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 b06 plr-134695-04 date date ---------- ----------------- --------------------------------------------------------------------------------- ---------------------------------------- ---------------------------------------------- --------------------------------------------------- --------------------------------------------------------------- legend taxpayer ------------------------------------------------------------------------------------------------------------ parent country new subs date date date date percentage percentage percentage dear ------------------ this letter is in response to the letter submitted by taxpayer's authorized representatives in which a ruling was requested regarding the conformity requirements ------------------ ------------------ -------------- -------------- -------------- ---------- plr-134695-04 of sec_472 sec_472 and sec_472 of the internal_revenue_code specifically the ruling requested is that parent a foreign_corporation may issue consolidated financial statements to its shareholders and creditors reporting new subs’ operations on a non-lifo basis without violating the lifo conformity requirement set forth in sec_472 e and g parent is a corporation organized under the laws of country for financial statement presentation purposes parent is subject_to generally_accepted_accounting_principles of country taxpayer is a wholly-owned u s subsidiary of parent on date parent entered into an agreement whereby taxpayer would acquire all of the outstanding_stock of new subs the acquisition the acquisition was closed on date prior to the acquisition taxpayer also had other wholly-owned u s subsidiaries old subs following the acquisition the activities of parent taxpayer and taxpayer’s subsidiaries old subs and new subs collectively subs are reported on the consolidated financial statements of parent taxpayer and subs join in the filing consolidated u s federal_income_tax returns on a fiscal_year ending each year on date prior to the acquisition new subs used the last-in_first-out lifo_method of valuing inventory for federal_income_tax purposes parent and taxpayer currently use a non-lifo method of valuing inventory for u s and country tax purposes parent values its inventory in its worldwide consolidated financial statements which previously included the balance sheets and operations of taxpayer and old subs and which will now include the balance_sheet and operations of new subs as well on a first- in first-out fifo basis taxpayer represents that the percentage of operating_assets used by the worldwide group group in foreign operations as reflected on the consolidated financial statements of group constituted approximately percentage of the total operating_assets of the consolidated_group prior to the acquisition and percentage following the acquisition taxpayer requests that the following rulings be issued that parent has substantial foreign operations within the meaning of revrul_78_246 1978_1_cb_146 and consequently the issuance of consolidated financial statements by parent to its shareholders and creditors reporting new subs’ operations on a non-lifo basis does not violate the lifo conformity requirement set forth in sec_472 e and g sec_472 of the code provides that a taxpayer that elects to use the lifo inventory_method for federal_income_tax purposes must establish to the satisfaction of the commissioner that it has used no method other than lifo in inventorying goods plr-134695-04 specified in its lifo election to ascertain income profit or loss for the first taxable_year for which the method is to be used for the purpose of a report or statement covering such taxable_year to shareholders partners or other proprietors or to beneficiaries or for credit purposes sec_472 imposes a requirement similar to that contained in sec_472 for taxable years subsequent to the year of the lifo election and provides that the taxpayer may be required to discontinue the use of the lifo inventory_method if this requirement is violated sec_472 of the code provides that all members of the same group_of_financially_related_corporations are treated as a single_taxpayer for purposes of the lifo conformity requirement of sec_472 and e the term group_of_financially_related_corporations means any affiliated_group as defined in sec_1504 determined by substituting percent for percent each place it appears and any group of corporations that consolidate or combine for purposes of financial statements revrul_78_246 holds that the lifo conformity requirement of sec_472 and e of the code does not apply to consolidated financial statements issued by a foreign parent_corporation provided that the foreign parent owns either directly or through members of its consolidated_group operating_assets of substantial value which are used in foreign operations operating_assets are considered to be used in foreign operations if they are owned by and used in the business of corporations that are members of the consolidated_group are foreign_corporations do not use the lifo_method of accounting for federal_income_tax purposes and engage in a business outside the united_states operating_assets for purposes of this test are all the assets necessary for the conduct of an active operating company the foreign parent_corporation will be considered as owning substantial foreign assets if the total value of such assets constitute sec_30 percent or more of the total operating_assets of the consolidated_group this determination will be made annually and normally will be made on the basis of the asset valuation reflected in the consolidated financial statements of the group for the year revrul_78_246 further holds that whether a foreign parent is engaged in substantial foreign operations will be decided on the basis of all the facts and circumstances presented if the consolidated_group does not satisfy the percent test previously discussed prior to the acquisition the percentage of operating_assets used by group in foreign operations as reflected on the consolidated financial statements of group constituted approximately percentage which percentage exceeded the percent threshold of the revrul_78_246 however following the acquisition the percentage dropped to percentage which percentage falls below the percent threshold of the revenue_ruling plr-134695-04 consequently taxpayer concedes it does not meet the percent standard for establishing substantial foreign operations under revrul_78_246 for taxpayers not meeting that standard the revenue_ruling determines the substantiality of foreign operations based upon all the facts and circumstances taxpayer argues that based upon this facts_and_circumstances_test the substantial foreign operations test is met while the revenue_ruling states that the determination will normally will be made on the basis of the asset valuation reflected in the consolidated financial statements of the group for the year taxpayer argues that as a result of the stepped up basis in the assets involved in the acquisition financial statement comparisons do not fairly represent its situation the assets of new subs reflect current value because the acquisition was recorded as a purchase pursuant to generally_accepted_accounting_principles taxpayer proposes comparing the market values of the foreign operations to that of total operations for the market_value of new subs taxpayer proposes using the purchase_price of new subs for the market_value of the remainder of group taxpayer proposes using ebitda earnings before interest taxes depreciation and amortization as a basis for allocating group’s market_value prior to the acquisition between its foreign and domestic operations as a result of this analysis taxpayer represents that the percentage of foreign operations is approximately percentage which percentage is slightly below the percent threshold set forth in revrul_78_246 based upon the facts submitted including the relative market_value of group’s foreign and domestic operations as well as the impact of the acquisition on the comparability of the financial statement values it is ruled that for federal_income_tax purposes for parent’s fiscal_year ending date on the basis of all the facts and circumstances presented parent has substantial foreign operations within the meaning of revrul_78_246 1978_1_cb_146 and consequently for the fiscal_year ending date the issuance of consolidated financial statements by parent to its shareholders and creditors reporting new subs’ operations on a non-lifo basis does not violate the lifo conformity requirement set forth in sec_472 e and g this ruling applies only to the taxable_year ending date and does not apply to any subsequent taxable_year specifically no opinion is stated as to whether parent has substantial foreign operations for subsequent years or whether parent may issue consolidated financial statements for subsequent years reporting new subs’ operations on a non-lifo basis without violating the lifo conformity requirements further this letter should not be construed to approve the use of taxpayer’s market_value analysis for subsequent years plr-134695-04 in addition taxpayer and new subs must otherwise comply with the conformity requirements of sec_472 e and g of the code in inventorying their goods to ascertain income profit or loss for the purposes of a report or statement covering the taxable_year for which the lifo_method is used to shareholders partners or other proprietors or to beneficiaries or for credit purposes as provided under sec_1_472-3 of the income_tax regulations whether or not the lifo_method once adopted may be continued and the propriety of all computations incidental to the use of such method will be determined by the commissioner in connection with the examination of the taxpayer's income_tax returns accordingly this letter should not be construed as a ruling as to whether taxpayer’s or new subs’ use of the lifo inventory_method and relevant computations are in accordance with sec_472 of the code and regulations thereunder lastly no opinion is expressed as to the tax treatment of the proposed transaction under the provisions of any other sections of the code and regulations which may be applicable thereto or the tax treatment of any conditions existing at the time of or effects resulting from the transaction which are not specifically covered by the above ruling a copy of this letter should be attached to taxpayer's consolidated federal_income_tax return for the taxable_year ended date pursuant to a power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative this ruling is directed only to the taxpayer who requested it sec_6110 of the code provides that it may not be used or cited as precedent sincerely jeffery g mitchell chief branch income_tax accounting cc


internal_revenue_service p o box cincinnati oh number release date department of the treasury employer_identification_number contact person - id number date date contact telephone number legend u individual x dollar amount y dollar amount dear uil we have considered your request for advance approval of your grant-making program under sec_4945 of the internal_revenue_code dated date our records indicate that you were recognized as exempt from federal_income_tax under sec_501 of the code and that you are classified as a private_foundation as defined in sec_509 you will award grants to individuals in furthering your purpose to catalyze fund and disseminate scientific research to further the understanding of those aspects of consciousness and related subjects now poorly supported by the mainstream research community applicants who are eligible to apply for grants are all individuals who have expertise in or the aptitude to conduct research in the field of consciousness research they must also have a demonstrated financial need most qualified researchers operate within universities research institutions or other organizations you estimate that only a handful of individuals operating on their own are qualified to conduct research that is consistent with your exempt_purpose most of these individuals are retired but may maintain a continued interest in your area of study namely the field of consciousness and mind-matter interaction and its use as an instrument of subtle energy’ you anticipate making one to two research grants both this and next year and one to three grants each year thereafter the grant amounts will range from x dollars to y dollars per year of research you anticipate funds will be used for equipment and supplies necessary to conduct research grant funds may not be used to compensate recipients for performing personal services for you no grant may be awarded to any disqualified_person namely any founder director officer employee or substantial_contributor to you nor any family_member of any such person you will advertise the grants on a website run by you and send solicitations for applicants to universities and other research institutions you will also ask colleagues and associates of the selection committee members to forward applicant solicitations to candidates who may be interested and qualified you expect to eventually form a scientific committee of acknowledged experts in the field of consciousness research to solicit additional candidates for grants potential recipients are required to submit i written research proposals describing the purpose and significance of the proposed research and the specific objectives methods work schedules deliverables and expenditures expected in the carrying out of such research and ii a biographical record and supporting material and other evidence of the potential recipient’s qualifications and commitment to conduct the proposed research the selection committee will consist of three persons and will be responsible for indentifying candidates and selecting recipients of the grants your president u and two other individuals unrelated to u will make up the committee u has been studying the nature of consciousness for the last years the two other committee members will be required to have backgrounds and experience such as scientific expertise in the field of consciousness to enable them to evaluate and select candidates potential recipients will be selected only to effectuate the exempt_purpose of the grant and not to benefit particular persons you will select recipients based on the criteria related to the purposes of the grant including the merits of the proposal credentials of the potential recipient the relationship of the proposal to your purpose and its priority in relation to other demands on your funds the key criteria will be the candidate’s qualifications experience and expertise in the field of consciousness research and the candidate’s commitment to conduct further research in this field you will consider candidates who have already published valuable research you will enter into a grant agreement with each recipient of funds the agreement must i specify the responsibilities of both you and the recipient ii obligate the recipient to use the grant funds only for the purposes for which the grant is made iii provide for periodic reports at least annually concerning the results achieved and the use of the funds and iv require a final written report with an accounting of how grant funds were used the agreement must also authorize you to withhold or recover grant funds in case such funds are misused grants may be renewed if after a review of reports submitted by the researcher you conclude that additional research is warranted and that requirements for you to make a grant to an individual under your procedures and the grant agreement are satisfied you will obtain from the recipients progress reports at least annually and final reports detailing the research conducted any accomplishments and the use of funds your president or his designee has the responsibility to monitor the progress of each individual grant namely to review each report submitted by the recipient to determine whether the grant purposes are being or have been fulfilled and to further investigate any matters that warrant additional scrutiny or inquiry where reports to you or other information including failure to submit reports after a reasonable_time has elapsed from their due_date indicates that all or any part of grant funds are not being used for the purposes of such grant you will initiate an investigation while conducting the investigation you will withhold further payments to the extent possible until it has been determined that no part of the grant has been used for improper purposes and until any delinquent reports have been submitted if you determine that any part of a grant has been used for improper purposes you will take all reasonable and appropriate steps to recover diverted grant funds or to ensure the restoration of diverted funds and the dedication of other grant funds held by the recipient to the purposes being financed by the grant these steps will include legal action unless such action would in all probability not result in the satisfaction or execution of a judgment if you determine that any part of the grant has been used for improper purposes and the recipient has not previously diverted grant funds to any use not in furtherance of a purpose specified in the grant you will withhold further payments on the particular grant until i you have received the recipient’s assurances that future diversions will not occur ii any delinquent reports have been submitted and iii you have required the recipient to take extraordinary precaution to prevent future diversions from occurring if you determine that any part of the grant has been used for improper purposes and the recipient has previously diverted your grant funds you will withhold further payment until the three previous conditions are met and the diverted funds are in fact recovered or restored lf a grant recipient discontinues or is unable to proceed with a research project you expect to review the status of the research and obtain any appropriate interim reports on the research to seek assurance that the grant agreement has otherwise been complied with particularly as to use of grant funds obtain any appropriate accounting of funds used in the research require the return of the unused funds in appropriate circumstances require the return of equipment and other supplies procured by the grant funds and in appropriate circumstances seek another researcher to continue or complete the research which may include using the unused funds and making a new grant to the new researcher following the procedures for the grant neither u nor any member of your board_of directors or selection committee may be in a position to derive a private benefit directly or indirectly if certain potential recipients are selected over others you agree to maintain records that include the following i information used to evaluate the qualification of potential grantees ii identification of the grantees including any relationship of any grantee to the private_foundation iii the amount and purpose of each grant and iv all grantee reports and other follow-up data obtained in administering the private foundation's grant program sec_4945 and b of the code impose certain excise_taxes on taxable_expenditures made by a private_foundation sec_4945 of the code provides that the term taxable_expenditure means any amount_paid or incurred by a private_foundation as a grant to an individual for travel study or other similar purposes by such individual unless such grant satisfies the requirements of subsection g sec_4945 of the code provides that sec_4945 shall not apply to individual grants awarded on an objective and nondiscriminatory basis pursuant to a procedure approved in advance if it is demonstrated that the grant constitutes a scholarship or fellowship_grant which is subject_to the provisions of sec_117 and is to be used for study at an educational_organization described in sec_170 the grant constitutes a prize or award which is subject_to the provisions of sec_74 if the recipient of such prize or award is selected from the general_public or the purpose of the grant is to achieve a specific objective produce a report or similar product or improve or enhance a literary artistic musical scientific teaching or other similar capacity skill or talent of the grantee sec_53_4945-4 of the regulations provides that to secure approval a private_foundation must demonstrate that i ii its grant procedure includes an objective and nondiscriminatory selection process such procedure is reasonably calculated to result in performance by grantees of the activities that the grants are intended to finance and iii the foundation plans to obtain reports to determine whether the grantees performed activities that the grants are intended to finance based on the information submitted and assuming your award programs will be conducted as proposed with a view to provide objectivity and nondiscrimination in making the awards we have determined that your procedures for granting the awards comply with the requirements contained in sec_4945 of the code and that awards granted in accordance with such procedures will not constitute taxable_expenditures within the meaning of sec_4945 this determination is conditioned on the understanding that there will be no material_change in the facts upon which it is based it is further conditioned on the premise that no grants will be awarded to foundation managers or members of the selection committee or for a purpose that is inconsistent with the purpose described in sec_170 of the code the approval of your award program procedures herein constitutes a one-time approval of your system standards and procedures designed to result in awards which meet the requirements of sec_4945 of the code this determination only covers the grant programs described above thus approval shall apply to subsequent award programs only as long as the standards and procedures under which they are conducted do not differ materially from those described in your request any funds you distribute to individuals must be made on a true charitable basis in furtherance of the purposes for which you are organized therefore you should maintain adequate_records and case histories so that any or all award distributions can be substantiated upon request by the internal_revenue_service this determination is directed only to the organization that requested it sec_6110 of the code provides that it may not be used or cited as a precedent you must report any future changes in your grant making procedures please keep a copy of this letter in your permanent records we have sent a copy of this letter to your representative as indicated in your power_of_attorney if you have any questions please contact the person whose name and telephone number are shown above sincerely yours lois g lerner director exempt_organizations enclosures notice a copy of the redacted letter


t c summary opinion united_states tax_court robert and martha emanuel petitioners v commissioner of internal revenue respondent docket nos 10609-00s 13639-01s filed date larry c fedro and cara pavalock specially recognized for petitioners timothy maher for respondent panuthos chief special_trial_judge these cases were heard pursuant to the provisions of sec_7463 of the internal_revenue_code in effect at the time the petitions were filed the decisions to be entered are not reviewable by any other court and this opinion should not be cited as authority 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 respondent determined that petitioners are liable for deficiencies in federal income taxes as follows year deficiency dollar_figure big_number big_number after concessions ’ the issues for decision are whether petitioners are entitled to deductions for medical_expenses and whether petitioners are entitled to a deduction for a charitable_contribution for miles driven in their van ' petitioners conceded respondent’s determination that the payments mrs emanuel received in and for attendant care services provided to mr emanuel are includable in gross_income respondent conceded that petitioners are entitled to deduct as medical_expenses dollar_figure in for a modification to their van to accommodate a wheelchair and scooter lift and dollar_figure in for maintenance of mr emanuel’s scooter and dollar_figure in as a charitable_contribution as a result of the mutual concessions all adjustments in the notices of deficiency either have been resolved or are computational petitioners asserted entitlement to a deduction for expenses for wc young quest after ymca investment fees paid of dollar_figure income_tax preparation fees of dollar_figure and income_tax planning fees of dollar_figure which were not claimed on the return petitioners did not present any evidence concerning these issues accordingly we deem these issues conceded petitioners assert they are entitled to deduct the following medical_expenses that were not claimed on the returns for the years in issue expense attendant care services ‘dollar_figure dollar_figure dollar_figure van cost -o- -o- big_number gasoline child attendant care big_number big_number big_number back-up generator -q- -q- pool maintenance big_number big_number big_number ymca tuition big_number big_number big_number all amounts have been rounded to a whole dollar figure petitioners resided in hollywood florida at the time they filed their petitions some of the facts have been stipulated and are so found these two cases were consolidated pursuant to the court’s order of date for convenience we combine our findings_of_fact and conclusions in the petitions and at trial petitioners raised the matters at issue here accordingly petitioners bear the burden_of_proof rule a ’ medical_expenses petitioners allege they are entitled to various medical expense deductions we first discuss the requirements of section sec_7491 does not apply to shift the burden_of_proof to respondent because petitioners have neither alleged that sec_7491 is applicable nor established that they complied with the requirements of sec_7491 a and b to substantiate items maintain required records and cooperate fully with respondent’s reasonable requests - and then consider the particular claims made by petitioners certain expenses paid during the taxable_year not_compensated_for_by_insurance_or_otherwise for the medical_care of the taxpayer or a dependent as defined in sec_152 may be allowed as a deduction to the extent that the expenses exceed percent of the taxpayer’s adjusted_gross_income sec_213 a dependent includes a son more than half of whose support was received from the taxpayer sec_152 medical_care includes amounts paid for the diagnosis cure mitigation treatment or prevention of disease or for the purpose of affecting any structure or function of the body under sec_213 a and for transportation primarily for and essential to medical_care referred to in subparagraph a under sec_213 medical_care also includes amounts paid for qualified_long-term_care_services as defined in section 7t702b c sec_213 c qualified_long-term_care_services means necessary diagnostic preventative therapeutic curing treating mitigating and rehabilitative services and maintenance_or_personal_care_services which are required by a chronically_ill_individual and are provided pursuant to a plan of care prescribed by a licensed_health_care_practitioner sec_7702b a chronically_ill_individual means any individual who has been certified by a licensed_health_care_practitioner as being unable to perform at least two activities_of_daily_living - eating toileting transferring bathing dressing and continence for a period of at least days due to a loss of functional capacity or requires substantial supervision to protect himself from threats to health and safety due to severe cognitive impairment sec_7702b an amount_paid for qualified_long-term_care_services that are provided by the spouse or a relative of the individual is treated as not paid for medical_care for tax years beginning after date sec_213 a certain amounts paid for lodging that is not lavish_or_extravagant while away from home and that is primarily for and essential to medical_care referred to in paragraph a shall be treated as amounts paid for medical_care if the medical_care is provided by a physician in a licensed hospital or a related or equivalent medical_care facility and if there is no significant_element_of_personal_pleasure_recreation_or_vacation in the travel away from home sec_213 the amounts taken into account shall not exceed dollar_figure for each night for each individual id an expenditure which is merely beneficial to the general health of an individual such as an expenditure for a vacation is not an expenditure for medical_care sec_1_213-1 congress added sec_213 to the health_insurance_portability_act_of_1996 publaw_104_191 sec b c stat effective for tax years beginning after date - - income_tax regs expenses paid for transportation primarily for and essential to the rendition of the medical_care are expenses paid for medical_care but the deductible amount does not include the cost of meals_and_lodging while away from home receiving medical treatment sec_1_213-1 iv income_tax regs deductions for expenditures_for medical_care allowable under sec_213 will be confined strictly to expenses_incurred primarily for the prevention or alleviation of a physical or mental defect or illness sec_1_213-1 income_tax regs capital expenditures are generally not deductible sec_263 sec_1_213-1 income_tax regs however a capital_expenditure may qualify as a deductible medical expense if it has as its primary purpose the medical_care of the taxpayer or his dependent sec_1_213-1 income_tax regs expenditures made for the operation or maintenance of a capital_asset may be deductible as medical_expenses if they have as their primary purpose the medical_care as defined in sec_1 e and income_tax regs of the taxpayer or his dependent sec_1_213-1 income_tax regs a taxpayer is generally required to keep sufficient records to enable the secretary to determine the taxpayer’s correct income_tax_liability sec_6001 sec_1_6001-1 income_tax regs in addition the taxpayer shall furnish the name and - j- address of each person to whom payment for medical_expenses was made and the amount and date of the payment thereof in each case in connection with claims for deductions under sec_213 sec_1_213-1 income_tax regs the cost of educational_services rendered to the mentally handicapped can qualify as a medical expense 76_tc_408 citing 50_tc_164 sec_1_213-1 v income_tax regs medical_care includes the entire cost of institutional care for a person who is mentally ill and unsafe when left alone sec_1_213-1 v income_tax regs whether a service constitutes medical_care will depend upon its therapeutic nature to the individual and not upon the title of the person rendering the service or the general nature of the institution in which the services are rendered fay v commissioner supra the services provided must be directly or proximately related to the mitigation alleviation or treatment of the individual’s disease or disability fay v commissioner supra citing 62_tc_813 tf a mentally disturbed individual with learning disabilities is sent to an educational_institution which also has resources for treating the mental handicap and if the principal reason for his attendance at the institution is for_the_use_of those resources to alleviate or mitigate the mental handicap and if the institution’s educational program is only incidental to its medical_care function the school will be considered a special_school under sec_1_213-1 v a income_tax regs fay v commissioner supra pincite the expenditures_for the educational_services will be deductible 54_tc_1684 if a school or institution does not gualify as a special_school the costs of medical services rendered are nevertheless deductible fay v commissioner supra sec_1_213-1 v 6b income_tax regs sec_262 prohibits deductions for personal living or family_expenses a attendant care provider expense mr emanuel was injured in while employed by eastern airlines and at the time of the trial was still unable to work because of the injuries mr emanuel was awarded worker’s compensation benefits mr emanuel is unable to walk a distance greater than a hundred feet or to stand for more than a few minutes consecutively and relies on a scooter for mobility he has also been unable to fully care for himself and has relied on the assistance of mrs emanuel to help him shower dress eat and exercise in the worker’s compensation court in miami florida determined that mr emanuel was to receive the additional benefit of attendant care services and selected mrs emanuel as his attendant care provider mrs emanuel was paid minimum wage for hours of services provided to mr emanuel each day the following amounts were --- - paid to mrs emanuel by eastern airline’s disability insurance carrier american international domestic brokerage group aig year amount dollar_figure big_number big_number petitioners maintain that they are entitled to deduct the amounts paid to mrs emanuel as medical_expenses sec_213 allows the taxpayer to deduct amounts paid for medical_expenses a taxpayer may deduct amounts that the taxpayer has paid for himself or his dependent but not amounts that a third party has paid on the taxpayer’s behalf see 54_tc_1727 because aig paid mrs emanuel petitioners cannot deduct as a medical expense the payments received petitioners argue that the funds paid to mrs emanuel belong to mr emanuel and are his to direct as he sees fit and that he could have received the funds directly from aig and paid mrs emanuel himself assuming arguendo that we were to accept as previously indicated petitioners now agree that the amounts should have been reported as gross_income in their respective income_tax returns petitioners also cited a private_letter_ruling which bears no factual resemblance to this case in any event private letter rulings may be helpful but have no precedential force 452_us_247 ndollar_figure 887_f2d_1302 6th cir affg 90_tc_1033 -- - petitioners’ argument the deduction would nevertheless be disallowed because the payments received for worker’s compensation would be considered as compensated for by insurance or otherwise sec_213 the deduction would also be disallowed with respect to petitioners’ and tax years because the amounts paid for the services provided to mr emanuel which are qualified_long-term_care_services as defined under sec_7702b are treated as not paid for medical_care because the services were provided by mr emanuel’s spouse sec_213 a respondent is sustained on this issue b new van petitioners replaced their old van with the purchase of a new chevrolet van in for dollar_figure petitioners purchased a van rather than another vehicle such as an automobile in order to accommodate mr emanuel’s scooter petitioners claim that they are entitled to deduct dollar_figure as a medical expense which represents approximately the difference between the cost of the new van at dollar_figure and the cost of a new car such as a chevrolet lumina at dollar_figure petitioners argue that their position is supported by a private_letter_ruling and two revenue rulings none of these rulings supports petitioners’ position revenue rulings do not have the force of law 153_f3d_964 n 9th cir affg 107_tc_1 supplemented by tcmemo_1997_70 as indicated a taxpayer may not rely on a private_letter_ruling issued to another taxpayer see supra note the difference between the cost of petitioners’ new van and the cost of a new car is not deductible as an expense because this expense was not incurred for the diagnosis cure mitigation treatment prevention of disease or to affect any structure or function of the body or for transportation primarily for and essential to such medical_care of mr emanuel sec_213 d a and b we conclude that petitioners are not entitled to deduct the excess cost of the new van as a medical expense om gasoline petitioners also claim a medical_expense_deduction for the cost of the gasoline consumed by both their old van and their new van the amount claimed represents the difference between the cost of the gasoline used by the vans and the cost of the gasoline that would otherwise have been consumed by a standard size automobile petitioners estimated the amount of gasoline the new van consumed and the amount which petitioners now claim as a medical expense because they did not keep records of the actual gasoline consumption petitioners estimated that they drove big_number miles annually they also estimated that the fuel consumption of a car would be miles to a gallon and the fuel consumption of the vans was miles to the gallon mr emanuel explained that he averaged the cost of a premium and regular gasoline to estimate the cost of the gasoline used he testified that he priced the gasoline for and using prices available ona website petitioners provided a written summary of their gasoline expenses but did not provide supporting documentary_evidence for the summary in addition the amounts of expenses in the summary are different from the amounts to which mr emanuel testified petitioners did not provide any evidence that they incurred these expenses for the cost of the gasoline in the course of transportation primarily for and essential to medical_care sec_213 b in addition petitioners have not substantiated the amounts claimed under sec_1_213-1 income_tax regs we conclude that petitioners are not entitled to deduct the cost of gasoline as a medical expense d attendant care petitioners’ son christopher who was years old in is microcephalic and suffers from severe mental retardation and physical problems he is unable to wash himself dress himself take medication and perform other basic functions and he requires constant assistance although petitioners received social_security payments ssi medicare and mediwaiver on behalf of christopher he qualifies as their dependent under sec_152 petitioners took numerous trips to entertainment parks petitioners traveled to walt disney world and the universal studios florida a total of four times during and petitioners assert that the trips were therapeutic for christopher and also for family vacations an attendant care provider traveled with petitioners to assist with the care of christopher the care provider performed many services including dressing christopher pushing his wheelchair and accompanying him on amusement rides petitioners argue that they are entitled to deduct as medical_expenses for their dependent certain costs incurred on behalf of the attendant care provider when traveling such as the airplane fare lodging and food petitioners provided to the court summaries listing the travel_expenses incurred on behalf of the care provider such as food hotel gas and tolls and tickets but they did not provide supporting documentary_evidence to substantiate the expenses because petitioners did not keep receipts of expenses they estimated the amounts that they now claim as expenses mr emanuel explained that he was able to provide a summary of expenses because he was in the habit of contemporaneously maintaining a log of vacation expenses which he subsequently entered onto his computer mr emanuel prepared the summaries when they were first audited which was sometime between and we are not satisfied that there was no significant_element_of_personal_pleasure_recreation_or_vacation in their trips to walt disney world and universal studios florida sec_213 moreover petitioners have not substantiated the claimed travel_expenses sec_1_213-1 income_tax regs we conclude that petitioners are not entitled to deduct the travel_expenses for the attendant care provider as a medical expense e backup generator christopher would scratch and bite himself in great distress when the radio television and air conditioning in the home could not operate due to a loss of power power outages would occur in petitioners’ home three or four times a year petitioners purchased a backup electrical generator for dollar_figure in to avoid the distress to christopher when the radio television and air condition were not operating the generator was not used to provide electricity to medical equipment for christopher the electrical generator is a capital_expenditure sec_263 sec_213 a sec_1_213-1 income_tax regs petitioners’ explanation for the electrical generator is that they purchased it to ease christopher’s distress but this does not indicate a medical exigency see 71_tc_644 although the electrical generator may have been beneficial to christopher because it operated the radio -- - television and air conditioner during power outages it does not have as its primary purpose medical_care that is the cure mitigation or treatment of christopher’s condition sec_1 e income_tax regs petitioners have not alleged nor are there facts in the record that would suggest that they are entitled to deductions for the radio television and air conditioner as medical_expenses id see 37_tc_826 we conclude that petitioners are not entitled to deduct the cost of the backup generator as a medical expense f pool maintenance petitioners claim that they are entitled to deduct as a medical expense amounts paid to maintain the gquality of the swimming pool ie chemicals equipment electricity at their home petitioners installed the swimming pool in their home in after christopher’s pediatrician recommended that he swim to develop his motor skills he uses the pool about once a day with mrs emanuel’s assistance the pool depth ranges from to feet it has wide steps and a grab rail in the shallow end but it has no diving board or slide mr emanuel’s doctors also recommended that he engage in aguatic therapy in a swimming pool mr emanuel testified that he used the pool at his house three or four times a day in good - weather mr emanuel testified that his other son almost never used the swimming pool both christopher and mr emanuel used the pool daily for therapy related to their physical disabilities upon the advice of doctors the pool is tailored for use by both christopher and mr emanuel it is usable throughout the year and christopher and mr emanuel used the pool daily see haines v commissioner supra pincite other family members do not use the swimming pool for recreation upon these facts we conclude that the swimming pool has as its primary purpose and is directly related to the medical_care of both christopher and mr emanuel sec_1 1l e income_tax regs petitioners did not maintain receipts of the expenses_incurred with respect to the maintenance of the pool therefore they produced an estimate from the swimming pool supply store pinch-a-penny from which they purchased supplies the estimate provided that the annual cost of maintaining a swimming pool such as the one owned by petitioners was approximately dollar_figure moreover mr emanuel provided testimony as to the items needed to maintain the pool and their general cost we find the estimate from pinch-a-penny and mr emanuel’s testimony to be credible although generally a taxpayer is required to keep records to establish the amount of his deductions under sec_6001 in some situations the court may estimate the amount of medical_expenses and allow a deduction to that extent notwithstanding substantiating documentary_evidence in the record 39_f2d_540 2d cir meyers v commissioner tcmemo_1996_219 the court is satisfied that petitioners incurred dollar_figure in pool maintenance_expenses for each of the years at issue and petitioners are entitled to deduct the expenses for and as medical_expenses to the extent allowable under sec_213 g ymca day camp christopher was enrolled in a ymca program during the tax years at issue the cost of which petitioners allege they are entitled to deduct for each of the years at issue as dependent medical_expenses the brochure for the ymca program reflects that it is structured to enhance physical and social growth in the areas of recreation and leisure activities for special populations the ymca program was designed to assist a student like christopher with severe physical and mental disabilities with physical growth and to treat his problems christopher’s participation in the program was prompted by his mental and physical disabilities and the program had principally a therapeutic value for him see 54_tc_1684 we conclude that the ymca program was - - directly or proximately related to the mitigation or treatment of christopher’s disabilities and the principal reason for christopher’s attendance was to treat his disability therefore petitioners are entitled to deduct dollar_figure in dollar_figure in and dollar_figure in as medical_expenses to the extent allowable under sec_213 charitable_contribution any charitable_contribution which is made within the taxable_year may be allowed as a deduction sec_170 any contribution of dollar_figure or more shall not be allowed unless the taxpayer substantiates the contribution by a contemporaneous written acknowledgment of the contribution by the donee organization sec_170 a the written acknowledgment must contain the following information sec_170 f b content of acknowledgement - the amount of cash and a description but not a value of any property other than cash contributed whether the donee organization provided any goods or services in consideration in whole or in part for any property described in clause a description and good_faith estimate of the value of any goods or services referred to in clause or if such goods or services consist solely of intangible religious benefits a statement to that effect although no deduction is allowed for a contribution of services unreimbursed out-of-pocket transportation_expenses incurred such as mileage driven while performing donated - - services are deductible sec_1_170a-1 income_tax regs the deductible standard mileage rate for computing the deduction for_the_use_of a passenger_automobile driven in connection with rendering services to a charitable_organization i sec_12 cents per mile for years beginning on or before date and cents per mile for years beginning after date sec_170 churukian v commissioner tcmemo_1980_205 see also revproc_95_54 1995_2_cb_450 revproc_96_63 1996_2_cb_420 revproc_97_58 1997_2_cb_587 petitioners assert they are entitled to deduct as a charitable_contribution dollar_figure relating to use of their van for charitable purposes petitioners have not provided any facts indicating that the use of the van was for the benefit of a charity and not for the benefit of one of the family members see 57_tc_265 in addition petitioners allege that exhibit 16-p substantiates the mileage driven however this exhibit does not indicate what the donee charitable_organization was or describe the charitable services provided by petitioners we conclude that petitioners are not entitled to a charitable deduction for mileage driven - - reviewed and adopted as the report of the small_tax_case division to reflect the foregoing decisions will be entered under rule


internal_revenue_service number release date index number - --------------------------------- ---------------------------------------------------- ----------------------------- ---------------- ------------------------- - department of the treasury washington dc third party communication none date of communication not applicable_person to contact ----------------------- id no ------------- telephone number --------------------- refer reply to cc tege eoeg teb presp-150128-06 date date dear ---------------- pursuant to sec_54 of the internal_revenue_code the code and notice_2005_98 2005_52_irb_1211 and after review of your application submitted on date including supplements thereto we have determined that the project described in appendix a attached hereto is qualified for purposes of sec_54 and will be owned by one or more qualified borrowers we allocate authority to ----------------------------------- ------------------------------------------------------------------------------------------------------------------- the issuer a qualified issuer under sec_54 to issue up to dollar_figure--------------of clean renewable energy bonds crebs bonds issued pursuant to this allocation must be designated by the issuer as bonds for purposes of sec_54 for the project described in appendix a up to the amount allocated for each project described in appendix a bonds so designated must be issued on or before date please be aware that in order for bonds to be crebs the applicable_requirements of the code including without limitation sec_54 notice_2005_98 and notice_2006_7 2006_10_irb_559 must be met please note that creb proceeds may be used to reimburse capital expenditures paid_by qualified borrowers for qualified projects only if the provisions of sec_54 are met if you have any questions with respect to this allocation please contact --------------------- ---------------------------------------- of the office of division counsel associate chief_counsel tax-exempt and government entities on --------------------- not a toll-free call except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter presp-150128-06 for purposes of the renewable_electricity_production_credit under sec_45 of the code no inference may be drawn from this allocation that any project listed in appendix a is a qualified_facility or that electricity to be produced at such project s is electricity from a qualified_energy resource at a qualified_facility within the meaning of sec_45 this determination is directed only to the applicant named above sec_6110 of the code provides that it may not be used or cited as precedent a copy of this letter must be attached to any form 8038-g information_return for tax- exempt governmental obligations filed for bonds issued pursuant to this allocation the allocation contained in this letter is based upon information and representations submitted by the applicant for the creb allocation and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the application_for an allocation it is subject_to verification on examination sincerely assistant chief_counsel exempt_organizations employment_tax government entities tax exempt government entities by timothy l jones senior counsel tax-exempt_bonds branch presp-150128-06 borrower name appendix a project type project location --------------- -------------------------------- ------------------------------- ------------------------------ wind facility --------- ---------------------------------- ------------------------------------------------ ------------------------------------------------- -------------------------- -------------------------------------------- --------------------------- amount allocated dollar_figure-------------


internal_revenue_service department of the treasury number release date index number 468a 468a washington dc person to contact telephone number refer reply to cc psi plr-113190-01 date date re request for a revised schedule of ruling amounts taxpayer parent plant location act state commission director fund dear this letter responds to the request of taxpayer dated date for a revised schedule of ruling amounts in accordance with sec_1_468a-3 of the income_tax regulations taxpayer was previously granted a revised schedule of ruling amounts on date information for the schedule of ruling amounts was submitted on behalf of the taxpayer pursuant to sec_1_468a-3 taxpayer represents the facts and information relating to its request for a revised schedule of ruling amounts as follows taxpayer is under the audit jurisdiction of the director taxpayer is percent owned by parent and files a consolidated federal_income_tax return with parent taxpayer has an interest of percent in plant which is situated at location plant’s operating license expires in taxpayer is subject_to the jurisdiction of commission which covers percent of the taxpayer’s total electric sales the estimated base cost for decommissioning the plant is based on an independent study and is premised on the decon method on act became effective in state act provides for a transition to competition in state with respect to the generation and sale of electricity act allows electric utilities including taxpayer to recover their stranded costs through a plr-113190-01 competitive transition charge ctc imposed upon consumers of electricity in the utility’s service area for a period of the ctc provides for the recovery_of stranded costs including nuclear decommissioning costs for plant commission in case no effective authorized nuclear decommissioning costs to be included in the taxpayer’s cost of service for ratemaking purposes for the plant in the amount of and estimated an after- tax_rate of return on assets of percent commission also determined the total estimated cost of decommissioning to be this base cost escalated using an estimated inflation rate of percent results in an estimated future decommissioning cost of the tax and investment changes made to sec_468a of the internal_revenue_code by section of the energy policy act of were not taken into consideration when estimating these costs there are no proceedings pending before commission that may result in an increase or decrease in the amount of decommissioning costs for the plant to be included in taxpayer’s cost of service for ratemaking purposes the funding_period for the plant extends from and the level_funding limitation period for the plant extends from the estimated period for which the fund will be in effect is the estimated_useful_life of the plant is thus the taxpayer has calculated its qualifying percentage to be percent sec_468a of the internal_revenue_code provides that a taxpayer may elect to deduct the amount of payments made to a qualified nuclear decommissioning fund however sec_468a limits the amount_paid into the fund for any taxable_year to the lesser_of the amount of nuclear decommissioning costs allocable to the fund that is included in the taxpayer’s cost of service for ratemaking purposes for the taxable_year or the ruling_amount applicable to that year sec_468a of the code provides that no deduction shall be allowed for any payment to the nuclear decommissioning fund unless the taxpayer requests and receives from the secretary a schedule of ruling amounts the ruling_amount for any taxable_year is defined under sec_468a as the amount which the secretary determines to be necessary to fund that portion of nuclear decommissioning costs which bears the same ratio to the nuclear power plant as the period for which the fund is in effect bears to the estimated_useful_life of the plant this term is further defined to include the amount necessary to prevent excessive funding of nuclear decommissioning costs or funding of these costs at a rate more rapid than level_funding taking into account such discount rates as the secretary deems appropriate sec_468a of the code provides that a taxpayer shall be deemed to have made a payment to the nuclear decommissioning fund on the last day of the taxable_year if the payment is made on account of the taxable_year within 2½ months after the close of the taxable_year plr-113190-01 sec_1_468a-1 of the regulations provides that an eligible_taxpayer may elect to deduct nuclear decommissioning costs under sec_468a of the code an eligible_taxpayer as defined under sec_1_468a-1 is a taxpayer that has a qualifying interest in a nuclear power plant as defined under sec_1_468a-1 a qualifying interest is a direct ownership_interest including an interest held as a tenant in common or joint tenant or under certain conditions a leasehold interest in any portion of a nuclear power plant sec_1_468a-2 of the regulations provides that the maximum amount of cash payments made or deemed made to a nuclear decommissioning fund during any taxable_year shall not exceed the lesser_of i the cost of service amount applicable to the nuclear decommissioning fund for such taxable_year or ii the ruling_amount applicable to the nuclear decommissioning fund for such taxable_year sec_1_468a-3 of the regulations provides that in general a schedule of ruling amounts for a nuclear decommissioning fund is a ruling specifying annual payments that over the taxable years remaining in the funding_period as of the date the schedule first applies will result in a projected balance of the nuclear decommissioning fund as of the last day of the funding_period equal to and in no event more than the amount of decommissioning costs allocable to the fund sec_1_468a-3 of the regulations provides that each schedule of ruling amounts shall be based on the reasonable assumptions and determinations used by the applicable public_utility commission s in establishing or approving the amount of decommissioning costs to be included in the cost of service for ratemaking purposes taking into account amounts that are otherwise required to be included in the taxpayer’s income under sec_88 of the code and the regulations thereunder each schedule of ruling amounts shall be based on the public_utility commission’s reasonable assumptions concerning i the after-tax rate of return to be earned by the amounts collected for decommissioning ii the total estimated cost of decommissioning the nuclear power plant and iii the frequency of contributions to the nuclear decommissioning fund for a taxable_year sec_1_468a-3 of the regulations requires the internal_revenue_service to provide a schedule of ruling amounts that is identical to the schedule proposed by the taxpayer but no such schedule shall be provided by the service unless the taxpayer’s proposed schedule is consistent with the principles and provisions of this section sec_1_468a-3 of the regulations provides that the ruling_amount specified in a schedule of ruling amounts for any taxable_year in the level_funding limitation period shall not be less than the ruling_amount specified in such schedule for any earlier taxable_year under sec_1_468a-3 the level_funding limitation period begins on the first day of the first taxable_year for which a deductible payment is made to the nuclear decommissioning fund and ends on the last day of the taxable_year that includes the estimated date on which the nuclear power plant will no longer be plr-113190-01 included in the taxpayer’s rate base for ratemaking purposes sec_1_468a-3 of the regulations provides that the funding_period for a nuclear decommissioning fund is the period that begins on the first day of the first taxable_year for which a deductible payment is made or deemed to be made to such nuclear decommissioning fund and ends the later of i the last day of the taxable_year that includes the estimated date on which decommissioning costs of the nuclear power plant to which the nuclear decommissioning fund relates will no longer be included in the taxpayer’s cost of service for ratemaking purposes or ii the last day of the taxable_year that includes the estimated date on which the nuclear power plant to which the nuclear decommissioning fund relates will no longer be included in the taxpayer’s rate base for ratemaking purposes sec_1_468a-3 of the regulations provides that the amount of decommissioning costs allocable to a nuclear decommissioning fund is the taxpayer’s share of the total estimated cost of decommissioning the nuclear power plant multiplied by the qualifying percentage sec_1_468a-3 of the regulations provides that in general the total estimated cost of decommissioning a nuclear power plant is the reasonably estimated cost of decommissioning used by the applicable public_utility commission in establishing or approving the amount of these costs to be included in cost of service for ratemaking purposes sec_1_468a-3 of the regulations provides that a taxpayer’s share of the total estimated cost of decommissioning a nuclear power plant equals the total estimated cost of decommissioning the plant multiplied by the taxpayer’s qualifying interest in the plant sec_1_468a-3 of the regulations provides that the qualifying percentage for any nuclear decommissioning fund is equal to the fraction the numerator of which is the number of taxable years in the estimated period for which the nuclear decommissioning fund is to be in effect and the denominator of which is the number of taxable years in the estimated_useful_life of the applicable nuclear power plant sec_1_468a-3 of the regulations provides that the estimated period for which a nuclear decommissioning fund is to be in effect begins on the later of the first day of the first taxable_year for which a deductible payment is made to the nuclear decommissioning fund or deemed made or the first day of the taxable_year that includes the date that the nuclear power plant begins commercial operations as determined by the applicable public_utility commission at the time the plant was first included in the taxpayer’s rate base and ends on the last day of the taxable_year that includes the estimated date on which the nuclear power plant will no longer be included in the taxpayer’s rate base for ratemaking purposes according to sec_1_468a-3 the estimated date on which the nuclear power plant will no longer be plr-113190-01 included in the taxpayer’s rate base for ratemaking purposes is determined under the ratemaking assumptions used by the applicable public_utility commission in establishing or approving rates during the first ratemaking proceeding in which the nuclear power plant was included in the taxpayer’s rate base sec_1_468a-3 of the regulations provides that the estimated_useful_life of a nuclear power plant begins on the first day of the taxable_year that includes the date that the plant begins commercial operations as determined by the applicable public_utility commission at the time the plant was first included in the taxpayer’s rate base and ends on the last day of the taxable_year that includes the estimated date on which the nuclear power plant will no longer be included in the taxpayer’s rate base for ratemaking purposes according to sec_1_468a-3 the estimated date on which the nuclear power plant will no longer be included in the taxpayer’s rate base for ratemaking purposes is determined under the ratemaking assumptions used by the applicable public_utility commission in establishing or approving rates during the first ratemaking proceeding in which the nuclear power plant was included in the taxpayer’s rate base sec_1_468a-3 of the regulations provides that if two or more public_utility commissions establish or approve rates for electric energy generated by a single nuclear power plant then the schedule of ruling amounts shall be separately determined pursuant to the rules of sec_1_468a-3 through e for each public_utility commission that has determined the amount of decommissioning costs to be included in the cost of service for ratemaking purposes for this plant under sec_1_468a-3 this separate determination shall be based on the reasonable assumptions and determinations used by the relevant public_utility commission and shall take into account only that portion of the total estimated cost of decommissioning that is properly allocable to the ratepayer whose rates are established or approved by the public_utility commission according to sec_1_468a-3 the ruling amounts for any taxable_year is the sum of the ruling amounts for such taxable_year determined under the separate schedules of ruling amounts sec_1_468a-3 of the regulations provides that the internal_revenue_service shall not provide a taxpayer with a schedule of ruling amounts for any nuclear decommissioning fund unless the public_utility commission that establishes or approves the rates for electric energy generated by the plant to which the nuclear decommissioning fund relates has determined the amount of decommissioning costs to be included in the taxpayer’s cost of service for ratemaking purposes and has disclosed the after-tax rate of return and any other assumptions and determinations used in establishing or approving the amount sec_1_468a-3 of the regulations enumerates the information required to be contained in a request for a schedule of ruling amounts filed by a taxpayer in order to receive a ruling_amount for any taxable_year sec_1_468a-3 of the regulations provides that a taxpayer is required plr-113190-01 to request a revised schedule of ruling amounts for a nuclear decommissioning fund if a any public_utility commission that establishes or approves rates for the furnishing or sale of electric energy generated by a nuclear power plant to which the nuclear decommissioning fund relates increases the proposed period over which decommissioning costs of the nuclear power plant will be included in cost of service for ratemaking purposes adjusts the estimated date on which the nuclear power plant will no longer be included in the taxpayer’s rate base for ratemaking purposes or reduces the amount of decommissioning costs to be included in cost of service for any taxable_year and b the taxpayer’s most recent request for a schedule of ruling amounts did not provide notice to the service of such action by the public_utility commission sec_1_468a-3 of the regulations provides that any taxpayer that has previously obtained a schedule of ruling amounts can request a revised schedule of ruling amounts such a request must be made in accordance with the rules of sec_1_468a-3 the internal_revenue_service shall not provide a revised schedule of ruling amounts applicable to a taxable_year in response to a request for a schedule of ruling amounts that is filed after the deemed payment deadline date for such taxable_year sections a and c of the energy act eliminated for taxable years beginning after date the investment restrictions contained in sec_468a of the code sections b and c of the energy act revised sec_468a by lowering the tax_rate applicable to a nuclear decommissioning fund for taxable years beginning after date we have examined the representations and information submitted by the taxpayer in relation to the requirements set forth in the sec_468a of the code and the regulations thereunder based solely on these representations of the facts we reach the following conclusions taxpayer has a qualifying interest in the plant and is therefore an eligible_taxpayer under sec_1_468a-1 of the regulations commission has determined the amount of decommissioning costs to be included in the taxpayer’s cost of service for ratemaking purposes as required by sec_1_468a-3 of the regulations taxpayer as owner of the plant has calculated its share of the total decommissioning costs under sec_1_468a-3 of the regulations taxpayer has determined that pursuant to sec_1_468a-3 of the regulations the qualifying percentage is percent taxpayer has proposed a schedule of ruling amounts which meets the requirements of sec_1_468a-3 and of the regulations the plr-113190-01 annual payments specified in the proposed schedule of ruling amounts are based on the reasonable assumptions and determinations used by commission and will result in a projected fund balance at the end of the funding_period equal to or less than the amount of decommissioning costs allocable to the fund the maximum amount of cash payments made or deemed made to the fund during any taxable_year is restricted to the lesser amount of the decommissioning costs applicable to the fund or the ruling_amount applicable to the fund as set forth under sec_1_468a-2 of the regulations taxpayer subject_to the jurisdiction of two public_utility commissions for ratemaking purposes has calculated its share of the total decommissioning costs allocable to commission as required by sec_1_468a-3 of the regulations based on the above determinations we conclude that the taxpayer’s proposed schedule of ruling amounts satisfies the requirements of sec_468a of the code approved schedule of ruling amounts taxable years year commission approval of the schedule of ruling amounts is contingent on there being no change in the facts and circumstances known or assumed at the time this ruling is issued if any of the events described in sec_1_468a-3 of the regulations occur in future years the taxpayer must request a review and revision of the schedule of ruling amounts generally the taxpayer is required to file such a request on or before the deemed payment deadline date for the first taxable_year in which the rates reflecting such action became effective when no such event occurs the taxpayer must file a request for a revised schedule of ruling amounts on or before the deemed payment deadline of the tenth taxable_year following the close of the tax_year in which the most recent schedule of ruling amounts was received the approved schedule of ruling amounts is relevant only to those payments made to the fund payments allocable to any funds other than the fund cannot qualify for purposes of the deduction under the provisions of sec_468a of the code as stated above payments made to the fund can qualify only to the extent that they do not exceed the lesser_of the decommissioning costs applicable to the fund or the ruling amounts applicable to the fund in the taxable_year plr-113190-01 this letter_ruling is directed only to the taxpayer who requested it sec_6110 of the code provides that this ruling may not be used or cited as precedent pursuant to sec_1_468a-7 of the regulations a copy of this letter must be attached with the required election statement to the taxpayer’s federal_income_tax return for each taxable_year in which the taxpayer claims a deduction for payments made to the fund in accordance with the power_of_attorney a copy of this letter_ruling is being sent to the taxpayer a copy of this letter_ruling also is being sent to the director sincerely yours peter c friedman senior technician reviewer branch office of the associate chief_counsel passthroughs and special industries enclosure copy


t c summary opinion united_states tax_court jerry jefferson kirkeby and ying wang petitioners v commissioner of internal revenue respondent docket no 21371-05s filed date jerry jefferson kirkeby and ying wang pro sese jonathan a neumann for respondent dean special_trial_judge this case was heard pursuant to the provisions of sec_7463 of the internal_revenue_code unless otherwise indicated subsequent section references are to the internal_revenue_code as in effect for the year at 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 a deficiency in petitioners’ federal_income_tax of dollar_figure for the issues for decision are whether petitioners are entitled to claim a dependency_exemption deduction and a child_tax_credit background the stipulation of facts and the exhibits received into evidence are incorporated herein by reference at the time the petition in this case was filed petitioners resided in santa rosa california petitioner ying wang ms wang and james hammer mr hammer are the biological parents of jjh ms wang and mr hammer divorced around and ms wang was awarded custody of jjh jjh has lived with ms wang at all times since the divorce petitioners filed a form_1040 u s individual_income_tax_return for claiming for jjh a dependency_exemption deduction and a child_tax_credit respondent issued to petitioners a statutory_notice_of_deficiency determining that they are not entitled to claim jjh as a dependent because ms wang executed a form_8332 release of claim to exemption for child of divorced or separated parents in favor of mr hammer for and all years thereafter 1the court will refer to the minor child by her initials discussion the commissioner’s determinations are presumed correct and generally taxpayers bear the burden of proving otherwise rule a 290_us_111 dependency_exemption sec_151 allows a taxpayer to claim an exemption deduction for each qualifying dependent a child of the taxpayer is considered a dependent so long as the child has not attained the age of at the close of the calendar_year in which the taxable_year of the taxpayer begins and more than half the child’s support for the taxable_year was received from the taxpayer sec_151 sec_152 the age limit is increased to if the child is a student as defined by sec_151 sec_151 in the case of a child whose parents are divorced or legally_separated and together provide over half of the support for the child sec_152 provides that the parent having custody for a greater portion of the calendar_year custodial_parent generally shall be treated as providing over half of the support for the child a noncustodial_parent may be treated as providing 2petitioners have not raised the issue of sec_7491 which shifts the burden_of_proof to the commissioner in certain situations this court concludes that sec_7491 does not apply because petitioners have not produced any evidence that establishes the preconditions for its application over half of the support if the requirements under sec_152 are satisfied sec_152 provides exception where custodial_parent releases claim to exemption for the year --a child shall be treated as having received over half of his support during a calendar_year from the noncustodial_parent if -- a the custodial_parent signs a written declaration in such manner and form as the secretary may by regulations prescribe that such custodial_parent will not claim such child as a dependent for any taxable_year beginning in such calendar_year and b the noncustodial_parent attaches such written declaration to the noncustodial parent’s return for the taxable_year beginning during such calendar_year to release a claim to a dependency_exemption deduction properly the custodial_parent must sign a written declaration with an express statement that such custodial_parent will not claim that child as a dependent sec_152 114_tc_184 bramante v commissioner tcmemo_2002_228 a validly executed form_8332 satisfies the written declaration requirement 121_tc_245 brissett v commissioner tcmemo_2003_310 it is not disputed that ms wang was the custodial_parent of jjh during respondent argues that petitioners are not entitled to claim jjh as a dependent because ms wang executed a form_8332 in favor of mr hammer in the form_8332 ms wang agreed not to claim an exemption for jjh for and all future years ms wang argues that the form_8332 is not a valid release because it is fraudulent and she could not recall signing the form ms wang nevertheless admitted at trial that she recognized the signature on the form_8332 as hers ms wang further argues that even if she had signed the form_8332 mr hammer took advantage of her minimal command of english and deceived her as to the legal consequences of signing the form she noted that the form_8332 contained several different handwritings and suggested an inference that the form was blank at the time she signed it and the remaining information was filled in by mr hammer at a later time the signature of the custodial_parent confirms the custodial parent’s intention to release the dependency_exemption to the noncustodial_parent and signifies an agreement not to claim the dependency_exemption miller v commissioner supra pincite by signing the form ms wang affirmatively consented to the release of the dependency_exemption deduction for jjh to mr hammer even if the form_8332 contained different handwritings without more they fail to support one way or the other what ms wang’s intent was at the time she signed the form petitioners have the burden_of_proof and they have failed to offer any other evidence to show that ms wang did not have the intent to release her right to claim jjh as a dependent ms wang had a duty to make the appropriate inquiries before she signed the form_8332 permanently releasing her claim to exemption deductions for jjh see king v commissioner supra pincite the court will not ignore the properly executed form for sec_152 to operate as intended by congress strict adherence to the requirements of sec_152 must be observed miller v commissioner supra pincite bramante v commissioner supra cafarelli v commissioner tcmemo_1994_265 therefore petitioners are not entitled to claim for a dependency_exemption deduction for jjh under sec_151 child_tax_credit sec_24 authorizes a child_tax_credit with respect to each qualifying_child of the taxpayer the term qualifying_child is defined in sec_24 a qualifying_child means an individual with respect to whom the taxpayer is allowed a deduction under sec_151 who has not attained the age of as of the close of the taxable_year and who bears a relationship to the taxpayer as prescribed by sec_32 sec_24 since petitioners are not allowed a deduction with respect to jjh as a dependent under sec_151 jjh is not a qualifying_child in the absence of a qualifying_child in petitioners are not entitled to claim a child_tax_credit reviewed and adopted as the report of the small_tax_case division to reflect the foregoing decision will be entered for respondent


internal_revenue_service department of the treasury sin washington dc no third party contacts contact person telephone number in reference to op b eo t date mar o o t e e t s i s i k k n i dear applicant this refers to your request for approval of proposed set-asides pursuant to sec_4942 revenue code the code b i of the internal our records indicate that you have been recognized as exempt of the code and not a private_operating_foundation under under sec_501 indicate that you are classified as a private_foundation under sec_509 sec_4942 and housing of historical maps documents and objects which collection is housed in historical buildings that you operate as research centers and museums available for public visitation and study your primary activity is the preservation further our records you have recently acquired real_property which contains the a building the property one-story remains of is located in a historic_district subject_to regulation with respect to building design among other things contiguous to your other properties m and n used for your parking needs library operate and is presently m is your research and reference a collection of historic buildings you own and n is the property the property is you plan to construct a five-story building on the property which you will use for storage of your collection of research if v page materials and historic objects meeting rooms suitable for lectures and seminars staff office space and parking at the ground level you anticipate that the construction will cost approximately x dollars and will be completed in several years you propose to set_aside up to y dollars for fiscal_year further set-asides and expenditures of ending march approximately z dollars will be required to complete the project the first set-aside funds will be used for architectural and engineering study conceptual designs and obtaining the necessary government approvals prior to commencing final design and construction within months after the date of the first set-aside the amount set_aside for the project will be paid sec_4942 of the code imposes a tax on the undistributed_income of year which has not been distributed before the first day of the second taxable_year following such taxable_year a private_foundation for any taxable sec_4942 of the code defines the term undistributed of any time income with respect to any private_foundation for any taxable_year as amount for such taxable_year exceeds the qualifying distributions made before such time out of such distributable_amount as the amount by which the distributable sec_4942 of the code defines the term qualifying_distribution generally as any amount_paid to accomplish one or more purposes described in sec_170 b any amount_paid to acquire an asset used or held for use directly in carrying out one or more purposes described in sec_170 b of the code or sec_4942 a of the code provides that an amount set_aside for a specific project which comes within one or more purposes described in sec_170 b qualifying_distribution if subparagraph b it meets the requirements of may be treated as a sec_4942 b of the code provides in relevant that an amount set_aside for a specific project shall meet part the requirements of this subparagraph if set-aside the foundation establishes to the satisfaction of the secretary that the amount will be paid for the specific project within years and that the project is one which can better be accomplished by such set-aside than by immediate payment of funds at the time of the g page sec_53 a -3 b of the foundation and similar excise_tax regulations the regulations provides that an amount set_aside for a specific project that is for one or more of the purposes described in sec_170 or b may be treated as a qualifying_distribution in the year in which set_aside but not in the year in which actually paid if the requirements of sec_4942 satisfied are satisfied if the private_foundation establishes to the satisfaction of the commissioner that the amount set-aside will be paid for the specific project within months after it set-aside satisfies the suitability test described in subparagraph satisfied the month period may extended by the commissioner the requirements of this paragraph b if the suitability test is otherwise for good cause shown be and this paragraph b is set_aside and the are sec_53 a -3 b of the regulations provides that specific projects that can be better the suitability test is satisfied if the private_foundation establishes to the satisfaction of the commissioner that the specific project for which the amount is set_aside is one that can be better accomplished by the set-aside than by the immediate payment of funds accomplished by the use of a set-aside include but are not limited to projects in which relatively long-term grants or expenditures must be made in order to assure the continuity of particular charitable projects example a plan to erect a building to house the direct charitable educational or other similar exempt activity of the private_foundation even though the exact location and architectural plans have not been finalized such project include for as represented the amount you will set_aside will be used to construct a building which will be used in your operations in furtherance of exempt purposes described in sec_170 b of the code within a 5-year period set-aside meets the requirements of sec_4942 b code and sec_53 a -3 b also the amounts set_aside will be distributed therefore we find that your proposed of the regulations of the accordingly we rule that the proposed set-aside of x dollars for fiscal_year ending march a sec_4942 of the code a qualifying_distribution within the meaning of section will be treated our approval of your set-aside for your fiscal_year ending march set-aside will in fact be pledged for the indicated specific project and that the pledged funds will be expended within the 5-year period required by sec_4942 b i of the code is based upon our understanding that the af page this ruling applies only to income set_aside for that particular taxable_year under sec_53_4942_a_-3 of the regulations your a future date or dates proposed set-aside must be evidenced by the entry of amount on your books_and_records as paid at shall be taken into account for purposes of determining your minimum_investment_return under sec_53 a -2 c of the regulations and any income attributable to such set-aside must be taken into account in computing adjusted_net_income under sec_53 a -2 d any amount which is set_aside a pledge or obligation to be a dollar we are informing the ep eo key district_office of this because this letter could help resolve any questions ruling about your exempt status you should keep it records filing your form_990-pf for the particular tax years also you should include a copy of this ruling in in your permanent if you have any immediate questions about this ruling please contact the person whose name and telephone number are shown in the heading of this letter including questions concerning reporting requirements please contact the toll free number or send correspondence to the following address internal_revenue_service ep eo customer service ep eo customer service office at for other matters a this ruling does not express or imply an opinion as to the tax consequences of the transactions or the organization’s qualification under other provisions of the code this ruling is directed only to the organization that requested it sec_6110 or cited as precedent of the code provides that it may not be used also sincerely robert c harper jr chief exempt_organizations technical branch


office_of_chief_counsel 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 washington d c number info release date conex-118716-05 cc ita b1 uil the honorable roscoe g bartlett member u s house of representatives guilford drive suite frederick md ----------------------------- attention micki hamilton dear congressman bartlett this letter responds to your inquiry dated date on behalf of ----------------------------of ------------------------------------------------------------------ ---------------- ----------------asked about the new rules for vehicle donations under sec_170 of the internal_revenue_code the code ----------------wrote that ---------------is a --------------school that offers classes in -------------- --------------------------------------------------------------------------- ----------------uses the donated vehicles typically in the classes for four to six months and this use usually ----------------- --------------------------- when a vehicle is no longer useful for instructional purposes the school sells it to a wholesaler or junk dealer depending on the condition of the vehicle the new rules limit the charitable_contribution_deduction for a donated vehicle to the gross_proceeds received from the vehicle’s sale if it is sold without any significant intervening use or material improvement by the donee organization sec_170 of the code if the donee organization makes a significant intervening use of a donated vehicle however the donor may be allowed a fair_market_value deduction ----------------------of my staff called ----------------on date and discussed with ------the requirements of the significant intervening use exception and the factual nature of the inquiry if you need further assistance please contact me at ---------------------or ----------------------- ------------------------------------------------------------------------------------------------------------------- ------------------------ at --------------------- sincerely thomas a luxner chief branch office of associate chief_counsel income_tax accounting