internal_revenue_service number release date index number -------------------------------------- -------------------------- -------------------------------------------------- --------------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact -------------------- id no ----------------- telephone number -------------------- refer reply to cc psi b01 plr-107470-12 date april x -------------------------------------------------- --------------------------------------- member ----------------------------------------------------- ---------------------------- trust country country d1 d2 d3 d4 dear ------------- -------------------------------- -------------------------------- -------------------------- -------------------------- ----------------------- -------------------------- -------------- this letter responds to a letter dated date submitted on behalf of x by its authorized representative requesting a ruling under sec_301_9100-1 and sec_301_9100-3 of the procedure and administration regulations that x be granted an extension of time to file an election to be classified as a disregarded_entity under sec_301_7701-3 effective d3 facts plr-107470-12 the information submitted states that member formed x on d1 as a limited_liability_company under the laws of country member was the sole owner of x at the time member was a citizen of country on d2 member transferred member’s interests in x to trust member represents that trust is a grantor_trust for u s federal tax purposes in d4 member became a resident_of_the_united_states the entity classification of x then became relevant member intended that x be treated as a disregarded_entity for federal tax purposes effective d3 however member did not timely file a form_8832 entity classification election for x law and analysis sec_301_7701-3 provides that a business_entity that is not classified as a corporation under sec_301_7701-2 or an eligible_entity can elect its classification for federal tax purposes as provided in sec_301_7701-3 sec_301_7701-3 provides that unless it elects otherwise a foreign eligible_entity is a a partnership if it has two or more members and at least one member does not have limited_liability b an association if all members have limited_liability or c disregarded as an entity separate from its owner if it has a single owner that does not have limited_liability sec_301_7701-3 provides that an eligible_entity may elect to be classified other than as provided in sec_301_7701-3 or to change its classification by filing form_8832 with the service_center designated on form_8832 sec_301_7701-3 provides that an election made under sec_301 c i will be effective on the date specified by the entity on form_8832 or on the date filed if no date is specified on the election form the effective date specified on form_8832 cannot be more than days prior to the date on which the election is filed and cannot be more than months after the date on which the election is filed sec_301_9100-1 provides that the commissioner has discretion to grant a reasonable extension of time under the rules set forth in sec_301_9100-2 and sec_301_9100-3 to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the code except subtitles e g h and i sec_301_9100-1 defines a regulatory election to include an election whose due_date is prescribed by a regulation published in the federal_register sec_301_9100-2 provides the rules governing automatic extensions of time for making certain elections sec_301_9100-3 sets forth the standards the commissioner will use to determine whether to grant an extension of time for regulatory elections that do not meet the requirements of sec_301_9100-2 sec_301_9100-3 provides that requests for relief subject_to sec_301_9100-3 will be granted when the taxpayer provides evidence including affidavits described in plr-107470-12 sec_301_9100-3 to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and granting relief will not prejudice the interests of the government conclusion based on the facts submitted and the representations made we conclude that the requirements of sec_301_9100-1 and sec_301_9100-3 have been satisfied as a result x is granted an extension of time of days from the date of this letter to file form_8832 with the appropriate service_center and to elect to be classified as a disregarded_entity for federal tax purposes effective d3 a copy of this letter should be attached to the form_8832 a copy is enclosed for that purpose this ruling is contingent on x member and trust filing all income_tax and information returns including amended returns consistent with the requested relief within days of the date of this letter if this condition is not met then this ruling is null and void except as expressly set forth above we express or imply no opinion concerning the federal tax consequences of the facts discussed above under any other provision of the code this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent in accordance with a power_of_attorney on file with this office we are sending a copy of this letter to x’s authorized representative sincerely associate chief_counsel passthroughs special industries by __ s ______________________________ david r haglund chief branch office of associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes cc


internal_revenue_service number release date index number -------------------------------- ---------------------------------------------------------- ------------------------------------ ------------------------------- 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 psi b09 plr-127375-04 date date legend trust trust trust trust trust trust trust trust trust trust trust trust trust trust ------------------------------------------------------------------------------------------ ----------------------- ------------------------------------------------------------------------------------------ ----------------------- ------------------------------------------------------------------------------------------ ----------------------- ------------------------------------------------------------------------------------------ ----------------------- ------------------------------------------------------------------------------------------ ----------------------- ------------------------------------------------------------------------------------------ ----------------------- ------------------------------------------------------------------------------------------ ----------------------- ------------------------------------------------------------------------------------------ ----------------------- ------------------------------------------------------------------------------------------ ----------------------- ------------------------------------------------------------------------------------------ ----------------------- ------------------------------------------------------------------------------------------ ----------------------- ------------------------------------------------------------------------------------------ ----------------------- ------------------------------------------------------------------------------------------ ----------------------- ------------------------------------------------------------------------------------------ ----------------------- plr-127375-04 ------------------------------- grantor ----------------------- date ----------------------------------------------- foundation ----------------------- date beneficiary ---------------------- beneficiary ----------------------- beneficiary ---------------------- beneficiary -------------------------- beneficiary -------------------- beneficiary ------------------------- beneficiary ---------------------- beneficiary ----------------------------- beneficiary ------------------------ beneficiary ------------------------------------------ beneficiary -------------------------------------------------- beneficiary -------------------------------- beneficiary ---------------------------- beneficiary ------------------------------------ trustee child child date court state date county dear ---- requesting rulings relating to the estate gift and generation-skipping_transfer_tax consequences of modifying trust trust trust trust trust trust trust trust trust trust trust trust trust and trust collectively the series v trusts of foundation and then her grandchildren date is prior to date trust is for the benefit of beneficiary trust is for the benefit of beneficiary trust is for the benefit of beneficiary trust is for the benefit of beneficiary trust is for the benefit of beneficiary trust is for the benefit of beneficiary trust is for the benefit of beneficiary trust is for the benefit of beneficiary trust is for the benefit of beneficiary trust is for the benefit of beneficiary trust is for the benefit of beneficiary trust is for the benefit of beneficiary trust is for the benefit of beneficiary trust is for the benefit of beneficiary -------------------------------- ------------------------- --------------------------- ------------------- ----------------------------------------------------------- -------- ------------------- ---------------------------- this letter responds to your letter dated date and prior correspondence grantor created the series v trusts irrevocable trusts on date for the benefit article i paragraph of the series v trust agreement provides that the article iii paragraph of the series v trust agreement provides that on article ii paragraph of the series v trust agreement provides that the article iii paragraph of the series v trust agreement provides that after plr-127375-04 trustee is a corporation and currently serves as the trustee of the series v trusts the series v trusts each have the same operating provisions trustees shall divide the trust property initially into separate trusts equal in value a separate trust to be held for each of grantor’s grandchildren trustees shall distribute all of the net_income of all the trusts to foundation at least quarterly until date the charitable interest ended accordingly on date date the trustees shall distribute any remaining income of all of the trusts created by the series v trust agreement to foundation date the distribution corporate trustee shall in its sole discretion distribute income or principal from each trust to or apply for the benefit of the named beneficiary of a_trust or any of that beneficiary’s descendants the individual trustee shall have no power to make distributions from the trusts all discretion to be exercised in making distributions from the trusts shall be vested solely in the distribution corporate trustee less than twenty-one years after the death of the last to survive of grantor’s descendants who were living on date all of the trusts in existence under the series v trust agreement shall terminate and the corporate trustee shall distribute all of the then remaining income and principal of each trust outright to the beneficiary for whom such trust property is then being held in trust death of a beneficiary prior to the termination of all of the trusts as provided in paragraph the undistributed_income and principal of such deceased beneficiary’s trust shall be divided into portions for such beneficiary’s then living descendants per stirpes to be administered and distributed in the same manner as the other series v trusts should a beneficiary leave no descendant surviving at his or her death then his or her trust assets shall be distributed to the series v trusts for each then living grandchildren of the grantor in equal shares and for the descendants of deceased grandchildren per stirpes and child acting jointly or the survivor of them acting alone may remove any corporate trustee with or without cause and name a successor trustee there shall always be a corporate trustee serving under the series v trust agreement either jointly with an individual trustee or serving alone as sole trustee a corporate trustee shall have a combined capital and surplus of at least dollar_figure article iii paragraph of the series v trust agreement provides that upon the article iii paragraph of the series v trust agreement provides that one day article v paragraph of the series v trust agreement provides that child article z paragraph z will provide that notwithstanding any provision to the on date trustee petitioned court to modify the series v trusts to allow a plr-127375-04 trust’s beneficiaries to remove and replace trustees and modify the capital requirements for successor corporate fiduciaries the modification will insert a new article z court approved the modifications as follows under state law on date the date court order provides that the judgment shall become effective as of the date that the internal_revenue_service issues a favorable ruling holding that the modifications made under the judgment will not result in the loss of the series v trusts’ exemption from the generation-skipping_transfer_tax will not otherwise subject the trusts to the generation-skipping_transfer_tax and will not cause any trust_beneficiary to have a general_power_of_appointment pursuant to sec_2041 or sec_2514 of the internal_revenue_code contrary in the event child and child have either died resigned or shall have ceased to serve for any reason those persons who are then living and competent who have attained the age of thirty-five years of age and who are entitled to receive income or principal distributions the powerholders shall have the power to remove any corporate trustee with or without cause be created or organized in the united_states or under the law of the united_states or any state any successor trustee must be a bank with trust powers either state or national or a_trust company with a combined capital and surplus of at least dollar_figure at the time of its appointment the powerholders of a_trust may petition a court having jurisdiction in county to seek the appointment by such court of a bank with trust powers either state or national or a_trust company having at least the minimum capital and surplus required by applicable state or federal_law for that type of entity if such a petition is filed prior to the time the entity to be named as successor trustee has obtained the necessary approvals of the appropriate regulatory agency under state or federal_law any order appointing such entity as a successor trustee shall be contingent upon obtaining such regulatory approvals any such petition must seek the appointment of a guardian ad litem to represent those beneficiaries of a_trust who are unknown or who are under a legal disability any powerholder within the meaning of sec_672 of the internal_revenue_code article z to appoint a successor trustee shall be exercised by a majority of all such persons whether or not one or more of such persons declines to exercise such powers when there are only two such persons such powers must be exercised jointly and if only one such person qualifies such person shall exercise such powers alone paragraph z will provide that any trustee must not be related or subordinate to paragraph z will provide that any successor corporate trustee appointed must paragraph z will provide that the powers granted to the powerholders under paragraph z will provide in relevant part that any removal notice must be by paragraph z will provide that the power to remove and replace a trustee may you have requested a ruling that the proposed modifications to the terms of the paragraph z will provide that the powers vested in the powerholder shall not be plr-127375-04 paragraph z will provide that if the power to remove and replace a trustee is exercised by the powerholder with respect to any trust created under article v then in no event may such power be exercised again for such trust for a five year period beginning from the date of the exercise of such power as evidenced by the effective date of the required writing acknowledged instrument signed by all of the powerholders exercising the removal and replacement powers provided for in article z must be actually delivered to the trustee being removed must contain the acceptance of the successor trustee endorsed on it and must include the effective date of such removal and acceptance only be exercised by a person who then qualifies as a powerholder and may not be exercised by an assignee guardian attorney-in-fact or any other agent of the powerholder deemed to be so vested in a fiduciary capacity trusts will not cause the trusts to lose their generation-skipping_transfer_tax exempt status or otherwise become subject_to the generation-skipping_transfer_tax in addition you have requested a ruling that the proposed modifications to the terms of the trusts will not result in the trusts’ beneficiaries possessing a general_power_of_appointment for the trusts taxable_distribution taxable_termination and a direct_skip each of the series v trusts is a generation-skipping_transfer_trust because the trust provisions allow for distributions to one or more generation of beneficiaries below the grantor’s generation each of the series v trusts was irrevocable on date the trustees represent that there have been no additions actual or constructive to these trusts after date under b a of the tax_reform_act_of_1986 and sec_26_2601-1 of the generation-skipping_transfer_tax regulations the generation-skipping_transfer_tax provisions do not apply to any generation-skipping_transfer under a_trust as defined in sec_2652 that was irrevocable on date but only to the extent that the transfer is not made out of corpus added to the trust after date or out of income attributable to corpus so added sec_2611 defines the term ageneration-skipping transfer to include a sec_2601 imposes a tax on every generation-skipping_transfer sec_26_2601-1 provides rules for determining when a modification sec_26_2601-1 provides that a modification of the governing plr-127375-04 sec_26_2601-1 provides that any trust in existence on date is considered an irrevocable_trust except as provided in sec_26_2601-1 or c that relate to property includible in a grantor’s gross_estate under sec_2038 and sec_2042 in the present case the series v trusts are considered to have been irrevocable on date because neither sec_2038 nor sec_2042 applies judicial construction settlement agreement or trustee action with respect to a_trust that is exempt from the generation-skipping_transfer_tax under sec_26_2601-1 or hereinafter referred to as an exempt trust will not cause the trust to lose its exempt status in general unless specifically provided for otherwise the rules contained in sec_26_2601-1 are applicable only for purposes of determining whether an exempt trust retains its exempt status for generation-skipping_transfer_tax purposes unless specifically noted the rules do not apply in determining for example whether the transaction results in a gift subject_to gift_tax or may cause the trust to be included in the gross_estate of a beneficiary or may result in the realization of capital_gain for purposes of sec_1001 instrument of an exempt trust by judicial reformation or nonjudicial reformation that is valid under applicable state law will not cause an exempt trust to be subject_to the provisions of chapter if the modification does not shift a beneficial_interest in the trust to any beneficiary who occupies a lower generation as defined in sec_2651 than the person or persons who held the beneficial_interest prior to the modification and the modification does not extend the time for vesting of any beneficial_interest in the trust beyond the period provided in the original trust furthermore a modification that is administrative in nature that only indirectly increases the amount transferred for example by lowering administrative costs or income taxes will not be considered a shift in a beneficial_interest in a_trust and will not be considered a shift in a beneficial_interest in a_trust under sec_26 b i d therefore the series v trusts will not lose their status as exempt from the generation-skipping_transfer_tax under sec_26_2601-1 accordingly based on the facts submitted and the representations made future distributions from or terminations of a series v trust will not be subject_to the generation-skipping_transfer_tax sec_2041 provides that the value of the gross_estate shall include the value of all property to the extent of any property with respect to which the decedent has at the time of his death a general_power_of_appointment created after date or with respect to which the decedent has at any time exercised or released a power_of_appointment by a disposition that is of such nature that if it were a transfer of property owned by the decedent the property would be includible in the decedent’s gross_estate under sec_2035 to inclusive for purposes of sec_2041 the power_of_appointment shall be considered to exist on the date of the the proposed modifications to the series v trusts are administrative changes plr-127375-04 decedent’s death even though the exercise of the power is subject_to a precedent giving of notice or even though the exercise of the power takes effect only on the expiration of a stated period after its exercise whether or not on or before the date of the decedent’s death notice has been given or the power has been exercised sec_2041 provides that a general_power_of_appointment is a power that is exercisable in favor of the decedent the decedent’s estate the decedent’s creditors or the creditors of the decedent’s estate however a power to consume invade or appropriate property for the benefit of the decedent that is limited by an ascertainable_standard relating to the health education support or maintenance of the decedent shall not be deemed a general_power_of_appointment sec_20_2041-1 of the estate_tax regulations provides in part that a donee may have a power_of_appointment if he has the power remove or discharge a trustee and appoint himself for example if under the terms of the instrument the trustee or his successor has the power to appoint the principal of the trust for the benefit of individuals including himself and the decedent has the unrestricted power to remove or discharge the trustee at any time and appoint any other person including himself the decedent is considered as having a power_of_appointment however the mere power of management investment custody of assets or the power to allocate receipts and disbursements as between income and principal exercisable in a fiduciary capacity whereby the holder has no power to enlarge or shift any of the beneficial interests therein except as an incidental consequence of the discharge of the fiduciary duties is not a power_of_appointment appointment created after date shall be deemed a transfer of property by the individual possession such power sec_2514 provides that a general_power_of_appointment is a power that is exercisable in favor of the individual possessing the power the possessor his estate his creditors or the creditors of his estate however a power to consume invade or appropriate property for the benefit of the posessor that is limited by an ascertainable_standard relating to the health education support or maintenance of the decedent shall not be deemed a general_power_of_appointment donee may have a power_of_appointment if he has the power remove or discharge a trustee and appoint himself for example if under the terms of the instrument the trustee or his successor has the power to appoint the principal of the trust for the benefit of individuals including himself and the decedent has the unrestricted power to remove or discharge the trustee at any time and appoint any other person including himself the decedent is considered as having a power_of_appointment however the mere power of management investment custody of assets or the power to allocate receipts and disbursements as between income and principal exercisable in a fiduciary capacity sec_2514 provides that the exercise or release of a general power of sec_25_2514-1 of the gift_tax regulations provides in part that a sec_672 defines the term related_or_subordinate_party to mean any revrul_95_58 1995_2_cb_191 holds that a decedent grantor’s reservation of plr-127375-04 whereby the holder has no power to enlarge or shift any of the beneficial interests therein except as an incidental consequence of the discharge of the fiduciary duties is not a power_of_appointment an unqualified power to remove a trustee and to appoint an individual or corporate successor trustee that is not related or subordinate to the decedent within the meaning of sec_672 is not considered a reservation of the trustee’s discretionary powers of distribution over the property transferred by the decedent grantor to the trust accordingly the trust corpus is not included in the decedent’s gross_estate under sec_2036 or sec_2038 the ruling notes that the eighth circuit in 973_f2d_1409 8th cir concluded that the decedent had not retained dominion and control_over assets transferred to a_trust by reason of his power to remove and replace the trustee with a party that was not related or subordinate to the decedent accordingly the court held that under sec_25_2511-2 the decedent made a completed_gift when he created the trust and transferred assets to it nonadverse_party who is the grantor’s spouse if living with the grantor or any one of the following the grantor’s father mother issue brother or sister an employee of the grantor a corporation or any employee of a corporation in which the stock holdings of the grantor and the trust are significant from the viewpoint of voting control a subordinate employee of a corporation in which the grantor is an executive child the individual beneficiaries of the series v trusts as powerholders will have an unqualified power either alone or in conjuction with the other beneficiaries to remove a trustee and to appoint a successor corporate trustee the article z modifications restrict any appointment to a successor corporate trustee that is not related or subordinate to any powerholder within the meaning of sec_672 the article z power granted to the series v trust beneficiaries is not the equivalent of the power referenced in the examples in sec_20_2041-1 and sec_25_2514-1 where an individual may remove a trustee and appoint himself instead the article z power granted to the series v trust beneficiaries is the equivalent of the power referenced in revrul_95_58 where a replacement trustee may not be related or subordinate to the powerholder within the meaning of sec_672 accordingly based on the facts submitted and the representations made the proposed modifications will not cause any trust_beneficiary to have a general_power_of_appointment under sec_2041 or sec_2514 concerning the federal tax consequences of any aspect of any transaction or item discussed or referenced in this letter representations submitted by the taxpayer and accompanied by a penalty of perjury after the proposed modifications and the death or resignations of child and except as expressly provided herein no opinion is expressed or implied the rulings contained in this letter are based upon information and plr-127375-04 statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination being sent to your attorney provides that it may not be used or cited as precedent pursuant to the power_of_attorney on file with this office a copy of this letter is this ruling is directed only to the taxpayer s requesting it sec_6110 sincerely james f hogan senior technician reviewer branch passthroughs special industries enclosure copy of this letter for sec_6110 purposes


internal_revenue_service number info release date uilc date genin-152236-02 cc psi dear we are responding to correspondence requesting relief under revproc_97_48 in order to establish date as the effective taxable_year for your s_corporation_election section dollar_figure of revproc_97_48 requires that the internal_revenue_service must have failed to notify the taxpayer about the form_2553 deficiency within six months of receiving the first form_1120s return in your case the irs sent notification on date which was within four months of receiving your tax_return therefore automatic relief is unavailable under this revenue_procedure although we are unable to respond to your request as submitted this letter provides information relating to your request announcement copy enclosed provides guidance on seeking relief for late s_corporation elections generally to request relief for a late s_corporation_election you must request a private_letter_ruling from the national_office the procedures for requesting a private_letter_ruling are set out in revproc_2002_1 copy enclosed in addition taxpayers must submit a user_fee along with their ruling_request the standard user_fee for a private_letter_ruling is dollar_figure however taxpayers with gross_income of less than dollar_figure million on their tax_return for the most recent 12-month taxable_period qualify for a reduced user_fee in the amount of dollar_figure if you qualify for the reduced fee you must include a statement certifying your corporate gross_income for the last 12-month taxable_year otherwise the higher fee will apply if you decide to submit a formal request for a private_letter_ruling please review appendix b of revproc_2002_1 and be certain to include all required procedural statements the proper user_fee and any documents that substantiate your intent to be an s_corporation from inception please refer your request to our office by adding the following to the address attn cc pa t p o box ben franklin station washington dc direct to cc psi room in addition the irs has developed two new cd-roms to help educate small_business owners on their tax responsibilities introduction to federal taxes for small_business self-employed and a virtual small_business workshop these two cd- roms are free and can be ordered by calling the irs also provides a special website www irs gov smallbiz which is dedicated to providing information to small_business taxpayers please keep this letter with your tax records and feel free to provide a copy of it to your authorized representative we hope that the above information proves helpful sincerely yours s dianna k miosi dianna k miosi chief branch associate chief_counsel passthroughs and special industries enclosures announcement revproc_2002_1


department of the treasury internal_revenue_service washington d c apr tax exempt government e division and ntities uniform issue list tep lat legend taxpayer a ira b bank c account d bank e amount dear this is in response to your request for a letter_ruling dated date as supplemented by correspondence dated february and date 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 taxpayer a represents that he received a distribution of amount taxpayer a asserts that his failure to accomplish a rollover of amount within the 60-day period prescribed by sec_408 was due to a mistake made by an employee of financial_institution e taxpayer a further represents that amount has not been used for any purpose page taxpayer a maintained ira b under sec_408 of the code with bank c in date the account reached maturity and taxpayer a transferred the account to a high yield ira at bank c while he decided on where to permanently invest the funds on date taxpayer a received a distribution check for amount and immediately went to bank e with the intent to purchase a certificate of deposit cd in a rollover ira he met with an employee of bank e and represents he informed her that he wanted to purchase a cd for amount within an ira the employee completed an electronic application_for account d which taxpayer a signed assuming it was an ira on date after the 60-day period taxpayer a examined account d and discovered it was a non- ira account based on the facts and representations you request a ruling that the service waive the 60-day rollover requirement contained in sec_408 of the code with respect to the distribution of amount from ira b 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 receives 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 includible in gross_income because of the application of sec_408 page 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 i lr b date 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 is consistent with his assertion that his failure to accomplish a transfer of amount was due to a mistake made by an employee of bank e therefore pursuant to sec_408 of the code the service hereby waives the 60-day rollover requirement with respect to the distribution of amount from ira b taxpayer a is granted a period of days from the issuance of this letter_ruling to transfer an amount not to exceed amount into a rollover ira provided all other requirements of sec_408 of the code except the 60-day requirement are met with respect to such contribution the contribution will be considered a rollover_contribution within the meaning of sec_408 of the code this ruling does not authorize the rollover of amounts that are required to be distributed by sec_408 of the code no opinion is expressed as to the tax treatment of the transaction described herein under the provisions of any other section of either the code or regulations which may be applicable thereto ‘page this letter is directed only to the taxpayer who requested it sec_61 k of the code provides that it may not be used or cited as precedent if you wish to inquire about this ruling please contact - se t ep ra t1 at ' i d sincerely yours co dtm a wlhing carlton a watkins manager employee_plans technical group enclosures deleted copy of this letter notice of intention to disclose notice


significant index no department of the treasury internal_revenue_service washington d c may wile bh tha fs tax_exempt_and_government_entities_division ein re dear this letter is in response to your request dated above-referenced defined benefit pension_plan pursuant to revproc_90_49 1990_2_cb_620 for the plan_year commencing with respect to the a revproc_90_49 sets forth the procedure whereby under certain circumstances a disallowance of the deduction of employer contributions to a qualified defined benefit pension_plan may be obtained thereby fulfilling a condition under which such contributions could revert to the employer this ruling is directed only to the organization that requested it sec_6110 of the internal_revenue_code provides that it may not be used or cited by others as precedent - which were made for the plan_year commencing based upon the information submitted we have determined that contributions amounting to may be considered as disallowed solely for the purpose of applying revrul_91_4 1991_1_cb_57 therefore the return of contributions not exceeding dollar_figure would not adversely affect the qualified status of the plan provided this reversion occurs no later than one year from the date of this letter however if it is not returned by your tax filing_date including extensions filed for and granted the tax under sec_4972 would apply in granting this approval we are not expressing any opinion as to the accuracy or acceptability of any calculations or other material submitted with your request when filing form_5500 for the plan_year commencing _a copy of this letter must be attached to the schedule b actuarial information a copy of this letter should be sent to the enrolled_actuary servicing the plan we have sent a copy to the if you have any questions regarding this matter please contact also please refer written replies to sincerely yours wake a find martin l pippins manager employee_plans actuarial group


internal_revenue_service number release date index number ------------------------ ------------------------- ----------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact -------------------- id no ----------------- telephone number --------------------- refer reply to cc ita plr-140305-09 date date in re ----------------------------------------------- legend act ------------------------------------------------------------------------------------------ agency ---------------------------------------------------- agreement ---------------------------------------- b ------------------------ court ------------------------------------------------------------------------------- department ---------------------------------------------------------------------------- entity1 -------------------------------------------------------- entity2 --------------------------------- entity2 claimants ------------------- incident ------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------- t -------------------------------------- z ------------------------------------------------- c ----- plr-140305-09 date -------------------- date ---------------------- year ------- year ------- year ------- f ---------------------- dollar_figureq dollar_figure--------------- dollar_figurer dollar_figure--------------- dollar_figuret dollar_figure------------------- dollar_figurev dollar_figure------------------- w ----- dollar_figurey dollar_figure--------------- dear --------------- this is in reply to your request for a ruling that any payment you receive from department for the wrongful death of b your c is excludable from your gross_income under sec_104 of the internal_revenue_code facts b your c was one of w individuals killed in incident in year the estates of those killed and their survivors including you entered into a joint prosecution agreement jpa to pursue claims for damages against entity1 and its officials who were responsible for incident the jpa sets forth how the plaintiffs will divide any amounts they recover in litigation or settlement of their claims plr-140305-09 initial litigation the estates of those killed and their survivors initially sued entity1 in court in year the causes of action included claims for wrongful death and intentional infliction of emotional distress you sought recovery for wrongful death and intentional infliction of emotional distress caused by the death of b your c in year court granted summary_judgment for plaintiffs on the issue of liability in year court awarded the plaintiffs an aggregate recovery_of dollar_figurev for compensatory_damages prejudgment_interest and punitive_damages you were awarded an aggregate of dollar_figurey dollar_figurer against t and dollar_figureq against z legislative settlement subsequently on date entity2 passed the act to provide fair compensation to all entity2 claimants who have f claims for wrongful death and physical injury including claims for emotional distress against entity1 through a comprehensive settlement of those claims upon entity1’s payment to entity2 the act voided all prior court proceedings and judgments for f claims by entity2 claimants against entity1 or its officials and permanently precluded entity2 claimants from asserting f claims against entity1 or its officials on date entity1 and entity2 entered into the agreement to resolve all f claims against entity1 entity1 then transferred dollar_figuret to entity2 which will be paid to claimants covered by the agreement thus pursuant to the act court award of damages to the plaintiffs was voided and has been vacated agency has established procedures to compensate victims pursuant to the agreement you must file a claim with department to recover damages for claims of wrongful death based on the death of b your c law and analysis sec_104 provides that except in the case of amounts attributable to and not in excess of deductions allowed under sec_213 relating to medical etc expenses for any prior taxable_year gross_income does not include the amount of any damages received whether by suit or agreement on account of personal physical injuries or physical sickness sec_1_104-1 of the income_tax regulations provides that the term damages received whether by suit or agreement means an amount received through prosecution of a legal suit or action based upon tort or tort type rights or through a settlement agreement entered into in lieu of such prosecution section of the small_business job protection act of limits the exclusion_from_gross_income provided by sec_104 to amounts received on account of personal physical injuries or physical sickness subject_to one exception in h_r conf_rep no pincite congress expressed its intent concerning the treatment of wrongful death damages and emotional distress damages attributable to a physical injury plr-140305-09 d amages other than punitive_damages received on account of a claim of wrongful death continue to be excludable from taxable_income as under present law because all damages received on account of physical injury or physical sickness are excludable from gross_income the exclusion_from_gross_income applies to any damages received based on a claim of emotional distress that is attributable to physical injury or physical sickness the action you brought in court and the claim you file with department each seek recovery_of damages for wrongful death and intentional infliction of emotional distress attributable to a personal physical injury these claims are based in tort under sec_1 c under the act any recovery_of compensatory_damages that department awards you is for the wrongful death of b your c this wrongful death recovery as adjusted by the jpa is received on account of a personal physical injury under sec_104 conclusions based strictly on the information submitted and the representations made we conclude that the amount you receive from department as adjusted by the jpa for the wrongful death of b your c is excludable from your gross_income under sec_104 except for any amounts attributable to medical_expenses that you in fact deducted on a prior year s ’ federal_income_tax return we do not express or imply an opinion on the federal tax consequences of any aspect of these transactions other than those expressed in the conclusion above this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent the rulings contained in this letter are based upon information and representations that you submitted under penalties of perjury while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination you must attach to any income_tax return to which it is relevant a copy of this letter or if you file your returns electronically a statement providing the date and control number of this letter_ruling plr-140305-09 in accordance with the power_of_attorney on file with this office we are sending a copy of this letter to your authorized representative sincerely michael j montemurro branch chief office of associate chief_counsel income_tax accounting cc


internal_revenue_service number release date index number ------------------------------- ----------------------------------------- ---------------------------- --------------------- - department of the treasury washington dc third party communication none date of communication not applicable_person to contact ----------------------- id no ------------- telephone number --------------------- refer reply to cc psi b01 plr-128565-06 date date legend x d1 state dear ------------ ------------------------------- ----------------------- ---------------------- -------- this responds to a letter dated date submitted on behalf of x requesting relief under sec_1362 of the internal_revenue_code facts according to the information submitted x was incorporated on d1 under the laws of state x intended to be treated as an s_corporation for federal tax purposes effective d1 but the election was not timely filed law and analysis sec_1362 provides that a small_business_corporation may elect to be an s_corporation sec_1362 provides when an s election will be effective if an s election is made within the first two and one-half months of a corporation’s taxable_year then the corporation will be treated as an s_corporation for the year in which the election is made if the election is made after the first two and one-half months of a corporation’s plr-128565-06 taxable_year then the corporation will not be treated as an s_corporation until the taxable_year after the year in which the s election is made sec_1362 provides that if no election is made pursuant to sec_1362 or if made the election is made after the date prescribed for making such an election and the secretary determines there was reasonable_cause for the failure to timely make the election then the secretary may treat such election as timely made for such taxable_year and effective as of the first day of that year x did not file a timely election to be treated as an s_corporation under sec_1362 effective d1 x has however established reasonable_cause for not making a timely election and is entitled to relief under sec_1362 conclusion based solely upon the facts submitted and representations made and provided that x otherwise qualifies as a subchapter_s_corporation we conclude that x will be recognized as an s_corporation effective d1 within days from the date of this letter x should submit a properly completed form_2553 with a copy of this letter attached to the relevant service_center except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter this ruling is directed only to the taxpayer s 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 x’s authorized representative plr-128565-06 the rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination sincerely dianna k miosi chief branch office of the associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes


department of the treasury internal_revenue_service commerce street ms 4920-dal dallas texas release number release date date date org _ util person to contact identification_number contact telephone number in reply refer to te_ge review staff ein n last date for filing a petition with the tax_court date dear this is a final adverse determination_letter as to the org’s exempt status under section s01 c of the internal_revenue_code our adverse determination was made for the following reasons org has not been operating exclusively for exempt purposes within the meaning of internal_revenue_code sec_501 org also is not a charitable_organization within the meaning of sec_1 c -1 d you are not an organization which operates exclusively for one or more of the exempt purposes which would qualify it as an exempt_organization the organization has not been active and no longer meet the criteria under sec_509 and the organization no longer has a charitable purpose that would qualify it as exempt under sec_501 based upon these reasons we are retroactively revoking your sec_501 tax exempt status to date contributions to your organization are no longer deductible under sec_170 of the internal_revenue_code you are required to file federal_income_tax returns on form_1041 these returns should be filed with the appropriate service_center for the year ending date and for all years thereafter 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 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 contact the clerk of the appropriate court for the rules for initiating suits for declaratory_judgment you also have the right to contact the office_of_the_taxpayer_advocate however you should first contact the person whose name and telephone number are shown above since this person can access your tax information and can help you get answers you can call and ask for taxpayer_advocate assistance or you can contact the taxpayer_advocate from the site where the tax_deficiency was determined by writing to internal_revenue_service taxpayer advocates office tao taxpayer_advocate assistance cannot be used as a substitute for established irs procedures formal appeals processes etc the taxpayer_advocate is not able to reverse legal or technically correct_tax determinations nor extend the time fixed by law that you have to file a petition in the united_states tax_court the taxpayer_advocate can however see that a tax matter that may not have been resolved through normal channels gets prompt and proper handling we will notify the appropriate state officials of this action as required by sec_6104 of the internal_revenue_code if you have any questions please contact the person whose name and telephone number are shown in the heading of this letter sincerely yours marsha ramirez director eo examinations schedule number or exhibit explanations of items form 886-a rev date name of taxpayer tax identification_number year period ended december name ein primary isue should the sec_501 sec_509 tax exempt status of the name be revoked because it has had no activities and has not operated exclusively for tax exempt purposes facts the name the organization was created with a declaration of trust by founders each being a founder and trustee dated date the trust was created for the purpose of establishing an organization which is described in sec_501 and sec_509 the trust instrument is irrevocable and the founder expressly waives the right and power to alter amend revoke or terminate the trust or any of the terms of the declaration trustee in addition the trust instrument also provides that the founder renounces an interest either vested or contingent including any reversionary_interest or possibility of reverter in the income or principal of the trust estate the declaration of trust further provides that each year the trustee shall distribute of the adjusted_net_income of the trust to the leukemia society of america the named primary charity in addition to this distribution each year the trustee shall distribute a total of of the adjusted_net_income to one or more identified charitable organizations or to the primary charity as directed by a majority of the board_of directors the board the declaration of trust provides that the board shall be the governing body of the trust the trust document provides that upon winding up and dissolution of the trust the assets shall be distributed to a non-profit fund foundation or corporation which is organized and operated exclusively for charitable educational religious and or scientific purposes and which has established its tax exempt status under sec_501 by letter dated date the organization was recognized by the service as exempt from federal_income_tax under sec_501 because it is described in sec_501 and classified as an organization that is not a private_foundation because it is described in sec_509 the microfiche file states that this ruling was based upon revrul_67_149 an organization formed for the purpose of providing financial assistance to one or more sec_501 exempt_organizations that carries on no operations of its own may be exempt under sec_501 the organization doe not accumulate its investment_income and makes regular distributions to other exempt_organizations founders husband and wife spend their summer months at a home in mi and winters are spent at a home in florida the case was transferred from an eo agent in tempe az in coordination with an sb_se exam audit being conducted by an agent in fort myers fl the examination originated in arizona from a referral for supporting_organization sos promoter project the project consists of promoters developing supporting organizations to use other supporting organizations in abusive_tax_schemes by selling charitable deductions these cases have a standard feature a standing offer that the donor can borrow up to of the contributed funds at any time founders became involved with namel promoter and entered into an agreement for implementation of master financial plan with promoter in addition to setting up the organization the plan provides for the formation of various domestic and foreign programs directed at asset protection wealth management and tax planning objectives a dollar_figure deposit was made by founder's 1120s corporation name inc into a name account on account monies are used over the yéars for account managements fees charged by and there is a current balance of only cents the taxpayers have been trying to close this account but since name seems to be involved with the irs and is currently in receivership due to the complaint filed by the securities_and_exchange_commission sec on things fraud misrepresentation and misappropriation of client funds the taxpayer has been unable to do this complaint a temporary restraining order tro was issued freezing the assets and records of name after filing of the sec complaint most of the former employees of name vacated the former name offices and began operations under various new names on january utah name receiver has been appointed receiver of the funds assets and property of name ind all affiliated entities for the purpose of marshalling and preserving the assets of name no other deposits have been made into this name llp attorneys at law located in alleging among other in connection with the 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 explanations of items rev date name of taxpayer name tax dentification number ein year period ended december the power_of_attorney cpa stated that there has been no activity from this foundation no contributions were taken on the personal form sec_1040 of founders in except for this deposit no other transactions ever occurred the poa cpa stated the taxpayer was aware that the promotor who set up the trust was being investigated by several federal agencies and that name was in receivership a the dollar_figure initial deposit in the foundation's name was made from the 1120s corporation law sec_501 provides exemption from federal_income_tax to corporations and any community chest fund or foundation organized and operated exclusively for religious charitable scientific testing for public safety literary or educational_purposes or to foster national or international amateur sports competition but only if no part of its activities involve the provision of athletic_facilities or equipment or for the prevention of cruelty to children or animals no part of the net_earnings of which inures to the benefit of any private_shareholder_or_individual no substantial part of the activities of which is carrying on propaganda or otherwise attempting to influence legislation except as provided in subsection h and which does not participate in or intervene in including the publishing or distributing of statements any political campaign on behalf of or in opposition to any candidate for public_office regulation sec_1_501_c_3_-1 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 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 regulation sec_1_501_c_3_-1 provides that an organization is not operated exclusively for one or more exempt purposes if it net_earnings inure in whole or in part to the benefit of private shareholders or individuals the words private_shareholder_or_individual refer to persons having a personal and private interest in the activities of the organization regulation sec_1_501_c_3_-1 provides an organization is not organized or operated exclusively for one or more exempt purposes unless it serves a public rather than a private interest thus to meet the requirement of this subdivision it is necessary for an organization to establish that is is not organized or operated for the benefit of private interests such as the creator or his family shareholders of the organization or persons controlled directly or indirectly by such private interests sec_4947 states in part a_trust is not exempt from taxation under sec_501 a are devoted to one or more of the purposes described in sec_170 and for which a deduction was allowed under sec_170 sec_545 sec_556 sec_642 sec_2055 sec_2106 or sec_2522 or the corresponding provisions of prior_law shall be treated as an organization described in sec_501 for purposes of sec_509 such a_trust shall be treated as if organized on the day on which it first becomes subject_to this paragraph all of the unexpired interests in which sec_509 is defined as an organization which a is organized and operated exclusively for the benefit of to perform the functions of or to carry out the purposes specified by organizations described in sec_501 and b is operated supervised or controlled by or in connection with one or more organizations described in sec_501 and c is not controlled directly or indirectly by one or more disqualified persons as defined in sec_4946 other than foundation managers and other than one or more organizations described in sec_501 and an organization described in sec_509 and shall be deemed to include an organization described in sec_501 form 886-a catalog number 20810w page publish no irs gov department of the treasury-interna revenue service form 886-a explanations of items rev date name of taxpayer tax identification_number year period ended year end name ein schedule number or exhibit government's position since the organization has not been active and no longer meets the criteria under sec_509 and since the organization no longer has a charitable purpose that would qualify the organization as exempt under sec_501 the organization's exempt status should be revoked additional funds have not been contributed to the organization initial dollar_figure contribution has not earned_income and has been depleted by the monthly account management fees charged by name and currently ha sec_29 cents remaining distributions were not made to the designated primary charity leukemia society of america or any other charity board meetings have not been held board members are no longer involved with the organization taxpayer's position founders president requested that the organization's exempt status be revoked since the organization has not been active and the trust fund has become worthless conclusion the organization does not meet the criteria as a supporting_organization under sec_501 and sec_509 and should be revoked revocation of exemption effective for the year ended year ended form 886-a catalognumber 20810w page publish no irs gov department of the treasury-internal revenue service internal_revenue_service department of the treasury taxpayer_identification_number n form_990 tax_year s ended dec person to contact id number contact numbers telephone fax date date org certified mail - return receipt requested dear we have enclosed a copy of our report of examination explaining why we believe revocation of your exempt status under sec_501 of the internal_revenue_code code is necessary if you accept our findings take no further action we will issue a final revocation letter if you do not agree with our proposed revocation you must submit to us a written request for appeals_office consideration within days from the date of this letter to protest our decision your protest should include a statement of the facts the applicable law and arguments in support of your position an appeals officer will review your case the appeals_office is independent of the director eo examinations the appeals_office resolves most disputes informally and promptly the enclosed publication the examination process and publication exempt_organizations appeal procedures for unagreed issues explain how to appeal an internal_revenue_service irs decision publication also includes information on your rights as a taxpayer and the irs collection process you may also request that we refer this matter for technical_advice as explained in publication if we issue a determination_letter to you based on technical_advice no further administrative appeal is available to you within the irs regarding the issue that was the subject of the technical_advice letter rev catalog number 34809f if we do not hear from you within days from the date of this letter we will process your case based on the recommendations shown in the report of examination if you do not protest this proposed determination within days from the date of this letter the irs will consider it to be a failure to exhaust your available administrative remedies sec_7428 of the code provides in part a declaratory_judgment or decree under this section shall not be issued in any proceeding unless the tax_court the claims_court or the district_court of the united_states for the district of columbia determines that the organization involved has exhausted its administrative remedies within the internal_revenue_service we will then issue a final revocation letter we will also notify the appropriate state officials of the revocation in accordance with sec_6104 of the code you have the right to contact the office_of_the_taxpayer_advocate taxpayer_advocate assistance is not a substitute for established irs procedures such as the formal appeals process the taxpayer_advocate cannot reverse a legally correct_tax determination or extend the time fixed by law that you have to file a petition in a united_states court the taxpayer_advocate can however see that a tax matter that may not have been resolved through normal channels gets prompt and proper handling you may call toll-free and ask for taxpayer_advocate assistance if you prefer you may contact your local taxpayer_advocate at internal_revenue_service taxpayer_advocate tao tao 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 marsha a ramirez director eo examinations enclosures publication publication report of examination letter rev catalog number 34809f


internal_revenue_service number release date index number ------------------------------ ----------------------- ---------------------------------------- ------------------------------------- ------------------------------- department of the treasury washington dc person to contact ------------------------------- --------- ------------ --------- telephone number --------------------- refer reply to cc psi - plr-145219-05 date date legend x ----------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- ------------------ --------------------------------------------------------- --------------------------------------------------- date date date dear --------------------- ----------------------- ---------------------- ---------------- this letter responds to a letter dated date submitted on behalf of x requesting a ruling under sec_1362 of the internal_revenue_code the information submitted states that x was incorporated on date and elected to be an s_corporation on date x’s s election terminated one hundered percent of the stock in x was acquired by new shareholders x requests permission to reelect to be an s_corporation effective date date is prior to the five-year waiting_period imposed by sec_1362 corporation may elect to be an s_corporation sec_1362 provides that except as provided in sec_1362 a small_business sec_1362 provides that an election under sec_1362 shall be sec_1362 provides that if a small_business_corporation has made an sec_1_1362-5 of the income_tax regulations provides that absent the terminated whenever at any time on or after the 1st day of the 1st taxable_year for which the corporation is an s_corporation such corporation ceases to be a small_business_corporation election under sec_1362 and if such election has been terminated under sec_1362 the corporation and any successor_corporation shall not be eligible to make an election under sec_1362 for any taxable_year before its fifth taxable_year which begins after the first taxable_year for which the termination is effective unless the secretary consents to the election commissioner's consent an s_corporation whose election has terminated or a successor_corporation may not make a new election for five taxable years as described in sec_1362 the commissioner however may permit the corporation to make a new election before the 5-year period expires the corporation has the burden of establishing that under the relevant facts and circumstances the commissioner should consent to a new election based solely on the representations made and on the information submitted we conclude that x has met its burden under sec_1_1362-5 we grant permission for x to reelect to be an s_corporation effective date accordingly provided that x makes an election to be an s_corporation by timely filing as defined in sec_1362 a completed form_2553 with the appropriate service_center effective date then such election will be treated as timely made for x's taxable_year beginning date a copy of this letter should be attached to the form_2553 federal tax consequences of the facts described above under any other provision of the code specifically no opinion is expressed concerning whether x otherwise satisfies the s_corporation eligibility requirements including whether all of x’s shareholders are eligible s_corporation shareholders except as specifically set forth above no opinion is expressed concerning the 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 x’s authorized representative enclosures copy of this letter copy for sec_6110 sincerely yours beverly katz senior technician reviewer branch associate chief_counsel passthroughs and special industries


internal_revenue_service number release date index number -------------------------- --------------------------------------------------------------- ----------------------------------------- ----------------------------------- ---------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact --------------------------- id no ------------- telephone number --------------------- refer reply to cc tege eb hw plr-148131-08 date march legend state ------------------------------- ------------------------ ------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------ plan statute ---------------------------------------------------------------------------------------------------------------- ---------------------------------------------- dear -------------------- this is in reply to your letter dated date requesting a ruling on behalf of state concerning whether certain disability retirement payments made under plan pursuant to statute are excludable from the gross_income of recipients under sec_104 of the internal_revenue_code the code the plan was established by state for the purpose of providing retirement allowances and other_benefits for employees of counties cities towns and other eligible employers participating in plan subsection a of statute provides that any member who meets certain age and service criteria may receive an unreduced service retirement benefit subsection b of statute provides formulas for calculating service retirement benefits using the member’s age average final compensation and years of creditable service subsection c of statute provides for disability retirement benefits and states that a member who has had five or more years of creditable service may apply for a disability plr-148131-08 retirement benefit subject_to certification by the medical board that the member is mentally or physically incapacitated for the further performance of duty that such incapacity was incurred at the time of active employment and has been continuous thereafter that such incapacity is likely to be permanent and that the member should be retired subsection c of statute further provides that if the member is a law enforcement officer a fireman or rescue squad worker who has one year or more of creditable service and becomes incapacitated for duty as the natural and proximate result of an accident occurring while in the actual performance of duty and meets all other requirements for disability retirement benefits that member may be retired on a disability retirement allowance subsection d of statute sets out the method for calculating the disability retirement benefit authorized under subsection c of statute for members retiring on or after date the disability retirement benefit is equal to the service retirement allowance if the member had qualified for an unreduced service retirement benefit otherwise the disability retirement benefit is equal to the service retirement benefit calculated on the member’s average final compensation prior to his disability retirement and the creditable service he would have had had he continued in service until the earliest date on which he would have qualified for an unreduced service retirement allowance 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 the first part of subsection c of statute provides a disability retirement benefit to a member who has completed at least five years_of_service and who becomes mentally or physically incapacitated for further performance of duty while in active employment this provision does not limit compensation to the member for personal injury or plr-148131-08 sickness incurred in the course of employment and therefore is not a statute in the nature of a workmen’s compensation act although the second part of subsection c of statute provides a disability retirement benefit to a member who has completed at least one year_of_service and becomes incapacitated for duty as the result of an accident occurring while in the actual performance of duty the amounts received under subsection c are determined under subsection d of statute under subsection d of statute the disability retirement benefit is equal to a percentage of the final_average_compensation multiplied by the number of years of creditable service the member would have had if he had continued in service until the earliest date on which he would have qualified for an unreduced service retirement benefit under plan in addition a member who at the time of his disability retirement is eligible for an unreduced service retirement benefit based on age and years of creditable service will receive that service retirement benefit in lieu of a disability retirement benefit we conclude that disability retirement benefits provided under subsection d of statute are determined with reference to the employee’s age and length of service based on the representations made and authorities cited above statute is not a statute in the nature of a workmen’s compensation act and amounts paid under statute are not excludable from members’ gross_income under sec_104 of the code 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 sincerely harry beker chief health and welfare branch office of division counsel associate chief_counsel tax exempt government entities


internal_revenue_service department of the treasury number release date index numbers washington dc person to contact telephone number refer reply to cc psi 1-plr-166155-01 date date legend dear x y d1 d2 this responds to your letter dated date submitted on behalf of x requesting an extension of time under sec_301_9100-1 of the procedure and administration regulations to elect to treat y as a qualified_subchapter_s_subsidiary qsub under sec_1361 of the internal_revenue_code facts according to the information submitted x made an s election effective d1 on d2 x acquired all shares of y stock x intended to elect to treat y as a qsub effective d2 however x failed to timely file the proper election law and analysis sec_1361 defines a qsub as a domestic_corporation that is not an ineligible_corporation if percent of the stock of the corporation is owned by an s_corporation and the s_corporation elects to treat the corporation as a qsub a taxpayer makes a qsub election with respect to a subsidiary by filing a form_8869 qualified_subchapter_s_subsidiary election with the appropriate service_center sec_1_1361-3 of the income_tax regulations provides that the election will be effective on the date specified on the election form or on the date the election is filed if no date is specified the effective date specified on the election form cannot be plr-166155-01 more than two months and days prior to the date of filing and cannot be more than months after the date of filing sec_301_9100-1 provides that the commissioner has discretion to grant a reasonable extension of time under the rules set forth in sec_301_9100-3 to make a regulatory election sec_301_9100-1 defines a regulatory election as an election with a due_date prescribed by a regulation published in the federal_register or a revenue_ruling revenue_procedure notice or announcement published in the internal_revenue_bulletin requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government conclusion based solely on the facts submitted and the representations made we conclude that x has satisfied the requirements of sec_301_9100-1 and sec_301_9100-3 accordingly x is granted an extension of time of sixty days from the date of this letter to elect to treat y as qsub effective as of d2 the election should be made by filing form_8869 with the appropriate service_center a copy of this letter should be attached to the election except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter specifically no opinion is expressed concerning whether x is a valid s_corporation or whether y is a valid qsub 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 the requested tax representatives sincerely paul f kugler associate chief_counsel passthroughs and special industries


internal_revenue_service number release date index number -------------------------------- --------------------------------- -------------------------------- ----------------------------- ----------------------------- department of the treasury washington dc third party communication date of communication month dd yyyy person to contact -------------------------- id no ---------------- ---------------- telephone number ------------------- refer reply to cc ita b05 plr-126461-18 date date ty ------ legend taxpayer state a station staton market market dollar_figurex dollar_figurey date a dear ------------------ ---------------------------------------------------------- ------------ --------- --------- ----------------------- -------------------------------- ----------------- --------------- ----------------- this responds to your request for a private_letter_ruling dated date regarding the application of sec_1033 of the internal_revenue_code to your transactions you have requested a ruling that the sale of spectrum-based content distribution rights associated with station and station together the stations constituted sales under a threat of an involuntary_conversion for purposes of sec_1033 facts taxpayer is a state a corporation taxpayer is a diversified media and entertainment business taxpayer is the common parent of an affiliated_group_of_corporations and files a consolidated federal_income_tax return taxpayer uses the accrual_method of accounting and files on a december taxable year-end for u s federal_income_tax purposes taxpayer was treated as the owner of the spectrum-based content distribution rights associated with station a full-power uhf plr-126461-18 television station in market and station a full-power uhf television station in market the stations operated pursuant to licenses and permits issued by the fcc which authorized the stations to deliver video audio data and other content over specific broadcast frequencies pursuant to applicable provisions of the middle class tax relief and job creation act of spectrum act the fcc is implementing a mandate by congress to repurpose spectrum in the mhz band currently used by television broadcasters to help meet the nation’s accelerating needs for mobile broadband and other new bandwidth- intensive technologies the spectrum act required the fcc to undertake two related but independent processes to reclaim spectrum currently used for television broadcasting i an incentive auction and ii a repacking the incentive auction is intended to motivate existing television broadcasters to relinquish some or all of their spectrum usage rights to accommodate the requirements of the wireless carriers within the repurposed spectrum repacking is an involuntary reassignment of remaining broadcast television stations to a narrower segment of spectrum lower in the band the purpose of the repacking is to allow the fcc to assemble a near nation-wide contiguous band of spectrum in the upper mhz band for reallocation to mobile broadband the spectrum act provided broadcasters with three relinquishment options for participating in the incentive auction first broadcasters could relinquish their spectrum-based content distribution rights in their entirety and cease broadcasting second broadcasters operating on frequencies in the uhf band could voluntarily agree to relocate to frequencies in the vhf band third broadcasters could relinquish their rights to deliver content over a television broadcast channel and instead agree to share a single channel with another broadcaster alternatively broadcasters could also forgo participation in the incentive auction altogether and remain on the air however that would mean accepting as part of the repacking process the potential to be reassigned to a different possibly inferior less valuable uhf channel without compensation other than reimbursement from a limited fund for the cost of moving to the new channel on date the fcc released a report and order2 adopting rules to implement the spectrum act including the incentive auction and repacking process under the rules the incentive auction was to consist of a reverse auction and a forward auction the reverse auction would determine the price at which a broadcast station would be willing to relinquish some or all of its spectrum-based content distribution rights the forward auction would set the price that the wireless carriers would pay for middle class tax relief and job creation act of pub_l_no sec_6403 expanding the economic and innovation opportunities of spectrum through incentive auctions report and order fcc rcd plr-126461-18 the new licenses for repurposed spectrum after the auction was completed broadcasters whose bids were accepted in the auction received their payments from the forward auction proceeds the fcc will also use proceeds from the forward auction to reimburse certain spectrum relocation costs of broadcasters who do not elect to sell any remaining proceeds will be deposited with the federal treasury broadcasters who chose to forego the incentive auction and instead remain on the air were subject_to repacking mandatory relocation to different operating frequencies at the direction of the fcc non-participating stations operating in that portion of the upper mhz band that is being repurposed for mobile broadband licenses were almost certain to be forced to change to a new channel in a lower portion of the existing uhf band in addition some non-participating stations not operating in the repurposed band could still have been required to operate on new channels to accommodate other stations being moved to other frequencies although the fcc was obligated to use all reasonable efforts in the repacking process to replicate a station’s coverage area and population served there was no guarantee that a broadcast station’s coverage area and population served would in fact be preserved following the repacking in addition broadcasters forced to change to a new channel through repacking are incurring significant out-of-pocket costs to obtain new broadcasting facilities and equipment taxpayer represents that at the time it decided to sell spectrum-based content distribution rights associated with the stations it believed that a material portion of its total anticipated out-of-pocket repacking costs would not be reimbursed by the fcc given the stations’ particular circumstances taxpayer believed it was almost certain that the stations’ spectrum-based content distribution rights would be repacked taxpayer agreed i to sell to the fcc all of station 1’s spectrum-based content distribution rights for dollar_figurex and ii to sell to the fcc all of station 2’s spectrum-based content distribution rights for dollar_figurey the fcc distributed the auction proceeds to taxpayer on date a requested ruling you have requested a ruling that the sale of spectrum-based content distribution rights associated with the stations pursuant to the actions of the fcc constituted sales under a threat of an involuntary_conversion for purposes of sec_1033 law and analysis sec_1033 of the code generally provides that if property as a result of its destruction in whole or in part theft seizure or requisition or condemnation or threat or imminence thereof is compulsorily or involuntarily converted into money and the taxpayer within the period provided in sec_1033 and for the purpose of replacing plr-126461-18 such property purchases other_property similar_or_related_in_service_or_use to the property so converted or purchases stock in the acquisition of control of a corporation owning such other_property at the election of the taxpayer the gain shall be recognized only to the extent that the amount_realized upon such conversion regardless of whether such amount is received in one or more taxable years exceeds the cost of such other_property or such stock one of the circumstances in which a sec_1033 requisition or condemnation occurs is where a taxpayer’s property is subjected to a compensable governmental taking for public use under the fifth_amendment of the u s constitution 279_f2d_220 ct_cl 196_fsupp_129 d c mass revrul_69_254 1969_2_cb_162 revrul_58_11 1958_1_cb_273 the fifth_amendment provides in part that no private property be taken for public use without just compensation however the meaning of condemnation or requisition for purposes of sec_1033 of the code is not strictly limited to takings within the meaning of the fifth_amendment in revrul_82_147 1982_1_cb_190 a federal_law prohibited the use of motor boats with motors of greater than horsepower on designated lakes in wilderness areas it also provided that if the horsepower restriction made the operation of a resort uneconomical the owner of the resort could require the government to purchase its resort at its fair_market_value determined without regard to the horsepower restrictions the horsepower restriction made the operation of the taxpayer’s resort uneconomical and the taxpayer sold its fishing lodge to the federal government in holding that the government’s purchase of the resort constituted a condemnation within the meaning of sec_1033 the service did not refer to a fifth_amendment taking but instead emphasized that the horsepower restriction in addition to the provision authorizing purchase of a resort at its fair_market_value without regard to the restriction effectively constitutes a taking of property upon payment of fair compensation in the present case the fcc’s repacking process is functionally equivalent to a direct physical taking of private property for a public use without the consent of the property owner because it effectively deprived taxpayer of its assets taxpayer’s choice to participate in the incentive auction with respect to the stations was not a meaningful choice choosing to forego the incentive auction would have subjected the spectrum- based content distribution rights sold by taxpayer to the repacking process due to taxpayer’s unique circumstances if taxpayer did not participate in the incentive auction with respect to the stations it was almost certain that the stations would have been repacked into different channels without compensation other than reimbursement from a limited fund for the cost of moving to the new channel in revrul_63_221 1963_2_cb_332 the service stated that for purposes of sec_1033 threat_or_imminence_of_condemnation is generally considered to exist where a property owner is informed either orally or in writing by a representative of a governmental body plr-126461-18 that the government_entity has decided to acquire his property and the property owner has reasonable grounds to believe from the information conveyed to him by such representative that the necessary steps to condemn the property will be instituted if a voluntary sale is not arranged in revrul_81_180 1981_2_cb_161 the service considered a situation where a taxpayer learned through newspaper reports that a city intended to acquire its property by condemnation for public use if a sale could not be negotiated city officials confirmed the accuracy of the reports the taxpayer sold its property to a third party thereafter but before the city actually condemned the property the service concluded that the sale was made under the threat_or_imminence_of_condemnation because the property was sold after the taxpayer was given reasonable grounds to believe that its property would be taken these authorities indicate that a voluntary sale qualifies as an involuntary_conversion under sec_1033 if the threat_or_imminence_of_condemnation is present at the time of sale however the threat need not be a certainty a threat exists if the taxpayer may reasonably believe from representations of the government and surrounding circumstances that a forced sale is likely to take place in this case the fcc’s decision to impose on taxpayer mandatory modification of its broadcast facilities if it decided not to participate in the incentive auction including forced relocation to a different operating frequency and the potential to incur service losses unreimbursed out-of-pocket costs and reduced value for its remaining assets creates the reasonable grounds to believe that condemnation is forthcoming the fcc’s threat of repacking taxpayer’s stations to different frequencies and the consequent loss of economic utility of its related property constitute an involuntary_conversion the fcc has provided taxpayer with notice through the spectrum act and the report and order of its intent to acquire the type of spectrum-based content distribution rights that taxpayer possessed in the stations under its unique circumstances taxpayer reasonably believed that if it did not sell spectrum-based content distribution rights associated with the stations it was almost certain that the fcc would take taxpayer’s rights and force the stations to relocate to different channels accordingly taxpayer’s sales of spectrum-based content distribution rights associated with the stations constitute dispositions under the threat_or_imminence_of_condemnation for purpose of sec_1033 of the code conclusion the sale of the spectrum-based content distribution rights associated with the stations constituted sales under a threat of an involuntary_conversion for purposes of sec_1033 plr-126461-18 caveats except as otherwise provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter the rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter this ruling is directed only to the taxpayer requesting it sec_6110 of the code provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative a copy of this letter must be attached to any income_tax return to which it is relevant alternatively taxpayers filing their returns electronically may satisfy this requirement by attaching a statement to their return that provides the date and control number of the letter_ruling sincerely william a jackson branch chief branch office_of_chief_counsel income_tax accounting cc