9100-3 certifying that the interests of the government are not prejudiced under the standards set forth in sec_301 c i which provides that the interests of the government will be prejudiced if granting relief results in the taxpayer having less tax_liability in the aggregate for all taxable years affected by the election than he would have had if the election would have been timely made taking into account the time_value_of_money - based on the above taxpayer meets the requirements of sec_301_9100-3 of the regulations clauses i iii and v for the tax_year in addition since the statute_of_limitations is closed under sec_301_9100-3 of the regulations granting relief would ordinarily prejudice the interests of the government taxpayer has provided a statement from an independent auditor other than the auditors involved in the identification or correction of the failed conversion certifying that the interests of the - government were not prejudiced under the standards set forth under sec_301 the information presented and documentation submitted by taxpayer is consistent with taxpayer's assertion that his failure to elect to recharacterize the roth_ira on or before the date prescribed by law including extensions for filing his income_tax return for the year of contribution was caused by taxpayer reasonably relying on a qualified_tax professional who failed to advise taxpayer to make the election taxpayer was not made aware of the failed conversion or the election until after the tax_year in question closed taxpayer filed this request for sec_301 relief shortly after discovering he had a failed conversion and before the service discovered his failure to make a timely election to recharacterize the failed conversion 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 accordingly taxpayer is granted an extension of days as measured from the date of the issuance of this ruling letter to recharacterize amount a as a contribution to a traditional_ira c i which satisfies a conditional grant of relief under sec_301_9100-3 this letter assumes that the above ira qualifies under either sec_408 of the code or sec_408a of the code at all relevant times _ 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 by others as precedent a copy of this letter has been sent to your authorized representative in accordance with a power_of_attorney on file with this office if you wish to inquire about this ruling please contact d tteeeeseeee of please address all correspondence to se t ep ra t2 sincerely yours enclosures deleted copy of this letter notice of intention to disclose notice cc cc week cc


internal_revenue_service number release date index number ---------------------------- ------------------- ------------------------------------------ ---------------------------- ---------------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact --------------------------- id no ---------------- telephone number -------------------- refer reply to cc ita b05 plr-125307-14 date date ty ------ legend taxpayer company exempt_organization ------------------------------------------- -------------------------- ----------------------------------------------- -------------------- ----------------------- ----------------------------------------- partnership -------------------------------------------------------------- tax_year a percent b percent x percent state affidavit ------------------------------------------------------------------------ affidavit related partnership ------ -------------- -------------- ---------------- ------------ ------------------------------------------------------------------------- ----------------------------------------------------------------------------- -------------------------------------------- dear ----------------- this letter is in response to a request for a private_letter_ruling dated date submitted on your behalf by your authorized representative specifically you have requested an extension of time under sec_301_9100-1 and sec_301_9100-3 of the procedure and administration regulations for taxpayer a tax-exempt_controlled_entity under sec_168 of the internal_revenue_code to make an election under sec_168 to not be treated as a tax-exempt_controlled_entity plr-125307-14 facts taxpayer was formed in tax_year in state and is taxed as a c_corporation for federal_income_tax purposes taxpayer is a percent owned by exempt_organization a not-for- profit corporation exempt from taxation under sec_501 and b percent owned by company based on exempt organization’s majority ownership_interest in and control of taxpayer taxpayer is a tax-exempt_controlled_entity within the meaning of sec_168 taxpayer is the general_partner of partnership partnership’s real_property was placed_in_service in tax_year and taxpayer filed a timely federal_income_tax return for tax_year but failed to make the sec_168 election on that return taxpayer’s failure to make the required sec_168 election was discovered for the first time when evidence of such election was requested in the case of related partnership which is also owned by exempt_organization however from affidavit affidavit and the other materials submitted it is clear that taxpayer at all times intended to be treated as if it was not tax-exempt which would have required taxpayer to make the sec_168 election affidavit and affidavit further make it clear that taxpayer’s return preparer was unaware that an affirmative election statement was required to be attached to the taxpayer’s federal tax_return for tax_year upon discovering its failure taxpayer promptly sought an extension of time in which to file the sec_168 election taxpayer makes the following representations notwithstanding omitting the statement of the sec_168 from the tax_return for tax_year every tax_return prepared and filed by taxpayer reflects the same treatment as if the sec_168 election had been made taxpayer is not under audit nor is being considered by an appeals officer or federal court for any_tax year in which the sec_168 election should have been made or for any_tax year affected by that election taxpayer is not seeking to alter a return position for which an accuracy-related_penalty has been or could be imposed under sec_6662 taxpayer is not using hindsight in requesting the relief sought the requested relief will not result in a lower tax_liability in the aggregate for all tax years affected by the sec_168 election than the taxpayer would have had if the sec_168 election had been timely made finally although the period of limitations on assessment under sec_6501 for tax_year has expired the government is not prejudiced in this case and thus relief should be granted law sec_167 of the internal_revenue_code provides generally for a depreciation deduction for property used in a trade_or_business under sec_168 the alternative plr-125307-14 depreciation system must be used for any tax-exempt_use_property as defined in sec_168 sec_168 provides that for purposes of sec_168 if any property which but for this subparagraph is not tax-exempt_use_property is owned by a partnership having both a tax-exempt_entity and a nontax-exempt entity as partners and any allocation to the tax-exempt_entity is not a qualified_allocation then an amount equal to such tax- exempt entity’s proportionate share of such property is treated as tax-exempt_use_property sec_168 provides generally that any tax-exempt_controlled_entity is treated as a tax-exempt_entity for purposes of sec_168 under sec_168 a tax-exempt_controlled_entity means any corporation without regard to that subparagraph and sec_168 if percent or more in value of the corporation’s stock is held by one or more tax-exempt entities other than a foreign_person_or_entity sec_168 applies similar rules in the case of tiered partnerships and other entities under sec_168 a tax-exempt_controlled_entity can elect not to be treated as a tax-exempt_entity such an election is irrevocable and will bind all tax-exempt entities holding an interest in the tax-exempt_controlled_entity under sec_301_9100-7t of the procedure and administration regulations a sec_168 election must be made by the due_date of the tax_return for the first taxable_year for which the election is to be effective sec_301_9100-7t provides the manner in which the sec_168 election is made sec_301_9100-1 provides that the commissioner of internal revenue has discretion to grant a reasonable extension of time to make a regulatory election sec_301_9100-1 defines the term regulatory election as including any election the due_date for which is prescribed by a regulation because the due_date of the sec_168 election is prescribed in sec_301_9100-7t the sec_168 election is a regulatory election sec_301_9100-1 through provide the standards the service will use to determine whether to grant an extension of time to make a regulatory election sec_301_9100-3 provides that requests for extensions of time for regulatory elections other than automatic extensions of time covered in sec_301_9100-2 will be granted when the taxpayer provides evidence including affidavits to establish that the taxpayer acted reasonably and in good_faith and granting relief will not prejudice the interests of the government plr-125307-14 sec_301_9100-3 provides that a taxpayer is deemed to have acted reasonably and in good_faith if the taxpayer - i requests relief before the failure to make the regulatory election is discovered by the service ii failed to make the election because of intervening events beyond the taxpayer’s control iii failed to make the election because after exercising due diligence the taxpayer was unaware of the necessity for the election iv reasonably relied on the written advice of the service or v reasonably relied on a qualified_tax professional and the tax professional failed to make or advise the taxpayer to make the election under sec_301_9100-3 a taxpayer will not be considered to have acted reasonably and in good_faith if the taxpayer - i seeks to alter a return position for which an accuracy-related_penalty could be imposed under sec_6662 at the time the taxpayer requests relief and the new position requires a regulatory election for which relief is requested ii was fully informed of the required election and related tax consequences but chose not to file the election or iii uses hindsight in requesting relief if specific facts have changed since the original deadline that make the election advantageous to a taxpayer the service will not ordinarily grant relief sec_301_9100-3 provides that the service will grant a reasonable extension of time only when the interests of the government will not be prejudiced by the granting of relief sec_301_9100-3 provides that the interests of the government are prejudiced if granting relief would result in a taxpayer having a lower tax_liability in the aggregate for all taxable years affected by the election than the taxpayer would have had if the election had been timely made under sec_301_9100-3 the interests of the government are ordinarily prejudiced if the taxable_year in which the regulatory election should have been made or any taxable years affected by the election had it been timely made are closed by the period of limitations on assessment under sec_6501 before the taxpayer's receipt of a ruling granting relief under this section analysis the information submitted indicate that taxpayer at all times intended from the outset to make the sec_168 election and taxpayer’s failure to make the sec_168 election was inadvertent taxpayer represents that it has requested relief before the failure to make the sec_168 election was discovered by the service pursuant to plr-125307-14 an examination there is no evidence that taxpayer is using hindsight in requesting relief further based on the facts presented and the representations made taxpayer will not have a lower tax_liability for all tax years affected by the sec_168 than it would have had if the sec_168 election had been timely made although the taxable_year in which the sec_168 election should have been made is closed under sec_6501 the above representations support our conclusion that taxpayer has acted reasonably and in good_faith therefore the interests of the government will not be prejudiced by the granting of relief conclusion based solely on the facts as represented and the applicable law we conclude that the requirements of sec_301_9100-3 have been met and the request for relief under sec_301_9100-3 is granted accordingly taxpayer is treated as if it had made the sec_168 election with the tax_return it filed for tax_year provided that taxpayer attaches a copy of this letter to the next tax_return it files taxpayer also must attach the aforementioned sec_168 election and the information set forth in sec_301_9100-7t to its next return if taxpayer files electronically it may satisfy this requirement by attaching a statement to the return that provides the date and control number of this letter_ruling in addition the letter_ruling or statement should be attached for all subsequent returns and amended returns for all taxable years to which this ruling is relevant pursuant to sec_301_9100-7t a copy of this letter and the sec_168 election statement also should be attached to the federal_income_tax returns of each of the tax-exempt shareholders or beneficiaries of taxpayer 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 further we express no opinion concerning the assessment of any interest additions to tax additional_amounts or penalties for failure_to_file a timely income_tax return with respect to any taxable_year the ruling in this letter is based upon the information and representations submitted by taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party although this office has not verified any of the material submitted in support of the request for the ruling 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 plr-125307-14 enclosed is a copy of the letter showing the deletions proposed to be made when it is disclosed under sec_6110 if you have any questions concerning this matter please contact the individual whose name and telephone number appear at the top of the letter in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative sincerely seoyeon sharon park assistant to the branch chief branch office_of_chief_counsel income_tax accounting enclosure cc


internal_revenue_service department of the treasury number release date index numbers washington dc person to contact telephone number refer reply to cc corp - plr-138258-01 date date legend purchaser target seller company official tax professional state x state y date a date b this letter responds to a letter dated date submitted on behalf of purchaser and seller requesting an extension of time under sec_301_9100-1 through of the procedure and administration regulations to file an election purchaser and seller are requesting an extension to file a sec_338 election under sec_338 and sec_338 of the internal_revenue_code and sec_1_338_h_10_-1t c of the income_tax regulations with respect to purchaser’s acquisition of the stock of target sometimes hereinafter referred to as the election on date a all citations in this letter to regulations under sec_338 are to regulations in effect on date a additional information was received in a letter dated date the material information is summarized below purchaser is a state x corporation that has a fiscal_year ending september target was an s_corporation incorporated in state y prior to date a seller an individual owned all of the stock of target target’s tax_year was the calendar_year plr-138258-01 on date a purchaser and seller entered into a stock purchase agreement and purchaser acquired all of the stock of target from seller in exchange for cash in a fully taxable_acquisition it is represented that purchaser’s acquisition of the stock of target qualified as a qualified_stock_purchase as defined in sec_338 purchaser and seller intended to file the election the election was due on date b but for various reasons a valid election was not filed after the due_date for the election it was discovered that the election had not been filed subsequently this request was submitted under sec_301_9100-1 for an extension of time to file the election the period of limitations on assessment under sec_6501 has not expired for purchaser’s target’s or seller’s taxable years in which the acquisition occurred the taxable years in which the election should have been filed or any taxable years that would have been affected by the election had it been timely filed sec_338 permits certain stock purchases to be treated as asset acquisitions if the purchasing_corporation makes or is treated as having made a sec_338 election or a sec_338 election and the acquisition is a qualified_stock_purchase sec_338 permits the purchasing and selling corporations to elect jointly to treat the target_corporation as deemed to sell all of its assets and distribute the proceeds in complete_liquidation a sec_338 election may be made for target only if it is a member of a selling_consolidated_group a member of a selling affiliated_group filing separate returns or an s_corporation see sec_1_338_h_10_-1t c 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 internal_revenue_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 see sec_301_9100-1 sec_301_9100-2 provides automatic extensions of time for making certain elections 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 see sec_301_9100-3 in this case the time for filing the election is fixed by the regulations ie sec_1_338_h_10_-1t c therefore the commissioner has discretionary authority under sec_301_9100-1 to grant an extension of time for purchaser and seller to file the election provided purchaser and seller show they 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-138258-01 information affidavits and representations submitted by purchaser seller company official and tax professional explain the circumstances that resulted in the failure to timely file a valid election the information establishes that purchaser and seller reasonably relied on a qualified_tax professional who was aware of all relevant facts the request for relief was filed before the failure to make the election was discovered by the internal_revenue_service and that the government will not be prejudiced if relief is granted see sec_301_9100-3 and v based on the facts and information submitted including the representations made we conclude that purchaser and seller have shown they 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 accordingly an extension of time is granted under sec_301_9100-1 until days from the date on this letter for purchaser and seller to file the election with respect to the acquisition of the stock of target as described above the above extension of time is conditioned on the filing within days of the date on this letter of all returns and amended returns if any necessary to report the transaction in accordance with the election and the taxpayers' purchaser's seller’s and target’s tax_liability if any being not lower in the aggregate for all years to which the election applies than it would have been if the election had been timely made taking into account the time_value_of_money no opinion is expressed as to the taxpayers’ tax_liability for the years involved a determination thereof will be made by the applicable director’s office 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 the taxpayers’ tax_liability is lower see sec_301_9100-3 purchaser and seller must file the election in accordance with sec_1_338_h_10_-1t c that is a new election on form_8023 must be executed on or after the date on this letter which grants an extension and filed in accordance with the instructions to the form a copy of this letter must be attached to the election form purchaser and seller must file or amend as applicable their returns to report the transaction as a sec_338 transaction for the taxable_year in which the transaction was consummated and for any other affected_taxable_year and to attach to the returns a copy of this letter and a copy of the election we express no opinion as to whether the acquisition sale of the target stock qualifies as a qualified_stock_purchase under sec_338 whether the acquisition sale of target stock qualifies for sec_338 treatment or any other tax consequences arising from the election in addition we express no opinion as to the tax consequences of filing the election late under the provisions of any other section of the code and 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_9100-1 we relied on certain statements and representations plr-138258-01 made by the taxpayers however the director should verify all essential facts in addition notwithstanding that an extension is granted under sec_301_9100-1 to file the election penalties and interest that would otherwise be applicable if any continue to apply purchaser must provide seller with a copy of this letter this letter is directed only to the taxpayer s who requested it sec_6110 provides that it may not be used or cited as precedent pursuant to the power_of_attorney on file in this office a copy of this letter is being sent to your authorized representative sincerely yours associate chief_counsel corporate by ken cohen senior technician reviewer branch


t c summary opinion united_states tax_court obie harris and quincy ramsay petitioners v commissioner of internal revenue respondent docket no 5038-06s filed date obie harris pro_se stephen j neubeck for respondent ruwe judge this case was heard pursuant to the provisions of sec_7463 of the internal_revenue_code in effect when the petition was filed pursuant to sec_7463 the decision unless otherwise indicated all section references are to the internal_revenue_code in effect for the year in issue and all rule references are to the tax_court rules_of_practice and procedure to be entered is not reviewable by any other court and this opinion shall not be treated as precedent for any other case respondent determined a deficiency of dollar_figure in petitioners’ federal_income_tax the only issue we must decide is whether petitioners are entitled to a dollar_figure alimony deduction they claimed on their tax_return for the taxable_year background some of the facts have been stipulated and are so found the stipulation of facts and the attached exhibits are incorporated by this reference when the petition was filed petitioners resided in dayton ohio on date petitioner obie harris mr harris left the marital home he jointly owned and shared with his then spouse carrie harris ms harris by temporary order first temporary order dated date the common pleas court of the record is not clear as to the specific items making up the dollar_figure deducted on the return but it is apparent that petitioners included some child_support payments in this amount at trial respondent conceded that petitioners were entitled to deduct dollar_figure of the dollar_figure alimony deduction claimed on their return respondent’s determination to disallow the alimony deduction resulted in an increase in petitioners’ adjusted_gross_income and a decrease in their tentative_minimum_tax certain miscellaneous_itemized_deductions deductible only to the extent that they exceed a percentage of petitioners’ adjusted_gross_income were reduced the decrease in the tentative_minimum_tax also reduced petitioners’ alternative_minimum_tax liability our determination will affect these adjustments montgomery county ohio division of domestic relations common pleas court directed mr harris in relevant part as follows it is further ordered that plaintiff mr harris shall pay to defendant ms harris by way of temporary spousal support the sum of dollar_figure per month beginning if defendant is residing in the marital residence plaintiff shall have the right option and privilege of discharging this monthly spousal support by paying the mortgage rent including taxes and insurance and basic utilities at the marital residence on date ms harris through counsel requested from the common pleas court a temporary order of custody parenting time and child_support by temporary order second temporary order dated date and in accordance with the agreement by mr and ms harris the common pleas court directed mr harris in relevant part as follows temporary child_support shall be dollar_figure per child per week for four children totaling dollar_figure per week temporary child_support payments shall be made through the office of defendant’s attorney on date the common pleas court issued a final judgment and decree of divorce divorce decree between mr and ms harris under the title spousal support the common pleas court directed mr harris in relevant part as follows ohio statutory law provides that during the pendency of any divorce or legal_separation proceeding the court may award reasonable temporary spousal support to either party ohio rev code ann sec b anderson it also provides that any award of spousal support made under this section shall terminate upon the death of either party unless the order containing the award expressly provides otherwise id the plaintiff obligor mr harris shall pay as and for spousal support dollar_figure per month beginning date and ending date to be discharged in equal amounts according to the pay schedule of the plaintiff obligor the plaintiff obligor shall pay an additional dollar_figure per month in spousal support beginning date and ending date or upon the re- marriage or death of the defendant obligee representing the mortgage payment for the defendant obligee this additional spousal support shall be paid directly to the mortgage company the common pleas court also directed mr harris to pay as and for child_support dollar_figure per child per month for four children for a total of dollar_figure per month to be discharged in equal amounts according to the pay schedule of the plaintiff obligor pursuant to the divorce decree both spousal and child_support payments were required to be made through the ohio child_support payment central mr harris met his obligations under the first temporary order by opting to make the monthly mortgage payments of dollar_figure beginning in date mr and ms harris were jointly liable on this mortgage mr harris timely made payments in directed by the above-mentioned common pleas court temporary orders and divorce decree including the dollar_figure mortgage payments for the months of may through december and the dollar_figure monthly spousal support payments for october november and december discussion sec_215 provides that an individual is allowed a deduction for alimony or separate_maintenance payments as defined in sec_71 alimony does not include any part of a payment which the terms of the divorce instrument fix as a sum payable for the support of the children of the payor spouse sec_71 zinsmeister v commissioner tcmemo_2000_364 affd 21_fedappx_529 8th cir respondent acknowledges that mr harris paid at least dollar_figure and maybe more during pursuant to the court orders and decree in his divorce proceeding but argues that most of these payments did not constitute deductible_alimony or separate_maintenance as defined in sec_71 sec_71 provides sec_71 alimony and separate_maintenance payments b alimony or separate_maintenance payments defined --for purposes of this section-- in general --the term alimony_or_separate_maintenance_payment means any payment in cash if-- a such payment is received by or on behalf of a spouse under_a_divorce_or_separation_instrument b the divorce_or_separation_instrument does not designate such payment as a payment which is not includible in gross_income under this section and not allowable as a deduction under sec_215 c in the case of an individual legally_separated from his spouse under a decree of divorce or of separate_maintenance the payee spouse and the payor spouse are not members of the same household at the time such payment is made and d there is no liability to make any such payment for any period after the death of the payee spouse and there is no liability to make any payment in cash or property as a substitute for such payments after the death of the payee spouse divorce_or_separation_instrument --the term divorce_or_separation_instrument means-- a a decree of divorce or separate_maintenance or a written instrument incident to such a decree b a written_separation_agreement or c a decree not described in subparagraph a requiring a spouse to make payments for the support or maintenance of the other spouse the common pleas court’s first temporary order and the divorce decree satisfy the requirements of the definition of a divorce_or_separation_instrument mr harris’s child_support payments made pursuant to the second temporary order and the divorce decree clearly fail to satisfy the requirements of sec_71 and cannot be deducted as alimony we must determine which of the payments directed by the first temporary order and the divorce decree qualify as alimony under the requirements of sec_71 respondent does not contest that mr harris made the monthly dollar_figure spousal support payments directed by the divorce decree and it is clear that these payments totaling dollar_figure constitute alimony or separate_maintenance payments with regard to the mortgage payments we considered a similar situation in zinsmeister v commissioner supra where we stated different considerations come into play regarding whether petitioner’s payment of the mortgages were on the spouse’s behalf when a divorce court orders one spouse to make payments on a mortgage for which both spouses are jointly liable a portion of such payments discharges the legal_obligation of the other spouse in such circumstances the payee spouse has received income under the general principle of 279_us_716 payment by a third party of a person’s legal_obligation is taxable_income to that person accordingly in such cases one-half of the mortgage payment is includable in the gross_income of the payee spouse and to the extent it otherwise qualifies as alimony it is deductible by the payor spouse as alimony see 45_tc_120 simpson v commissioner tcmemo_1999_251 zampini v commissioner tcmemo_1991_395 revrul_67_420 1967_2_cb_63 see also sec_1_71-1t q a-6 temporary income_tax regs fed reg date we find that one-half of each of the eight dollar_figure monthly payments made by mr harris during as directed by the common pleas court in the first temporary order and the divorce decree constitutes alimony or a separate_maintenance payment under sec_71 the other half of each of mr harris’s mortgage payments is attributable to his own mortgage obligation and thus does not qualify as alimony petitioners have not produced any evidence of other_payments that could be considered alimony or separate_maintenance we hold that petitioners are entitled to an alimony deduction limited to the dollar_figure total of the three spousal support payments for october november and date plus one-half of each dollar_figure monthly mortgage payment for may through date to reflect the foregoing decision will be entered under rule


internal_revenue_service national_office technical_advice_memorandum third party contact none index no control no tam-121592-98 number release date district_director date taxpayer’s name taxpayer’s address taxpayer’s identification no quarters involved date of conference legend taxpayer issue is taxpayer exempt from the tax imposed by sec_4251 of the internal_revenue_code with respect to the services described below by reason of sec_4253 conclusion taxpayer is not exempt from the tax imposed by sec_4251 with respect to the services described above by reason of sec_4253 facts taxpayer is a common carrier or communications company within the meaning of sec_4253 in the conduct of its business it subscribes to an inbound intrastate and inbound interstate toll_telephone_service the charge for the intrastate service is a specified per minute amount billed in six second increments with an second minimum a different per minute amount billed in six second increments with an second minimum applies to the interstate service law and analysis sec_4251 imposes a tax on amounts paid for certain communications_services sec_4251 provides that the term communications_services includes toll_telephone_service sec_4252 defines toll_telephone_service as a telephonic quality communication for which a there is a toll_charge which varies in amount with the distance and elapsed transmission time of each individual communication and b the charge is paid in the united_states and a service which entitles the subscriber upon payment of a periodic charge determined as a flat amount or upon the basis of total elapsed transmission time to the privilege of an unlimited number of telephonic communications to or from all or a substantial portion of the persons having telephone or radio telephone stations in a specified area which is outside the local telephone system area in which the station provided with the service is located sec_4253 provides that no tax shall be imposed under sec_4251 on the amount_paid for any toll_telephone_service described in sec_4252 to the extent that the amount so paid is for use by a common carrier telephone or telegraph company or radio broadcasting station or network in the conduct of its business as such in revrul_79_404 1979_2_cb_382 the service considered the applicability of sec_4252 to telephone messages that were relayed by an offshore radio telephone service by satellite between sites outside the united_states and landline stations in the united_states the charge for the service varied only with elapsed transmission time the charge was stated to be 3x dollars per minute for the first three minutes thereof and 1x dollar for each additional minute or fraction thereof the ruling states that prior to the amendment of sec_4252 by sec_302 of the excise_tax reduction act of 1965_2_cb_568 toll_telephone_service was defined in part as a telephone or radio telephone message or conversation for which there was a toll_charge and the charge is paid within the united_states the legislative_history of sec_4252 indicates that in amending sec_4252 congress intended to exempt certain private communication services from the tax and repeal the tax on telegraph service and wire and equipment service but there was no indication that congress otherwise intended to make changes in the types of service subject_to tax accordingly the ruling holds that the above-described service is toll_telephone_service within the meaning of sec_4252 notwithstanding that the charge for the service did not vary by distance as provided by sec_4253 amounts paid for_the_use_of any toll_telephone_service described in sec_4252 by a common carrier or communications company in the conduct of its business as such are exempt from the communications tax however a common carrier or communications company is not exempt with respect to toll_telephone_service that is described in sec_4252 the definition contained in sec_4252 was intended to describe service commonly known as wide area telephone service or wats which is described in the legislative_history to sec_4252 as a service whereby for a flat charge the subscriber is entitled to make an unlimited calls within a defined area sometimes limited as to the maximum amount of hours see h_rep_no 89th cong 1st sess 1965_2_cb_643 s rep no 89th cong 1st sess 1965_2_cb_676 thus wats resembles on a wide area basis a service similar to traditional local_telephone_service wherein the subscriber pays a fixed monthly rate for an unlimited number of calls and the charge does not vary according to the length destination or number of calls taxpayer emphasizes that the charge per fixed unit of time for each service is the same so that the charge may be computed based upon total elapsed transmission time as used in the parenthetical in sec_4252 however calls are billed on the basis of the duration of each individual call not on the total elapsed transmission time of all calls to a specified area thus the services are similar to that described in revrul_79_404 sec_4252 rather than sec_4252 that is the services for which taxpayer pays do not entitle taxpayer to an unlimited number of calls to a specified service area for which a charge is made based on a flat fee or elapsed transmission time but rather provide taxpayer with telephone service for which taxpayer is charged an amount that varies based upon the duration of each call caveats a copy of this technical_advice_memorandum is to be given to the taxpayer sec_6110 provides that it shall not be used or cited as precedent in accordance with sec_6110 names addresses and other identifying numbers have been deleted


internal_revenue_service number info release date cc psi 1-genin-131513-02 july uilc we are responding to correspondence requesting relief in order to revoke your s_corporation_election the information submitted explains that you wish to revoke the election retroactively to date pursuant to sec_1_1362-2 of the income_tax regulations an election made under sec_1362 of the internal_revenue_code is terminated if the corporation revokes the election for any taxable_year of the corporation for which the election is effective including the first taxable_year a revocation must be made with the consent of all shareholders holding more than one-half of the issued and outstanding_stock of the corporation in general a revocation is prospective however a revocation made during the taxable_year and before the 16th day of the third month of the taxable_year is effective on the first day of the year and a revocation made after the 15th day of the third month of the taxable_year is effective for the following taxable_year if a corporation makes an election to be an s_corporation that is to be effective beginning with the next taxable_year and revokes its election on or before the first day of the next taxable_year the corporation is deemed to have revoked its election on the first day of the next taxable_year if a corporation specifies a date for revocation and the date is expressed that is on or after the date the revocation is filed the revocation is effective on and after the date so specified in your situation you have requested to retroactively revoke the s_corporation_election currently there is no provision which allows you to take this action in order to guide taxpayer education the irs has developed two new cd-roms to help educate small_business owners on their tax responsibilities introduction to federal taxes for small_business self-employed and a virtual small_business workshop these two cd-roms are free and can be ordered by calling the irs also provides a special website www irs gov smallbiz which is dedicated to providing information to small_business taxpayers please keep this letter with your tax records and feel free to provide a copy of it to your authorized representative we hope that the above information proves helpful sincerely yours s dianna k miosi dianna k miosi chief branch associate chief_counsel passthroughs and special industries


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 b02 plr-105039-08 date june legend legend taxpayer corporation x firm a firm b date date date date date date date ------------------------- ---------------------------------- -------- ---------------- ------------------- -------------------------- ---------------------------- ------------------------ ------------------------ --------------------- ---------------------------- dear --------------------- this letter responds to a letter_ruling request dated date submitted on behalf of corporation x as successor-in-interest to taxpayer taxpayer requests an extension of time to date under treas reg to complete the documentation of success-based fees required under sec_1_263_a_-5 thereby excluding the fees from the definition of amounts paid to facilitate a transaction under sec_1_263_a_-5 that are required to be capitalized under sec_263 prior to date taxpayer and corporation x were the parents of two separate affiliated groups of corporations filing consolidated federal_income_tax returns on date taxpayer merged into corporation x under applicable state law with corporation x as the surviving entity the acquisition on date corporation x engaged firm a to assist in determining the filing deadlines for taxpayer’s federal and state tax returns for plr-105039-08 the period ending on date on date corporation x engaged firm a to assist with the preparation and filing of the returns firm a mistakenly believed that the acquisition was a stock acquisition in which taxpayer remained a separate legal entity and became a member of corporation x’s consolidated_group accordingly firm a incorrectly informed taxpayer that the due_date for taxpayer’s return for the period ending on date was date with an extended due_date of date taxpayer filed a request for an extension on or before date and therefore believed that the due_date of its return was date the actual due_date of the return was on date corporation x had engaged firm b on date to compile the necessary documentation for the success-based fees initially firm b operated under the assumption that the documentation must be completed by date firm b subsequently discovered the error in the calculation of the due_date and after date notified taxpayer of the error thus the success-based_fee documentation was not completed prior to date the actual due_date of the return as a general_rule sec_263 and sec_1_263_a_-5 require capitalization of amounts paid to facilitate certain acquisition transactions the amounts required to be capitalized generally include amounts paid in the process of investigating or otherwise pursuing the transaction sec_1_263_a_-5 however there is an exception to this requirement for certain success-based fees sec_1 a - f this exception provides an amount_paid that is contingent on the successful closing of a transaction described in paragraph a of this section is an amount_paid to facilitate the transaction except to the extent the taxpayer maintains sufficient documentation to establish that a portion of the fee is allocable to activities that do not facilitate the transaction this documentation must be completed on or before the due_date of the taxpayer’s timely filed original federal_income_tax return including extensions for the taxable_year during which the transaction closes id sec_301_9100-1 through set forth the standards the commissioner uses in determining whether to grant an extension of time to make an election sec_301_9100-1 provides that an election includes an application_for relief in respect of tax and a request to adopt change or retain an accounting_method or accounting_period but does not include an application_for an extension of time for filing a return under sec_6081 a regulatory election means an election whose due_date is prescribed by inter alia a regulation published in the federal_register plr-105039-08 sec_301_9100-1 generally provides that the commissioner has discretion to grant a taxpayer a reasonable extension of time to make a regulatory election under the rules set forth in sec_301_9100-2 and sec_301_9100-3 sec_301_9100-2 provides automatic extensions of time in certain circumstances not applicable in this case sec_301_9100-3 provides that requests for extensions of time for regulatory elections will be granted when the taxpayer provides evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and the grant of relief will not prejudice the interests of the government in the present situation the documentation required by sec_1_263_a_-5 is a regulatory election as defined in sec_301_9100-1 therefore the commissioner has discretionary authority under sec_301_9100-1 to grant taxpayer a reasonable extension of time provided that taxpayer satisfies the requirements set forth in sec_301_9100-3 based on the facts and information submitted we conclude that taxpayer satisfies the requirements of sec_301_9100-3 we further conclude that taxpayer’s request for an extension of time to complete the documentation until date is a reasonable extension of time under sec_301_9100-1 the granting of an extension of time is not a determination that taxpayer is otherwise eligible to make the election 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 specifically no opinion is expressed concerning the correct due_date of taxpayer’s return or the deductibility of the success-based fees including whether taxpayer’s documentation is adequate for purposes of sec_1_263_a_-5 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_ruling it is subject_to verification on examination a copy of this letter must be attached to any income_tax return to which it is relevant alternatively taxpayers filing their returns electronically may satisfy this requirement by attaching a statement to their return that provides the date and control number of the letter_ruling this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent plr-105039-08 in accordance with the power_of_attorney on file with this office copies of this letter are being sent to your authorized representatives sincerely thomas d moffitt branch chief branch associate chief_counsel income_tax accounting cc