internal_revenue_service number release date index number ---------------------------------------- -------------------------- -------------------------------------- ----------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact -------------------- id no ------------- telephone number --------------------- refer reply to cc psi b03 plr-151009-06 date date ---------------------------------------- ---------------------------------------- ---------- x --------------------------------------------------------------------- state general_partner --------------------------------------------------------------------- limited_partner former partner a d1 year dear ------------- ----------------------------- ---------------------------- -------------------------- -------------- ------- this letter responds to a letter dated date and subsequent correspondence submitted on behalf of x requesting an extension of time under sec_301_9100-1 through of the procedure and administration regulations for x to file an election under sec_754 of the internal_revenue_code facts according to the information submitted x was formed on d1 as a limited_partnership under the laws of state the general_partner of x is general_partner plr-151009-06 during year limited_partner acquired a a interest in x from former partner x’s partnership return for year was timely filed but a sec_754 election to adjust the basis of partnership property was inadvertently not filed with the return law and analysis sec_754 provides that if a partnership files an election in accordance with the regulations prescribed by the secretary the basis of partnership property is adjusted in the case of a transfer of a partnership_interest in the manner provided in sec_743 such an election shall apply with respect to all distributions of property by the partnership and to all transfers of interests in the partnership during the taxable_year with respect to which the election was filed and all subsequent taxable years sec_1_754-1 of the income_tax regulations provides that an election under sec_754 to adjust the basis of partnership property under sec_734 and sec_743 with respect to a distribution_of_property to a partner or a transfer of an interest in a partnership shall be made in a written_statement filed with the partnership return for the taxable_year during which the distribution or transfer occurs for the election to be valid the return must be filed not later than the time prescribed by sec_1 e including extensions thereof for filing the return for that taxable_year sec_301_9100-1 provides that the commissioner may grant a reasonable 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 provides that the term regulatory election includes an election whose due_date is prescribed by a regulation published in the federal_register sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make the election 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 that granting relief will not prejudice the interests of the government conclusion based solely upon the information submitted and the representations made we conclude that the requirements of sec_301_9100-1 and sec_301_9100-3 have been satisfied as a result x is granted an extension of time of days following the date of this letter plr-151009-06 to make a sec_754 election effective for its year taxable_year and thereafter the election should be made in a written_statement filed with the appropriate service_center for association with x's year return a copy of this letter should be attached to the sec_754 election a copy is enclosed for that purpose except as expressly set forth above no opinion is expressed or implied concerning the federal tax consequences of the facts discussed above under any other provision of the code specifically we express no opinion as to whether or not x is a partnership for federal tax purposes this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent in accordance with a power_of_attorney on file with this office we are sending a copy of this letter to your authorized representatives s sincerely william p o'shea associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes


internal_revenue_service number release date index number ----------------------------- ---------- ---------------------- ---------------------------- in re ------------------------------------------------------------ ------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact -------------------------- id no ------------- telephone number --------------------- refer reply to cc tege eb hw plr-162971-04 date date legend taxpayer ----------------------------------------------------- ----------------------------------------------------------- ------------------------------------------- statute --------------------------------------------------- dear -------------------- this is in reply to your request dated date on behalf of the taxpayer for a ruling concerning the federal tax treatment under sec_104 of the internal_revenue_code the code of benefits received under the plan the statute requires that all employees be covered by the disability and pre-retirement death_benefits under the statute sec_806 of the statute provides that if a member who is otherwise eligible to apply for disability retirement benefits under section is required to terminate the member's regular employment due to a total or occupational disability that is the result of an injury received while performing official duties or an occupational disease arising out of and in the course of the member's employment the member is eligible for a disability benefit in an amount provided for in section sec_806 of the statute states that t he board shall promulgate rules that specify standards for determining whether a member's disability is the result of an injury plr-162971-04 received while performing official duties or an occupational disease arising out of and in the course of employment and that establish procedures for making such determination the annual disability benefits provided are based on a percentage of a member's annual base salary immediately preceding retirement and an additional percentage if the member has a spouse and dependent_children at the time of the disability as authorized by the statute sec_401 and sec_601 the taxpayer withdrew from the statewide defined_benefit_plan and created its own locally administered and financed plan pension and disability benefits for firefighters are available through the plan sec_61 of the code provides that except as otherwise provided by law gross_income means all income from whatever source derived including compensation_for services sec_104 of the code provides that gross_income does not include amounts received under workmen's_compensation acts as compensation_for personal injuries or sickness sec_1_104-1 of the income_tax regulations states that sec_104 of the code excludes from gross_income amounts received by an employee under a workmen's_compensation_act or under a statute in the nature of a workmen's_compensation_act that provides compensation to the employee for personal_injury_or_sickness incurred in the course of employment sec_1_104-1 of the regulations also states that this exclusion does not apply to the amount received either to the extent that it is determined by reference to the employee's age or length of service or the employee's prior contributions even though the employee's retirement is occasioned by an occupational injury or sickness or to the extent that it is in excess of the amount provided in the applicable workmen's_compensation_act or acts based on the information submitted representations made and authorities cited we conclude as follows sec_806 of the statute limits benefits to a class of employees with service-incurred injuries or disease and the benefits are not determined with reference to the employee's age length of service or prior contributions accordingly sec_806 of the statute is a statute in the nature of a workmen's_compensation_act benefits paid under the plan to offset service-related benefits provided under sec_806 of the statute are excludable from the employee's gross_income under sec_104 of the code amounts received in excess of the benefit amount determined under sec_806 of the statute are not excludable under sec_104 of the code because they are determined by reference to the employee's age length of service or prior contributions plr-162971-04 no opinion is expressed as to the federal tax consequences of the transaction under any other section of the code or statute other than those specifically stated above this ruling is directed only to the taxpayer requesting it sec_6110 of the code provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative sincerely harry beker chief health and welfare branch office of division counsel associate chief_counsel tax exempt and government entities cc


internal_revenue_service index numbers number release date department of the treasury washington dc person to contact telephone number refer reply to cc dom fi p plr-114298-98 date date in re legend parent company state a bank trust state a state b state c statute spe securities investor securities a b c d e dear plr-114298-98 this letter is in reply to your letter dated date and other correspondence asking the internal_revenue_service to rule on the transaction described below the proposed transaction facts parent is the common parent of an affiliated_group_of_corporations that includes company parent files a consolidated_return for the group company a calendar_year taxpayer that uses the accrual_method of accounting is an investor-owned electric utility based in state b with a small electric service in state a company generates transmits and distributes electricity to residential commercial industrial and governmental customers within a designated territory company has a monopoly for providing electricity within its territory and is regulated by the public_utility commissions of states a and b and the federal energy regulatory commission ferc company maintains its accounts in accordance with the uniform system of accounts prescribed by both states’ public_utility commissions and ferc state a is deregulating its electric industry as a result company’s customers within state a will be allowed to contract directly with alternative suppliers of electricity and company will compete with other parties to sell electricity in a competitive market some of company’s generation facilities will have values substantially below their book_value and some of its contracts to purchase electricity will be at rates above the market price to enable company to recover the net uneconomic portions of its prudently incurred costs of generation-related assets and obligations transition costs and offset the projected required rate reduction state a enacted statute under which its public_utility commission puc may issue orders allowing company to collect nonbypassable charges from consumers of electricity located in company’s territory in state a the charges will be based in part on the amount of electricity purchased by the consumer whether from company or from an alternative supplier under statute a portion of company’s transition costs may be recovered by collecting a separate nonbypassable usage-based charge called fixed transition amounts ftas and by issuing securities that will be secured_by company’s right to collect the ftas the ftas will be collected from residential and small commercial consumers to establish the actual amount of plr-114298-98 company’s transition costs that may be recovered by collecting ftas and issuing securities company must apply for a financing order from the puc under a financing order ftas to be collected by company will be generally based on the actual electricity usage of each affected consumer actual collection of ftas will vary from expected collections due to a number of factors including power usage and delinquencies to ensure timely recovery_of all transition costs covered by a financing order the financing order will require the puc to adjust at least annually the fta charge under statute the right to collect ftas is a separate_property right transition property the final terms and conditions for collection of ftas by company will be set forth in an advice letter to be filed by company at a future date proposed transaction the puc has issued a financing order authorizing the issuance of up to dollar_figured of investor securities in one or more series company through a special purpose entity spe described below will issue up to dollar_figured of spe securities state a bank through trust described below will acquire the spe securities and will issue to investors up to dollar_figured of investor securities company will form the spe under state c law as a bankruptcy remote limited_liability_company for the special purpose of effectuating the proposed transaction the spe will use the accrual_method of accounting company will be the sole member of the spe the spe will not elect to be treated as an association_taxable_as_a_corporation under sec_301_7701-3 of the procedure and administration regulations state a bank will establish trust to hold the spe securities and to issue the investor securities company will transfer the transition property in the form of a sale to the spe in exchange for the proceeds from the spe’s issuance of the spe securities company will also contribute as equity to the spe cash equal to a percent of the total issue_price of the spe securities the spe will invest the equity in financial instruments that are issued by parties unaffiliated with company and that can be readily converted to cash the spe will issue the spe securities to trust in exchange for the proceeds from trust’s issuance of the investor securities the spe will use the proceeds of the spe securities plr-114298-98 to pay costs of issuing the spe securities and the investor securities and to acquire the transition property trust will hold the spe securities and issue investor securities to public investors investors the investor securities will be issued in the form of pass-through certificates that will represent ownership interests in the spe securities held by trust the terms of the investor securities will substantially mirror the terms of the associated spe securities the investor securities will be nonrecourse but will be secured_by the transition property the equity of the spe the overcollateralization amount described below the fta reserve described below undistributed investment earnings_of the spe and the equity and other assets of the spe less a small amount to ensure payment of spe expenses company expects the investor securities to receive the highest credit rating from one nationally recognized credit rating agency the trust will initially issue one series of investor securities that may be divided into sequential classes each with a different legal maturity_date company expects that the investor securities will have scheduled maturities of approximately c years with legal maturities of up to years following the scheduled maturities scheduled maturity is the date on which the final principal payment is expected to be paid legal maturity is the date on which nonpayment is a default interest on the investor securities will be payable quarterly at rates that are based on yields commensurate with similarly rated debt obligations of comparable weighted average lives the investor securities are expected to be sold at or near par_value principal payments will be scheduled to be made quarterly and in the case of sequential classes will be applied in sequential order to each class of the series until the outstanding principal balance of the class is reduced to zero scheduled principal payments for each quarter will be different but the total scheduled principal payments for each year will be approximately equal investor securities may be subject_to an optional clean-up call -- early payment of all outstanding principal and accrued interest -- when the outstanding principal of the series declines to a small percentage eg c percent of the original issue_price of the series if there are sequential classes any clean- up call will apply only to the class with the longest maturity plr-114298-98 initially company will service the consumer accounts that are subject_to the ftas as servicer company will on a monthly basis bill and collect ftas remit collected ftas to trust and retain all books_and_records regarding the ftas subject_to the spe’s right of inspection company will retain all investment_income earned on the ftas between the time they are collected and the time they are remitted to trust only in the event that company fails satisfactorily to perform its servicing functions will company be subject_to replacement as servicer company’s ability to resign as servicer will be restricted the fta charge will be set to provide for recovery_of the costs associated with billing and collecting the ftas as well as for an excess_amount overcollateralization amount that will eventually reach b percent of the original principal_amount of the investor securities the overcollateralization amount will be collected ratably over the expected term of the investor securities company also expects to receive at least dollar_figuree net of all fees and expenses payable by the spe in ftas after the last scheduled date for payment of accrued interest and principal on the spe securities trust will retain all remitted ftas in the collection account quarterly the trustee will pay out of the collection account the trustee’s fees servicing fees administrative costs operating_expenses of the spe and trust accrued but unpaid interest on all classes of the investor securities and principal to the extent scheduled on the outstanding investor securities any remaining ftas will be allocated to the overcollateralization amount to the extent scheduled and then to a reserve fund the fta reserve if the ftas collected in any period are insufficient to satisfy the spe’s payment obligations on the spe securities then amounts in the fta reserve the accumulated overcollateralization amount and the spe’s equity except for amounts set_aside to ensure payment of spe expenses will be used to satisfy scheduled principal and interest payments to the extent that the spe’s equity or the overcollateralization amount is used to satisfy scheduled principal and interest payments future ftas will be adjusted to restore the spe’s equity and the scheduled overcollateralization amount investment_income earned on amounts in the collection account also may be used to satisfy scheduled interest and principal payments on spe securities and to replenish the spe’s equity and the scheduled overcollateralization amount any excess earnings will be remitted to the spe the spe generally plr-114298-98 will not make distributions to the company until the investor securities have been defeased or redeemed if the ftas deposited in the collection account differ from the ftas projected to be collected by more than a certain amount the puc is required to adjust the fta charge at least annually the spe securities will provide for the following events of default a default of five days or more in the payment of accrued interest on any investor securities a default in the payment of outstanding principal as of the legal maturity_date a default in payment of the redemption price following an optional clean-up call as of the redemption date certain breaches of covenants representations or warranties by the spe in the indenture under which the investor securities are issued and certain events of bankruptcy insolvency receivership or liquidation of the spe in the event of a payment default the trustee or holders of a majority in principal_amount of all series then outstanding may declare the principal of all classes of the investor securities to be immediately due and payable if all classes of the spe securities have been declared to be due and payable following an event of default the trustee may in its discretion either sell the transition property or allow the spe to maintain possession of the transition property and continue to apply receipts of the ftas as if there had been no declaration of acceleration company the spe the trust and the investors will expressly agree under the terms of the applicable documents to treat the spe securities as debt of the spe for all purposes for financial_accounting purposes the spe securities will be treated as debt of company company anticipates that the puc and the credit rating agencies will treat the spe securities as debt issues does the issuance of the puc financing order authorizing the collection of the ftas result in gross_income to company do the issuance of the spe securities to trust and the issuance of the investor securities result in gross_income to company are the spe securities obligations of company law plr-114298-98 sec_61 of the internal_revenue_code generally defines gross_income as income from whatever source derived except as otherwise provided by law gross_income includes income realized in any form whether in money property or services sec_1_61-1 of the income_tax regulations this definition encompasses all accessions to wealth clearly realized and over which the taxpayers have complete dominion 348_us_426 1955_1_cb_207 the right to collect the ftas is of significant value in producing income for company and state a’s action in making the fta rights transferable has enhanced that value generally the granting of a transferable right by the government does not cause the realization of income revrul_92_16 1992_1_cb_15 allocation of air emission rights by the environmental protection agency does not cause a utility to realize gross_income revrul_67_135 1967_1_cb_20 fair_market_value of an oil_and_gas lease obtained from the government through a lottery is not includible in income the economic_substance of a transaction generally governs its federal tax consequences 293_us_465 xiv-1 c b affixing a label to an undertaking does not determine its character revrul_97_3 1997_1_cb_9 an instrument secured_by property may be an obligation of the taxpayer or alternatively may be a disposition of the underlying property by the taxpayer cf id the small_business administration is the primary obligor of certain guaranteed_payment rights that are created under its participating security program conclusions based on the facts as represented we rule as follows the issuance of the puc financing order authorizing the collection of the ftas does not result in gross_income to company the issuance of the spe securities to trust and the issuance of the investor securities will not result in gross_income to company the spe securities will be obligations of company except as specifically ruled on above no opinion is expressed or implied regarding the federal tax aspects of the transaction plr-114298-98 this ruling is directed only to company under sec_6110 of the code this ruling may not be used or cited as precedent a copy of this letter should be attached to the federal_income_tax return of company for the taxable years that include the transaction described in this letter sincerely yours assistant chief_counsel financial institutions products by marshall feiring marshall feiring senior technician reviewer branch


tax_exempt_and_government_entities_division department of the treasury od r internal_revenue_service washington d c jun tl ce rat se u l l xxxxxxxxxxxaxxxx xxxxxxxxxxxxxxx xxxxxxxxxxxxxxx legend taxpayer a ira x individual b amount d xxxxxxxxxxxxx xxxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx company m xxxxxxxxxxxx company n xxxxxxxxxxxx dear xxxxxxxxxxx this is in response to your request dated date as supplemented by correspondence dated date submitted on your behalf by your authorized representative in which you request a waiver of the 60-day rollover requirement contained in sec_408 of the internal_revenue_code the code’ the following facts and representations have been submitted under penalty of perjury in support of the ruling requested on date taxpayer a withdrew amount d from ira x taxpayer a asserts that her failure to accomplish a rollover of amount d within the 60-day period prescribed by sec_408 of the code was due to an error committed by individual b of company m taxpayer a represents that in order to safeguard her financial security in the event of economic recession she met with individual b her financial advisor at company m about changing her ira x investments to invest in gold american eagle and silver american eagle coins individual b told taxpayer a that she could not make such an investment through company m and advised her to do some research before withdrawing funds from ira x to purchase physical gold investments taxpayer a represents that individual b did not explain any_tax consequences of the transaction upon additional research taxpayer a decided she would still like to invest in physical gold and contacted a representative of company n who explained that company n could facilitate her request but because the source of the funds to purchase gold would be from her ira that she should speak with her financial advisor accordingly on date taxpayer a contacted individual b via phone to request information on withdrawing funds from ira x to invest in physical gold on date a check was made payable directly to company n company n used amount d to purchase gold american eagle and silver american coins taxpayer a has physical possession of the coins taxpayer a further represents that she was not aware of the income_tax_liability associated with this transaction until she contacted her tax preparer on date to file her federal tax_return and by that time the 60-day rollover period had already expired based on the foregoing facts and representations you request that the internal_revenue_service service waive the 60-day rollover requirement contained in sec_408 of the code with respect to amount d sec_408 of the code provides that except as otherwise provided in sec_408 any amount_paid or distributed out of an ira shall be included in gross_income by the payee or distributee as the case may be in the manner provided under sec_72 of the code sec_408 of the code defines and provides the rules applicable to ira_rollovers sec_408 of the code provides that sec_408 of the code does not apply to any amount_paid or distributed out of an ira to the individual for whose benefit the ira is maintained if- i the entire amount received including money and any other_property is paid into an ira for the benefit of such individual not later than the day after the day on which the individual received the payment or distribution or ii the entire amount received including money and any other_property is paid into an eligible_retirement_plan other than an ira for the benefit of such individual not later than the day after the date on which the payment or distribution is received except that the maximum amount which may be paid into such plan may not exceed the portion of the amount received which is includible in gross_income determined without regard to sec_408 sec_408 of the code provides that sec_408 does not apply to any amount described in sec_408 received by an individual from an ira if at any time during the 1-year period ending on the day of such receipt such individual received any other amount described in sec_408 from an ira which was not included in gross_income because of the application of sec_408 sec_408 of the code provides a similar 60-day rollover period for partial rollovers sec_408 of the code provides that the rollover provisions of sec_408 do not apply to any amount required to be distributed under sec_408 sec_408 of the code provides that the secretary may waive the day requirement under sec_408 and sec_408 of the code where the failure to waive such requirement would be against equity or good conscience including casualty disaster or other events beyond the reasonable control of the individual subject_to such requirement only distributions that occurred after date are eligible for the waiver under sec_408 of the code revproc_2003_16 r b provides that in determining whether to grant a waiver of the 60-day rollover requirement pursuant to sec_408 the service will consider all relevant facts and circumstances including errors committed by a financial_institution inability to complete a rollover due to death disability hospitalization incarceration restrictions imposed by a foreign_country or postal error the use of the amount distributed for example in the case of payment by check whether the check was cashed and the time elapsed since the distribution occurred the information presented and documentation submitted by taxpayer a do not support the assertion that taxpayer a's failure to accomplish a timely rollover was caused due to an error committed by individual b of company m in addition a representative of company n which is a precious metal company and not an ira sponsor advised taxpayer a to speak with her financial advisor accordingly taxpayer a was put on notice that an ira could not be established through company n by the purchase of gold american eagle and silver american eagle coins therefore pursuant to sec_408 of the code the service hereby declines to waive the 60-day rollover requirement with respect to the distribution of amount d from ira x this ruling does not authorize the rollover of amounts that are required to be distributed by sec_408 of the code no opinion is expressed as to the tax treatment of the transaction described herein under the provisions of any other section of either the code or regulations which may be applicable thereto a copy of this letter is being sent to your authorized representative pursuant to a power_of_attorney on file in this office this 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 if you have any questions concerning this ruling please contact xxxxxxxxxxxxxxxx at xxxxxxxxxxxxxxx all correspondence should be addressed to se t ep ra t sincerely yours om manager employee pians technical group enclosures deleted copy of letter_ruling notice of intention to disclose cc xxxxxxxxxxxxxxxx


internal_revenue_service department of the treasury number release date index number 468a 468a washington dc person to contact telephone number refer reply to cc psi plr-113153-01 date date re request for a revised schedule of ruling amounts taxpayer parent plant location act state commission a commission b director fund dear this letter responds to the request of taxpayer dated date for a revised schedule of ruling amounts in accordance with sec_1_468a-3 of the income_tax regulations taxpayer was previously granted a revised schedule of ruling amounts on date information for the schedule of ruling amounts was submitted on behalf of the taxpayer pursuant to sec_1_468a-3 taxpayer represents the facts and information relating to its request for a revised schedule of ruling amounts as follows taxpayer is under the audit jurisdiction of the director taxpayer is percent owned by parent and files a consolidated federal_income_tax return with parent taxpayer has an interest of percent in plant which is situated at location plant’s operating license expires in taxpayer is subject_to the jurisdiction of commission a which covers percent of the taxpayer’s total electric sales and commission b which covers percent for a total of percent these percentages may vary slightly from year to year the estimated base cost for decommissioning the plant is based on an independent study and is premised on the decon method plr-113153-01 on act became effective in state act provides for a transition to competition in state with respect to the generation and sale of electricity act allows electric utilities including taxpayer to recover their stranded costs through a competitive transition charge ctc imposed upon consumers of electricity in the utility’s service area for a period of the ctc provides for the recovery_of stranded costs including nuclear decommissioning costs for plant commission a in case no effective authorized nuclear decommissioning costs to be included in the taxpayer’s cost of service for ratemaking purposes for the plant in the amount of and estimated an after-tax rate of return on assets of percent commission also determined the total estimated cost of decommissioning to be this base cost escalated using an estimated inflation rate of percent results in an estimated future decommissioning cost of the tax and investment changes made to sec_468a of the internal_revenue_code by section of the energy policy act of were not taken into consideration when estimating these costs ruling amounts for commission b were not requested and are not specifically reviewed herein there are no proceedings pending before commission a or commission b that may result in an increase or decrease in the amount of decommissioning costs for the plant to be included in taxpayer’s cost of service for ratemaking purposes the funding_period for the plant extends from and the level_funding limitation period for the plant extends from the estimated period for which the fund will be in effect is the estimated_useful_life of the plant is thus the taxpayer has calculated its qualifying percentage to be percent sec_468a of the internal_revenue_code provides that a taxpayer may elect to deduct the amount of payments made to a qualified nuclear decommissioning fund however sec_468a limits the amount_paid into the fund for any taxable_year to the lesser_of the amount of nuclear decommissioning costs allocable to the fund that is included in the taxpayer’s cost of service for ratemaking purposes for the taxable_year or the ruling_amount applicable to that year sec_468a of the code provides that no deduction shall be allowed for any payment to the nuclear decommissioning fund unless the taxpayer requests and receives from the secretary a schedule of ruling amounts the ruling_amount for any taxable_year is defined under sec_468a as the amount which the secretary determines to be necessary to fund that portion of nuclear decommissioning costs which bears the same ratio to the nuclear power plant as the period for which the fund is in effect bears to the estimated_useful_life of the plant this term is further defined to include the amount necessary to prevent excessive funding of nuclear plr-113153-01 decommissioning costs or funding of these costs at a rate more rapid than level_funding taking into account such discount rates as the secretary deems appropriate sec_468a of the code provides that a taxpayer shall be deemed to have made a payment to the nuclear decommissioning fund on the last day of the taxable_year if the payment is made on account of the taxable_year within 2½ months after the close of the taxable_year sec_1_468a-1 of the regulations provides that an eligible_taxpayer may elect to deduct nuclear decommissioning costs under sec_468a of the code an eligible_taxpayer as defined under sec_1_468a-1 is a taxpayer that has a qualifying interest in a nuclear power plant as defined under sec_1_468a-1 a qualifying interest is a direct ownership_interest including an interest held as a tenant in common or joint tenant or under certain conditions a leasehold interest in any portion of a nuclear power plant sec_1_468a-2 of the regulations provides that the maximum amount of cash payments made or deemed made to a nuclear decommissioning fund during any taxable_year shall not exceed the lesser_of i the cost of service amount applicable to the nuclear decommissioning fund for such taxable_year or ii the ruling_amount applicable to the nuclear decommissioning fund for such taxable_year sec_1_468a-3 of the regulations provides that in general a schedule of ruling amounts for a nuclear decommissioning fund is a ruling specifying annual payments that over the taxable years remaining in the funding_period as of the date the schedule first applies will result in a projected balance of the nuclear decommissioning fund as of the last day of the funding_period equal to and in no event more than the amount of decommissioning costs allocable to the fund sec_1_468a-3 of the regulations provides that each schedule of ruling amounts shall be based on the reasonable assumptions and determinations used by the applicable public_utility commission s in establishing or approving the amount of decommissioning costs to be included in the cost of service for ratemaking purposes taking into account amounts that are otherwise required to be included in the taxpayer's income under sec_88 of the code and the regulations thereunder each schedule of ruling amounts shall be based on the public_utility commission's reasonable assumptions concerning i the after-tax rate of return to be earned by the amounts collected for decommissioning ii the total estimated cost of decommissioning the nuclear power plant and iii the frequency of contributions to the nuclear decommissioning fund for a taxable_year sec_1_468a-3 of the regulations requires the internal_revenue_service to provide a schedule of ruling amounts that is identical to the schedule proposed by the taxpayer but no such schedule shall be provided by the service unless the plr-113153-01 taxpayer’s proposed schedule is consistent with the principles and provisions of this section sec_1_468a-3 of the regulations provides that the ruling_amount specified in a schedule of ruling amounts for any taxable_year in the level_funding limitation period shall not be less than the ruling_amount specified in such schedule for any earlier taxable_year under sec_1_468a-3 the level_funding limitation period begins on the first day of the first taxable_year for which a deductible payment is made to the nuclear decommissioning fund and ends on the last day of the taxable_year that includes the estimated date on which the nuclear power plant will no longer be included in the taxpayer’s rate base for ratemaking purposes sec_1_468a-3 of the regulations provides that the funding_period for a nuclear decommissioning fund is the period that begins on the first day of the first taxable_year for which a deductible payment is made or deemed to be made to such nuclear decommissioning fund and ends the later of i the last day of the taxable_year that includes the estimated date on which decommissioning costs of the nuclear power plant to which the nuclear decommissioning fund relates will no longer be included in the taxpayer’s cost of service for ratemaking purposes or ii the last day of the taxable_year that includes the estimated date on which the nuclear power plant to which the nuclear decommissioning fund relates will no longer be included in the taxpayer’s rate base for ratemaking purposes sec_1_468a-3 of the regulations provides that the amount of decommissioning costs allocable to a nuclear decommissioning fund is the taxpayer’s share of the total estimated cost of decommissioning the nuclear power plant multiplied by the qualifying percentage sec_1_468a-3 of the regulations provides that in general the total estimated cost of decommissioning a nuclear power plant is the reasonably estimated cost of decommissioning used by the applicable public_utility commission in establishing or approving the amount of these costs to be included in cost of service for ratemaking purposes sec_1_468a-3 of the regulations provides that a taxpayer’s share of the total estimated cost of decommissioning a nuclear power plant equals the total estimated cost of decommissioning the plant multiplied by the taxpayer’s qualifying interest in the plant sec_1_468a-3 of the regulations provides that the qualifying percentage for any nuclear decommissioning fund is equal to the fraction the numerator of which is the number of taxable years in the estimated period for which the nuclear decommissioning fund is to be in effect and the denominator of which is the number of taxable years in the estimated_useful_life of the applicable nuclear power plant plr-113153-01 sec_1_468a-3 of the regulations provides that the estimated period for which a nuclear decommissioning fund is to be in effect begins on the later of the first day of the first taxable_year for which a deductible payment is made to the nuclear decommissioning fund or deemed made or the first day of the taxable_year that includes the date that the nuclear power plant begins commercial operations as determined by the applicable public_utility commission at the time the plant was first included in the taxpayer’s rate base and ends on the last day of the taxable_year that includes the estimated date on which the nuclear power plant will no longer be included in the taxpayer’s rate base for ratemaking purposes according to sec_1_468a-3 the estimated date on which the nuclear power plant will no longer be included in the taxpayer’s rate base for ratemaking purposes is determined under the ratemaking assumptions used by the applicable public_utility commission in establishing or approving rates during the first ratemaking proceeding in which the nuclear power plant was included in the taxpayer’s rate base sec_1_468a-3 of the regulations provides that the estimated_useful_life of a nuclear power plant begins on the first day of the taxable_year that includes the date that the plant begins commercial operations as determined by the applicable public_utility commission at the time the plant was first included in the taxpayer’s rate base and ends on the last day of the taxable_year that includes the estimated date on which the nuclear power plant will no longer be included in the taxpayer’s rate base for ratemaking purposes according to sec_1_468a-3 the estimated date on which the nuclear power plant will no longer be included in the taxpayer’s rate base for ratemaking purposes is determined under the ratemaking assumptions used by the applicable public_utility commission in establishing or approving rates during the first ratemaking proceeding in which the nuclear power plant was included in the taxpayer’s rate base sec_1_468a-3 of the regulations provides that if two or more public_utility commissions establish or approve rates for electric energy generated by a single nuclear power plant then the schedule of ruling amounts shall be separately determined pursuant to the rules of sec_1_468a-3 through e for each public_utility commission that has determined the amount of decommissioning costs to be included in the cost of service for ratemaking purposes for this plant under sec_1_468a-3 this separate determination shall be based on the reasonable assumptions and determinations used by the relevant public_utility commission and shall take into account only that portion of the total estimated cost of decommissioning that is properly allocable to the ratepayer whose rates are established or approved by the public_utility commission according to sec_1_468a-3 the ruling amounts for any taxable_year is the sum of the ruling amounts for such taxable_year determined under the separate schedules of ruling amounts sec_1_468a-3 of the regulations provides that the internal_revenue_service shall not provide a taxpayer with a schedule of ruling amounts for any nuclear decommissioning fund unless the public_utility commission that establishes or approves plr-113153-01 the rates for electric energy generated by the plant to which the nuclear decommissioning fund relates has determined the amount of decommissioning costs to be included in the taxpayer’s cost of service for ratemaking purposes and has disclosed the after-tax rate of return and any other assumptions and determinations used in establishing or approving the amount sec_1_468a-3 of the regulations enumerates the information required to be contained in a request for a schedule of ruling amounts filed by a taxpayer in order to receive a ruling_amount for any taxable_year sec_1_468a-3 of the regulations provides that a taxpayer is required to request a revised schedule of ruling amounts for a nuclear decommissioning fund if a any public_utility commission that establishes or approves rates for the furnishing or sale of electric energy generated by a nuclear power plant to which the nuclear decommissioning fund relates increases the proposed period over which decommissioning costs of the nuclear power plant will be included in cost of service for ratemaking purposes adjusts the estimated date on which the nuclear power plant will no longer be included in the taxpayer’s rate base for ratemaking purposes or reduces the amount of decommissioning costs to be included in cost of service for any taxable_year and b the taxpayer’s most recent request for a schedule of ruling amounts did not provide notice to the service of such action by the public_utility commission sec_1_468a-3 of the regulations provides that any taxpayer that has previously obtained a schedule of ruling amounts can request a revised schedule of ruling amounts such a request must be made in accordance with the rules of sec_1_468a-3 the internal_revenue_service shall not provide a revised schedule of ruling amounts applicable to a taxable_year in response to a request for a schedule of ruling amounts that is filed after the deemed payment deadline date for such taxable_year sections a and c of the energy act eliminated for taxable years beginning after date the investment restrictions contained in sec_468a of the code sections b and c of the energy act revised sec_468a by lowering the tax_rate applicable to a nuclear decommissioning fund for taxable years beginning after date we have examined the representations and information submitted by the taxpayer in relation to the requirements set forth in the sec_468a of the code and the regulations thereunder based solely on these representations of the facts we reach the following conclusions taxpayer has a qualifying interest in the plant and is therefore an eligible_taxpayer under sec_1_468a-1 of the regulations commission a has determined the amount of decommissioning costs to plr-113153-01 be included in the taxpayer’s cost of service for ratemaking purposes as required by sec_1_468a-3 of the regulations taxpayer as owner of the plant has calculated its share of the total decommissioning costs under sec_1_468a-3 of the regulations taxpayer has determined that pursuant to sec_1_468a-3 of the regulations the qualifying percentage is percent taxpayer has proposed a schedule of ruling amounts which meets the requirements of sec_1_468a-3 and of the regulations the annual payments specified in the proposed schedule of ruling amounts are based on the reasonable assumptions and determinations used by commission a and will result in a projected fund balance at the end of the funding_period equal to or less than the amount of decommissioning costs allocable to the fund the maximum amount of cash payments made or deemed made to the fund during any taxable_year is restricted to the lesser amount of the decommissioning costs applicable to the fund or the ruling_amount applicable to the fund as set forth under sec_1_468a-2 of the regulations taxpayer subject_to the jurisdiction of two public_utility commissions for ratemaking purposes has calculated its share of the total decommissioning costs allocable to commission a as required by sec_1_468a-3 of the regulations based on the above determinations we conclude that the taxpayer’s proposed schedule of ruling amounts satisfies the requirements of sec_468a of the code approved schedule of ruling amounts taxable years commission a year commission approval of the schedule of ruling amounts is contingent on there being no change in the facts and circumstances known or assumed at the time this ruling is issued if any of the events described in sec_1_468a-3 of the regulations occur in future years the taxpayer must request a review and revision of the schedule of ruling amounts generally the taxpayer is required to file such a request on or plr-113153-01 before the deemed payment deadline date for the first taxable_year in which the rates reflecting such action became effective when no such event occurs the taxpayer must file a request for a revised schedule of ruling amounts on or before the deemed payment deadline of the tenth taxable_year following the close of the tax_year in which the most recent schedule of ruling amounts was received the approved schedule of ruling amounts is relevant only to those payments made to the fund payments allocable to any funds other than the fund cannot qualify for purposes of the deduction under the provisions of sec_468a of the code as stated above payments made to the fund can qualify only to the extent that they do not exceed the lesser_of the decommissioning costs applicable to the fund or the ruling amounts applicable to the fund in the taxable_year this letter_ruling is directed only to the taxpayer who requested it sec_6110 of the code provides that this ruling may not be used or cited as precedent pursuant to sec_1_468a-7 of the regulations a copy of this letter must be attached with the required election statement to the taxpayer’s federal_income_tax return for each taxable_year in which the taxpayer claims a deduction for payments made to the fund in accordance with the power_of_attorney a copy of this letter_ruling is being sent to the taxpayer a copy of this letter_ruling also is being sent to the director sincerely yours peter c friedman senior technician reviewer branch office of the associate chief_counsel passthroughs and special industries enclosure copy


tax_exempt_and_government_entities_division release number release date uil code department of the treasury internal_revenue_service tege eo examinations commerce street mc dal dallas tx date jan person to contact identification_number contact telephone number telephone ein certified mail - return receipt requested dear this is a final revocation letter as to your exempt status under sec_501 c of the internal_revenue_code our favorable determination an organization described in sec_501 is hereby revoked effective january 20xx to you dated august 20xx recognizing you as letter the revocation of your exempt status was made for the following reasons organizations described in sec_501 of the internal_revenue_code and exempt from tax under sec_501 must be both organized and operated exclusively for exempt purposes you have failed to produce documents or otherwise establish that you are operated exclusively for exempt purposes and that no part of your net_earnings inures to the benefit of private shareholders or individuals as such you failed to meet the requirements of sec_501 c and sec_1_501_c_3_-1 d ii in that you have not demonstrated that you are operated exclusively for exempt purposes within the meaning of internal_revenue_code sec_501 contributions to your organization are no longer deductible under sec_170 of the internal_revenue_code effective january 20xx you are required to file federal_income_tax returns on form_1120 these returns should be filed with the appropriate service_center for the year ending december 20xx and for all subsequent years processing of income_tax returns and assessment of any taxes due will not be delayed should a petition for declaratory_judgment be filed under sec_7428 of the internal_revenue_code contact the clerk of the appropriate court for the rules for initiating suits for if you decide to contest this determination in court you must initiate a suit for declaratory_judgment in the united_states tax_court the united_states claim court or the district_court of the united_states for the district of columbia before the day after the date this determination was mailed to you declaratory_judgment forms regarding filing petitions for declaratory_judgment by referring to the enclosed publication please note that the united_states tax_court is the only one of these courts where a declaratory_judgment action can be pursued without the selvices of a lawyer you may write to the courts at the following addresses please contact the clerk of the respective court for rules and the appropriate united_states tax_court second street nw washington dc us court of federal claims madison place nw washington dc u s district_court for the district of columbia constitution ave n w washington dc you may call the irs telephone number listed in your local directory an irs employee there may be able to help you but the contact person at the address shown on this letter is most familiar with your case you may also call the internal_revenue_service taxpayer_advocate the taxpayer_advocate_service tas is an independent organization within the irs that can help protect your taxpayer rights we can offer you help if your tax problem is causing a hardship or you've tried but haven't been able to resolve your problem with the irs if you qualify for our assistance which is always free we will do everything possible to help you visit taxpayeradvocatc irs gov or call if you have any questions please contact the person whose name and telephone number are shown in the heading of this letter uryjanua oeoke maria hooke director eo examinations enclosures publication sincerely yours ys department of the treasury yi internal_revenue_service tax_exempt_and_government_entities_division date date taxpayer_identification_number form tax_year s ended december 20xx person to contact id number contact numbers phone number fax number manager's name id number manager's contact number phone number response due_date date certified mail - return receipt requested dear why you are receiving this letter we propose to revoke your status as an organization described in sec_501 of the internal_revenue_code code enclosed is our report of examination explaining the proposed action what you need to do if you agree if you agree with our proposal please sign the enclosed form_6018 consent to proposed action - sec_7428 and return it to the contact person at the address listed above unless you have already provided us a signed form we'll issue a final revocation letter determining that you aren't an organization described in sec_501 after we issue the final revocation letter we’ll announce that your organization is no longer eligible for contributions deductible under sec_170 of the code if we don't hear from you if you don't respond to this proposal within calendar days from the date of this letter we'll issue a final revocation letter failing to respond to this proposal will adversely impact your legal standing to seek a declaratory_judgment because you failed to exhaust your administrative remedies effect of revocation status if you receive a final revocation letter you'll be required to file federal_income_tax returns for the tax_year s shown above as well as for subsequent tax years what you need to do if you disagree with the proposed revocation if you disagree with our proposed revocation you may request a meeting or telephone conference with the supervisor of the irs contact identified in the heading of this letter you also may file a protest with the letter rev catalog number 34809f irs appeals_office by submitting a written request to the contact person at the address listed above within calendar days from the date of this letter the appeals_office is independent of the exempt_organizations division and resolves most disputes informally for your protest to be valid it must contain certain specific information including a statement of the facts the applicable law and arguments in support of your position for specific information needed for a valid protest please refer to page one of the enclosed publication how to appeal an irs decision on tax-exempt status and page six of the enclosed publication the examination process publication also includes information on your rights as a taxpayer and the irs collection process please note that fast track mediation referred to in publication generally doesn’t apply after we issue this letter you also may request that we refer this matter for technical_advice as explained in publication please contact the individual identified on the first page of this letter if you are considering requesting technical_advice if we issue a determination_letter to you based on a technical_advice_memorandum issued by the exempt_organizations rulings and agreements office no further irs administrative appeal will be available to you contacting the taxpayer_advocate office is a taxpayer right you have the right to contact the office_of_the_taxpayer_advocate their assistance isn’t a substitute for established irs procedures such as the formal appeals process the taxpayer_advocate can't reverse a legally correct_tax determination or extend the time you have fixed by law to file a petition in a united_states court they can however see that a tax matter that hasn't been resolved through normal channels gets prompt and proper handling you may call toll-free and ask for taxpayer_advocate assistance if you prefer you may contact your local taxpayer_advocate at internal_revenue_service office_of_the_taxpayer_advocate phone number for additional information if you have any questions please call the contact person at the telephone number shown in the heading of this letter if you write please provide a telephone number and the most convenient time to call if we need to contact you thank you for your cooperation sincerely mary a epps acting director eo examinations enclosures report of examination form_6018 publication publication letter rev catalog number 34809f schedule number or exhibit form 886-a rev date name of taxpayer year period ended dec 20xx tax identification_number explanations of items issue should the tax exempt status of internal_revenue_code facts be revoked as described in sec_501 of the was incorporated on march 20xx in the state of as a non-profit corporation ' are to provide relief and support to those who articles of incorporation provided that the purposes of suffer from breast cancer or are at risk of breast cancer and to provide education and direct assistance as well as aid to other nonprofit_organizations engaged in like causes through such means as financial aid education research grants providing supplies and care giving products and any other forms of support or assistance the form_1023 application_for recognition of exemption under sec_501 of the internal_revenue_code was signed by the president of on june 20xx part iv of the form_1023 sets forth the purposes of help fund education and research for the eventual eradication of breast cancer in all of its forms and to assist and provide relief to those who currently suffer from the effects of breast cancer as well as assisting personnel agencies and other charitable organizations who assist cancer patients provided that the organization will provide direct assistance to those suffering the effects of breast cancer the provision of supplies care-giving products and any other form of support deemed necessary and appropriate it provided that the organization was formed to it also internal_revenue_service granted tax exempt status to on august 20xx was the executive director and president of since 20xx filed its forms every year since 20xx part of its forms provided that the guiding mission of is to provide relief to those who suffer from the effects of breast cancer now as well as to work cooperatively with and give support to other personnel individuals and organizations through education direct assistance financial aid the providing of supplies and caregiving products and referral services additionally the assists in the eradication of breast cancer through education and the support of breast cancer research the forms filed by table below for the years from 20xx through 20xx are compared and summarized in table deleted form 886-a catalog number 20810w page_1 publish no irs gov department of the treasury-internal revenue service schedule number or exhibit form 886-a rev date explanations of items name of taxpayer tax identification_number year period ended dec 20xx table deleted fundraising revenue and expenses utilized many contracted telemarketers to raise fund for contracted telemarketers raised a total of dollar_figure million for the fundraising fees see the table below for the telemarketers’ fundraising summary and received a total of dollar_figure million after between 20xx and 20xx the net cash cash raised fundraising fees net cash received over received cash raised totals year 20xx 20xx 20xx 20xx 20xx 20xx 20xx non-cash donation received gift-in-kind the noncash donations noncash grants and non-cash goods are referred to as gift-in-kind gik’ as the president of was created by was also the vice-president of in 20xx father in 19xx introduced the international gik shipping to the board on december 20xx according to board meeting minutes’ called kind are intended for international charities and they need us charities such as by agreeing to accept goods and cover the shipping costs freight costs toward patient services with a substantial offset to our fundraising costs this company is a broker that lines up gifts in_kind with charities these gifts-in- has hosted three international shipments through a company to handle the can credit these shipments did not file schedule b schedule of contributors to report the details of noncash contributions filed the schedule b of forms for the years 20xx received for the years 20xx and 20xx through 20xx the information was provided by court ordered form 886-a department of the treasury-internal revenue service catalog number 20810w publish no irs gov page_2 schedule number or exhibit form 886-a rev date explanations of items name of taxpayer tax identification_number year period ended dec 20xx the gik goods consisted of sending individuals cancer patients shelters missions hospitals and clinics with medicines medical_supplies clothes wigs prosthetics bras bedding bathing aids hygiene products therapeutic items health aids and other household_items the table below summarized the noncash donations gik goods that 20xx received from the non-profit amount noncash contributions received from reported on its form_990 year 20xx 20xx 20xx 20xx 20xx aa _ a reported on its forms showed that received a total of dollar_figure noncash donations from in the year 20xx was a registered charity the website’ of provided that the agency had revoked on april 20xx reported on its forms showed that and the totals of fair_market_value of the noncash donations received were dollar_figure dollar_figure and dollar_figure for the years 20xx 20xx and 20xx respectively received the noncash donations from released its forms for the years 20xx 20xx and 20xx for public inspection the revealed that forms of any non-profit entities in u s due to the problems with verifying values and or ownership in addition was not listed on schedule of indicated that 20xx through 20xx forms for the years 20xx through 20xx which did not provide any cash grant or noncash assistance to did not report any gift-in-kind shipments provided to for the year sec_3 the website address is form 886-a catalog number 20810w publish no irs gov page_3 department of the treasury-internal revenue service schedule number or exhibit form 886-a onl ate explanations of items name of taxpayer tax identification_number year period ended dec 20xx reported on its forms showed that received the noncash donations from and the totals of fair_market_value of the noncash donations received were dollar_figure and dollar_figure for the years 20xx and 20xx respectively released its forms for the years 20xx and 20xx for public inspection the forms revealed that the 20xx and 20xx respectively the receipts were less than dollar_figure make a total grant cash and or noncash of dollar_figure and dollar_figure in the years filed form 990-n for the year 20xx due to its gross reported on its forms showed that received the noncash donations from and the totals of fair_market_value of the noncash donations received were dollar_figure and dollar_figure for the years 20xx and 20xx respectively the schedule b of same address in was found forms showed that the website of and were shared the provided that no record of reported on its forms showed that received a total of dollar_figure noncash donations from in the year 20xx filed form 990-n for the year 20xx because its gross_receipts were less than dollar_figure forms showed that received the noncash donations from and the totals of fair_market_value of the noncash donations received were dollar_figure and dollar_figure for the years 20xx and 20xx respectively released its forms for the years 20xx and 20xx for public inspection the forms revealed that the total expenses of and dollar_figure in the years 20xx and 20xx respectively including grants made cash and or noncash were dollar_figure the noncash donations gik goods that and non-profit gik brokers by paying procurement cost of shipping in warehousing and shipping out fees received and distributed were procured from both for-profit form 886-a department of the treasury-internal revenue service catalog number 20810w page_4 publish no irs gov schedule number or exhibit form 886-a rev date name of taxpayer year period ended dec 20xx tax identification_number explanations of items paid more than dollar_figure of gik procurement fees to for-profit and non-profit gik brokers in the year the non-profit gik and 20xx the for-profit gik brokers were broker was cash and non-cash grants made the forms filed by patients revealed that provided cash and non-cash grants to breast cancer reported a total of dollar_figure cash grants made from 20xx through 20xx which represented of total cash and noncash grants made from 20xx through 20xx reported a total of dollar_figure noncash grants made from 20xx through 20xx which represented of total cash and noncash grants made from 20xx through 20xx the amounts and percentages of cash and non-cash grants made by summarized in the table below from 20xx through 20xx are table deleted private benefits the information was provided by court ordered of were used by its officers and employees for their private benefits revealed the funds statements‘ of owned several vehicles from time to time the vehicles were used by its officers and employees for the years from 20xx through 20xx revealed that the officers the and employees used explanation of the business usages such as the purposes of the trips and or mileage logs no discussion was found in the board meeting minutes regarding the vehicles of employees for business or personal usages funds to pay for gasoline repairs and car washes however there was no used by its officers and provided employees with company credit cards without providing written policies about personal_use of such cards to employees the washes college tuitions and gym memberships no document showed that the reimbursement for personal charges on company cards was paid at the end of each month or had been repaid at all com restaurants food cell phone cell phone accessories cell phone plan credit cards’ showed the purchases of gas car the information was provided by court ordered the information was provided by court ordered form 886-a catalog number 20810w page publish no irs gov department of the treasury-internal revenue service schedule number or exhibit form 886-a rev date name of taxpayer explanations of items year period ended dec 20xx tax identification_number as the president of known as statement reconciliation statement for the month of april 20xx to may 20xx however no loan was reported on the form_990 for the year 20xx that was filed by personal loan shown on in april 20xx the dollar_figure loan was shown as a handwritten note on authorized a dollar_figure loan of charity funds to see exhibit for the dollar_figure of statement formerly the ticket charges from each ticket was dollar_figure plus dollar_figure of air ticket service fee the october 20xx were and and dollar_figure to in addition to the airfare charges there were and his family members credit card september 20xx statement showed that there were airline with the departure date of october 20xx the fare of on passengers who flew to charges for dollar_figure on october 20xx stayed in hotel for one night boarded the the documents provided by court ordered receivership revealed that the members flew to for day hotel charges were also paid_by 20xx could not be found in the documents provided by court ordered the airline tickets and hotel charges on 20xx due to the statement for the period ended november see exhibit for statement for the period ended october on october 20xx the service could not determine whether the and his family the credit card statement for the period ended october 20xx showed charges for dollar_figure of wedding planning and dollar_figure of edible arrangements expenses those charges appeared to be personal expenses no explanations or receipts to show the wedding planning and edible arrangements expenses were for furthering its exempt purposes or any document to show those expenses were personal and repaid by the officers or employees of arrangement expenses on statement for period ended october 20xx see exhibit for wedding and edible family relationships established in 20xx he employed his family members and relatives and see below for the detailed family relationships between ceo and employees the information was provided by court ordered no forms w-2 filed by showed doc had an employee whose name was however there was an employee whose name was the information was provided by court ordered ' the information was provided by court ordered who is married to has various names doc and doc form 886-a catalog number 20810w page publish no irs gov department of the treasury-internal revenue service schedule number or exhibit form 886-a rev date name of taxpayer year period ended dec 20xx tax identification_number explanations of items chart deleted paid a total of dollar_figure in salaries to his family members and relatives from the years 20xx through 20xx see the detailed salaries paid to his family members and relatives below table deleted law sec_501 exempts from federal_income_tax organizations organized and operated exclusively for religious charitable scientific or educational_purposes whereby no part of the net_earnings inures to the benefit of any private_shareholder_or_individual no substantial part of the activities of which is carrying on propaganda or otherwise attempting to influence legislation and which does not intervene on behalf of or in opposition to any candidate for public_office sec_1_501_c_3_-1 states that in order to be exempt as an organization described in sec_501 an organization must be both organized and operated exclusively for one or more purposes specified in such section if an organization fails to meet either the organizational or the operational_test it is not exempt an organization is organized exclusively for one or more exempt purposes only if its articles of the organization as defined in subparagraph of this paragraph a limit the purposes of such organization to one or more exempt purposes and b do not expressly empower the organization to engage otherwise than as an insubstantial part of its activities in activities which in themselves are not in furtherance of one or more exempt purposes sec_1_501_c_3_-1 states that an organization will be regarded as operated exclusively for one or more purposes only if exempt purposes specified in sec_501 an organization will not be so regarded if more than an insubstantial part of its activities is not in furtherance of an exempt_purpose it engages primarily in activities which accomplish one or more such sec_1_501_c_3_-1 provides that an organization is not operated exclusively for one or more exempt purposes if its net_earnings inure in whole or in part to the benefit of private shareholders or form 886-a catalog number 20810w page publish no irs gov department of the treasury-internal revenue service schedule number or exhibit form 886-a rev date explanations of items name of taxpayer tax identification_number year period ended dec 20xx individuals sec_1_501_a_-1 provides that the terms private_shareholder_or_individual as used in sec_501 refer to persons having a personal and private interest in the activities of the organization sec_1_501_c_3_-1 provides that an organization is not organized or operated it is necessary exclusively for charitable purposes unless it serves a public rather than a private interest for an organization to establish that it is not organized or operated for the benefit of private interests such as designated individuals the creator or his family shareholders of the organization or persons controlled directly or indirectly by such private interests sec_1_501_c_3_-1 states that an organization may meet the requirements of sec_501 although it operates a trade_or_business as a substantial part of its activities if it operates the trade_or_business in furtherance of its exempt purposes the organization must not be organized or operated for the primary purpose of carrying on an unrelated_trade_or_business sec_6033 provides except as provided in sec_6033 every organization exempt from tax under sec_501 shall file an annual return stating specifically the items of gross_income receipts and disbursements and such other information for the purposes of carrying out the internal revenue laws as the secretary may by forms or regulations prescribe and keep such records render under oath such statements make such other returns and comply with such rules and regulations as the secretary may from time to time prescribe government’s position does not meet the operational_test for exempt status under sec_501 of the internal has failed to establish that it is operated exclusively for charitable revenue code because purposes the regulations define exclusively as engaging primarily in activities that accomplish one or more of the exempt purposes specified in sec_501 of the code benefits to and members of his family than the needy breast cancer patients provided more financial exempt purposes utilized many contracted telemarketers to raise fund for and spent a total of dollar_figure on professional fundraising fees from 20xx through 20xx the dollar_figure represents percent of a total of cash donated to expenses in other words o cents of every dollar donated to went to professional fundraising hired his wife and their family members as directors and employees as the president of of and his family members were dollar_figure between 20xx and 20xx which was more than the total cash grants that were provided to the needy breast cancer patients in the same period the total salaries paid to in addition to well-paid salaries to personal items such as cars trips college tuition gym memberships airline tickets car washes com restaurants food cell phone cell phone accessories and cell phone plan reimbursement for personal charges on company cards was not required until the end of each year actually created floating short-term interest-free loans to its directors and employees no document was also spent contributions on and his family members it form 886-a catalog number 20810w page publish no irs gov department of the treasury-internal revenue service schedule number or exhibit form 886-a rev date name of taxpayer year period ended dec 20xx tax identification_number explanations of items found in the documents provided by court ordered its directors and employees that those personal charges were repaid by based on the information shown above it showed that that of paying salaries for professional fundraising fees salaries for salaries for other employees free vehicles and interest-free short-term loans to its directors and employees exempt_purpose activity is secondary to and his family members failed to meet the sec_501 of the internal_revenue_code because has failed to establish that it is operated exclusively for charitable purposes the primary purpose of providing employments and benefits to charitable purposes and his family members which is not exclusively for was to inaccurate non-cash donations gik reporting on forms as a vice president of procure non-cash donations gik from gik brokers during its board meeting in 20xx it is because can credit these gik shipments toward patient services with a substantial offset to its fundraising costs revealed the purpose to board_of why needs to incorrectly reported the non-cash donations gik on its forms by using unverified fair market values of the gik goods that procurement fees on its forms as non-cash grants provided procured from gik brokers instead should report the total of in addition records that establish the recipient uses the non-cash goods for the organization’s sec_501 purposes did not retain control and discretion over the use of the non-cash goods and maintain form_990 is used by tax-exempt organizations to provide information required by sec_6033 some members of the public and or state agencies rely on form_990 as the primary or sole source of information about a particular organization how the public perceives an organization in such cases may be determined by the information presented on its return therefore the return must be complete accurate and fully describe the organization’s programs and accomplishments filed forms inaccurately by claiming fair market values of gik goods procured from gik brokers as non-cash donations the gik transactions represented a flow-through of dollar amounts that were paper transactions only revenue received and expenses paid_by reporting fair market values of gik goods procured as revenue incorrectly increased the revenue received by reporting fair market values of gik goods procured as expenses fundraising costs decreased the overall percentage of administrative costs and substantial offset its reported the fair market values of gik goods procured on forms as fails to meet sec_6033 of the code which requires every organization_exempt_from_taxation under a to file an annual return stating specifically the items of gross_income receipts and disbursements and such other information for the purpose of carrying out the internal revenue laws form 886-a catalog number 20810w page publish no irs gov department of the treasury-internal revenue service schedule number or exhibit form 886-a rev date name of taxpayer year period ended dec 20xx tax identification_number explanations of items exhibit - the dollar_figure of personal loan shown on statement exhibit deleted exhibit - the airline tickets and hotel charges on statement exhibit deleted exhibit - the airline tickets and hotel charges on statement continued exhibit deleted exhibit - the airline tickets and hotel charges on statement continued exhibit deleted exhibit - statement for the charges of airline tickets and hotel continued exhibit deleted exhibit - wedding and edible arrangement expenses exhibit deleted form 886-a department of the treasury-internal revenue service catalog number 20810w _ publish no irs gov page


department of the treasury internal_revenue_service washington d c contact person identification_number contact number employer_identification_number form required to be filed tax years se t eo ra t tax_exempt_and_government_entities_division number release date date date uniform issue list dear this is our final_determination that you do not qualify for exemption from federal_income_tax as an organization described in internal_revenue_code sec_501 recently we sent you a letter in response to your application that proposed an adverse determination the jetter explained the facts law and rationale and gave you days to file a protest since we did not receive a protest within the requisite days the proposed adverse determination is now final because you do not qualify for exemption as an organization described in code sec_501 donors may not deduct contributions to you under code sec_170 you must file federal_income_tax returns on the form and for the years listed above within days of this letter unless you request an extension of time to file instructions and do not send them to this office failure_to_file the returns timely may result in a penalty file the returns in accordance with their we will make this letter and our proposed adverse determination_letter available for public inspection under code sec_6110 after deleting certain identifying information please read the enclosed notice notice of intention to disclose and review the two attached letters that show our proposed deletions if you disagree with our proposed deletions follow the instructions in notice if you agree with our deletions you do not need to take any further action in accordance with code sec_6104 we will notify the appropriate state officials of our determination by sending them a copy of this final letter and the proposed adverse letter you should contact your state officials if you have any questions about how this determination may affect your state responsibilities and requirements if you have any questions about this letter please contact the person whose name and telephone number are shown in the heading of this letter federal_income_tax status and responsibilities please contact irs customer service pincite-829-1040 or the irs customer service number for businesses the irs customer service number for people with hearing impairments is if you have any questions about your sincerely robert choi director exempt_organizations rulings agreements enclosure notice redacted proposed adverse determination_letter redacted final adverse determination_letter department of the treasury internal_revenue_service washington d c contact person identification_number contact number fax number employer_identification_number xxxkxx tax_exempt_and_government_entities_division date date xxxxx xxkxxk xxxxx uniform issue list legend a b cc d e f g h j k xxkxxk xxxxx xxxkxx xxkxxx xxkxx xxkxxx xxxxx xxxxx xxxxx xxxkxx xxxkxx m xxxxx xxxxx xxxxx xxxkxx xxkxx xxxxx xxxkxxk xxxkxx t uo v w x y z dear we have considered your application_for recognition of exemption from federal_income_tax under internal_revenue_code sec_501 based on the information provided we have concluded that you do not qualify for exemption under code sec_501 the basis for our conclusion is set forth below you are a nonprofit organization incorporated in m your articles of incorporation provide that you are organized exclusively for one or more purposes as specified in sec_501 of the internal_revenue_code you have five uncompensated directors the current directors of the corporation are a b c d and e a and e are related by blood you have indicated that you have a conflict of interest policy and bylaws your activities are exclusively dedicated to providing a viable alternative to institutional type care facilities for f a mentally and physically handicapped_individual a is the sister of f e and g are the parents of f you maintain a tri-level house that has been remodeled to specifically suit the needs of a handicapped_individual the house includes self-activated chair lifts on each level the bathroom features a powered lift chair that elevates over the edge of the bathtub and then lowers to tub surface level the house also contains a spa which allows for range-of-motion exercises in heated water the spa is equipped with a powered seat sling and arm boom that is capable of moving a person into and out of the spa in addition to housing you provide care for one special needs resident you employ three caregivers h and j h is on duty monday thru thursday from a m until p m h provides training tailored to the needs of the resident and j reside in the home alternating weeks on duty they are responsible for caring for the resident during the hours that h is not on duty you also employ an on-call and visiting neo-natal pediatric nurse medicaid billing payroll vendor invoice payments preparation of financial statements and record keeping are all performed by e for nd compensation these administrative duties are undertaken at a home_office in the residence of e and using e’s office equipment free of charge g prepares the menus and purchases and delivers all the food and household supplies also free of charge you plan to cease relying on e and g for these services in approximately three years time at which point you will purchase those services from another source you primarily fund your activities using medicaid reimbursements for services rendered to your special needs resident most of the remaining expenses are paid out of f’s social_security income however in e and g contributed t for the purpose of making the down payment on the tri-level house and paying the closing costs associated with the purchase of the house in that same year e and g also donated dishes cookware kitchen appliances and linens valued at u and loaned you v to cover salaries and operational costs until medicaid issued reimbursement e also made improvements to the house valued at w for which he was not reimbursed additionally in you received a grant from k in the amount of x for the purchase of disposable diapers as well as donations from e and g of cash in the amount of y for the purchase of the spa and of kitchen ware valued at z you have represented that your cost for the care of f is less than the cost of that care if it were provided by an intermediate care facility for mental retardation you have also stated that e is charged an amount that does not exceed f’s social_security income additionally if f was unable to afford the cost of living in your facility you have represented that the amount charged would be reduced to the point of affordability and that if this was not possible you would dissolve sec_501 of the internal_revenue_code provides an exemption from taxation for organizations organized and operated exclusively for religious charitable scientific testing for public safety literary or educational_purposes no part of the net_earnings of which inures to the benefit of any private_shareholder_or_individual sec_1_501_c_3_-1 of the income_tax regulations provides that in order to be exempt as an organization described in sec_501 of the code the organization must be one that is both organized and operated for one or more of the purposes specified in that section thus an organization that fails to meet either the organizational or operational_test is not exempt sec_1_501_c_3_-1 of the regulations provides that an organization will be regarded as operated exclusively for one or more exempt purposes only if it engages primarily in activities which accomplish one or more of such exempt_activities specified in sec_501 an organization will not be so regarded if more than an insubstantial part of its activities is not in furtherance of an exempt_purpose sec_1_501_c_3_-1 of the regulations provides that an organization is not operated exclusively for one or more exempt purposes if its net_earnings inure in whole or in part to the benefit of private shareholders or individuals sec_1_501_a_-1 of the regulations defines private_shareholder_or_individual as a person having a personal and private interest in the activities of the organization sec_1_501_c_3_-1 of the regulations provides that an organization is not organized or operated exclusively for one or more exempt purposes unless it serves a public rather than a private interest therefore to meet the requirement of this subsection it is necessary for an organization to establish that it is not organized or operated for the benefit of private interests such as designated individuals the creator or his family shareholders of the organization or persons controlled directly or indirectly by such private interests revrul_56_403 1956_2_cb_307 provides that an organization which awarded scholarships solely to undergraduate members of a designated fraternity was organized and operated exclusively for exempt purposes because there was no specific designation of person eligible for the scholarships nor were the purposes of the organization so personal or private in nature as to lack the elements of public usefulness and benefit that are required of an organization qualifying for exemption under sec_501 of the code revrul_79_19 1979_1_cb_195 provides that an organization formed under the sponsorship of community leaders consisting of civic leaders and other individuals with particular interest in the problems of the handicapped to meet the housing needs of the physically handicapped by building and operating an apartment rental complex designed especially for them at the lowest feasible cost and maintains in residence those tenants who subsequently become unable to pay its monthly fees is operated exclusively for charitable purposes within the meaning of sec_501 of the code 326_us_279 holds that the presence of a single non-exempt purpose if substantial in nature will preclude exemption regardiess of the number or importance of statutorily exempt purposes in wendy l parker rehabilitation foundation inc v commissioner t c memo the tax_court considered whether the petitioner qualified for exemption under sec_501 of the code petitioner’s purpose was to aid the victims of coma by providing these coma victims with funds and therapeutic equipment and devices used in conjunction with accepted coma recovery programs petitioner's officers and directors were the father mother and brother of wendy l parker a recovering coma patient in its exemption application petitioner represented that thirty percent of its income was expected to be expended for the benefit of wendy l parker the court found that wendy parker’s parents and brother as officers and directors of the foundation formed to benefit coma patients including wendy parker had a personal_interest in petitioner's affairs to provide assistance to wendy parker and other coma patients in addition these persons were found to be private individuals within the meaning of sec_1_501_a_-1 of the regulations the distribution of funds for the benefit of wendy parker assisted the parker family in providing for her care consequently there was a prohibitive benefit from petitioner's funds that inures to the benefit of private individuals similarly in 203_fsupp_126 e d s c the district_court reasoned whether a foundation which was organized and operated to provide scholarships to four children of employees of a corporation qualified for exemption under sec_501 of the code the court found that one of the four children the son of the corporation president and foundation trustee received of the foundation’s income the court held that the narrow class of persons who might benefit the more restricted_group that did benefit and the preference given to the son of the director stockholder and trustee were dispositive that the foundation was not operated exclusively for charitable purposes based on the information submitted you have failed to establish that your operations will further a charitable purpose and that you will not be operated for a substantial nonexempt private purpose the information also indicates that you are not serving a charitable_class of individuals and thus lacking in the elements of public usefulness and benefit you provide services solely to one specified_individual the individual that you serve is also related to your directors in such a way that your assistance to that individual relieves obligations of the directors thereby constituting inurement and private benefit the above cases demonstrate that a charitable_organization or trust must be set up for the benefit of an indefinite class of individuals not for specific persons a_trust or corporation organized and operated for the benefit of specific individuals is not charitable regardless of whether the individuals served are part of a charitable_class where the beneficiaries have been identifiable the service has taken an adverse position your situation is similar to that found in wendy l parker supra f while a member of a charitable_class does not constitute a charitable_class f is the only resident of the facility the facility was purchased and improved with the intention that f not another reside there f will be the sole resident of the facility for the duration of f’s life unless f chooses to leave the facility or you are forced to dissolve without serving any charitable_class you cannot be organized and operated for charitable purposes within the meaning of c of the code it excessively benefits private interests either through inurement of its net_earnings to certain insiders or by primarily benefiting the interests of persons who though not insiders do not comprise a charitable_class a and e are two of your directors and as such have a personal additionally even an otherwise qualifying_organization will be disqualified for exemption if interest your activities thus a and e are both private individuals within the meaning of sec_1_501_a_-1 of the regulations under c -1 c of the regulations no net_earnings may inure to the benefit of these private individuals however a and e are closely related to f in fact e and g are the parents of f and have an obligation to pay for f’s care as a result distribution of funds or services for the benefit of f assists e and g in providing for f’s care in this way your net_earnings inure to the benefit of private individuals housing organizations may be charitable by providing specially designed housing for the handicapped at the lowest feasible cost and maintaining in residence those tenants who subsequently become unable to pay its monthly fees see eg revrul_79_19 supra however in your case you are providing the housing to a single handicapped tenant as stated in better business bureau of washington d c supra the presence of a single nonexempt purpose if substantial in nature will destroy the exemption regardless of the number or importance of truly exempt purposes you were formed for the purpose of providing a home for fe such activity relieves f’s parents of certain financial obligations and constitutes substantial inurement for the benefit of a private individual such benefit is specifically prohibited by sec_1_501_c_3_-1 of the regulations based on the foregoing you are not operating exclusively for charitable purposes but primarily for the purpose of benefiting f accordingly you do not qualify for exemption as an organization described in sec_501 of the code and you must file federal_income_tax returns contributions to you are not deductible under sec_170 of the code you have the right to file a protest if you believe this determination is incorrect to protest you must submit a statement of your views and fully explain your reasoning you must submit the statement signed by one of your officers within days from the date of this letter we will consider your statement and decide if the information affects our determination your protest statement should be accompanied by the following declaration under penalties of perjury declare that have examined this protest statement including accompanying documents and to the best of my knowledge and belief the statement contains all the relevant facts and such facts are true correct and complete you also have a right to request a conference to discuss your protest this request should be made when you file your protest statement an attorney certified_public_accountant or an individual enrolled to practice before the internal_revenue_service may represent you if you want representation during the conference procedures you must file a proper power_of_attorney form_2848 power_of_attorney and declaration of representative if you have not already done so for more information about representation see publication practice_before_the_irs and power_of_attorney all forms and publications mentioned in this letter can be found at www irs gov forms and publications if you do not file a protest within days you will not be able to file a suit for declaratory_judgment in court because the internal_revenue_service irs will consider the failure to protest as a failure to exhaust available administrative remedies code sec_7428 provides in part that a declaratory_judgment or decree shall not be issued in any proceeding unless the tax_court the united_states court of federal claims or the district_court of the united_states for the district of columbia determines that the organization involved has exhausted all of the administrative remedies available to it within the irs if you do not intend to protest this determination you do not need to take any further action letter that letter will provide information about filing tax returns and other matters if we do not hear from you within days we will issue a final adverse determination please send your protest statement form_2848 and any supporting documents to this address you may also fax your statement using the fax number shown in the heading of this letter if you fax your statement please call the person identified in the heading of this letter to confirm that he or she received your fax if you have any questions please contact the person whose name and telephone number are shown in the heading of this letter sincerely robert choi director exempt_organizations rulings agreements


id office uilc cca_2009090213262962 -------------- number release date from ------------------------- sent wednesday september pm to -------------------- cc subject re cdp closing_agreement question --------- if the taxpayer in connection with a closing_agreement has waived the right to a cdp hearing under sec_6320 and sec_6330 and has waived rights to notice of his her hearing rights then he she is not entitled to the hearings or notice of the hearing rights should be sent notice of the lien filing without the notice of the hearing right similarly when a levy is planned the taxpayer should be given notice_of_intent_to_levy unless jeopardy exists but should not be given notice of his her right to a hearing if a notice_of_federal_tax_lien is filed then he she