internal_revenue_service number release date index number ---------------------- ------------- ------------------------------- ---------------------- ------------------------------------ in re ------------------------------- department of the treasury washington dc person to contact ------------------- id no -------------- telephone number --------------------- refer reply to cc corp - plr-147666-03 date date distributing ------------------------------- ---------------------------- ----------------------- controlled ------------------------------------------------------------------------ ---------------------------- ---------------------- controlled controlled controlled ----------------------------- ---------------------------- ---------------------------- ----------------------------- ---------------------------------------------- ---------------------------- ----------------------------- ---------------------------------------------- ---------------------------- shareholder --------------------------------------------------------------------- shareholder ----------------- ------------------- ------------------------- shareholder shareholder ------------------- ------------------------- ------------------- --------------------------------------------------------------------- shareholder ------------------------ ------------------------- ----------------- ------------------------- ------------------ ------------------------- ------------------ ------------------------- -------------------------------------------- --------- -------- ------ -------- -------- -------- -------- ------ ---- ----------- ---------- shareholder shareholder shareholder business a year a b c d e f g h i state x dear -------------- this letter is in reply to your letter dated date requesting rulings as to the federal_income_tax consequences of a proposed transaction additional information was submitted in letters dated october october october november december and date the information submitted for consideration is summarized below distributing is a cash_basis state x corporation distributing elected to be taxed as an s_corporation in year distributing currently has big_number shares of voting common_stock outstanding which is owned by eight ashareholders shareholder a shareholder b shareholder c shareholder d shareholder e shareholder f shareholder g and shareholder h distributing has directly engaged in business a for more than five years through its shareholders and employees the taxpayer has supplied financial information which indicates that business a has had gross_receipts and operating_expenses representative of the active_conduct of the business for each of the past five years distributing has accumulated earning and profits of approximately dollar_figurei all of which is attributable to distributing’s predecessor by virtue of a sec_355 transaction in year prior to distributing’s s election distriubuting’s predecessor had accumulated these profits as a c_corporation prior to the proposed transaction distributing intends to make a cash distribution cash distribution proportionally to the shareholders of its accumulated_earnings_and_profits to resolve management issues relating to asset deployment and economic risk that are inherent in the current structure distributing has decided to separate business a as follows the proposed transaction i distributing will form controlled controlled controlled and controlled as cash_basis corporations together the controlled corporations under the laws of state x distributing will contribute business a assets to each of the newly formed controlled corporations in exchange for all of the outstanding_stock of each of the controlled corporations ii distributing will distribute all of the stock of controlled to shareholder and shareholder in exchange for all of shareholder 1’s and shareholder 2’s stock in distributing distributing will distribute all of the stock of controlled to shareholder in exchange for all of shareholder 4's stock in distributing distributing will distribute all of the stock of controlled to shareholder in exchange for all of shareholder sec_5's stock in distributing distributing will distribute all of the stock of controlled to shareholder in exchange for all of shareholder 6's stock in distributing the distribution no fractional shares will be exchanged sec_1361 provides that the term s_corporation means with respect to a taxable_year a small_business_corporation for which an election under sec_1362 is in effect for such year sec_1361 provides that i a corporation which is a qsub shall not be treated as a separate corporation and ii all assets liabilities and items of income deduction and credit of a qsub shall be treated as assets liabilities and such items as the case may be of the s_corporation sec_1361 provides that the term qualified_subchapter_s_subsidiary means any domestic_corporation which is not an ineligible_corporation if i percent of the stock of such corporation is held by the s_corporation and ii the s_corporation elects to treat such corporation as a qualified_subchapter_s_subsidiary sec_1361 provides that if any corporation which was a qsub ceases to meet the requirements of sec_1361 such corporation shall be treated as a new corporation acquiring all of its assets and assuming all of its liabilities immediately before such cessation from the s_corporation in exchange for its stock sec_1361 provides that if a corporation's status as a qsub sec_1_1361-5 of the income_tax regulations provides that if a qsub terminates such corporation and any successor_corporation shall not be eligible to make i an election to be treated as a qsub or ii an election to be treated as an s_corporation before it sec_5th taxable_year which begins after the first taxable_year for which such termination was effective unless the secretary consents to such election election terminates under sec_1_1361-5 the former qsub is treated as a new corporation acquiring all of its assets and assuming all of its liabilities immediately before the termination from the s_corporation parent in exchange for the stock of the new corporation the tax treatment of this transaction or of a larger transaction that includes this transaction will be determined under the code and general principles of tax law including the step_transaction_doctrine sec_1_1361-5 example provides an example whereby an s_corporation that distributes the stock of its qsub to its shareholders terminating the qsub election can qualify as a distribution to which sec_368 and sec_355 apply if the transaction otherwise satisfies the requirements of those sections sec_1_1361-5 provides that absent the commissioner's consent and except as provided in sec_1 c a corporation whose qsub election has terminated or a successor_corporation may not make an s election or have a qsub election made with respect to it for five taxable years sec_1_1361-5 provides that a corporation may make an s election or have a qsub election made with respect to it before the expiration of the five-year period described in sec_1361 provided that i immediately following the termination the corporation or its successor_corporation is otherwise eligible to make an s election or have a qsub election made for it and ii the relevant election is made effective immediately following the termination of the qsub election the following representations have been made in connection with the proposed transaction a the indebtedness if any owed by each of the controlled corporations to distributing after the distribution of each controlled corporations’ stock will not constitute stock_or_securities b the fair_market_value of the stock of controlled controlled controlled and controlled to be received by shareholder sec_1 and shareholder shareholder and shareholder respectively will be approximately equal to the fair_market_value of distributing stock surrendered by such shareholders in exchange c no part of the consideration distributed by distributing is being received by a shareholder as a creditor employee or in any capacity other than that as a shareholder of distributing d the five years of financial information submitted on behalf of distributing is representative of the corporation's present operation and with regard to such corporation there have been no substantial operational changes since the date of the last financial statements submitted e following the transaction distributing and each controlled_corporation will each continue independently and with its separate employees the active_conduct of all of the integrated activities of the business conducted by distributing prior to the consummation of the transaction the distribution of stock of controlled controlled controlled and controlled is being carried out for the corporate business_purpose of allowing divergent approaches to the appropriate asset deployment and economic risks with respect to business a to avoid management and shareholder disagreements the distribution of the stock of the controlled corporations is motivated in whole or in substantial part by this corporate business_purpose g distributing is an s_corporation within the meaning of sec_1361 of the internal_revenue_code each of the controlled corporations will elect to be an s_corporation pursuant to sec_1362 of the internal_revenue_code the code on the first available date after the distribution and there is no plan or intent to revoke or otherwise terminate the s_corporation_election of either distributing or any of the controlled corporations f i j l h there is no plan or intention by the shareholders of distributing to sell exchange transfer by gift or otherwise dispose_of any of their stock in either distributing or any of the controlled corporations after the transaction there is no plan or intention by any of distributing or any of the controlled corporations directly or through any subsidiary_corporation to purchase any of its outstanding_stock after the transaction there is no plan or intention to liquidate either distributing or any of the controlled corporations to merge any of the corporations with any corporation or to sell or otherwise dispose_of the assets of any of the corporations after the transaction except in the ordinary course of business k the total adjusted_basis and fair_market_value of the assets transferred to each of the controlled corporations by distributing each equals or exceeds the sum of the liabilities assumed by each of the controlled corporations plus any liabilities to which the transferred assets are subject as determined under sec_357 the liabilities assumed in the transaction and the liabilities to which the transferred assets are subject were incurred in the ordinary course of business and are associated with the assets being transferred distributing neither accumulated its receivables nor made extraordinary payment of its payables in anticipation of the transaction m no intercorporate debt will exist between distributing and any of the controlled corporations at the time of or subsequent to the distribution of the stock of each of the controlled corporations n payments made in connection with all continuing transactions if any between distributing and any of the controlled corporations will be for fair_market_value based on terms and conditions arrived at by the parties bargaining at arm's length o no parties to the transaction are investment companies as defined in sec_368 and iv p the distribution is not part of a plan or series of related transactions within the meaning of sec_355 pursuant to which one or more persons will acquire directly or indirectly stock possessing percent or more of the total combined voting power of all classes of stock of distributing and each of the controlled corporations or stock possessing or more of the total value of all classes of stock of distributing and each of the controlled corporations based solely on the information submitted and on the representations set forth above we rule as follows the transfers by distributing to controlled controlled controlled and controlled of a portion of the assets of business a in exchange for all of the stock of each of the controlled corporations and the assumption_of_liabilities by each of the controlled corporations as described above followed by the distribution of stock of controlled controlled controlled and controlled to shareholder sec_1 and shareholder shareholder and shareholder respectively will each be a reorganization within the meaning of sec_368 distributing and each of the controlled corporations will be a party to the reorganization within the meaning of sec_368 no gain_or_loss will be recognized by distributing upon the transfer of assets subject_to liabilities to each of the controlled corporations solely in exchange for stock in each of the controlled corporations as described above sec_361 and sec_357 no gain_or_loss will be recognized by controlled controlled controlled and controlled upon the receipt of the assets from distributing in exchange for shares of stock of each such controlled_corporation sec_1032 the basis of the assets received by controlled controlled controlled and controlled will be the same as the basis of such assets in the hands of distributing immediately prior to their transfer to controlled controlled controlled and controlled sec_362 the holding_period of the distributing assets received by controlled controlled controlled and controlled will include the period during which such assets were held by distributing sec_1223 except for the cash distribution no gain_or_loss will be recognized by and no amount will be included in the income of shareholder sec_1 and shareholder shareholder or shareholder upon their receipt of shares of controlled controlled controlled and controlled respectively in exchange for all of their distributing shares as described above sec_355 and sec_356 the cash contribution will be treated as a distribution_of_property to which sec_301 applies sec_356 and sec_1_356-2 no gain_or_loss will be recognized by distributing upon the distribution of the stock of controlled controlled controlled and controlled to shareholder sec_1 and shareholder shareholder and shareholder respectively as described above sec_361 the basis of the stock of controlled controlled controlled and controlled in the hands of shareholder sec_1 and shareholder shareholder and shareholder respectively will be the same as the basis of the distributing stock surrendered by such shareholders in exchange therefor decreased by the amount of cash received by such shareholders in the cash distribution and increased by the amount of such cash that is treated as a dividend to such shareholders sec_358 and sec_358 the holding_period of the stock of controlled controlled controlled and controlled received by shareholder sec_1 and shareholder shareholder and shareholder respectively will include the holding_period of the distributing stock surrendered in exchange therefor provided that the distributing stock is held as a capital_asset on the date of the distribution sec_1223 as provided in sec_312 proper allocation of earnings_and_profits between distributing and each of the controlled corporations will be made under sec_1 a of the income_tax regulations distributing’s momentary ownership of the stock of each of the controlled corporations as part of the divisive_reorganization under sec_368 will not cause any of the controlled corporations to have an ineligible shareholder for any portion of its first taxable_year under sec_1361 the election of each of the controlled corporations to be an s_corporation under sec_1362 if timely made under sec_1362 and without requiring distributing’s consent will be effective during such corporation’s first taxable_year notwithstanding the momentary ownership of the stock of such controlled_corporation by distributing immediately prior to the distribution no opinion is expressed about the tax treatment of the proposed transaction under other provisions of the code and regulations or about the tax treatment of any conditions existing at the time of or effects resulting from the proposed transaction that are not directly covered by the above rulings this ruling letter is directed only to the taxpayer who requested it sec_6110 of the code provides that it may not be used or cited as precedent a copy of this letter should be attached to the federal_income_tax returns of the taxpayers involved for the taxable_year in which the transaction covered by this ruling letter is consummated the rulings contained in this letter are predicated upon the facts and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party this office has not verified any of the material submitted in support of the request for a ruling verification of the factual information representations and other data may be required as part of the audit process pursuant to the power_of_attorney on file in this office a copy of this letter has been sent to your authorized representative sincerely yours associate chief_counsel corporate by mark s jennings mark s jennings chief branch


internal_revenue_service number release date index number ------------------------------- ------------------------- ----------------------- ------------------------- - department of the treasury washington dc third party communication none date of communication not applicable_person to contact ----------------------- id no ------------- telephone number --------------------- refer reply to cc psi b02 plr-108679-05 date date ------ ---------------------- ------------------------------------ legend x ------------------------------------------ country date dear --- ----------- this responds to a letter dated date submitted on behalf of x requesting that the service grant x an extension of time under sec_301_9100-3 of the procedure and administration regulations to elect to be treated as a disregarded_entity under sec_301_7701-3 x represents that x is a foreign_entity eligible to elect to be treated as a disregarded_entity however the service has no record of a timely filed form_8832 entity classification election electing to treat x as a disregarded_entity effective date entity for federal_income_tax purposes generally a foreign eligible_entity is treated as an association_taxable_as_a_corporation if all members have limited_liability unless the entity makes an election to be treated otherwise if the foreign eligible_entity has only one owner it may elect to be treated as a disregarded_entity pursuant to the rules in sec_301_7701-3 the information submitted states that x was formed under the laws of country sec_301_7701-3 provides guidance on the classification of a foreign sec_301_9100-1 through provide the standards the sec_301_9100-1 provides that the commissioner may grant a reasonable sec_301_7701-3 provides that an entity classification election must be filed plr-108679-05 on form_8832 and can be effective up to seventy-five days prior to the date the form is filed or up to twelve months after the date on which the form is filed extension of time to make a regulatory election or a statutory election but no more than months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301_9100-1 defines the term regulatory election as an election whose due_date is prescribed by a regulation published in the federal_register or a revenue_ruling revenue_procedure notice or announcement published in the internal_revenue_bulletin commissioner will use to determine whether to grant an extension of time to make the election sec_301_9100-2 provides the rules governing automatic extensions of time for making certain elections sec_301_9100-3 provides the standards the commissioner will use to determine whether to grant an extension of time for regulatory elections that do not meet the requirements of sec_301_9100-2 under sec_301_9100-3 a request for relief will be granted when the taxpayer provides evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and granting relief will not prejudice the interests of the government conclude that the requirements of sec_301_9100-3 have been satisfied as a result x is granted an extension of time of days from the date of this letter to file a form_8832 with the appropriate service_center and elect to be treated as a disregarded_entity effective date a copy of this letter should be attached to the form_8832 a copy is enclosed for that purpose federal tax consequences of the facts described above under any other provision of the code provides that it may not be used or cited as precedent except as specifically set forth above no opinion is expressed concerning the based solely on the information submitted and the representations made we this ruling is directed only to the taxpayer requesting it sec_6110 plr-108679-05 being sent to x’s authorized representatives pursuant to a power_of_attorney on file with this office a copy of this letter is sincerely enclosures copy of this letter copy for sec_6110 purposes heather c maloy associate chief_counsel passthroughs and special industries


number release date id office uilc cca_2010102008114016 -------------- from ---------------------- sent wednesday date am to ---------------------- cc ----------------------- subject form_8849 signature_authority of poa ---------- in general a taxpayer may use a form_2848 power_of_attorney and declaration of representative or other document that meets the requirements of a power_of_attorney to appoint a recognized representative to perform certain specified acts on behalf of the taxpayer see statement of procedural rules conference and practice requirements sec_601_501 et seq two essential requirements of any power_of_attorney are that it include a description of the matter s for which representation is authorized and provide a clear expression of the taxpayer's intention concerning the scope of authority granted to the recognized representative in the instant case the representative has not provided a form_2848 or other power_of_attorney that expressly authorizes him to sign the form_8849 claim_for_refund of excise_taxes on the taxpayer's behalf accordingly the representative will need to provide a form_2848 or other power_of_attorney signed by the taxpayer that shows he is authorized to sign the form_8849 on the taxpayer's behalf before the irs will consider the form_8849 as a formal claim_for_refund we note however that the reference to sec_1_6012-1 is misplaced that regulation sets forth the limited circumstances and the procedures by which a representative named on a power_of_attorney is authorized to sign an income_tax return or claim_for_refund of such tax on behalf of a taxpayer please let me know if you have any further questions thanks ------------------------ -------------- -----------------


internal_revenue_service number release date index number -------------------- ------------------- ------------------------------------ in re --------------------------------------------------- ---------------------------------------------- department of the treasury washington dc person to contact ------------------ id no ------------- telephone number --------------------- refer reply to cc tege eoeg e02 - plr-137193-03 date date legend pool ---------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------- association ---------------------------------------- state -------- state laws -------------------------------------------------------- --------------------------------------------------------- ------------------------------------------------ --------------------------------------------------------- dear ------------- this is in response to your letter dated date and subsequent correspondence requesting a ruling that the income of pool is excluded from gross_income under sec_115 of the internal_revenue_code facts pool is an unincorporated association of counties and county-related political subdivisions of state it was established by means of participation agreements with its members to provide health and employee_benefits to officers employees retirees and eligible dependents of its members pursuant to state laws pool is organized exclusively for the benefit of state counties and other county related political subdivisions to provide a pool for its members’ health and employee_benefits membership in pool is limited to state counties and other county related political subdivisions of state that execute participation agreements with pool pool represents plr-137193-03 that each current or future member must be a political_subdivision as defined in sec_1_103-1 of the federal_income_tax regulations of state an organization constituting an integral part of a political_subdivision of state or an entity whose income is excluded from gross_income under sec_115 of the code pool’s participation_agreement will be amended to conform to these representations by pool association is a nonprofit membership corporation established by resolution of the state legislature and later incorporated the association’s articles of incorporation provide that it was organized and shall be operated to augment the efforts of state county officials to provide a responsive form of government for the people of state further the interest of local_government for the people of state and assist the people and counties of state in accomplishing their goals toward meeting the challenge of modern society and acts necessary to achieve that end voting membership in association is limited to counties of state association has received a ruling from the internal_revenue_service that it is exempt from federal tax under sec_501 of the code as an organization described in sec_501 pool is governed by a board_of trustees elected by the members of pool all board members must be an employee or an elected or appointed official of a member of pool association is under contract with pool to provide administrative services and serve as pool’s manager association acts as an independent_contractor and has control of its services and the manner in which they are performed association is free to contract for similar services to be performed for other trusts funds or pools sponsored by association while it is under contract with pool pool pays association a fee for the services rendered pursuant to the contract the contract provides that either party may terminate the contract at any time upon thirty days written notice pool’s income is from contributions and fees from its members and investment_income pool makes expenditures to cover claims payable the costs of certain insurance premiums program administration fees royalties and miscellaneous expenses any surplus resulting from an excess of revenues over expenditures may be distributed or refunded to pool’s members at the discretion of pool’s board_of trustees no net_earnings of pool may inure to the benefit of or be distributed to any private person except that reasonable_compensation for services rendered may be paid_by pool in the event of pool’s dissolution all its assets after payment of debts and obligations shall be distributed to its members or to a successor entity the income of which is excluded under sec_115 of the code law analysis plr-137193-03 sec_115 of the code provides that gross_income does not include income derived from any essential_governmental_function and accruing to a state or political_subdivision thereof in revrul_77_261 1977_2_cb_45 holds that income from a fund established under a written declaration of trust by a state for the temporary investment of cash balances of the state and its political subdivisions is excludable from gross_income under sec_115 of the code that ruling reasons that the investment of positive cash balances by a state or political_subdivision thereof in order to receive yield on the funds until needed to meet expenses is a necessary incident of the power of the state or political_subdivision to collect taxes or other revenue for use in meeting governmental expenses in addition the ruling also provides that since the state and its participating political subdivisions have an unrestricted right to their proportionate share of the investment fund’s income the fund’s income accrues to them within the meaning of sec_115 revrul_77_261 points out that congress did not desire in any way to restrict a state’s participation in enterprises that may be useful in carrying out those projects desirable from the standpoint of the state government which on a broad consideration of the question may be the function of the sovereign to conduct revrul_90_74 1990_2_cb_34 holds that income of an organization formed operated and funded by political subdivisions of a state to pool their casualty risks is excluded from gross_income under sec_115 of the code the ruling states that income of such an organization formed to pool risks in lieu of purchasing insurance to cover their public liability workers’ compensation or employees’ health obligations is excluded under sec_115 if private interests do not except for incidental_benefits to employees of the participating state and political subdivisions participate in or benefit from the organizations pool was created to provide a vehicle for providing health and employee benefit plans and related_services to its members and their employees the type of benefits provided are similar to those mentioned in revrul_90_74 pool therefore like the organization described in revrul_90_74 performs an essential_governmental_function within the meaning of sec_115 of the code the income of pool is used solely to provide benefits to members and their employees only counties and other political subdivisions of state are allowed to become members of pool in the event of the dissolution of pool all its remaining assets after the payment of debts and obligations shall be distributed to its members or to a successor entity the income of which is excluded under sec_115 of the code private interests do not participate in or benefit from income of pool other than as provided in revrul_90_74 therefore the income of pool accrues to political subdivisions within the meaning of sec_115 of the code conclusion plr-137193-03 provided that pool amends its participation_agreement as provided above we conclude that the income of pool is excluded from gross_income under sec_115 of the code a copy of this letter should be attached to any income_tax return to which it is relevant this ruling is directed only to the taxpayer who requested it sec_6110 of the code provides that it may not be used or cited as precedent the rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter letter is being sent to your authorized representative in accordance with the power_of_attorney on file with this office a copy of this except as expressly provided herein no opinion is expressed or implied sincerely barbara e beckman assistant chief eo branch office of division counsel associate chief_counsel tax exempt and government entities enclosures copy of this letter copy for sec_6110 purposes


significant index number government entities division department of the treasury internal_revenue_service washington d c jul o14 tree raiad re plan no ein plan 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 for the above-named plan which are described in sec_431 and sec_431 of the internal_revenue_code code and sec_304 and sec_304 of the employee_retirement_income_security_act_of_1974 erisa this extension is effective with the plan_year beginning this extension applies to the eligible amortization charge bases as identified in your application submission established as of the extension of the amortization periods of the unfunded liabilities of the plan was granted in accordance with sec_431 of the code sec_431 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 the plan has submitted the required information to meet the criteria in sec_431 including a certification from the plan’s actuary that plan's funding status i absent the extension under subparagraph a the plan would have an accumulated_funding_deficiency in the current plan_year or any of the succeeding plan years ii the plan_sponsor has adopted a plan to improve the 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 a has been provided we have sent a copy of this letter to the manager ep classification in baltimore maryland to the manager ep compliance unit in chicago lilinois 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 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 id at sincerely yours cc 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 tege eoeg teb presp-144244-06 date date dear -------------- pursuant to sec_54 of the internal_revenue_code the code and notice_2005_98 2005_52_irb_1211 and after review of your application submitted on date including supplements thereto we have determined that the project described in appendix a attached hereto is qualified for purposes of sec_54 and will be owned by one or more qualified borrowers we allocate authority to -------------------------- the issuer a qualified issuer under sec_54 to issue up to dollar_figure--------------- of clean renewable energy bonds crebs bonds issued pursuant to this allocation must be designated by the issuer as bonds for purposes of sec_54 for the project described in appendix a up to the amount allocated for each project described in appendix a bonds so designated must be issued on or before date please be aware that in order for bonds to be crebs the applicable_requirements of the code including without limitation sec_54 notice_2005_98 and notice_2006_7 2006_10_irb_559 must be met please note that creb proceeds may be used to reimburse capital expenditures paid_by qualified borrowers for qualified projects only if the provisions of sec_54 are met if you have any questions with respect to this allocation please contact --------------------- -------- or -----------------------------of the office of division counsel associate chief_counsel tax-exempt and government entities on --------------------- not a toll-free call 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 for purposes of the renewable_electricity_production_credit under sec_45 of the code no inference may be drawn from this allocation that any project listed in appendix presp-144244-06 a is a qualified_facility or that electricity to be produced at such project s is electricity from a qualified_energy resource at a qualified_facility within the meaning of sec_45 this determination is directed only to the applicant named above sec_6110 of the code provides that it may not be used or cited as precedent a copy of this letter must be attached to any form 8038-g information_return for tax- exempt governmental obligations filed for bonds issued pursuant to this allocation the allocation contained in this letter is based upon information and representations submitted by the applicant for the creb allocation 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 application_for an allocation it is subject_to verification on examination sincerely assistant chief_counsel exempt_organizations employment_tax government entities tax exempt government entities by timothy l jones senior counsel tax-exempt_bonds branch presp-144244-06 appendix a borrower name ------------------------- refined_coal project type project location production facility -------------------------------- ------------------ amount allocated dollar_figure---------------


internal_revenue_service department of the treasury index nos p o box number release date ben franklin station washington dc person to contact telephone number refer reply to cc dom p si -- plr-118685-98 date in re request for private_letter_ruling under sec_42 legend partnership state x city y county z district a b c d e f g plr-118685-98 h i j k l m n o p q dear this letter responds to a letter dated date and subsequent correspondence submitted on behalf of the partnership by the partnership’s authorized representative in that letter rulings are requested regarding the rehabilitation of a building financed by tax-exempt_bonds for purposes of sec_42 of the internal_revenue_code the partnership has made the following representations the partnership was organized on a as a state x limited_partnership the partnership is under the examination jurisdiction of the district the partnership was formed to acquire rehabilitate construct and operate a low-income_housing project located in city y the property is located in census_tract b that the partnership represents to be a qualified_census_tract for purposes of sec_42 on c county z issuing authority issued bonds with a face_amount of dollar_figured for the project the partnership represents that the interest on the bonds is tax exempt under sec_103 and the bonds will be taken into account under sec_146 the partnership anticipates that all bond proceeds will be used to finance real_property rehabilitation costs for the project plr-118685-98 as represented by the partnership the project consists of one building that is listed on the national register of historic places the partnership has submitted part sec_1 and of the historic preservation certification application to the department of interior national park service the partnership anticipates that the building will qualify as a certified_historic_structure and that rehabilitation_expenditures will be qualified_rehabilitation_expenditures eligible for the percent credit under sec_47 the partnership purchased the property from the county z improvement corporation on e for dollar_figuref closing costs associated with the land were dollar_figureg the partnership represents that depreciable costs are estimated to be dollar_figureh which includes acquisition closing costs of dollar_figurei land improvements of dollar_figurej personal_property of dollar_figurek and furnishings of dollar_figurel the partnership expects qualified_rehabilitation_expenditures to be dollar_figurem resulting in a credit of dollar_figuren under sec_47 depreciable basis after adjustment for the historic tax_credit is projected to be dollar_figureo the partnership anticipates that construction will be complete by p the partnership expects to claim historic and low-income tax_credits under sec_47 and sec_42 respectively on its q federal_income_tax return the partnership requests rulings that the basis of the project for purposes of sec_42 is the project’s adjusted_basis under sec_1011 and not eligible_basis under sec_42 including any increase in eligible_basis for buildings located in high cost areas under sec_42 sec_38 provides as a credit against the tax imposed for the taxable_year an amount equal to the sum of the business_credit carryforwards carried to the taxable_year the amount of the current_year_business_credit and the business_credit carrybacks carried to the taxable_year sec_38 provides that the amount of the current_year_business_credit includes the low-income_housing_credit determined under sec_42 sec_42 provides that for purposes of sec_38 the amount of the low-income_housing_credit for any taxable_year in the credit_period shall be an amount equal to the applicable_percentage of the qualified_basis of each qualified_low-income_building sec_42 provides that the qualified_basis of any qualified_low-income_building for any taxable_year is an amount equal to i the applicable_fraction determined as of the close of such taxable_year of ii the eligible_basis of such building determined under sec_42 sec_42 provides that the eligible_basis of a new_building is its adjusted_basis as of the close of the first taxable_year of the credit_period under sec_42 rehabilitation_expenditures paid_or_incurred by the taxpayer with respect to any building shall be treated for purposes of sec_42 as a separate new_building plr-118685-98 sec_42 provides that in the case of any building located in a qualified_census_tract or difficult_development_areas that is designated for purposes of sec_42 the rehabilitation_expenditures taken into account under sec_42 shall be percent of such expenditures determined without regard to sec_42 sec_42 provides that the term qualified_census_tract means any census_tract that is designated by the secretary of housing and urban development and for the most recent year for which census data are available on household_income in such tract in which percent or more of the households have income that is less than percent of the area_median_gross_income for such year if the secretary of housing and urban development determines that sufficient data for any period are not available to apply sec_42 on the basis of census tracts such secretary shall apply sec_42 for such period on the basis of enumeration districts sec_42 provides that the amount of credit determined under sec_42 for any taxable_year with respect to any building shall not exceed the housing_credit_dollar_amount allocated to such building under sec_42 sec_42 provides that sec_42 shall not apply to the portion of any credit allowable under sec_42 that is attributable to eligible_basis financed by any obligation the interest on which is exempt from tax under sec_103 if such obligation is taken into account under sec_146 and principal payments on such financing are applied within a reasonable period to redeem obligations the proceeds of which were used to provide such financing sec_42 provides that for purposes of sec_42 if percent or more of the aggregate basis of any building and the land on which the building is located is financed by an obligation described in sec_42 sec_42 shall not apply to any portion of the credit allowable under sec_42 with respect to such building under sec_50 if the investment_credit under sec_46 applies to any property the basis of the property is reduced by the amount of the credit sec_46 defines the investment_credit as including the rehabilitation_credit under sec_47 sec_47 provides that for purposes of sec_46 the rehabilitation_credit for any taxable_year is percent of the qualified_rehabilitation_expenditures with respect to any certified_historic_structure under sec_1011 the adjusted_basis for determining gain_or_loss from the sale_or_other_disposition of property is the basis determined under sec_1012 adjusted as provided in sec_1016 sec_1012 provides that the basis_of_property shall be the cost of such property sec_1016 adjusts the basis_of_property to the extent provided in sec_50 plr-118685-98 the partnership contends basis should be defined as adjusted_basis under sec_1011 and not eligible_basis under sec_42 if basis is defined as the building’s eligible_basis increasing the project’s eligible_basis by percent under sec_42 will result in the partnership not satisfying the requirement in sec_42 that the tax-exempt_bonds finance percent or more of the project’s aggregate basis of any building and land on which the building is located defining basis as adjusted_basis which excludes the amount of the rehabilitation_credit allowable under sec_47 from basis by reason of sec_1016 and sec_50 results in the project satisfying the percent requirement in sec_42 buildings meeting the requirement of sec_42 do not need an allocation of sec_42 credits by a state or local housing agency under sec_42 provided percent or more of the aggregate basis of any building and the land on which the building is located is financed by tax-exempt_bonds while sec_42 contains provisions in which the term basis has been further defined for example qualified_basis under sec_42 and eligible_basis under sec_42 no such qualifying language is provided in sec_42 to suggest that basis should read as adjusted_basis or eligible_basis the plain meaning of the statute may be read as aggregating the building’s basis and the land’s basis thus basis for purposes of sec_42 is the cost of the property as defined in sec_1012 if we define basis as the building’s cost_basis under sec_1012 the partnership’s project’s total costs of dollar_figuref dollar_figureg and dollar_figureh will not satisfy the percent requirement in sec_42 accordingly based upon the above facts and representations including the partnership’s representation that its project is located in a qualified_census_tract under sec_42 we rule as follows the basis of the partnership’s building for purposes of sec_42 is determined by using the building’s cost_basis under sec_1012 and is determined without regard to any eligible_basis adjustment allowed for buildings located in high cost areas under sec_42 no opinion is expressed or implied regarding the application of any other provisions of the code or regulations specifically no opinion is expressed regarding whether partnership’s project qualifies as a low-income_housing project under sec_42 this ruling is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file a copy of this letter is being sent to the partnership's authorized legal_representative plr-118685-98 sincerely yours s susan j reaman susan j reaman chief branch office of assistant chief_counsel passthroughs and special industries enclosure copy


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 b05 plr-152794-05 date -------------------------------------------------------------- -------------------------------- re ---------------------------------------------------------- re ---------------------------------------------------------- legend parent ----------------------------------------------------------------------------- -------------------------------------------------------------------- parent lp ------------------------------------------------------------------------------------------------------------ ----------------------------------------------------------------------------- --------------------------------------------------------------------- buyer ----------------------------------------------------------------------------- ------------------------------------------------------------------------ buyer parent company ----------------------------------------------------------------------------- -------------------------------------------------------------------- company lp ------------------------------------------------------------------------------------------------------------------ ----------------------------------------------------------------------------- company gp --------------------------------------------------------------------- merger sub -------------------------------------------------------------------- ----------------------------------- --------------------------------- --------------------------------- -------------------------------- ---------- -------------------------------------------------------------- ------------------------------------ plr-152794-05 lp merger sub --------------------------------------------------------------------- state x state y state z exchange parent common ------------ ------------ --------------- ----------------------------------- -------------------------------------------------------------- ----------------------- -------------------------------------------------------------- -------------------------------------------------------------- --------------------------------------------- --------------------------------------------- parent preferred ---------------------------------------------------------------------------- parent preferred ---------------------------------------------------------------------------- parent lp common ------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------- parent lp gp ------------------------------------------------------------------------------------------------------------ --------------------------------------------------------------------------------------------------- parent lp mirror ------------------------------------------------------------------------------------------------------------ ----------------------------------------------------------------------------------------------- parent lp mirror ------------------------------------------------------------------------------------------------------------ ----------------------------------------------------------------------------------------------- company common -------------------------------------------------------------- ----------------------- company preferred a -------------------------------------------------------------- -------------------------- -------- -------------------------------------------------------------- -------------------------------------------------------------- ------ ------ ------ ---------- --------------- plr-152794-05 b c d e f dollar_figureg dollar_figureh date date business aa ----------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------- business bb asset xx dear ----------------- ----------------------- --------------------- ------------------ ------------------ ------- ------------------------------------------ ------------------------------------------------ this letter replies to your authorized representative's letter dated date requesting rulings regarding a proposed transaction additional information was provided in letters dated date date date date date and date the information submitted for consideration is summarized below summary of facts parent a calendar_year taxpayer is a publicly traded self-administered and self- managed state x real_estate_investment_trust reit parent is engaged in business aa through it’s a ownership_interest in parent lp a state y limited_partnership and its subsidiaries the remaining interest in parent lp is owned by unrelated persons parent lp has the following classes of units parent lp common parent lp gp parent lp mirror and parent lp mirror parent is a publicly traded company whose stock parent common is traded on the exchange parent has two other classes of stock issued and outstanding parent preferred and parent preferred plr-152794-05 parent lp has formed solely for the purposes of the transactions that are the subject of this ruling_request two limited_liability companies merger sub and lp merger sub company a calendar_year taxpayer is a publicly traded self-administered and self-managed state x reit that is engaged in business aa through its b interest in company lp and its subsidiaries the remaining interest in company lp is owned by unrelated persons company is a publicly traded company whose stock company common is traded on exchange company has another class of stock issued and outstanding company preferred company is the owner of of company gp a wholly owned state y qualified_reit_subsidiary company gp is the sole general_partner of company lp immediately before the transactions that are the issue of this request company gp will elect to be treated as a taxable_reit_subsidiary buyer a state z corporation is an indirect wholly owned subsidiary of buyer parent a publicly traded company whose common_stock is traded on exchange as part of its overall business buyer is involved in business bb proposed transactions as described below pursuant to an agreement and plan of merger entered into on date among parent parent lp merger sub lp merger sub company and company lp the agreement company will be merged with and into merger sub with merger sub surviving the reit merger the shareholders of company will receive cash and shares of parent in the reit merger company will cease to exist as a result of the reit merger pursuant to a separate date agreement between parent lp and buyer the master agreement immediately after the reit merger buyer will acquire certain of the assets that were held by company lp the reit merger and the other transactions proposed in the agreement and the master agreement represent the transaction the following steps summarize the transaction parent lp has formed merger sub and lp merger sub parent will transfer approximately f newly issued shares of parent common_stock to parent lp which will retransfer them to merger sub to be used in the reit merger as part of the consideration payable to the holders of company common shares for their interests in company by operation of parent lp’s partnership_agreement parent will receive additional partnership units in exchange for the parent stock parent lp will transfer approximately dollar_figureg to merger sub to be used in the reit merger as part of the consideration payable to the holders of company common shares for their interests in company plr-152794-05 buyer will transfer approximately dollar_figureh to merger sub to be used in the reit merger as part of the consideration payable to the holders of company common shares for their interests in company in exchange buyer will receive an interest in merger sub company will be merged with and into merger sub in the reit merger merger sub will be the surviving entity in the reit merger with parent lp and buyer as the members of merger sub in the reit merger merger sub will receive two assets of company partnership interests in company lp and all of the stock of company gp in the reit merger company’s common shareholders will receive consideration in the form of cash and parent common shares immediately after the reit merger lp merger sub will be merged with and into company lp with company lp surviving the op merger prior to the op merger merger sub company gp and third parties will own company lp the purpose of the op merger is to cause the third-party holders of company lp units to exchange their company lp units for units of parent lp after the op merger merger sub and company gp will be the sole owners of company lp immediately after the op merger buyer will transfer its merger sub interest to company lp in exchange for certain company lp properties these properties represent approximately c of the fair_market_value of company lp’s gross operating_assets and approximately d of the fair_market_value of company lp’s net operating_assets immediately after the preceding step merger sub will dissolve parent lp’s interest and company lp’s interest in merger sub will be eliminated as a result parent lp will own of the limited_partnership interests in company lp and company gp will own the general_partnership interest in company lp representations the following representations have been made in connection with the transaction a b all of the steps of the transaction described above are interrelated and each would not be effectuated without all of the steps being consummated company lp is classified as a partnership for federal_income_tax purposes and has been since its inception in date plr-152794-05 c d e f g h i j k l in the transaction parent lp will acquire approximately e of the total gross and net assets of company held by company immediately prior to the transaction all of the assets to be purchased by buyer consist of asset xx and historic operating_assets of the business buyer’s acquisition of certain properties held by company lp will occur in a bona_fide arm’s length transaction the cash consideration to be paid_by parent lp to the shareholders of company in the reit merger will principally originate from borrowings by parent lp parent lp merger sub and lp merger sub are not classified as qualified reit subsidiaries or taxable reit subsidiaries for federal_income_tax purposes none of the entities in the transaction will make an election under sec_301_7701-3 to be taxed as anything other than its current or default entity classification parent lp through its newly acquired company lp interest will continue to operate a portion of the historic_business of company lp the agreement does not grant parent any rights to acquire company lp interests from company in the reit merger parent has no intention of acquiring company lp interests from parent lp after the transaction the shareholders of company will receive cash from parent lp and buyer and parent common shares from parent lp that will collectively be approximately equal to the value of the company stock exchanged parent lp has no plan or intention to dispose_of any of the assets it acquires in the transaction m to the best of parent’s knowledge and after consultation with its financial advisors no shareholder or group of shareholders of company will be in control within the meaning of sec_368 of the code of parent immediately after the transaction ruling based solely on the information submitted and the representations set forth above we hold as follows plr-152794-05 the transaction is not described in sec_368 of the code but will be treated for federal_income_tax purposes as a taxable sale of company’s assets followed by a liquidation of company to its shareholders pursuant to sec_331 of the code caveats 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 in particular no opinion is expressed regarding whether any of the entities discussed in this letter qualifies as a reit or the treatment of the transaction under the partnership rules of subchapter_k of the code procedural statements a copy of this letter must be attached to any income_tax return to which it is in accordance with the power_of_attorney on file with this office a copy of this 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 letter is being sent to your authorized representative relevant 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 the rulings contained in this letter are based upon information and sincerely william alexander associate chief_counsel corporate by virginia s voorhees virginia s voorhees senior technician reviewer branch corporate


internal_revenue_service number release date index number ------------------------------- ----------------------- ---------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact -------------------- id no ------------------ telephone number ---------------------- refer reply to cc psi b04 plr-120444-16 date july decedent --------------------- spouse ------------------------- date --------------------------- date ----------------------- dear ---------------- this letter responds to your personal representative's letter of date and subsequent correspondence requesting an extension of time pursuant to sec_301_9100-3 of the procedure and administration regulations to make the election under sec_2010 of the internal_revenue_code code portability election to allow a decedent's surviving_spouse to take into account that decedent's deceased spousal unused exclusion dsue amount facts decedent died on date survived by spouse date is a date after the effective date of the amendment to sec_2010 which provides for portability of a dsue amount to a surviving_spouse to obtain the benefit of portability of decedent's dsue amount to spouse decedent's_estate was required to file form_706 united_states estate and generation-skipping_transfer_tax return on or before the date that is months after decedent's date of death or the last day of the period covered by an extension plr-120444-16 decedent's form_706 was due on date but the estate did not file a form_706 to make the portability election the estate discovered its failure to elect portability after the due_date for making the election spouse as executor of decedent's_estate represents that the value of decedent's gross_estate is less than the basic exclusion amount in the year of the decedent's death and that during her lifetime decedent made no taxable_gifts as executor spouse requests an extension of time pursuant to sec_301_9100-3 to elect portability of decedent's dsue amount pursuant to sec_2010 law and analysis sec_2001 imposes a tax on the transfer of the taxable_estate of every decedent who is a citizen or resident_of_the_united_states sec_2010 provides that a credit of the applicable credit_amount shall be allowed to the estate of every decedent against the tax imposed by sec_2001 sec_2010 provides that the applicable credit_amount is the amount of the tentative_tax that would be determined under sec_2001 if the amount with respect to which such tentative_tax is to be computed were equal to the applicable_exclusion_amount on date congress amended sec_2010 effective for estates of decedents dying and gifts made after date to allow portability of a decedent's unused applicable_exclusion_amount between spouses tax relief unemployment insurance reauthorization and job creation act of pub_l_no sec_303 124_stat_3296 sec_2010 provides that the applicable_exclusion_amount is the sum of the basic exclusion amount and in the case of a surviving_spouse the dsue amount sec_2010 generally provides that the basic exclusion amount is dollar_figure to be adjusted for inflation annually after calendar_year sec_2010 defines the dsue amount to mean the lesser_of a the basic exclusion amount or b the excess of - i the applicable_exclusion_amount of the last deceased spouse of the surviving_spouse over ii the amount with respect to which the tentative_tax is determined under sec_2001 on the estate of such deceased spouse sec_2010 provides that a dsue amount may not be taken into account by a surviving_spouse under sec_2010 unless the executor of the estate of the deceased spouse files an estate_tax_return on which such amount is computed and makes an election on such return that such amount may be so taken into account the election plr-120444-16 once made shall be irrevocable no election may be made if such return is filed after the time prescribed by law including extensions for filing such return sec_2010 provides that the secretary shall prescribe regulations as may be necessary or appropriate to implement sec_2010 sec_20_2010-2t a of the estate_tax regulations as in effect on date provides that to allow a decedent's surviving_spouse to take into account that decedent's dsue amount the executor of the decedent's_estate must elect portability of the dsue amount on a timely-filed form_706 under sec_20_2010-2t a the due_date of an estate_tax_return required to elect portability is nine months after the decedent's date of death or the last day of the period covered by an extension if an extension of time for filing has been granted under sec_20_2010-2t a the portability election is made by timely filing a complete and properly prepared estate_tax_return unless the executor satisfies the requirements for the election not to apply in sec_20_2010-2t a i sec_301_9100-1 provides that the commissioner may grant a reasonable extension of time under the rules set forth in sec_301_9100-2 and sec_301_9100-3 to make a regulatory election or a statutory election but no more than six months except in the case of taxpayer who is abroad under all subtitles of the code except subtitles e g h and i sec_301_9100-1 provides that the term statutory election means an election whose due_date is prescribed by statute the term regulatory election means an election whose due_date is prescribed by a regulation published in the federal_register or a revenue_ruling revenue_procedure notice or announcement published in the internal_revenue_bulletin sec_301_9100-3 provides the standards the commissioner will use to determine whether to grant an extension of time to make an election whose due_date is prescribed by a regulation and not expressly provided by statute a request for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_30 b iii provides that a taxpayer is deemed to have acted reasonably and in good_faith if the taxpayer failed to make the election because after exercising reasonable diligence taking into account the taxpayer's experience and the complexity of the return or issue the taxpayer was unaware of the necessity for the election the due_date for the portability election is prescribed by statute in the case of an estate required to file an estate_tax_return under sec_6018 see sec_2010 sec_6075 and plr-120444-16 a in the case of an estate that is not required to file an estate_tax_return under sec_6018 the due_date is prescribed by regulation see sec_20_2010-2t a see also sec_20_2010-2 and revproc_2014_18 2014_7_irb_513 sec_2 accordingly in the latter case a taxpayer may seek an extension of time to elect portability under the provisions of sec_301_9100-3 sec_6018 requires the filing of an estate_tax_return in all cases where the gross_estate exceeds the basic exclusion amount in effect under sec_2010 for the calendar_year which includes the date of death for purposes of this determination under sec_6018 the basic exclusion amount is reduced but not below zero by the sum of - a the amount of the adjusted_taxable_gifts within the meaning of sec_2001 made by the decedent after date plus b the aggregate amount allowed as a specific exemption under sec_2521 as in effect before its repeal by the tax reform act of with respect to gifts made by the decedent after date conclusion as executor spouse represents that based on the value of the gross_estate and taking into account any taxable_gifts decedent's_estate is not required to file an estate_tax_return under sec_6018 under these facts the commissioner has discretionary authority under sec_301_9100-3 to grant to decedent's_estate an extension of time to elect portability based on the facts submitted and the representations made we conclude that the requirements of sec_301_9100-3 have been satisfied accordingly we grant an extension of time of days from the date of this letter in which to elect portability under sec_2010 the election should be made by filing a complete and properly-prepared form_706 and a copy of this letter within days from the date of this letter to the cincinnati service_center at the following address internal_revenue_service cincinnati service_center m s 343g cincinnati oh for purposes of electing portability a form_706 filed by decedent's_estate within days from the date of this letter will be considered to be timely filed the rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination if it is later determined that based on the value of the gross_estate and taking into account any taxable_gifts decedent's_estate is required to file an estate_tax_return pursuant to sec_6018 the commissioner is without authority under sec_301_9100-3 to grant to decedent's_estate an extension of time to elect portability and the grant of the extension referred to in this letter is deemed null and void plr-120444-16 this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative sincerely associate chief_counsel passthroughs special industries by melissa liquerman melissa liquerman branch chief branch office of the associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes cc


t c summary opinion united_states tax_court danny allen coker petitioner v commissioner of internal revenue respondent docket no 26933-12s l filed date danny allen coker pro_se horace crump and thomas alan friday for respondent summary opinion lauber judge this case was heard pursuant to the provisions of sec_7463 of the internal_revenue_code in effect when the petition was filed pur- all statutory references are to the internal_revenue_code in effect at all relevant times and all rule references are to the tax_court rules_of_practice and procedure rules suant to sec_7463 the decision to be entered is not reviewable by any other court and this opinion shall not be treated as precedent for any other case in this collection_due_process cdp case petitioner seeks review pursuant to sec_6330 of the determination by the internal_revenue_service irs or respondent to uphold a notice_of_intent_to_levy respondent has moved for sum- mary judgment under rule contending that there are no disputed issues of material fact and that his action in sustaining the proposed levy was proper as a matter of law we agree and accordingly will grant the motion background petitioner filed a federal_income_tax return for late and failed to pay the full amount of tax shown as due on the return the irs subsequently assessed the tax against him on date in an effort to collect the assessed tax the irs sent petitioner a final notice_of_intent_to_levy and notice of your right to a hearing petitioner timely submitted form request for a collection_due_process or equivalent_hearing in his request petitioner sought a collection alternative in the form of an installment_agreement on date a settlement officer so from the irs appeals_office sent petitioner a letter informing him that his cdp hearing request had been received on date the so sent petitioner a letter scheduling a telephone cdp hearing for date the so informed petitioner that in order for her to consider a collection alternative he needed to provide her with a copy of a completed form 433-a collection information statement for wage earners and self-employed individuals with supporting financial information petitioner provided no documentation and proposed no collection alter- native before the scheduled cdp hearing he failed to participate in that hearing and did not request that it be rescheduled the so called petitioner and left a voice message asking that he call her back to reschedule the hearing the so then mailed petitioner a last chance letter requesting that he submit financial informa- tion if he wished the irs to consider a collection alternative petitioner submitted no information and failed to contact the irs regarding his case accordingly on date the irs issued petitioner a notice_of_determination sustaining the proposed levy petitioner timely sought review in this court in his petition petitioner asserts that he never received the letters request- ing additional information the so sent three letters regarding the scheduling of the cdp conference to petitioner at a blue springs mississippi address blue springs address which is the address that petitioner provided on his cdp hearing request the so also mailed the notice_of_determination to that address the court has the blue springs address in its files as petitioner’s address on date respondent filed a motion for summary_judgment the court ordered petitioner to file a response to this motion by date this order advised petitioner that under tax_court rule d judgment may be entered against a party who fails to respond to a motion for summary_judgment petitioner has responded neither to respondent’s motion nor to the court’s order a summary_judgment and standard of review discussion the purpose of summary_judgment is to expedite litigation and avoid costly time-consuming and unnecessary trials fla peach corp v commissioner 90_tc_678 under rule b the court may grant summary_judgment when there is no genuine dispute as to any material fact and a decision may be rendered as a matter of law 98_tc_518 aff’d 17_f3d_965 7th cir rule d provides that where the moving party properly makes and supports a motion for summary_judgment an adverse_party may not rest upon the mere allegations or denials of such party’s pleading but rather must set forth specific facts by affidavits or otherwise showing that there is a genuine dispute for trial where as here there is no dispute concerning the underlying tax_liability the court reviews the irs’ determination for abuse_of_discretion 114_tc_176 an abuse_of_discretion exists when a determination is arbitrary capricious or without sound basis in fact or law see 125_tc_301 aff’d 469_f3d_27 1st cir because petitioner failed to respond to respondent’s motion for summary_judgment the court could enter a decision against him for that reason alone see rule d we will nevertheless consider the motion on its merits we conclude that there are no material facts in dispute and that this case is appropriate for summary adjudication b analysis the only question is whether the irs properly sustained a levy to collect petitioner’s liability we review the record to determine whether the appeals officer properly verified that the requirements of any applicable law or ad- ministrative procedure have been met any issues petitioner raised have merit and any proposed collection action balances the need for the efficient collection_of_taxes with the legitimate concern of the person that any collection action be no more intrusive than necessary sec_6330 it is clear from our review of the record that the so conducted a thorough review of transcripts of petitioner’s account and verified that the requirements of applicable law and administrative procedure were followed the so properly balanced the need for efficient collection_of_taxes with petitioner’s legitimate concern that collection action be no more intrusive than necessary petitioner did not raise a valid challenge to the appropriateness of respondent’s intended col- lection action these issues are now deemed conceded see rule b petitioner’s request for a cdp hearing included a statement that he intended to propose an installment_agreement sec_6159 authorizes the irs to enter into a written_agreement allowing a taxpayer to pay a tax_liability in installments if it concludes that the agreement will facilitate full or partial collection of such liability the decision to accept or reject installment agreements lies within the commissioner’s discretion see 140_tc_173 citing kuretski v commissioner tcmemo_2012_262 at aff’d __ f 3d __ d c cir date as a threshold matter it is not an abuse_of_discretion for the so to decline to consider an installment_agreement where the taxpayer does not place a specific proposal on the table see 138_tc_228 124_tc_69 stated otherwise it is the obligation of the taxpayer not of the reviewing officer to start negotiations regarding a collection alternative by making a specific proposal petitioner never made such a proposal further petitioner neglected to furnish form 433-a and the underlying financial information requested by the so as a prerequisite for consideration of an installment_agreement it is incumbent on the taxpayer to provide requested financial information that will enable the irs to make an informed evaluation of his ability to pay see eg sec_6159 sec_7122 454_f3d_688 7th cir 414_f3d_144 1st cir murphy v commissioner t c pincite we have held that no abuse_of_discretion occurs when an so is unable to consider collection alternatives because of a taxpayer’s failure to provide financial information see eg lance v commissioner tcmemo_2009_129 schwersensky v commissioner tcmemo_2006_178 we likewise find no abuse_of_discretion here petitioner argues that he failed to provide the requested financial informa- tion because he never received the letters requesting additional information the so sent three separate letters to petitioner regarding the scheduling of the cdp conference and left at a minimum one voice message for him these letters were addressed to petitioner at the blue springs address which is the same ad- dress to which the so mailed the notice_of_determination it is clear that peti- tioner received the notice_of_determination because he attached a copy of it to his petition he has provided no explanation--besides the general allegation in his pleading--as to why he received that notice but none of the letters mailed to the same address shortly before contrary to our rules petitioner has rest ed upon the mere allegations of his pleading see rule d as we were presented with no contrary evidence we find no genuine dispute as to any material fact on this point in any event petitioner does not explain why he failed to return the so’s phone call regardless of whether petitioner received the letters which we believe that he did he was instructed to call the so back by phone because petitioner failed to respond to the irs motion for summary_judgment we are left without any specific facts showing that there is a genuine issue for trial on that or any other point see rule d we therefore find that petitioner was aware of his responsibility to provide financial information to the so but neglected to do so finding no abuse_of_discretion in any respect we will grant summary_judgment for respondent and affirm the proposed collection action to reflect the foregoing an appropriate order and decision will be entered


a department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division -_ ‘ i ae bt date app uniform issue list contact person identification_number telephone number legend trust a_trust b company m company n company p policy e policy f policy g reserve_plan j plan k state v x date y date z date aa dear sir or madam we have considered your letters dated date and date in which you request rulings regarding the tax consequences of a proposed transfer of assets held in a retired health reserve to a voluntary employees’ beneficiary association veba facts according to the information provided company m is a life_insurance_company within the meaning of sec_816 of the internal_revenue_code the code and taxable as such under sec_801 company m is a member_of_an_affiliated_group of corporations the common parent of which is company n company m maintains a group_health_plan the health plan for the benefit of its active and retired employees and their dependents as well as the active and retired employees and their dependents of its affiliated companies parts of the retiree coverage under the health plan are insured under the following policies policies issued by company m policy e for all active employees disabled employees and retirees on or after date y policy f for all employees who retired or became disabled prior to date y excluding state v residents and policy g for employees who were state v residents and retired or became disabled prior to date y the health plan provides two medical coverages plan j for participants who are not eligible for medicare and plan k for participants who are medicare eligible each plan has several options that have different deductibles and pay different levels of benefits company m subsidizes the active and retiree medical coverages the amount of the subsidy is determined based on a number of factors including length of service number of covered dependents and eligibility for medicare under the policies company m maintains reserve a welfare_benefit_fund under sec_419 of the code to provide post-retirement medical benefits for eligible retirees each policy provides that the reserve is to be used exclusively to provide post-retirement medical benefits to eligible retirees who are not key employees as defined under the code the policies also provide that in the event that such policies are terminated any balance remaining in the reserve is to be used to provide continuing post-retirement medical coverage for as long as any eligible retiree remains alive balance in the reserve shall then be used as permitted by applicable law for the sole benefit of active or retired employees of company m and other participating employers at the time of the death of the last surviving eligible retiree any the reserve consists of two account balances one maintained for non-represented retirees and the other for represented retirees which are used to pay the retiree medical coverages for its respective members as of date z the balance in the reserve for non- represented retirees was approximately dollar_figurex and for represented retirees approximately dollar_figurex company m also maintains two vebas each veba provides funding for post-retirement medical benefits trust a provides for the funding of i post-retirement medical benefits for eligible non- represented retirees other than key employees as defined in sec_419a of the code and ii certain other_benefits for these retirees which may be designated by company m from time to time including life sick accident and other similar benefits trust b provides for the funding of i post-retirement medical benefits for eligible represented retirees other than key employees as defined in sec_419a of the code and ii certain other_benefits for these retirees which may be provided under a_trust which is tax exempt under sec_501 of the code trust a and trust b are recognized as tax exempt under sec_501 of the code like the reserve held under the policies each trust provides that all contributions to such trusts and all earnings on those contributions must be used for the exclusive benefit of eligible retirees identified therein moreover each trust provides that upon termination of the vebas any balance remaining in the trust must be used to provide post-retirement medical benefits under company m's health plan for as long as any eligible retiree or their dependents remains alive and covered by the health plan at the time of the death of the last surviving eligible retiree any balance in the trust shall then be used as permitted by applicable law for the sole benefit of active or retired employees of company m and other participating employers commencing date aa most non-represented employees of company m will be transferred to a newly created services company known as company p company p is a direct and wholly-owned subsidiary of company n which is also the parent company of company m group of corporations thus both company m and company p are members of the same controlled under a service_contract between company m and company p that is effective starting date aa company p employees the former employees of company m and newly hired employees will perform services for company m and in return company p will be compensated by company m for the employee costs salary and benefits attributable to such company p employees it is intended that all employees of company m that are transferred to company p have the same level of employee benefit coverage that they would have had if they had remained in the employ of company m thus in the case of the health plan the transferred employees will retain the same eligibility standards and receive the same employer cost subsidies that they would have had with company m to that end company p will adopt the health plan as a participating employer for its own employees in addition company p will become a participating employer in trust a in order to simplify the administration of the health plan and provide greater flexibility company m proposes to transfer up to all of the amounts held in the reserve for non- represented retirees to trust a and up to all of the amounts held in the reserve for represented retirees to trust b rulings requested the following rulings have been requested neither the transfer of amounts held in the reserve from company m to trust a and trust b nor the use by the trusts of these amounts to pay post-retirement medical benefits and related administrative expenses will result in the realization or recognition of gross_income or gain to company m under sec_61 or sec_1001 of the code neither the transfer of amounts held in the reserve from company m to trust a and trust b nor the use by the trusts of these amounts to pay post-retirement medical benefits and related administrative expenses will constitute a reversion subject_to the percent excise_tax under sec_4976 of the code neither the transfer of amounts from the reserve to trust a and trust b nor the use by the trusts of these amounts to pay post-retirement medical benefits and related administrative expenses will cause the trusts to lose their exemption from tax under sec_501 of the code as an organization described in sec_501 law sec_61 of the internal_revenue_code provides that unless otherwise excepted gross_income includes all income from whatever source derived including income from lire insurance and endowment contracts sec_419 of the code provides that contributions paid_or_accrued by an employer to a welfare_benefit_fund if they would otherwise be deductible shall be deductible subject_to limitations under sec_419 for the taxable_year in which paid sec_419 of the code provides that the term welfare_benefit_fund means any fund which is part of a plan of an employer and through which the employer provides welfare benefits to employees or their beneficiaries sec_419 of the code provides that the term fund means among other things any account held for an employer by any person to the extent provided in regulations sec_1_419-1t of the income_tax regulations q a-3 states that a retired_lives_reserve maintained by an insurance_company is a fund or part of a fund if it is maintained for a particular employer and the employer has the right to have any amount in the reserve applied against its future years’ benefit costs or insurance premiums sec_4976 of the code imposes an excise_tax in the amount of percent of the amount of any disqualified_benefit provided by a welfare_benefit_fund sec_4976 of the code defines the term disqualified_benefit to include any portion of a welfare_benefit_fund reverting to the benefit of the employer sec_501 of the code provides for exemption from federal income_taxation for voluntary_employees'_beneficiary_associations providing for the payment of life sick accident or other_benefits to the members of such association or their dependents or designated beneficiaries if no part of the net_earnings of such association inures other than through such payments to the benefit of any private_shareholder_or_individual sec_1_501_c_9_-1 of the regulations provides that to be described in sec_501 of the code an organization must meet the following requirements the organization is an employees’ association membership in the association is voluntary the organization provides for the payment of life sick accident or other_benefits to its members or their dependents or designated beneficiaries and no part of the net_earnings of the organization inures other than by payment of the aforementioned benefits to the benefit of any private_shareholder_or_individual sec_1_501_c_9_-4 of the regulations provides that no part of the net_earnings of an employees’ association may inure to the benefit of any private_shareholder_or_individual other than through the payment of permissible benefits whether prohibited inurement has occurred is a question to be determined with regard to all of the facts and circumstances sec_1_501_c_9_-4 of the regulations provides that it will not constitute prohibited inurement if on termination of a plan established by an employer and funded through an association described in sec_501 any assets remaining in the association after satisfaction of all liabilities to existing beneficiaries of the plan are applied to provide either directly or through the purchase of insurance life sick accident or other_benefits within the meaning of sec_1_501_c_9_-3 pursuant to criteria that do not provide for disproportionate benefits to officers shareholders or highly compensated employees of the employer similarly a distribution to members upon the dissolution of the association will not constitute prohibited inurement if the amounts distributed to members are determined pursuant to the terms of a collective bargaining agreement or on the basis of objective and reasonable standards which do not result in either unequal payments to officers shareholders or highly compensated employees of an employer contributing to or otherwise funding the employees’ association except as otherwise provided in the first sentence of this paragraph if the association's corporate charter articles of association trust instrument or other written instrument by which the association was created provides that on dissolution its assets will be distributed to its members' contributing employers or if in the absence of such provision the law of the state in which the association was created provides for such distribution to the contributing employers the association is not described in sec_501 revrul_69_382 1969_2_cb_28 holds in part for taxable years ending on or before date premiums_paid or incurred by an employer policyholder under contracts providing group term life and health and accident coverage for its active and retired employees were deductible in full even though a portion of the premium was credited to a retired_lives_reserve if the balance in the reserve was held by the insurance_company solely for the purpose of providing insurance coverage on active and retired lives so long as any active and retired employees remained alive and the amount added to the retired_lives_reserve was not greater than an amount that would be required to fairly allocate the cost of the insurance coverage provided over the working lives of the employees involved further the ruling holds in pertinent part that these conclusions would be applicable to taxable years ending after date provided that the employer policyholder promptly amended the contract to provide that it did not retain any right to recapture any portion of the reserve so long as any active or retired employee remains alive in revrul_73_599 1973_2_cb_40 the issue was whether the balance in a retired_lives_reserve had to be included in the gross_income of the employer in the taxable_year in which the employer terminated the insurance_contract at the time it terminated the insurance_contract the employer directed that the insurance carrier should transfer the balance in the retired_lives_reserve to a_trust qualified as a veba under sec_501 of the code the employer had deducted the premiums_paid into a retired_lives_reserve during the years when it was maintaining the insurance_contract for the benefit of its employees the insurance_contract provided that upon cancellation or other termination of the contract any balance in the retired_lives_reserve could be distributed to the employer as a dividend or at the employer's option transferred to a_trust qualified under sec_501 for the purpose of providing insurance coverage for retired employees under these facts the ruling holds that the balance in the retired_lives_reserve was includable in the employer's gross_income under sec_61 in the year of the transfer the ruling states that because the insurance_contract gave the employer a fixed_right to receive the balance in the retired_lives_reserve in the year in which it terminated its coverage under the policy that balance was includable in the employer's gross_income for the year of the termination notwithstanding the fact that the employer directed the insurance_company to transfer the money to a sec_501 c trust similarly in revrul_77_92 1977_1_cb_41 a corporate employer with a group term_insurance program that included a retired_lives_reserve had the option to discontinue the insurance coverage and to direct the insurance carrier to use the amount in the retired_lives_reserve either to pay premiums for insurance on the lives of retired employees or to pay a dividend to the employer the employer terminated the insurance_contract and directed the insurance carrier to transfer the balance in the retired_lives_reserve to another insurance_company to purchase insurance for retired employees the ruling states that the facts presented are in substance the same as those contained in revrul_73_599 except that the right reserved to the employer in revrul_77_92 to transfer the funds remaining in the retired_lives_reserve consisted of the right to direct payment to those funds to another insurance_company rather than to a_trust that qualified for exemption under c of the code however this difference was not considered material because the taxpayer's right of control_over the retired_lives_reserve was substantially the same in both cases accordingly the ruling concludes that the same federal_income_tax rules apply to the transfers in the two cases analysis the reserve is a retired_lives_reserve maintained to provide post-retirement medical benefits to eligible retirees of company m and other participating employers as such the employer has the right to have the amounts in the reserve applied against its future years’ benefit costs or insurance premiums consequently the reserve is a welfare_benefit_fund under sec_419 of the code the funds in the trusts like the amounts held in the reserve will be used to pay post- retirement medical benefits and related costs for retirees trust a established for non- represented retirees will receive only those reserve amounts that have been allocated for non- represented retirees similarly trust b established for represented retirees will receive only those reserve amounts that have been allocated for represented retirees the transfer of a retired_lives_reserve maintained under an insurance_policy and subject_to sec_419 and sec_419a of the code to a veba does not result in a reversion to the employer or cause the veba to lose its tax-exempt status under sec_501 when the policy clearly provides that such reserve is to be used solely for the purpose of providing coverage on active or retired lives for so long as any active or retired employee remains alive the policies prohibit the reversion of any amounts held in the reserve to company m as long as any eligible_employee or retiree of a participating employer remains alive similarly the trusts that will receive the proceeds of the reserve contain provisions prohibiting any reversion of the trusts’ assets to company m while any eligible_employee or retiree of a participating employer remains alive in addition both the policies and the trusts require that after the death of the last surviving eligible retiree under the health plan any balance remaining in the reserve or trusts must be used for the sole benefit of active or retired employees as permitted by applicable law these provisions preclude company m from receiving a reversion from either the reserve or the trusts and thus distinguish this case from the revenue rulings discussed above accordingly the transfer by company m of amounts from the reserve to the trusts should not give rise to taxable_income under sec_61 and sec_1001 nor should it be considered a reversion to company m under sec_4976 of the code nor should it result in any impermissible inurement for any employee retiree or company m conclusion therefore based on the information submitted and the representations made therein we conclude as follows neither the transfer of amounts held in the reserve from company m to trust a or trust b nor the use by the trusts of those amounts to pay post-retirement medical benefits and related administrative expenses will result in the realization or recognition of gross_income or gain to company m under sec_61 or sec_1001 of the code neither the transfer of amounts held in the reserve from company m to trust a or trust b nor the use by the trusts of those amounts to pay post-retirement medical benefits and related administrative expenses will constitute a reversion subject_to the excise_tax under sec_4976 of the code neither the transfer of amounts held in the reserve from company m to trust a or trust b nor the use by the trusts of those amounts to pay post-retirement medical benefits and related administrative expenses will cause either trust to lose its exemption from tax under sec_501 of the code as an organization described in sec_501 this ruling is directed only to the taxpayer that requested it sec_611 o k of the code provides that it may not be used or cited as precedent if you have any questions about this ruling please contact the person whose name and telephone number are shown in the heading of this letter sincerely signed terrell m berkovsky terrell m berkovsky manager exempt_organizations technical group