t c memo united_states tax_court frank blazic petitioner v commissioner of internal revenue respondent docket no filed date john gigounas for petitioner daniel j parent for respondent memorandum opinion carluzzo special_trial_judge this case is before the court on respondent’s motion to dismiss for lack of jurisdiction filed date respondent’s motion is based upon the ground that the petition in this case was not filed within the period prescribed by sec_6213 in petitioner’ sec_1 section references are to the internal_revenue_code_of_1986 as amended - - opposition to internal revenue service’s motion to dismiss filed date petitioner objects to respondent’s motion upon the ground that the notice_of_deficiency upon which this case is based was not mailed to petitioner’s last_known_address as required by sec_6212 an evidentiary hearing was conducted on respondent’s motion in san francisco california on date the issue for decision is whether the notice_of_deficiency upon which this case is based was sent to petitioner at his last_known_address background some of the facts have been stipulated and are so found at the time the petition was filed petitioner resided in san rafael california in a notice_of_deficiency issued and sent by certified mail on date the notice respondent determined a deficiency in and various additions to petitioner’s federal_income_tax the petition in this case was filed on date which is well beyond the period for doing so prescribed in sec_6213 the notice is addressed to petitioner pincite1 school street san leandro ca the san leandro address which is the address petitioner listed on his federal_income_tax return filed date the san leandro address is also shown as petitioner’s address on his federal_income_tax return filed date which is the most recently filed return before the notice was issued the examination of petitioner’s return began in date during the course of the examination several letters were sent to petitioner at the san leandro address although letters sent by respondent to petitioner at another address were returned nothing in the record as undeliverable during the examination suggests that any of the letters addressed to petitioner at the san leandro address were returned to the examining agent as best as can be determined from the record petitioner never the notice was also sent to petitioner at an address in grass valley california petitioner had provided this address to an employer and that address was on a form_w-2 issued to petitioner however the notice mailed to this address was returned to respondent by the u s postal service respondent agrees that the grass valley address was not petitioner’s last_known_address in date the examining agent sent two letters one by certified mail to petitioner at an address in auburn california both letters were stamped as undeliverable and returned apparently the auburn address was listed on documents filed by or on behalf of petitioner in a bankruptcy proceeding initiated in date and concluded in date the auburn address was used on respondent’s proof_of_claim for internal revenue taxes submitted in that bankruptcy proceeding on date on date a notice of intent to enter final decree and close chapter case was filed in the bankruptcy proceeding the auburn address was listed as petitioner’s address in that notice - responded to any of the examining agent’s attempts to communicate with him respondent’s agents can obtain a taxpayer’s address by requesting an inquiry national on-line entity inole report the database accessed through an inole report is maintained by respondent and is updated with information from various sources including federal_income_tax returns and forms change_of address receipt of a form_8822 by respondent is reflected on an inole report however after the information contained ona form_8822 has been entered into the database the form itself is not retained according to inole reports generated on various dates from date through date including date petitioner’s address was the san leandro address none of the reports indicates the receipt of a form_8822 from petitioner during that period discussion petitioner does not contend that the petition in this case was timely filed instead petitioner argues that the notice was not mailed to him at his last_known_address in general a taxpayer’s last_known_address is the address shown on the most recently filed return absent clear and concise notice of a change in address see 857_f2d_676 9th cir affg 88_tc_1042 91_tc_1019 relevant for our purposes a form_8822 is one method that a taxpayer can use to provide such notice see sec_5 of revproc_90_18 1990_ 1_cb_491 at the hearing petitioner testified that on date or shortly thereafter he sent by regular mail a form_8822 the form to respondent changing his address from the san leandro address to harpoon way hayward ca the hayward address petitioner claims that the form was sent prior to respondent’s issuance of the notice and therefore the hayward address was his last_known_address at the time the notice was issued we note that petitioner’s claim regarding the mailing of the form was not made known until later in the proceedings the petition does not contain any express reference to the form nor does it indicate what address petitioner claims to have been his last_known_address on the date the notice was mailed instead petitioner’s first reference to the form and the hayward address is set forth in a declaration attached to his objection to the in the petition petitioner alleges that respondent was put on notice of his change_of address through correspondence and or return filing before the mailing of the notice_of_deficiency we doubt that petitioner intended the term correspondence to include the form furthermore the san leandro address is the address listed for petitioner on the most recently filed return prior to the issuance of the notice motion here under consideration in the declaration petitioner stated that he mailed the form to respondent in july or date according to petitioner during the summer of he interviewed for employment with the internal_revenue_service but he could not recall the name of the woman who interviewed him he claims however she told him that to be considered for employment he must be in compliance with the tax laws he would be fingerprinted and subject_to a background investigation and he needed to notify the internal_revenue_service of his then-current address petitioner neither claims nor established that he satisfied either of the first two requirements listed above nevertheless he claims that he mailed the form to respondent in order to comply with the third requirement in further support of this claim petitioner produced a photocopy of the form at the hearing although he acknowledged that he did not provide respondent’s counsel with a copy of the form until weeks before the hearing under the circumstances we are not convinced that the form was sent to respondent during as petitioner did not file his return until date and he did not file his and returns until date claimed by petitioner in this case the san leandro address is the address listed on the return filed most recently before the issuance of the notice the san leandro address was also the address listed for petitioner in respondent’s computerized database on dates shortly there are other inconsistencies between petitioner’s testimony and statements contained in documents filed prior to the hearing in the petition petitioner alleges that he did not receive the notice and had no knowledge of the mailing of such until several months after the purported mailing emphasis added in the declaration referred to above he states that he was wholly unaware of any irs audit for and any deficiency determination until when he was contacted by irs collection at the hearing he testified on direct examination as follows q when did you first find out that you -- that the irs had made a tax_assessment against you a i believe it was in ’97 or - probably '97 q would you state how you discovered this fact a the franchise tax board sent a levy on my wages at eckhoff accountancy corporation qo and what did you do after you found out about that levy a i then contacted -- after speaking with the franchise tax board they indicated to me to contact the internal_revenue_service which i did qo and when was the first time you discovered that the irs did in fact send you a 90-day letter a i believe i already answered that question i think it was or somewhere in there --- - before and several months after the notice was issued and mailed to petitioner on date respondent’s records do not indicate that the form was received prior to the issuance of the notice and petitioner does not contend that he otherwise provided clear and concise notice to respondent that his address had changed from that shown on his most recently filed return nothing else in the record suggests that any event occurred that would otherwise have put respondent on notice that petitioner’s last_known_address changed from the san leandro address to the hayward address before the notice was issued the san leandro address is therefore petitioner’s last_known_address within the meaning of sec_6212 and the notice was properly mailed to him at that address see 91_tc_1019 because the petition in this case was not filed within the period prescribed by sec_6213 respondent’s motion to dismiss for lack of jurisdiction will be granted upon that ground to reflect the foregoing an appropriate order dismissing this case for lack of jurisdiction will be entered


internal_revenue_service number release date index nos cc psi - plr-130132-00 date x country date dear this is in reply to a letter dated date submitted by x’s authorized representative on behalf of x requesting a ruling that x be given an extension of time to elect to be classified as a partnership for federal tax purposes the information submitted states that x was organized on date under the laws of country as a b v sec_301_7701-3 of the procedure and administration regulations provides that a business_entity that is not classified as a corporation under sec_301 b or an eligible_entity can elect its classification for federal tax purposes a business_entity is any entity recognized for federal tax purposes that is not properly classified as a_trust under sec_301_7701-4 or otherwise subject_to special treatment under the internal_revenue_code sec_301_7701-2 an eligible_entity with at least two members can elect to be classified as either an association and thus a corporation under sec_301_7701-2 or as a partnership sec_301_7701-3 provides that unless a foreign eligible_entity elects otherwise the 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 owners if it has a single owner that does not have limited_liability sec_301_7701-3 provides that for purposes of sec_301_7701-3 a member of a foreign eligible_entity has limited_liability if the member has no personal liability for the debts of or claims against the entity by reason of being a member to elect to be classified other than as provided in sec_301_7701-3 an eligible_entity must file form_8832 entity classification election with the designated service_center sec_301_7701-3 an election will be effective on the date specified on the form_8832 or on the date filed if no such date is specified the effective date specified on the form_8832 cannot be more than days prior to the date the election is filed sec_301_7701-3 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 whose due_date is prescribed by a regulation published in the federal_register or a revenue_ruling revenue_procedure notice or announcement published in the internal_revenue_bulletin requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 based solely on the facts submitted and representations made we conclude that the requirements of sec_301_9100-3 have been satisfied as a result x is granted an extension of time of days from the date of this letter to file form_8832 effective on date with the appropriate service_center a copy of this letter should be attached to the form_8832 and submitted to the appropriate service_center except as specifically ruled above we express no opinion concerning the federal tax consequences of the transactions described above under any other provisions of the code no opinion is expressed about the u s tax consequences of the election for x to be treated as a partnership the ruling set forth in this letter is conditioned upon the facts and representations submitted by x this office has not verified any of the materials submitted in support of the request for a ruling verification of the information representations and other data may be required as part of the audit process this ruling is directed only to the taxpayers who requested it sec_6110 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 being sent to x's authorized representative sincerely paul f kugler passthroughs and special industries enclosures associate chief_counsel copy of this letter copy for sec_6110 purposes


o f f i c e o f t h e c h i e f c o u n s e l department of the treasury i n t e r n a l r e v e n u e s e r v i c e w a s h i n g t o n d c date number release date conex-106213-19 uil 4980h the honorable susan collins united_states senate washington dc attention dear senator collins ------------------- i am responding to your inquiry dated date on behalf of several of your constituents you noted that certain constituents may be liable for an employer shared responsibility payment esrp because they have not complied with the affordable_care_act aca rules on providing health coverage to their employees you asked whether an esrp may be waived or reduced based on hardship or other factors you also asked whether the internal_revenue_service will extend the transition relief for employers with fewer than employees explanation of employer shared responsibility provisions under sec_4980h of the internal_revenue_code applicable large employers ales that do not offer health coverage to their full-time employees may be liable for an esrp under sec_4980h of the internal_revenue_code the code an ale is generally an employer with at least full-time employees including full-time_equivalent_employees on business days in the preceding calendar_year an ale will generally owe an esrp under sec_4980h of the code if either one of the following situations apply the employer fails to offer minimum_essential_coverage to substantially_all of its full-time employees and their dependents and at least one full-time_employee is allowed the premium_tax_credit ptc the employer offers minimum_essential_coverage to substantially_all of its full- time employees and their dependents but at least one of the full-time employees was allowed the ptc because the coverage does not provide conex-106213-19 minimum value or is not affordable or the full-time_employee was not offered coverage the law doesn’t provide for a waiver of an esrp the employer shared responsibility provisions generally were first effective in but several forms of transition relief were available for several forms of transition relief also were available to some employers for however no transition relief is available for and future years explanation of the aca executive_order executive_order minimizing the economic burden of the patient protection and affordable_care_act pending repeal date directed federal agencies to exercise authority and discretion permitted to them by law to waive defer grant exemptions from or delay regulatory burden the aca imposed the legislative provisions of the aca are still in force until congress changes them therefore taxpayers must follow the law and pay what they may owe for additional information on the aca executive_order and the current tax filing season please visit our irs gov website at www irs gov tax-professionals aca-information-center-for-tax-professionals i hope this information is helpful if you have additional questions please contact me at -------------------- ----------------------- -------------------- or at sincerely victoria a judson associate chief_counsel employee_benefits exempt_organizations and employment_taxes


internal_revenue_service department of the treasury number release date index number washington dc person to contact telephone number refer reply to cc psi plr-168491-01 date date legend x sub d1 dear this letter responds to a letter dated date and subsequent correspondence submitted on behalf of x requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations for x to elect to treat sub1 as a qualified_subchapter_s_subsidiary qsub under sec_1361 of the internal_revenue_code facts according to the information submitted x made a valid election to be treated as a s_corporation under sec_1362 sub is wholly owned by x x intended to elect to treat sub as a qsub under sec_1361 effective d1 however the qsub election inadvertently was not filed timely law and analysis sec_1362 generally provides that a small_business_corporation may elect to be an s_corporation sec_1361 defines a qsub as a domestic_corporation which is not an ineligible_corporation if percent of the stock of the corporation is owned by the s_corporation and the s_corporation elects to treat the corporation as a qsub sec_1_1361-3 prescribes the time and manner for making a qsub election sec_1_1361-3 provides that an election to treat an eligible subsidiary as a qsub may be effective up to two months and days prior to the date the election is filed or not more than months after the election is filed under sec_301_9100-1 the commissioner may grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the code except plr-168491-01 e g h and i sec_301_9100-1 defines the term regulatory election as including an election whose deadline is prescribed by a regulation published in the federal_register sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make an election sec_301_9100-1 sec_301_9100-2 provides automatic extensions of time for making certain elections sec_301_9100-3 provides extensions of time for making elections that do not meet the requirements of sec_301_9100-2 requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 conclusions based on the information submitted and the representations made we conclude that the requirements of sec_301_9100-3 have been satisfied as a result x is granted an extension of time of days from the date of this letter to file form_8869 qualified_subchapter_s_subsidiary election with the appropriate service_center to elect to treat sub1 as a qsub effective d1 a copy of this letter should be attached to the election except as specifically set forth above we express or imply no opinion concerning the federal_income_tax consequences of the facts described above under any other provision of the code in particular we express or imply no opinion as to whether x is an eligible s_corporation and whether sub1 is an eligible qsub this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent under a power_of_attorney on file with this office a copy of this letter will be sent to your authorized representative sincerely paul f kugler associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes


department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division release number release date date uniform issue code contact person identification_number telephone number employer_identification_number legend corporation counties state foundation date date1 dear this ts in response to your ruling_request submitted on date requesting a ruling that you and corporation may be treated as a single entity and that funds created within either foundation or corporation that otherwise meet the requirements of temp sec_1_170a-9t f will be treated as component parts of a single_entity_community_trust facts you are a community_trust created in date’ to serve the charitable needs of the counties you have historically operated as a community_trust you have been recognized as an organization exempt under ilr c sec_501 you are organized pursuant to a resolution and declaration of trust trust document’ according to the trust document you are organized for the purpose of accepting gifts grants bequests or devises to be held in trust the principal or income available for distribution for any charitable religious educational literary scientific or public welfare to any charitable_organization your current trustees are certain banks located in counties you have a distribution committee that is composed of representatives of the counties your distribution committee is the board_of directors of the corporation the distribution committee and the trustee have determined that reorganizing your organization into a joint corporate trust structure will allow you to attract more contributions and advance your charitable mission accordingly your distribution committee and trustees formed corporation a state nonprofit corporation the corporation is operated exclusively for religious charitable scientific literary and educational_purposes and to support your charitable activities corporation’s original articles of incorporation and bylaws stated that its purpose is to receive money and other_property by gift administer funds and make distributions for charitable purposes for the benefit of the residents of the counties it has been described to the local community as your affiliate since its inception according to your trust document and the bylaws of the corporation all gifts devises and bequests of property are made subject_to the terms and conditions of these documents your trust document and organizing documents of the corporation require that both organizations be subject_to a common governing body specifically the board_of directors of the corporation serves as the distribution committee of the trust thus giving the distribution committee control_over the corporation your trust document and corporation’s organizing documents state that all gifts devises and bequests of property are made subject_to the terms and conditions of the resolution your distribution committee and board_of directors of the corporation each have the responsibility to ensure that the application and distribution of funds are made exclusively for one or more of your charitable purposes further your trust document and corporation's organizing documents each give their boards of directors the power to modify conditions or restrictions concerning the distributions of income and principal for charitable purposes and to remove any trustee that has breached its fiduciary duty or failed to produce a reasonable return of net_income ruling requested you and corporation may be treated as a single entity funds of either organization which otherwise meet the requirements of temp sec_1_170a-9t f ii should be treated as component parts of a single community_trust that by virtue of the combination of you and corporation as component parts of a single community_trust the corporation is included under and takes on all the entitlements of your status as a tax exempt_organization under sec_501 and that you and corporation as a single community_trust may operate and file a single form_990 return of organization exempt from income_tax return under your e n law sec_6033 describes the general filing_requirements for exempt_organizations and in particular specifies certain information required by sec_501 organizations in sec_6033 temp sec_1_170a-9t f i states that any organization that meets the requirements in temp sec_1_170a-9t f iii through vi will be treated as a single entity rather than as an aggregation of separate funds in addition all funds associated with such organization whether a_trust not-for-profit corporation unincorporated association or a combination thereof which meet the requirements of temp sec_1_170a-9t f ii will be treated as component parts of such organization temp sec_1_170a-9t f ii provides that to be treated as a component part of a community_trust referred to in paragraph f i of this section a_trust or fund a must be created by gift bequest legacy devise or other transfer to a community_trust which is treated as a single entity under temp sec_1_170a-9t f and b may not be directly or indirectly subjected by the transferor to any material restriction or condition with respect to the transferred assets temp sec_1_170a-9t f iii provides that the organization must be commonly known as a community_trust fund foundation or other similar name conveying the concept of a capital or endowment fund to support charitable activities in the community or area it serves temp sec_1_170a-9t f iv provides that all funds of the organization must be subject_to a common governing instrument or a master_trust or agency agreement which may be embodied in a single document or several documents containing common language in addition if a community_trust adopts a new governing instrument or creates a corporation to put into effect new provisions applying to future transfers to the community_trust the adoption of such new governing instrument or creation of a corporation with a governing instrument which contains common language with the existing governing instrument shall not preclude the community_trust from meeting the requirements of this paragraph temp sec_1_170a-9t f v provides a that the organization must have a common governing body or distribution committee which either directs or monitors the distribution of all the funds exclusively for charitable purposes in addition the governing body must have the power in the governing instrument or other applicable document b to modify any restriction or condition on the distributions of funds for any specified charitable purposes or to specified organizations if in the sole judgment of the governing body such restriction or condition becomes in effect unnecessary incapable of fulfillment or inconsistent with the charitable needs of the community or area served b to replace any participating trustee custodian or agent for breach of fiduciary duty under state law and b to replace any participating trustee custodian or agent for failure to produce a reasonable return of net_income over a reasonable period of time temp sec_1_170a-9t f v e provides that the governing body must commit itself to exercise these powers in the best interests of the community_trust temp sec_1_170a-9t f v f provides that the governing body must commit itself to obtain information and take other appropriate steps with the view to seeing that each participating trustee custodian or agent with respect to each restricted trust or fund that is and with respect to the aggregate of the unrestricted trusts or funds that are a component part of the community_trust administers such trust or fund in accordance with the terms of its governing instrument and accepted standards of fiduciary conduct to produce a reasonable return of net_income with due regard to safety of principal in furtherance of the exempt purposes of the community_trust temp sec_1_170a-9t f vi provides that the organization must prepare periodic financial reports treating all of the funds held by the community_trust either directly or in component parts as funds of the organization temp sec_1_170a-9t f i indicates that those entities which fail to qualify as component parts of a community_trust will be treated as a separate_entity for purposes of subchapter_a of chapter of subtitle f l r c sec_6033 if the form_990 filed annually by the community_trust included financial information with respect to such fund and treated such fund in the same manner as other component parts they will be treated as the entity's separate returns and the first such return filed by the community_trust will be treated as the notification required of the separate_entity for purposes of sec_508 analysis temp sec_1_170a-9t f i states in part four requirements in temp sec_1_170a-9t f iii through vi will be treated as a single entity rather than as an aggregation of separate funds that any organization that meets the you have been established under the name foundation for nearly a century you and corporation are both named for the community they serve and are commonly known in the community as endowment funds that support charitable activity in that community therefore you meet the requirement of temp sec_1_170a-9t f ili your trust document and the corporation’s organizing documents state that all gifts devises and bequests of property are made subject_to the terms and conditions of these documents therefore all the donor funds will be subject_to a common governing instrument or a master_trust or agency agreement which may be embodied in several documents containing common language within the meaning of temp sec_1_170a-9t f iv accordingly you meet this requirement your trust document and the organizing documents of the corporation each state that your distribution committee and board_of directors of the corporation which are required to be the same people have the responsibility to ensure that the application and distribution of funds are made exclusively for one or more of your charitable purposes thus you satisfy the requirement of temp sec_1_170a-9t f v that a common governing body monitor the distribution of all funds for charitable purposes your trust document and the organizing documents of the corporation each give their boards of directors the power to modify conditions or restrictions concerning the distributions of income and principal for charitable purposes and to remove any trustee that has breached its fiduciary duty or for failure to produce a reasonable return of net_income therefore you meet the requirement of temp sec_1_170a-9t f v your trust document and the organizing documents of the corporation require that each organization prepare annual reports you have continuously prepared such reports in which you treated your component funds as your funds similarly you expect to report the funds and assets of corporation as part of a single entity therefore both you and corporation meet this requirement of temp sec_1_170a-9t f vi although you and corporation will continue to be legally separate entities you will be treated as a single entity rather than as an aggregation of separate funds for federal tax law purposes because you meet the requirements described in temp sec_1_170a-9t f iii through vi as required by temp sec_1_170a-9t f i once a single entity is identified the component part provisions of the regulations determine whether a particular fund or trust may be considered part of the single entity associated with an organization whether a_trust non-for-profit corporation unincorporated association or a combination that are treated as a single entity and which meet the requirements of temp sec_1_170a-9t f ii will be treated as component parts of such organization temp sec_1_170a-9t f i all funds ruling based on your facts and representations in addition funds of either such organization which otherwise meet the you and corporation will be treated as a single entity under temp sec_1 170a- 9t f i requirements under temp sec_1_170a-9t f ii should be treated as a component parts of a single_entity_community_trust that by virtue of the combination of you and corporation as component parts of a single_entity_community_trust corporation is included under and takes on all the entitlements of your status as a tax exempt_organization under r c sec_501 and that you and corporation as a single_entity_community_trust operate and file returns under your e i n listed in the heading of this letter this ruling will be made available for public inspection under sec_6110 after certain deletions of identifying information are made for details see enclosed notice notice of intention to disclose a copy of this ruling with deletions that we intend to make available for public inspection is attached to notice if you disagree with our proposed deletions you should follow the instructions in notice this ruling is directed only to the organization that requested it that it may not be used or cited by others as precedent r c sec_6110 provides this ruling is based on the facts as they were presented and on the understanding that there will be no material changes in these facts this ruling does not address the applicability of any section of the code or regulations to the facts submitted other than with respect to the sections described because it could help resolve questions concerning your federal_income_tax status this ruling should be kept in your permanent records if you have any questions about this ruling please contact the person whose name and telephone number are shown in the heading of this letter in accordance with the power_of_attorney currently on file with the internal_revenue_service we are sending a copy of this letter to your authorized representative sincerely ronald shoemaker manager exempt_organizations technical group enclosure notice


internal_revenue_service number release date index number --------------------------------- ----------------------------------------------------------- --------------------------------- -------------------------------- - dear --------------- date of death ------------------------- date of death ------------------------- 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 pa apjp b02 plr-148198-06 date date in a letter dated date --------------------- the personal representative of the --------------------------------- requested an extension of time under reg sec_301_9100-3 to file an election under sec_6166 to pay estate_tax in installments alternatively ----------------requested that the sec_6166 election be considered a procedural directive and granted on the basis of the substantial compliance doctrine for the following reasons we are unable to grant this request pertinent facts ---------------------passed away on ------------------------- ----------------timely filed form_4768 on ---------------------------to request an extension of time to file form_706 on or before ------------------ ----------------filed form_706 along with a request for election under sec_6166 on or about ---------------------- on --------------------------- the internal_revenue_service notified the estate that the election under sec_6166 was denied due to it not being timely filed relevant statutory and regulatory sections sec_301_9100-1 states that the regulations under sec_301_9100-1 sec_301_9100-2 and sec_301_9100-3 provide the standards used to determine whether or not an extension of time to make a regulatory election will be granted sec_301_9100-1 and sec_301_9100-2 also provide automatic extensions of time for certain statutory elections sec_301_9100-3 provides extensions of time for making regulatory elections that do not meet the requirements of sec_301_9100-2 sec_301_9100-1 defines statutory election as an election whose due_date is prescribed by statute alternatively regulatory election means an election plr-148198-06 whose due_date is prescribed by a regulation published in the federal_register or a revenue_ruling revenue_procedure notice or announcement published in the internal_revenue_bulletin sec_301_9100-1 sec_6166 states that if the value of an interest_in_a_closely_held_business which is included in determining the gross_estate of a decedent who was a citizen or resident_of_the_united_states exceed sec_35 percent of the adjusted_gross_estate the executor may elect to pay part or all of the tax imposed in or more but not exceeding equal installments sec_6166 per sec_6166 this election must be made no later than the time prescribed by sec_6075 of the internal_revenue_code for filing the estate_tax_return sec_6075 states that such returns must be filed within months after the date of the decedent’s death because the due_date for an election under sec_6166 is prescribed by statute the election is by definition a statutory election within the meaning of sec_301_9100-1 additionally there are no regulations that purport to prescribe the due_date for a sec_6166 election sec_20_6166-1 states the election provided under sec_6166 is made by attaching certain information to a timely filed estate_tax_return however it is sec_6075 that prescribes what makes an estate_tax_return timely the due_date cannot be determined without reference to statute mere incorporation of a statutory due_date in a regulation does not change a statutory election into a regulatory election therefore sec_301_9100-3 does not apply in this instance as that section is applicable only to certain regulatory elections and not to statutory elections furthermore the substantial compliance doctrine does not apply in the context of making an election under sec_6166 the united_states tax_court considering statutory and regulatory provisions nearly identical to the current sec_6166 provisions has stated that there are no reasonable_cause exceptions to the requirements for election and a taxpayer is granted relief under the election only if he complies with the statutory requirements see estate of glenard b boyd v commissioner t c memo ruling in the context of sec_2032a and its regulations the court has also stated that where regulations provide that the election must be made on a timely filed estate_tax_return the requirement of a timely filed return is mandatory and the provisions leav e no room for a reasonable_cause exception for an untimely return 82_tc_989 ruling in the context of sec_2032a and its regulations plr-148198-06 conclusion because sec_301_9100-3 applies only to regulatory elections and not statutory elections and an election under sec_6166 is a statutory election the request for extension to file is denied sincerely blaise g dusenberry special counsel administrative provisions judicial practice procedure administration


t c summary opinion united_states tax_court james p ellis petitioner v commissioner of internal revenue respondent docket no 11098-03s filed date james p ellis pro_se cynthia j olson for respondent dean special_trial_judge this case was heard pursuant to the provisions of sec_7463 of the internal_revenue_code in effect at the time that the petition was filed unless otherwise indicated subsequent section references are to the internal_revenue_code in effect for the years in issue and all rule references are to the tax_court rules_of_practice and procedure the decision to be entered is not reviewable by any other court and this opinion should not be cited as authority respondent determined the following deficiencies in petitioner's federal income taxes and additions to tax for failure_to_file timely year deficiency addition to tax1 sec_6651 dollar_figure big_number big_number dollar_figure big_number 1figures are rounded to the nearest dollar after a concession the issues for decision are whether l respondent is estopped from asserting a deficiency against petitioner for petitioner is required to include in income a reward received from the internal_revenue_service irs during petitioner is entitled to deductions on schedule c profit or loss from business for and in excess of those allowed by respondent and petitioner is liable for additions to tax for failure_to_file timely his and federal_income_tax returns background the stipulation of facts and the exhibits received into evidence are incorporated herein by reference petitioner 1respondent concedes that petitioner is entitled to a deduction for depreciation expenses of dollar_figure for resided in security colorado at the time the petition was filed petitioner a disc jockey failed to file timely federal_income_tax returns for taxable years and a petitioner's individual_income_tax_return for attached to petitioner's form_1040 u s individual_income_tax_return for was a schedule c on which petitioner reported gross_receipts of dollar_figure and contract labor costs of dollar_figure petitioner also deducted car and truck expenses of dollar_figure depreciation of dollar_figure office expenses of dollar_figure supplies expense of dollar_figure and utilities of dollar_figure during in response to his claim petitioner received a reward from the irs in the amount of dollar_figure respondent increased petitioner's gross_income by this unreported amount respondent disallowed dollar_figure of the deduction for car and truck expenses and all the deductions for contract labor expenses of dollar_figure due to lack of substantiation respondent also determined that petitioner is liable for an addition_to_tax under sec_6651 for failure to timely file his return b petitioner's individual_income_tax_return for a schedule c was also attached to petitioner's form_1040 for petitioner reported gross_receipts of dollar_figure and contract labor costs of dollar_figure petitioner deducted depreciation of dollar_figure tuxedo dry cleaning expenses of dollar_figure car and truck expenses of dollar_figure office expenses of dollar_figure supplies expense of dollar_figure and utilities of dollar_figure respondent disallowed deductions for all of the car and truck expenses and all of the contract labor expenses due to lack of substantiation respondent also determined that petitioner is liable for an addition_to_tax under sec_6651 for failure to timely file his return c petitioner's individual_income_tax_return for petitioner's schedule c for again reflected gross_receipts of dollar_figure and contract labor costs of dollar_figure petitioner also deducted dollar_figure for depreciation car and truck expenses of dollar_figure office expenses of dollar_figure supplies expense of dollar_figure utilities of dollar_figure and tuxedo dry cleaning expenses of dollar_figure respondent disallowed deductions for all of the dry cleaning and car and truck expenses as well as all of the contract labor and depreciation expenses due to lack of substantiation respondent also determined that petitioner is liable for an addition_to_tax under sec_6651 for failure to timely file his return in date over months after respondent issued the statutory_notice_of_deficiency in this case respondent mailed to petitioner a letter advising of changes to petitioner's statement of account for indicating that for the amount you now owe is none a estoppel discussion as a preliminary matter petitioner contends that he does not owe any_tax for because he received a letter from the irs dated date which stated that corrections had been made to his tax account and the amount you now owe is none it appears that respondent erroneously assessed the amount shown on the notice_of_deficiency for petitioner's taxable_year the letter respondent sent petitioner on date reversed that assessment because it had been made while petitioner's case was pending before this court see sec_6213 petitioner alleges that he is no longer liable for the deficiency in tax and the sec_6651 addition_to_tax for claiming that respondent's october letter led him to believe that his case had been resolved i'm going by what they told me if they were wrong and they made a mistake i believed them i trusted in them although not explicitly stated petitioner's argument essentially amounts to a claim of estoppel equitable_estoppel is a judicial doctrine that precludes a party from denying that party's own acts or representations that induced another to act to his or her detriment e g 74_tc_743 affd 673_f2d_784 5th cir it is to be applied against the commissioner only with utmost caution and restraint e g 98_tc_695 the doctrine_of estoppel is not applicable unless the party relying on it establishes all of the following elements at a minimum there must be a false representation or wrongful misleading silence the error must be in a statement of fact and not in an opinion or a statement of law the person claiming the benefits of estoppel must be ignorant of the true facts and he must be adversely affected by the acts or statements of the person against whom an estoppel is claimed 67_tc_612 see also 439_f2d_1365 2d cir even if we assume that petitioner relied on respondent's letter petitioner has not presented any evidence that he was adversely affected by his reliance on the letter petitioner suffered no detriment that is legally recognizable he is only required to pay the tax that is lawfully owing he did not change a position to his detriment see reuben v commissioner tcmemo_2001_193 accordingly the doctrine_of estoppel does not apply in this case petitioner's position is further contrary to well-established law congress has provided that closing agreements under sec_7121 and compromise agreements under sec_7122 are the exclusive administrative means for the irs to settle civil tax disputes with finality see 278_us_282 58_tc_69 see also 444_f2d_530 6th cir affg tcmemo_1970_212 the record is devoid of any evidence that petitioner and respondent entered into a valid closing_agreement or compromise_agreement b deficiencies the commissioner's determinations are presumed correct and generally taxpayers bear the burden of proving otherwise 290_us_111 moreover deductions are a matter of legislative grace and taxpayers bear the burden of proving that they are entitled to any deduction claimed 292_us_435 welch v helvering supra this includes the burden of substantiation 65_tc_87 affd per curiam 540_f2d_821 5th cir the burden_of_proof may shift to the commissioner under sec_7491 because petitioner failed to comply with the requirements of sec_7491 however sec_7491 is inapplicable under sec_7491 respondent retains the burden of production only with respect to petitioner's liability for any additions to tax petitioner's income pursuant to sec_61 gross_income includes all income from whatever source derived unless excludable by a specific provision of the code petitioner does not dispute that during he received a reward from the irs of dollar_figure he testified that this amount was shared with several of his coworkers the letter the irs issued to petitioner identifying the reward was addressed solely to petitioner and did not indicate that he had an obligation to share the reward with anyone else petitioner did not present any argument that this amount is not includable in income the court therefore concludes that petitioner is required to include this amount in gross_income petitioner's deductions sec_162 allows a taxpayer deductions for ordinary and necessary business_expenses incurred during the taxable_year in carrying_on_a_trade_or_business generally a taxpayer must establish that deductions taken pursuant to sec_162 are ordinary and necessary business_expenses and must maintain records sufficient to substantiate the amounts of the deductions claimed sec_6001 sec_1_6001-1 income_tax regs under sec_6001 a taxpayer bears the sole responsibility for maintaining his business records if a claimed business_expense is deductible but the taxpayer is unable to substantiate it the court is permitted to make as close an approximation as it can bearing heavily against the taxpayer whose inexactitude is of his or her own making 39_f2d_540 2d cir the estimate however must have a reasonable evidentiary basis 85_tc_731 without such a basis such an allowance would amount to unguided largesse 245_f2d_559 5th cir the record does not contain any documents or reasonable evidence substantiating petitioner's claimed expenses therefore the court concludes that petitioner is not entitled to deduct any schedule c expenses for or in excess of amounts allowed by respondent c addition_to_tax for failure to timely file a tax_return under sec_7491 the commissioner has the burden of production in any court_proceeding with respect to the liability of any individual for any penalty or addition_to_tax 116_tc_438 in order to meet his burden of production the commissioner must come forward with sufficient evidence indicating that it is appropriate to impose the addition_to_tax for failure_to_file in the particular case id pincite once the commissioner meets his burden of production the taxpayer must come forward with evidence sufficient to persuade a court that the commissioner's determination is incorrect id pincite respondent contends that petitioner is liable for additions to tax pursuant to sec_6651 for and sec_6651 imposes an addition_to_tax for failure_to_file a federal_income_tax return by its due_date determined with regard to any extension of time for filing previously granted for each month that the return is late the addition equal sec_5 percent of the tax required to be shown on the return not to exceed percent sec_6651 additions to tax under sec_6651 are imposed unless the taxpayer establishes that the failure was due to reasonable_cause and not willful neglect id 92_tc_899 reasonable_cause requires the taxpayer to demonstrate that he exercised ordinary business care and prudence 469_us_241 willful neglect is defined as a conscious intentional failure or reckless indifference id pincite petitioner agrees that he did not timely submit his federal_income_tax returns for or respondent has met his burden of production regarding petitioner's liability for the additions to tax petitioner did not provide any evidence that would demonstrate that he had reasonable_cause or lacked willful neglect in failing to timely file his returns respondent's determination as to the sec_6651 additions to tax is sustained reviewed and adopted as the report of the small_tax_case division to reflect the foregoing decision will be entered under rule


t c no united_states tax_court medical emergency care associates s c an illinois corporation commissioner of internal revenue respondent petitioner v docket no filed date p was a medical service corporation that provided emergency medical services to hospitals p contracted with physicians to staff hospital emergency rooms p treated those physicians as independent contractors p failed to timely file required forms and for p delinquently filed those forms on a basis consistent with its treatment of the physicians as independent contractors r determined that the physicians were employees and that p was not eligible for relief under sec_530 of the revenue act of publaw_95_600 92_stat_2885 as amended sec_530 r determined that p did not meet the filing requirement of sec_530 r’s interpretation of sec_530 requires that a taxpayer timely file all required returns in order to be eligible for sec_530 relief this court granted r’s motion to sever and continue determinations of worker classification and proper employment_taxes until after our consideration of p’s eligibility for relief under sec_530 held because p did not treat the physicians as employees for any period filed all federal tax returns on a basis consistent with p’s treatment of the physicians as not being employees and had a reasonable basis for not treating the physicians as employees p is entitled to relief from employment_tax liability pursuant to sec_530 p’s untimely filing of information returns does not preclude p from qualifying for such relief particularly in the circumstances of this case carmen j mitchell for petitioner linda c grobe and david s weiner for respondent nims judge the petition in this case was filed in response to a notice_of_determination concerning worker classification under sec_7436 notice_of_determination regarding petitioner’s liabilities pursuant to the federal_insurance_contributions_act fica sections and the federal_unemployment_tax_act futa sections for respondent also determined that petitioner is not entitled to relief under sec_530 of the revenue act of publaw_95_600 92_stat_2885 as amended sec_530 on date this court granted respondent’s motion to sever and continue determinations of worker classification and proper federal employment_taxes consequently the only issue presently before the court is whether petitioner is entitled to relief from employment_tax liability pursuant to sec_530 unless otherwise indicated all section references are to the internal_revenue_code in effect for the year in issue for convenience fica and futa taxes are collectively referred to as employment_taxes findings_of_fact some of the facts have been stipulated and are so found the stipulations of the parties with accompanying exhibits are incorporated herein by this reference at the time the petition was filed petitioner’s principal_place_of_business was in chicago illinois petitioner was an illinois medical service corporation incorporated in to provide emergency medical services to hospitals larry mitchell m d dr mitchell was petitioner’s president and sole shareholder petitioner was involuntarily dissolved by the illinois secretary of state as of date on date neena mitchell the multiple-handicapped daughter of dr mitchell died after a chronic illness during and after petitioner entered into contracts entitled emergency department services agreements eds agreements with several chicago area hospitals to furnish professional emergency medical services and full-time physician staffing in petitioner had eds agreements with chicago area hospitals in order to fulfill its obligations under the eds agreements petitioner hired physicians to staff the hospital emergency rooms petitioner entered into contracts entitled independent_contractor agreements with such physicians twenty five of these physicians were reclassified by respondent as employees rather than independent contractors reclassified physicians relying upon a longstanding recognized practice of a significant segment of the emergency medicine industry petitioner treated each of the reclassified physicians as an independent_contractor during petitioner paid each of the reclassified physicians more than dollar_figure petitioner did not treat any of the reclassified physicians or any other worker in a substantially_similar position as an employee for any period beginning after date petitioner filed quarterly employment_tax returns form sec_941 for the quarters ended march june september and date on july july and date and date respectively petitioner filed a federal unemployment tax_return form 940-ez employer’s annual federal unemployment futa_tax return for on date petitioner filed federal_income_tax returns forms u s_corporation income_tax return for and on date and for on date the due_date for filing form_1096 annual summary and transmittal of u s information returns together with forms for was date petitioner did not request an extension of time within which to file its form_1096 for chris ihejirika petitioner’s accountant from through early prepared forms 1099-misc miscellaneous income for petitioner’s workers petitioner determined that some of the forms 1099-misc prepared by mr ihejirika were incorrect and it prepared corrected forms 1099-misc petitioner mailed corrected forms 1099-misc to each of the reclassified physicians during the period from january through date after date petitioner mailed only one corrected form 1099-misc to an individual physician on date petitioner mailed two forms together with forms 1099-misc to respondent by cover letter dated date respondent has no record of receiving the forms and 1099-misc sent by petitioner on date sometime after date petitioner filed form_1096 together with forms 1099-misc for on or about date respondent began an examination of petitioner’s income_tax_liability in date respondent began an examination of petitioner’s employment_tax liability by letter dated date respondent notified petitioner of his proposed determinations that petitioner was not entitled to relief under sec_530 and that certain workers should be reclassified as employees and respondent listed the attendant adjustments to petitioner’s federal employment_tax liability for on date respondent provided petitioner with publication which provided written notice of the provisions of sec_530 i sec_530 relief opinion sec_530 operates in enumerated circumstances to afford relief from employment_tax liability notwithstanding the actual relationship between the taxpayer and the individual performing services the statute provides in part sec_530 controversies involving whether individuals are employees for purposes of the employment_taxes a termination of certain employment_tax liability-- in general --if-- a for purposes of employment_taxes the taxpayer did not treat an individual as an employee for any period and b in the case of periods after date all federal tax returns including information returns required to be filed by the taxpayer with respect to such individual for such period are filed on a basis consistent with the taxpayer’s treatment of such individual as not being an employee then for purposes of applying such taxes for such period with respect to the taxpayer the individual shall be deemed not to be an employee unless the taxpayer had no reasonable basis for not treating such individual as an employee congress enacted sec_530 to alleviate what it perceived as the ‘overly zealous pursuit and assessment of taxes’ against employers who had in good_faith classified their workers as independent contractors 117_tc_263 quoting 77_f3d_236 8th cir sec_530 was enacted both as an interim solution to the problems inherent in increased enforcement by the internal_revenue_service irs of the employment_tax laws and in response to complaints by taxpayers that proposed reclassifications by the irs involved a change_of position by the irs in interpreting how the common_law rules apply to their workers or industry see 119_tc_121 citing h rept 1978_3_cb_629 the purpose of sec_530 was to provide an interim solution to controversies over common_law employment status by in part allowing taxpayers who had a reasonable basis for not treating workers as employees under the traditional common_law tests to continue to do so id pincite this interim solution was extended indefinitely by the tax equity fiscal responsibility act of publaw_97_248 96_stat_324 ii contentions of the parties as a preliminary matter petitioner argues that its forms and mailed to respondent on date should be deemed filed on that date since there is proof that they were mailed on that date respondent has no record of receiving those forms the due_date for filing those forms for was date even if the forms and mailed by petitioner on date were received and filed petitioner would still have failed to timely file those required forms since the primary issue in this case is whether timely filing is required by sec_530 and reasonable_cause for the filing delay is not an issue whether the forms and are deemed filed on date is irrelevant consequently we need not consider petitioner’s claim that the forms and mailed on date should be deemed filed on that date the parties agree that petitioner satisfied two of the three requirements of sec_530 specifically the parties agree that petitioner satisfied the requirement of sec_530 since petitioner did not treat any reclassified physician as an employee for any relevant period the parties also agree that petitioner relied upon a longstanding recognized practice of the emergency medicine industry and thus had a reasonable basis for not treating the reclassified physicians as employees consequently petitioner satisfied the requirement in the flush language of sec_530 the parties disagree about whether petitioner satisfied the requirement of sec_530 which provides that the taxpayer must file all required federal tax returns including information returns on a basis consistent with the treatment of the individual as not being an employee the parties agree that petitioner ultimately filed all returns including information returns on a basis consistent with the treatment of the reclassified physicians as not being employees however respondent maintains that it is respondent’s position that part of the reporting consistency_requirement in sec_530 is that the required returns be filed timely respondent argues that since petitioner failed to timely file forms and for the periods in question the relief provided by sec_530 is unavailable to petitioner petitioner does not dispute that it was required to file forms and petitioner however argues that since sec_530 is silent as to timeliness the required returns merely have to be filed not timely filed for a taxpayer to satisfy the requirement of sec_530 petitioner argues that sec_530 is to be liberally construed in favor of taxpayers petitioner states that sec_530 requires only that form 1099-misc be filed for each worker and precludes relief for petitioner only if the filing was never made petitioner further argues that the fact that petitioner complied with the filing requirement of sec_530 but not in a timely fashion does not warrant a denial of relief under the safe_harbor provisions of that statute since the statute does not speak to timing respondent claims that congress did not intend that the filing requirement be interpreted or treated liberally respondent cites general explanation of the revenue act of pincite comm print by the staff of the joint_committee on taxation for the proposition that except for the filing requirement taxpayers’ eligibility for the prospective relief from potential liabilities is to be determined under the same tests and the same liberal interpretations of the tests which determined eligibility for pre-1979 relief emphasis added further respondent claims that sec_530 implicitly requires that the necessary returns be filed timely as is mandated for all returns throughout the internal_revenue_code respondent argues that given the requirement of timely filing throughout the internal_revenue_code if congress did not intend to require timely filing congress would have included explicit language in sec_530 permitting a taxpayer who files delinquent returns to qualify for relief in addition to congressional intent respondent points to his own longstanding interpretation of sec_530 in revproc_85_18 1985_1_cb_518 revproc_85_18 states that relief under sec_530 will not be granted if form_1099 has not been timely filed for each worker for any period after date respondent argues that if congress disagreed with respondent’s position in revproc_85_18 congress would have amended sec_530 to allow delinquent filing respondent claims that when congress was considering amendments to sec_530 as part of the small_business job protection act of publaw_104_188 sec 110_stat_1755 it was aware of revproc_85_18 and respondent’s positions stated therein with respect to sec_530 relief revproc_85_18 is referenced in the legislative_history of the amendments to sec_530 see eg s rept pincite ndollar_figure citing rev_proc respondent argues that where congress disagreed with respondent’s interpretation of sec_530 congress amended the statute for example in the explanation of the amendments to sec_530 the senate report states that a worker does not have to otherwise be an employee of the taxpayer in order for sec_530 to apply the provision is intended to reverse the irs position as stated in the irs draft training guide id pincite respondent argues that given the level of scrutiny congress gave the area of sec_530 relief in congress would not have left the language of sec_530 silent as to timeliness if it disagreed with respondent’s position iii analysis as to the thrust of timeliness in the context of sec_530 we conclude for reasons hereinafter stated that both parties are off the mark petitioner unconvincingly argues that because of the remedial nature of sec_530 the code-wide pervasiveness of a timely filing requirement must give way to the greater good of sec_530 liberality respondent’s position that denial of sec_530 relief may be used as a totally disproportionate penalty for petitioner’s offense of late filing is likewise unconvincing in light of the fact that the internal_revenue_code contains a specific regime for dealing with the consequences of late filing of information returns--which respondent has apparently decided not to invoke see discussion infra we agree with petitioner that its late filing of the information returns does not prevent it from satisfying the filing requirement of sec_530 the plain language of sec_530 denies relief only if the required filing was not made or if the required filing was made on a basis not consistent with treatment of the individual as not being an employee as respondent acknowledges petitioner filed all required returns for on a basis consistent with the treatment of the reclassified physicians as not being employees but there is nothing in the language of sec_530 that requires timeliness along with consistent filing the unreality of respondent’s approach is illustrated by the following colloquy that took place at trial the court suppose a taxpayer is required to file the and the 1099s and the office burns down two weeks before the due_date and the taxpayer writes a letter to the--well i don’t know who but somebody in the irs and says look our office burned down and our records are destroyed we need some additional time you’re not saying that the statute would preclude the government from granting an extension of time are you ms grobe yes your honor i am this is a relief section they still have the ability to come in and argue that these workers are not independent contractors--rather are not employees they are independent contractors the relief proposed by respondent’s counsel presents precisely the situation that sec_530 was enacted to avoid in the case before us respondent has proposed a deficiency in the amount of dollar_figure to dispute which under respondent’s theory petitioner would be required to prove the status of each of the reclassified physicians the tax_liability of each of the reclassified physicians would likewise be affected we repeat that respondent correctly states that timely filing of returns is required throughout the internal_revenue_code this includes forms and the consequences of failure to comply with certain information reporting requirements are contained in sec_6721 through sec_6721 deals with failure_to_file_correct_information_returns which includes forms and see sec_6041a and sec_6721 describes a failure_to_file subject_to penalty as any failure_to_file an information_return with the secretary on or before the required_filing_date sec_6721 prescribes a penalty in case of intentional disregard sec_6722 provides for similar penalties in the case of failure to furnish correct payee statements sec_6723 prescribes a penalty for failure to comply with other information reporting requirements and sec_6724 contains among other things a reasonable_cause waiver nothing in the language or legislative_history of sec_530 leads us to the conclusion that denial of sec_530 relief was meant to be an additional penalty for the failure to timely file information returns particularly under the circumstances in this case rather as discussed above sec_530 was enacted to protect taxpayers from having to litigate the status of individual workers under the common_law employment rules the commissioner is entitled to require timely filing and to impose a penalty when appropriate for failure to timely file but not the penalty he seeks to impose here respondent also cites the commissioner’s interpretation of sec_530 in revproc_85_18 and implies that it warrants deference by this court in 533_us_218 the supreme court held that an administrative agency’s interpretation of a statute must be accorded the level of deference set forth in 323_us_134 the deference required depends on the thoroughness evident in the agency’s consideration the validity of its reasoning its consistency with earlier and later pronouncements and all those factors which give it the power to persuade united_states v mead supra pincite citing skidmore v swift co supra pincite revproc_85_18 is consistent with revrul_81_224 1981_2_cb_197 which held that a taxpayer who delinquently filed the required returns during the course of an employment_tax audit was not entitled to relief under sec_530 revproc_85_18 has been cited for its requirement of timely filing see in re critical care support servs inc bankr bankr e d n y citing the timely filing requirement of revproc_85_18 and holding that the debtor was not entitled to relief under sec_530 based in part on the fact that the debtor did not timely file the required tax forms revproc_85_18 however provides no reason why it requires timely filing thus we are unable to ascertain the thoroughness of the agency’s consideration or the validity of its reasoning consequently we do not defer to its requirement of timely filing as a prerequisite to sec_530 relief in this case we conclude that petitioner’s untimely filing of information returns does not preclude petitioner from qualifying for relief pursuant to sec_530 iv reasonable_cause for delinquent filing petitioner argues that if sec_530 requires timely filing that section should also provide a reasonable_cause exception to the timely filing requirement petitioner claims to have made a serious effort to overcome delinquencies that occurred in the wake of great personal crisis and loss the illness and subsequent death of neena mitchell and ineffective accounting representation since we conclude that sec_530 does not prevent petitioner from obtaining sec_530 relief we need not consider this argument we hold that petitioner is entitled to relief from employment_tax liability pursuant to sec_530 to reflect the foregoing decision will be entered for petitioner


internal_revenue_service number info release date index no date dear this replies to your date letter wherein you request information regarding the availability of credits and refunds for federal excise_tax imposed on fuel used in your company’s ambulances in a recent telephone discussion with a member of this office you indicated that you use diesel_fuel in those vehicles since you also stated that you have no interest in obtaining a ruling in this matter we hope the following information will be helpful sec_4081 of the internal_revenue_code imposes a tax on certain removals entries or sales of taxable fuels the definition of which includes diesel_fuel when tax is not imposed under that code section a backup tax is imposed under sec_4041 on diesel_fuel sold by any person to an owner lessee or other operator of a diesel-powered highway vehicle or used by any person as fuel in a diesel-powered highway vehicle under sec_6427 a credit or refund of tax imposed under sec_4081 or sec_4041 is available to the ultimate_purchaser of diesel_fuel used by any person in a nontaxable_use a nontaxable_use includes an off-highway_business_use section sec_6421 defines an off-highway_business_use as any use by a person in a trade_or_business of the person or in an activity of the person described in sec_212 relating to production_of_income otherwise than as a fuel in a highway vehicle that at the time of the use is registered or is required to be registered for highway use under the laws of any state or foreign_country sec_48_6421-4 of the manufacturers and retailers excise_tax regulations provides that the term highway vehicle has the same meaning assigned to the term under sec_48_4061_a_-1 that regulation defines a highway vehicle as any sel- propelled vehicle or any trailer or semitrailer designed to perform a function of transporting a load over public highways whether or not designed to perform other functions but does not include a vehicle described in sec_48_4061_a_-1 in general the exceptions to the definition of a highway vehicle provided under that code section which includes an exception for certain specially designed mobile_machinery for nontransportation functions are applicable to trucks and trailers but not to ambulances therefore a fuel tax_credit or refund is not available based on the use of the fuel in an ambulance if you have any questions about this please contact the person whose name appears above sincerely associate chief_counsel passthroughs and special industries by richard a kocak chief branch


internal_revenue_service number release date index number ----------------------- --------- ------------------------------------ ----------------------------------- --------------------- ------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact --------------- id no ------------- telephone number --------------------- refer reply to cc te_ge eo2 plr-156708-04 date march ---------------------------------------------------------------------- legend association ------------------------------------------------------ state statute a ---------- statute b statute c ----------------------------------------------------- ------------------------------------------- ------------------ ------------------------------------------ ----------------------------------------------- ------------------ -------------------------------------- ------------------------------------------------ ------------------- --------------------------------------------- state utility dear ------------ correspondence requesting rulings that the income of association is excludible from gross_income under sec_115 of the internal_revenue_code and that association is not required to file an annual federal_income_tax return this is in reply to a letter dated date and subsequent plr-156708-04 facts the members of association are local governments and political_subdivision of association is an organization of local governments and political subdivisions of state it was created for the purpose of allowing its members to act jointly to acquire electricity supply electricity delivery and other energy-related services association was formed pursuant to state statute a which authorizes municipalities and other government entities to aggregate their electricity supply requirements for the purpose of making joint purchases from electricity suppliers state statute b exempts the joint purchases of public bodies from its competitive sealed bidding and competitive negotiation requirements pursuant to state statute c local governments are authorized to exercise powers jointly with other local governments that they are otherwise authorized to exercise independently state association represents that in no case may an organization other than a state a political_subdivision of a state or an organization the income of which is excluded from gross_income under sec_115 be a member of association association further represents that no private party has any ownership_interest or control of association association proposes to amend its bylaws to include the requirement that only a political_subdivision of state may be a member of association association has a single vote which is cast by its designated representative the designated representative is an employee of the member it represents board members are elected for a three year term association lacks any employees of its own and maintains no payroll designated representatives described above who are appointed or elected as officers or members of the board_of association perform all required activities for association association’s core functions involve assisting its members when they purchase electrical power to meet their own power needs association serves as the members’ agent assisting in the purchase of energy services from competitive suppliers it also assists members regarding the negotiation of standard form contracts with state utility for the purchase of electric utility_services including electric supply distribution and transmission billing and ancillary services in addition association provides certain non-core functions for the benefit of its members who may elect to participate on a voluntary basis such non-core functions may include environmental compliance activities metering services billing services economic load curtailment services and efficiency and managing services association represents that it is formed as a cost-sharing enterprise among its members and will not have income or profits from its operations to allocate among its association is governed by a board elected by its members each member of plr-156708-04 members each member pays its pro_rata share of the budget for the core functions the pro_rata share is based upon each member’s energy consumption or upon such other equitable method of funding as may be determined by the board only members that participate in non-core functions will pay the fees for such non-core functions private parties will participate in association only to the extent of selling it electrical power and providing it with goods and services the income of association will not accrue to private parties other than incidentally as reasonable_compensation for providing association with power goods and services terminate the membership of any member who fails to pay its pro-rata share of the budget the association may be terminated at any time upon the concurrence of all members at the time of termination in the event of termination the remaining funds available to association after providing for all outstanding obligations shall be distributed exclusively to members at the time of termination any member may withdraw from association upon written notice the board can law and analysis in revrul_77_261 1977_2_cb_45 income from an investment fund sec_115 sec_115 of the code provides that gross_income does not include income derived from any public_utility or the exercise of any essential government function and accruing to a state or any political_subdivision thereof established under a written declaration of trust by a state for the temporary investment of cash balances of the state and its participating political subdivisions was excludable from gross_income for federal_income_tax purposes under sec_115 the ruling indicated that the statutory exclusion was intended to extend not to the income of a state or municipality resulting from its own participation in activities but rather to the income of a corporation or other entity engaged in the operation of a public_utilities or the performance of some governmental function that accrued to either a state or municipality the ruling points out that it may be assumed that congress did not desire in any way to restrict a state’s participation in enterprises that might be useful in carrying out projects that are desirable from the standpoint of a state government and which are within the ambit of a sovereign to properly conduct in addition pursuant to sec_6012 and the underlying regulations the investment fund being classified as a corporation that is subject_to taxation under subtitle a of the code was required to file a federal_income_tax return each year in revrul_90_74 1990_2_cb_34 the service determined that the income of an organization formed funded and operated by political subdivisions to pool various risks casualty public liability workers’ compensation and employees’ health is excludable from gross_income under sec_115 of the code in revrul_90_74 private interests by facilitating the cost effective acquisition and transmission of electrical power a plr-156708-04 neither materially participate in the organization nor benefit more than incidentally from the organization basic utility to member local governments association performs an essential_governmental_function any income of association will accrue solely to its members the income of association will not accrue to private parties other than incidentally as reasonable_compensation for providing association with power goods and services upon termination of association its remaining funds shall be distributed to its members based on the information and representations submitted by association and provided that the proposed amendment described above is made to the by-laws we hold that the income of association is derived from the exercise of an essential_governmental_function and will accrue to a state a political_subdivision of a state or an entity the income of which is excluded from gross_income under sec_115 accordingly association’s income is excludable from gross_income under sec_115 of the code sec_6012 under subtitle a shall make returns with respect to income taxes under subtitle a in addition sec_1_6012-2 of the regulations provides in part that every corporation as defined in sec_7701 subject_to taxation under subtitle a of the code shall make a return of income regardless of whether it has taxable_income or regardless of the amount of its gross_income any taxable_income or having gross_income of dollar_figure or over regardless of the amount of taxable_income shall make returns with respect to income taxes under subtitle a sec_7701 and sec_301_7701-4 of the regulations define trusts for purposes of sec_6012 income_tax return must be filed by association pursuant to sec_6012 since any income realized by association is excluded from gross_income under sec_115 however if association is a corporation as defined in sec_7701 it will be required to file an income_tax return pursuant to sec_6012 sec_6012 provides in general that every corporation subject_to taxation sec_6012 provides in general that every trust having for a taxable_year if association is classified as a_trust for federal_income_tax purposes no annual rulings plr-156708-04 upon amendment of the by-laws of association as described above the income of association will be excludible from gross_income under sec_115 of the code association is not required to file a federal_income_tax return if it is classified as an association for federal_income_tax purposes if it is a corporation as defined in sec_7701 it will be required to file an income_tax return pursuant to sec_6012 except as specifically provided otherwise no opinion is expressed on the federal this ruling is directed only to the taxpayer who requested it sec_6110 in accordance with a power_of_attorney on file we are sending a copy of this sincerely tax consequences of any particular transaction provides that this ruling may not be used or cited as precedent letter to your representative enclosures copy of this letter copy for sec_6110 purposes cc ___________________________ barbara e beckman assistant chief branch division counsel associate chief_counsel tax exempt and government entities