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 uil legend s county state t county u county v county w high school y dollar amount z dollar amount dear you asked for advance approval of your scholarship grant procedures under sec_4945 this approval is required because you are a private_foundation that is exempt from federal_income_tax you requested approval of your scholarship program to fund the education of certain qualifying students our determination we approved your procedures for awarding scholarships based on the information you submitted and assuming you will conduct your program as proposed we determined that your procedures for awarding scholarships meet the requirements of code sec_4945 as a result expenditures you make under these procedures won't be taxable also awards made under these procedures are scholarship or fellowship grants and are not taxable to the recipients if they use them for qualified_tuition_and_related_expenses subject_to the l-imitations provide in code sec_117 description of your request you will provide scholarships to needy worthy and ambitious graduates of high schools in s who are regularly enrolled or accepted for enrollment in accredited colleges or universities letter catalog number 58263t the number of scholarships distributed will vary depending on the amount of funds available to be distributed however it is estimated that anywhere from to individuals are eligible to apply for the scholarship annually and you will award between and scholarships the amount of each award generally ranges from y to z dollars you will advertise the award in several local newspapers to be eligible students from w must have a grade-point-average gpa demonstrate financial need and be accepted to an accredited college or university graduates of high schools in t u and v counties may also be considered if the committee cannot find sufficient qualified candidates from s each year you advise the scholarship selection committee of the amount of funds available to be awarded as scholarships the members of the selection committee review the scholarship applications rank the applicants based on gpa and financial need and makes recommendations to you regarding the individuals selected and the amount that should be awarded to each applicant all scholarships are awarded on an objective and non-discriminatory basis no scholarship is awarded to any disqualified_person as defined in code sec_4946 each scholarship recipient shall remain eligible for renewals you request proof of enrollment and a transcript for each year the student wishes to renew their scholarship past recipients of scholarships are given first consideration for future scholarships so long as the need exists and the recipient meets the required standards of academic achievement required by the school attended there are no limitations on the amount of times a scholarship can be renewed your trust document names the following five members to your selection committee a professional man or woman a business man or woman a public school teacher all of whom shall be college or university graduates an s judge and a church minister located in s you pay the scholarship proceeds directly to the school that the recipient attends for the benefit of the recipient you provide a letter to each school specifying that the school's acceptance of the funds constitutes the schools agreement to notify you and refund any unused portion of the scholarship if a scholarship recipient fails to meet any term or condition of the scholarship if the school will not agree to such terms they are to return the check and you will obtain proof of enrollment and a grade transcript from the student you will do this by sending a grant letter to the student to have them sign to acknowledge individual expenditure_responsibility before any check is mailed to the student if the student does not sign the agreement and provide proof of enrollment and grade transcripts they will not receive the scholarship you arrange to receive and review grantee reports annually and upon completion of the purpose for which the scholarship was awarded investigate diversions of funds from their letter catalog number 58263t intended purpose and take all reasonable and appropriate steps to recover diverted funds ensure other scholarship funds held by a recipient are used for their intended purpose and withhold further payments to recipients until you obtain assurances that future diversions will not occur and that the recipient will take extraordinary precautions to prevent future diversions you maintain all records relating to individual grants including information obtained to evaluate grantees identify whether a grantee is a disqualified_person establish the amount and purpose of each grant and establish that you undertook the supervision and investigation of grants awarded basis for our determination the law imposes certain excise_taxes on the taxable_expenditures of private_foundations code sec_4945 a taxable_expenditure is any amount a private_foundation pays as a grant to an individual for travel study or other similar purposes however a grant that meets all of the following requirements of code sec_4945 is not a taxable_expenditure the foundation awards the grant on an objective and nondiscriminatory basis the irs approves in advance the procedure for awarding the grant the grant is a scholarship or fellowship subject_to the provisions of code sec_117 the grant is to be used for study at an educational_organization described in code sec_170 a ii other conditions that apply to this determination this determination only covers the grant program described above this approval will apply to succeeding grant programs only if their standards and procedures don't differ significantly from those described in your original request this determination applies only to you it may not be cited as a precedent you cannot rely on the conclusions in this letter if the facts you provided have changed substantially you must report any significant changes to your program to the cincinnati office of exempt_organizations at internal_revenue_service exempt_organizations determinations p o box cincinnati oh you cannot award grants to your creators officers directors trustees foundation managers or members of selection committees or their relatives letter catalog number 58263t all funds distributed to individuals must be made on a charitable basis and further the purposes of your organization you cannot award grants for a purpose that is inconsistent with code sec_170 you should keep adequate_records and case histories so that you can substantiate your grant distributions with the irs if necessary please keep a copy of this letter in your records if you have questions please contact the person listed at the top of this letter sincerely director exempt_organizations letter catalog number 58263t


internal_revenue_service number release date index number ---------------------- -------------------------------------------- ---------------------------------------------------- --------------------------------- ----------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact ------------------------ id no ------------ telephone number --------------------- refer reply to cc corp plr-143744-08 date date legend legend distributing -------------------------------- ---------------------------------------------------------------------------- -------------------------------------------------------------------- controlled -------------------------------------------------------------------------------------------- -------------------------------------------------------------------- ---------------------------------------------------- sub --------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------- ----------------------------------------- sub ----------------------------------------------------------------------------- -------------------------------------------------------------------- --------------------------------------- sub ------------------------------------------------------------------------- -------------------------------------------------------------------- ---------------------------------- --------------------------- sub ------------------------------------------------------------------------- -------------------------------------------------------------------- sub ------------------------------------------------------------------------- -------------------------------------------------------------------- -------------------------------- sub --------------------------------------- plr-143744-08 ---------------------------------------------------------------------------- -------------------------------------------------------------------- sub ------------------------------------------------------------------------- -------------------------------------------------------------------- ------------------------------------------- sub ---------------------------------------------------------------------------- -------------------------------------------------------------------- ---------------------------------------- sub ---------------------------------------------------------------------------- -------------------------------------------------------------------- --------------------------------------------------------- business a ------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------ business b ----------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------ mergeco --------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------- -------------------------------------------------------------------- --------------------------------------------------------- corporation x -------------------------------------------------- transaction ------------------------------------------------------------------------ --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------- transaction -------------------------------------------------------------------------------------------- ------------------------------------------------------------------------ date date date date --------------------------- --------------------- ----------------------- ------------------------- plr-143744-08 date date a b c ----------------- ------------------ ----------- ------ -------------- credit assistance ------------------------------------------------------------------------ --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------- individual a individual b dear -------------------- ----------------- this letter responds to your date request for rulings on certain federal_income_tax consequences of a partially completed and proposed transaction the information submitted in that request and in later correspondence is summarized below the rulings contained in this letter are based on the facts and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party this office has not verified any of the materials submitted in support of the request for rulings verification of the information representations and other data may be required as part of the audit process moreover this office has not reviewed any information and no determination has been made regarding whether the distribution defined below i satisfies the business_purpose requirement of sec_1 b of the income_tax regulations ii is used principally as a device for the distribution of earnings_and_profits of the distributing_corporation or the controlled_corporation or both see sec_355 of the internal_revenue_code the code and sec_1_355-2 or iii is part of a plan or series or related transactions pursuant to which one or more persons will acquire directly or indirectly stock representing a 50-percent_or_greater_interest in the distributing_corporation or the controlled_corporation see sec_355 and sec_1_355-7 summary of facts plr-143744-08 distributing is a publicly traded company that is the common parent of an affiliated_group_of_corporations that files a consolidated federal_income_tax return distributing is engaged in business a and business b immediately before the proposed transaction defined below distributing wholly owned sub1 and sub sub was initially formed as a limited_liability_company that was disregarded for federal_income_tax purposes prior to the proposed transaction sub elected to be taxed as a corporation for federal_income_tax purposes sub was engaged in business a sub wholly owned sub sub sub sub and sub sub owned sub prior and unrelated to the proposed transaction certain subsidiaries in the distributing group engaged in certain restructurings specifically sub engaged in transaction and transaction and sub merged into sub and sub elected to become a disregarded_entity for federal_income_tax purposes sub is engaged in business b the taxpayer has submitted financial information indicating that business a and business b each has had gross_receipts and operating_expenses representative of the active_conduct_of_a_trade_or_business for each of the past five years in order to allow distributing’s management to focus solely on the performance and profitability of business a and for other business considerations distributing proposes to separate business a from business b proposed transaction in order to accomplish its stated objectives distributing has proposed and partially completed the following series of steps collectively the proposed transaction i on date sub caused sub to convert into a single member limited_liability_company treated as a disregarded_entity for federal_income_tax purposes the conversion simultaneous with the conversion an intercompany obligation the intercompany obligation between sub and distributing was partially satisfied and extinguished sub announced that it was terminating its business operations ii sub formed sub and on date made a capital_contribution of dollar_figurea prior to step vi sub will transfer its business b related assets to sub in exchange for an assumption of related liabilities iii on date sub caused sub to convert into a single member limited_liability_company treated as a disregarded_entity for federal_income_tax purposes the liquidation plr-143744-08 iv sub will distribute an inter-company receivable from distributing to sub v sub will sell its interest in sub sub and sub to distributing in exchange for cash or a distributing note for an amount equal to the fair_market_value of the transferred interests the intragroup sale vi on date distributing formed controlled as a limited_liability_company which will elect to be treated as an association_taxable_as_a_corporation prior to step vii distributing will capitalize controlled by contributing cash all of the membership units in sub and shares of sub and sub the contribution distributing and controlled will enter into a tax separation agreement and a credit assistance agreement at the time of the contribution vii distributing will cause controlled to convert its one outstanding membership unit to a number of llc membership units equal to the number of distributing shares outstanding on date the recapitalization viii distributing will distribute the membership interests of controlled to its common shareholders of record as of the close of business on date in a pro_rata distribution the distribution ix immediately following the distribution and in anticipation of a merger with mergeco controlled will make a taxable_distribution to its unit holders of record as of date an amount at least equal to its allocated earnings_and_profits e_p with the taxable_distribution being composed of cash and controlled membership interests the controlled unit holders will have the ability to elect to receive either cash or controlled membership interests the election_period will run from date to date x controlled will merge into mergeco with mergeco surviving the merger the merger controlled unit holders will receive b percent an amount in excess of of the total surviving corporation's outstanding shares as a result of the merger the combined entity will continue to operate as a reit and be renamed corporation x distributing makes the following representations regarding the conversion representations a as of date sub 3’s balance_sheet reflected total liabilities significantly in excess of the fair_market_value of its assets b at the time of the conversion sub was insolvent and its stock was worthless within the meaning of sec_165 plr-143744-08 c on the date of the conversion sub directly owned more than percent of the voting power and value of sub within the meaning of sec_1504 d taking into account the gross_receipts that carried over to sub pursuant to sec_381 as a result of transaction and transaction more than percent of the aggregate of sub 3’s gross_receipts for all taxable years has been from sources other than royalties rents except rents derived from rental of properties to employees of the corporation in the ordinary course of its operating business dividends interest except interest received on deferred purchase_price of operating_assets sold annuities and gains from sales or exchanges of stocks and securities e taking into account the tax effects of the proposed transaction sub 1’s net_positive_adjustment as defined in sec_1_1502-36 in the sub shares was zero distributing makes the following representations regarding the liquidation f on the date of the adoption of the plan_of_liquidation and at all times until the liquidation was completed sub was the owner of at least percent of the single outstanding class of sub stock g no shares of sub stock were redeemed during the three years preceding the adoption of the plan_of_liquidation h all distributions from sub to sub pursuant to the liquidation were made within a single taxable_year of sub i for federal_income_tax purposes upon the liquidation sub was deemed to cease to be a going concern and its activities were deemed to be limited to winding up its affairs paying its debts and distributing its remaining assets to sub j sub was deemed to retain no assets for federal_income_tax purposes following its liquidation k except for the transfers by sub and sub sub did not acquire assets in any nontaxable_transaction at any time except for acquisitions in the ordinary course of business and acquisitions occurring more than three years prior to the adoption of the plan_of_liquidation l no assets of sub have been disposed of by either sub or sub except for dispositions in the ordinary course of business and pursuant to the proposed transaction transfers within the controlled_group and dispositions occurring more than three years prior to the adoption of the plan_of_liquidation plr-143744-08 m except for transfers pursuant to the proposed transaction the liquidation of sub will not be preceded or followed by the reincorporation in or transfer or sale to a recipient corporation recipient of any of the businesses or assets of sub if persons holding directly or indirectly more than percent in value of the sub stock also hold directly or indirectly more than percent in value of the stock in recipient for purposes of this representation ownership will be determined by application of the constructive_ownership rule_of sec_318 as modified by sec_304 n prior to the adoption of the plan_of_liquidation no sub assets were distributed in_kind transferred or sold to sub except for i transactions occurring in the ordinary course of business and ii transactions occurring more than three years before adoption of the plan of complete_liquidation of sub o sub will report all earned_income represented by assets that will be deemed to be distributed to sub such as receivables being reported on a cash_basis unfinished construction contracts commissions due etc p the fair_market_value of sub 6’s assets exceeded its liabilities immediately prior to the adoption of the plan_of_liquidation q on the liquidation date other than obligations arising in the ordinary course of business there was no intercorporate debt existing between sub and sub and none has been cancelled forgiven or discounted except for transactions that occurred more than three years before the date of adoption of the liquidation plan r sub is not an organization that is exempt from federal_income_tax under sec_501 or any other provision of the code s all other transactions undertaken contemporaneously with in anticipation of in conjunction with or in any way related to the liquidation of sub have been fully disclosed t the merger of sub into sub was a reorganization pursuant to sec_368 and sub 5’s attributes carried over to sub pursuant to sec_381 u for federal_income_tax purposes the conversion of sub to a disregarded_entity was a reorganization pursuant to sec_368 and sub 7’s attributes carried over to sub pursuant to sec_381 distributing makes the following representations regarding the recapitalization plr-143744-08 v the fair_market_value of the controlled membership units held by distributing immediately following the recapitalization will be equal to the fair_market_value of the controlled membership units held by distributing immediately before the recapitalization w the recapitalization is a single isolated transaction and it is not part of a plan to periodically increase the proportionate interest of any shareholder in the assets or earnings_and_profits of controlled x controlled is not under the jurisdiction of a court in a title_11_or_similar_case within the meaning of sec_368 y none of the outstanding controlled membership interests is sec_306 stock z controlled and its exchanging member will each pay their own expenses if any incurred in connection with the exchange distributing makes the following representations regarding the contribution and the distribution aa the indebtedness owed by controlled to distributing after the distribution if any will not constitute stock_or_securities bb with the possible exception of the issuance of stock or shares pursuant to adjustments to distributing's existing compensatory options or deferred share arrangements no part of the consideration to be distributed by distributing will be received by a shareholder as a creditor employee or in any capacity other than that of a shareholder of the corporation cc the five years of financial information submitted on behalf of business b is representative of business b’s present operation and with regard to business b there have been no substantial operational changes since the date the last financial statements were submitted dd the five years of financial information submitted on behalf of business a is representative of business a’s present operations and with regard to business a there have been no substantial operational changes since the date the last financial statements were submitted ee following the distribution distributing and controlled or members of their respective separate_affiliated_group as defined in sec_355 dsag or csag each will continue the active_conduct of their respective business plr-143744-08 independently and with its separate employees or employees of the other members of its dsag or csag respectively ff except for transfers pursuant to the proposed transaction neither business a nor business b was acquired during the five year period ending on the date of the distribution in a transaction in which gain_or_loss was recognized or treated as recognized in whole or in part gg the distribution is being undertaken for corporate business purposes that include i resolving concerns regarding allocation of scarce resources ii allowing distributing’s management to focus solely on the performance and profitability of business a and iii allowing controlled’s management to focus solely on the performance and profitability of business b the distribution is motivated in whole or substantial part by these corporate business purposes hh the distribution will not be used principally as a device for the distribution of the earnings_and_profits of distributing or controlled or both ii the total fair_market_value of the assets transferred to controlled in the contribution will exceed the sum of i the amount of any liabilities assumed as determined under sec_357 by controlled in the contribution ii the amount of any liabilities owed by distributing to controlled that are extinguished in connection with the contribution and iii the amount of any cash and the fair_market_value of any other_property other than stock and securities permitted to be received under sec_361 without the recognition of gain received by distributing in connection with the contribution the fair_market_value of the assets of controlled will exceed the amount of liabilities immediately after the distribution jj the total adjusted bases and fair_market_value of the assets transferred to controlled by distributing in the contribution will equal or exceed the sum of the liabilities assumed as determined under sec_357 by controlled kk the liabilities assumed as determined under sec_357 by controlled in the contribution if any were incurred in the ordinary course of business and are associated with the assets being transferred ll following the distribution it is anticipated that distributing and controlled will share a number of administrative services for a transitional period not to exceed c months payments made in connection with all continuing transactions after the distribution if any between distributing and controlled will be for fair_market_value based on terms and conditions arrived at by the parties bargaining at arm’s length at terms consistent with past practices for intercompany charges plr-143744-08 mm other than i trade account indebtedness created in the ordinary course of business through continuing transactions at terms comparable to those which could be obtained in an arm’s length transaction at terms consistent with past practices for intercompany charges ii any liabilities that may arise from the tax separation agreement iii any liabilities that may arise from the credit assistance and iv payables created for all transitional services negotiated at arm’s length at terms consistent with past practices for intercompany charges no intercorporate debt will exist between distributing and controlled at the time of or subsequent to the distribution nn neither distributing nor controlled is an investment_company as defined in sec_368 and iv oo for purposes of sec_355 immediately after the distribution no person determined after applying the aggregation rules of sec_355 will hold stock possessing percent or more of the total combined voting power of all classes of distributing stock entitled to vote or percent or more of the total value of shares of all classes of distributing stock that was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the distribution pp for purposes of sec_355 immediately after the distribution no person determined after applying sec_355 will hold membership interests possessing percent or more of the total combined voting power of all classes of controlled membership interests entitled to vote or percent or more of the total value of shares of all classes of controlled membership interests that was either i acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the distribution or ii attributable to distributions on any stock of distributing that was acquired by purchase as defined in sec_355 and during the five-year period determined after applying sec_355 ending on the date of the distribution qq the distribution is not part of a plan or series of related transactions within the meaning of sec_1_355-7 pursuant to which one or more persons will acquire directly or indirectly stock representing a percent or greater interest within the meaning of sec_355 in distributing or controlled including any predecessor or successor of any such corporation rr immediately before the distribution items of intercompany income gain loss deduction and credit if any will be taken into account as required by the applicable intercompany_transaction regulations see sec_1_1502-13 and sec_1 as in effect before the publication of t d 1995_32_irb_6 and as currently in effect sec_1_1502-13 as published by t d further distributing's excess_loss_account plr-143744-08 with respect to the membership units of controlled or the stock any of its subsidiaries if any will be included in income immediately before the distribution under sec_1_1502-19 ss distributing controlled and the shareholders of distributing will each pay their own expenses if any incurred in connection with the distribution tt immediately following the distribution neither distributing nor controlled i will be a disqualified_investment_corporation within the meaning of sec_355 and ii no shareholder will hold a percent or greater interest in any disqualified_investment_corporation as defined by sec_355 who has not held such an interest in such corporation prior to the distribution uu following the distribution individual a and individual b will each be a member of the board_of directors of both distributing and controlled the following representations have been made regarding the merger vv the fair_market_value of the mergeco stock and cash in lieu of fractional shares if any received by each controlled unit holder will be approximately equal to the fair_market_value of the controlled units surrendered in the exchange ww at least percent of the proprietary interest in controlled will be exchanged for mergeco common_stock and continuity of shareholder interest will be preserved within the meaning of sec_1_368-1 xx mergeco has no plan or intention to reacquire any of its stock issued in the merger yy mergeco has no plan or intention to sell or otherwise dispose_of any of the assets of controlled acquired in the merger except for dispositions made in the ordinary course of business or transfers described in sec_368 or sec_1_368-2 zz the liabilities of controlled assumed by mergeco and the liabilities to which the transferred assets of controlled were subject were incurred by controlled in the ordinary course of its business aaa following the merger mergeco will continue business b or use a significant portion of such historic_business_assets in an active trade_or_business bbb mergeco controlled and controlled’s unit holders will pay their respective expenses if any incurred in connection with the merger plr-143744-08 ccc except as described herein there is no intercorporate indebtedness existing between controlled and mergeco that was issued acquired or will be settled at a discount ddd no two parties to the merger are investment companies as defined in sec_368 and iv eee controlled is not under the jurisdiction of a court in a title_11_or_similar_case within the meaning of sec_368 fff the fair_market_value of the assets of controlled transferred to mergeco will equal or exceed the sum of the liabilities assumed by mergeco plus the amount of liabilities if any to which the transferred assets are subject ggg the fair_market_value of mergeco's assets will exceed the amount of the liabilities of mergeco immediately after the transaction hhh the payment of cash in lieu of fractional shares if any of mergeco stock will be solely for the purpose of avoiding the expense and inconvenience to mergeco of issuing fractional shares and will not represent separately bargained-for consideration rulings based solely on the information submitted and on the representations set forth above we rule as follows the conversion the conversion results in a taxable asset exchange pursuant to sec_1001 gain_or_loss on the taxable asset exchange is taken into account immediately before the conversion the amount of the intercompany obligation not satisfied will result in cancellation_of_indebtedness_income to the debtor member and an ordinary bad_debt deduction to the creditor member sec_1_1502-13 upon the conversion sub is entitled to a loss deduction for the worthless_stock of sub sec_165 and sec_1_1502-80 taking into account the tax effects of the proposed transaction the basis of the sub shares held by sub i will not be redetermined pursuant to sec_1_1502-36 and ii will not be reduced pursuant to sec_1_1502-36 and any remaining tax_attributes of sub will be eliminated pursuant to sec_1_1502-36 plr-143744-08 in determining the character of sub 1’s deduction for its worthless_stock in sub for purposes of computing the more than percent gross_receipts_test under sec_165 sub will include in its gross_receipts all dividends received from lower-tier subsidiary members of its consolidated_group including any gross_receipts of all dividends attributable to transaction and transaction and such dividends will be treated as gross_receipts from passive sources to the extent they are attributable to the respective distributing member's gross_receipts from passive sources sec_1_1502-13 b and c pursuant to sec_1_1502-13 only dividends that are attributable to gross_receipts from passive sources as defined herein are counted as dividends for purposes of computing the more than gross_receipts_test under sec_165 in determining the character of sub 1’s deduction for its worthless_stock in sub for purposes of computing the more than percent gross_receipts_test under sec_165 sub will take into account the historic gross_receipts resulting from transaction and transaction sec_381 as provided by sec_1_1502-80 sec_362 will not apply to the deemed transfer of the stock sub to sub on the election to treat sub as a corporation for federal_income_tax purposes further any sec_362 election made with respect to the transfer will have no effect the conversion resulted in sub ceasing to be a member of the distributing group under sec_1_1502-1 and no other member of the group is a successor of sub as defined in sec_1_1502-1 the liquidation no gain_or_loss was recognized by sub on the liquidation sec_332 no gain_or_loss was recognized by sub on the liquidation sec_337 the basis of each asset received by sub in the liquidation will equal the basis of that asset in the hands of sub immediately before the liquidation sec_334 sub 1’s holding_period in each asset received from sub in the liquidation will include the period during which that asset was held by sub sec_1223 plr-143744-08 sub will succeed to and take into account the items of sub described in sec_381 subject_to the conditions and limitations specified in sec_381 sec_382 sec_383 and sec_384 and the regulations thereunder sec_381 and sec_1_381_a_-1 sub will succeed to and take into account the earnings_and_profits or the deficit in the earnings_and_profits of sub as of the date of the liquidation sec_381 the recapitalization the recapitalization will qualify as a reorganization within the meaning of sec_368 and controlled will be a_party_to_a_reorganization within the meaning of sec_368 distributing will not recognize any gain_or_loss on the recapitalization sec_354 controlled will not recognize any gain_or_loss on the recapitalization sec_1032 distributing’s basis in the controlled membership units received in the recapitalization will be equal to the basis of the membership unit in the hands of distributing prior to the recapitalization sec_358 distributing’s holding_period of the controlled membership units received in the recapitalization will include the period during which distributing held the membership units prior to the recapitalization sec_1223 the intragroup sale the intragroup sale will be treated as a taxable sale transaction sec_1001 any gain_or_loss deferred under sec_1_1502-13 on the intragroup sale will be taken into account upon the distribution sec_1_1502-13 the contribution and distribution the contribution followed by the distribution will be a reorganization within the meaning of sec_368 distributing and controlled will each be a_party_to_a_reorganization within the meaning of sec_368 plr-143744-08 the basis of each asset received by controlled will equal the basis of that asset in the hands of distributing immediately before the contribution sec_362 no gain_or_loss will be recognized by distributing on the contribution sec_361 no gain_or_loss will be recognized by controlled on the contribution sec_1032 the holding_period of each asset received by controlled in the contribution will include the period during which distributing held such asset sec_1223 no gain_or_loss will be recognized by distributing upon the distribution sec_361 no gain_or_loss will be recognized by and no amount will be included in the income of the distributing shareholders upon their receipt of the controlled membership units pursuant to the distribution sec_355 the aggregate basis of the distributing common shares and the controlled membership units in the hands of the distributing shareholders including a fractional share interest if any will be the same as the basis in the distributing common shares held by the shareholders immediately prior to the distribution allocated in proportion to the fair market values of the distributing common shares and the controlled membership units sec_1_358-2 the holding_period of the controlled membership units received by the distributing shareholders including a fractional membership unit interest if any will in each instance include the holding_period of the distributing common shares with respect to which the distribution of the controlled membership units is made provided that the distributing common shares are held as a capital_asset on the date of the distribution sec_1223 the payment of cash in lieu of any fractional membership units of controlled if any will be treated for federal_income_tax purposes as if the fractional membership units were distributed as part of the distribution and then sold by the distributing shareholders the cash payments will be treated as having been received in exchange for the fractional membership units of controlled deemed sold any gain_or_loss will be treated as capital_gain or loss provided that such fractional controlled plr-143744-08 membership units are held as capital assets on the date of the distribution earnings_and_profits will be allocated between distributing and controlled in accordance with sec_312 and sec_1_312-10 and sec_1_1502-33 the merger provided that the merger qualifies as a statutory merger under applicable law the merger of controlled into mergeco will qualify as a reorganization within the meaning of sec_368 controlled and mergeco will each be a_party_to_a_reorganization under sec_368 the controlled unit holders will not recognize any gain_or_loss on the receipt of mergeco shares in the merger sec_354 the controlled unit holders' basis in the mergeco shares including fractional units thereof will be equal to the basis of the controlled membership units or allocable portions thereof that are exchanged in the merger sec_358 a controlled unit holder who receives cash in lieu of a fractional share will recognize gain_or_loss measured by the difference between the basis allocated to the fractional share transferred and the amount of cash received sec_1001 any gain_or_loss will be treated as capital_gain or loss provided such fractional share will be held as a capital_asset on the date of the merger sec_1221 and sec_1222 controlled will not recognize any gain_or_loss as a result of the merger sec_361 mergeco’s basis in each asset received in the merger will equal the basis of the asset in the hands of controlled prior to the merger sec_362 mergeco will not recognize gain_or_loss on the receipt of controlled assets in exchange for the mergeco stock sec_1032 mergeco's holding_period in each asset received in the merger will include the period during which controlled held that asset sec_1223 as a result of the merger controlled 's tax_year will end sec_381 pursuant to sec_381 and sec_1_381_a_-1 mergeco will succeed to and take into account those attributes of controlled described in sec_381 subject plr-143744-08 to the conditions and limitations specified in sec_381 sec_382 sec_383 and sec_384 and the regulations thereunder sec_381 to the extent that controlled has any net_unrealized_built-in_gain in its assets as defined in sec_1374 at the time of the merger mergeco will be subject_to the provisions of sec_1374 with respect to any net built-in gains sec_1_337_d_-7 caveats no opinion is expressed about the tax treatment of the proposed transaction under other provisions of the code and regulations or the tax treatment of any conditions existing at the time of or effects resulting from the proposed transaction that are not specifically covered by the above rulings in particular no opinion is expressed regarding i whether the distribution described above satisfies the business_purpose requirement of sec_1_355-2 ii whether the distribution described above is used principally as a device for the distribution of the earnings_and_profits of distributing or controlled or both see sec_355 and sec_1_355-2 iii whether the distribution described above and an acquisition or acquisitions are part of a plan or series of related transactions under sec_355 iv the federal_income_tax consequences of step ii of the proposed transaction and v the federal_income_tax consequences of the taxable_distribution described in step ix of the proposed transaction procedural statements this ruling is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent a copy of this letter must be attached to any federal_income_tax return to which it is relevant alternatively taxpayers filing their returns electronically may satisfy this requirement by attaching a statement to their return that provides the date and control number of the letter_ruling plr-143744-08 in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative sincerely ________________ richard k passales senior counsel branch office of associate chief_counsel corporate


internal_revenue_service number release date index number ------------------------------------------------------ ----------------------------- -------------------------- ---------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact --------------------- id no ----------------- telephone number -------------------- refer reply to cc psi b02 plr-120230-12 date date x ---------------------------- ---------------------- legend legend y -------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------- ---------------------- date ----------------- country -------- dear ----- ------------ this is in response to a letter dated date and subsequent correspondence submitted on behalf of x by x’s authorized representative requesting that the service grant x an extension of time under sec_301_9100-1 of the procedure and administration regulations to elect to treat y as a disregarded_entity for federal tax purposes according to the information submitted x is a domestic_corporation on date x formed y under the laws of country x indirectly owns all of the interests in y x represents that it always intended to elect to treat y as a disregarded_entity effective date however x failed to timely file form_8832 entity classification election to elect to treat y as a disregarded_entity for federal tax purposes effective date sec_301_7701-3 provides in part that a business_entity that is not classified as a corporation under sec_301_7701-2 or an eligible_entity can elect its classification for federal tax purposes an eligible_entity with a single owner plr-120230-12 can elect to be classified as an association or disregarded as an entity separate from its owner sec_301_7701-3 provides guidance on the classification of a foreign eligible_entity for federal tax purposes unless the entity elects otherwise a foreign eligible_entity is treated as an association if all members have limited_liability a foreign eligible_entity with a single owner having limited_liability may elect to be treated as a disregarded_entity pursuant to the rules under c sec_301_7701-3 provides that an entity classification election must be filed on form_8832 and can be effective up to days prior to the election filing_date or more than months after the election filing_date sec_301_9100-1 provides that the commissioner may grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301_9100-1 defines the term regulatory election as including an election whose due_date is prescribed by a regulation published in the federal_register sec_301_9100-1 through provide the standards by which the commissioner will determine whether to grant an extension of time to make an election sec_301_9100-2 provides the rules governing automatic extensions of time for making certain elections sec_301_9100-3 describes the conditions under which the commissioner will grant requests for relief 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 granting relief will not prejudice the interests of the government based solely on the facts submitted and representations made we conclude that the requirements of sec_301_9100-3 have been satisfied accordingly x is granted an extension of days from the date of this letter to elect to treat y as a disregarded_entity for federal tax purposes effective date the election should be made by filing form_8832 with the appropriate service_center a copy of this letter should be attached to each election this ruling is contingent on x filing within days of this letter all required returns and amended income_tax returns consistent with the requested relief in this letter to the extent appropriate these returns must include but are not limited to form_8858 information_return of u s persons with respect to disregarded entities such that the forms and returns reflect the consequences of the relief granted in this letter a copy of this letter should be attached to any such returns 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 plr-120230-12 referenced in this letter this ruling is directed only to the taxpayer requesting it sec_6110 of the internal_revenue_code provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office copies of this letter will be sent to x's authorized representatives sincerely bradford poston senior counsel branch office of the associate chief_counsel passthroughs special industries cc


internal_revenue_service number release date index numbers ------------------------------------------------------------ ----------------- ------------------------------------------------------------ ------------------------------------------------- -------------------------------------------------- -------------------------------------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact ---------------- id no ------------------ telephone number ---------------------- refer reply to cc psi b01 plr-140083-12 date february legend x ----------------------------------------------------- ----------------------------------------------------------------- d country ------------------------ ----------------------- dear ------------- this is in response to a letter dated date submitted on behalf of x requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations to file an election under sec_301_7701-3 to be treated as a partnership for federal tax purposes facts according to the information submitted x was formed on d under the laws of country x intended to be treated as a partnership for federal tax purposes effective d however x inadvertently failed to timely file form_8832 entity classification election to be treated as a partnership for federal tax purposes law and analysis sec_301_7701-3 provides that a business_entity that is not classified as a corporation under sec_301_7701-2 or an eligible_entity can plr-140083-12 elect its classification for federal tax purposes an eligible_entity with at least two members can elect to be classified as either an association or a partnership sec_301_7701-3 provides guidance on the classification of a foreign eligible_entity for federal tax purposes generally a foreign eligible_entity is treated as an association if all members have limited_liability unless the entity makes an election to be treated otherwise a foreign eligible_entity with two or more members having limited_liability may elect to be treated as a partnership pursuant to the rules of sec_301 c sec_301_7701-3 provides that an entity classification election must be filed on form_8832 and can be effective up to days prior to the date the form is filed or up to months after the date the form 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 internal_revenue_code except subtitles e g h and i sec_301_9100-1 defines the term regulatory election as including an election whose due_date is prescribed by a regulation published in the federal_register sec_301_9100-1 through provide the standards that 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 rules for requesting extensions of time for regulatory 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 conclusion based solely on the facts 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 make an election to be treated as a partnership for federal tax purposes effective d x should make the election by filing a properly executed form_8832 with the appropriate service_center a copy of this letter should be attached to the form 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 plr-140083-12 this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representatives sincerely curt g wilson associate chief_counsel passthroughs special industries by david r haglund david r haglund branch chief branch office of the associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes cc


t c memo united_states tax_court john erwin hunter ii and alma esteban hunter petitioners v commissioner of internal revenue respondent docket no filed date john erwin hunter ii and alma esteban hunter pro sese a gary begun for respondent memorandum opinion laro judge this matter is before the court on respondent’s motion to dismiss for failure to state a claim upon which relief may be granted all section references are to the internal_revenue_code as amended and all rule references are to the tax_court rules_of_practice and procedure background on date respondent issued a notice_of_deficiency in which respondent determined a dollar_figure deficiency in petitioners’ federal_income_tax and a dollar_figure accuracy-related_penalty under sec_6662 in date the court filed as an imperfect petition a document submitted by petitioners in which they stated that they were contesting the amounts set forth in the notice_of_deficiency a week later the court ordered petitioners to file a proper amended petition and to pay the filing fee on date petitioners filed an amended petition first amended petition in which they alleged we are requesting injunctive relief totaling dollar_figure plus costs as the united_states tax_court deems appropriate because our tax form is subject_to the year statute_of_limitations that binds us and the commissioner instead irs issued a day letter without conducting a field_audit at our former place of residence this arbitrary decision involves dollar_figure worth of retaliation and harassment contrary to the tax code or irs rules we ask dismissal or reversal of all determinations on record about weeks later respondent filed a motion pursuant to rule a for a more definite statement as to the nature of petitioners’ first amended petition the relief requested therein and the reasons for which petitioners believed they were at the time of filing petitioners resided in ann arbor michigan entitled to such relief petitioners submitted an unsigned answer to this motion in which they stated we come before the court again as we are seeking injunctive relief totaling dollar_figure in consideration to comply with the march order however we ask the court to notice several specific errors in the respondent’s position a for the quarter ending date the dollar_figure deficiency or liability is underscored by our dollar_figure in paper assets such as mutual funds or a certificate of deposit this means our working_capital or current ratio i sec_1 or to with dollar_figure being our net working_capital these positive numbers are set-off against the phase-out formula that applies to the alternative_minimum_tax liability the dollar_figure lein levy sic assessment may involve questionable legality such as a our tax form and supporting materials were sent via certified mail which was postmarked date that being days prior to the date deadline however these facts are not mentioned in the transcript of b our tax filing_date was erroneously reported as this constitutes an to day time gap which allowed us to be hit with a dollar_figure tax_assessment plus interest and penalties thus amounting to an overall tax_liability of dollar_figure or more we respectfully disagree with ambiguous nature of said procedure approximately month later the court granted respondent’s motion for a more definite statement and ordered petitioners to file an amended petition by date on date petitioners in purported compliance with the court’s order filed with the court a second amended petition the second amended petition stated procedure rule directly answers the respondent’s motion for a more definite statement in support thereof we respectfully show unto the court the detroit appeals_office has granted us relief under sec_6213 and sec_6330 regardless of the notice_of_deficiency alleging dollar_figure in tax_liability plus a dollar_figure penalty for tax_year wherefore we the petitioners pray that the court enter an order requiring the respondent to answer our claim or the court award us injunctive relief on date respondent filed the motion at hand in his motion respondent asserts that petitioners in their second amended petition have made no factual or justiciable claims of error against respondent’s notice_of_deficiency respondent also notes that petitioners have set forth in their second amended petition no facts in support of any claimed error on the part of respondent on date petitioners submitted a notice of objection to respondent’s motion seeking costs damages and refunds starting at dollar_figure for in support petitioners stated on date we did accomplish our certified affidavit of support under united_states immigration law 213a of said act we did submit those documents to the department of justice and the ins as well the financial statement and supporting paperwork are answer and rebuttal to the respondent’s notice_of_deficiency dated date in failing to collect our affidavit america is responsible for reckless and intentional disregard under sec_7433 under the date letter of determination not following proper procedure also gives rise to an action for economic damages under sec_7430 since the respondent did willfully understate our tax_liability by invalid audit or investigation dated and this inaccurate information was used in full during and after the respondent’s issuing of the deficiency_notice dated date we think our position is consistent with the determination made under arnett v united_states f_supp relative to white v commissioner t c memo furthermore we think that our accounts_receivable can move our claim well past the date statute_of_limitations under klien v commissioner t c nor did we sign away our taxpayer rights under goldsmith v commissioner t c we did exhaust our administrative remedies in requesting refund of dollar_figure taken from tax_year we would very much appreciate receiving the amount in question along with the dollar_figure taken for tax_year as this issue is a matter of prior judgment wherefore we pray that the court affirm or grant our notice of objection discussion rule b requires that a petition filed in this court contain clear and concise assignments of each and every error that the petitioning taxpayer alleges to have been committed by the commissioner in the determination of any deficiency addition_to_tax or penalty in dispute rule b further requires that the petition contain clear and concise lettered statements of the facts on which the taxpayer bases the assignments of error see 123_tc_213 78_tc_646 meeker v commissioner tcmemo_2005_146 stearman v commissioner tcmemo_2005_39 any issue not raised in the pleadings is deemed conceded see rule b funk v commissioner supra jarvis v commissioner supra pincite n 73_tc_736 meeker v commissioner supra stearman v commissioner supra further the failure of a party to plead or otherwise proceed as provided in the court’s rules may be grounds for the court to hold the party in default either on the motion of another party or on the initiative of the court see rule a meeker v commissioner supra stearman v commissioner supra ward v commissioner tcmemo_2002_147 the court also may dismiss a case and enter a decision against a taxpayer for his failure properly to prosecute or to comply with the rules of this court see rule b meeker v commissioner supra stearman v commissioner supra ward v commissioner supra we agree with respondent that petitioners have failed to state a claim upon which relief can be granted see funk v commissioner supra pincite meeker v commissioner supra stearman v commissioner supra although they had ample opportunities to do so petitioners have still failed to present the court with a petition containing clear and concise assignments of errors that petitioners allege respondent has committed in the determination of the deficiency or the associated penalty petitioners have likewise failed to include in their petition clear and concise statements of the facts on which petitioners base their assignments of error instead petitioners have included in their petitions and other filings with the court virtually incoherent arguments the petition neither conforms to this court’s rules_of_practice and procedure nor states a claim upon which relief can be granted because of the absence from the petition of specific justiciable allegations of error and of supporting facts this court will grant respondent’s motion see funk v commissioner supra accordingly we shall dismiss petitioners’ case and enter a decision sustaining respondent’s determinations contained in the notice_of_deficiency for an appropriate order of dismissal and decision will be entered


internal_revenue_service index nos number release date cc dom it a b9 plr-109799-99 in re date dear this is in reference to a form_1128 application to adopt change or retain a tax_year submitted on behalf of the above- named taxpayers requesting permission to change their accounting_period for federal_income_tax purposes from a taxable_year ending to a taxable_year ending effective the taxpayers have requested that the form_1128 be considered timely filed under the authority contained in sec_301_9100-3 of the procedure and administration regulations the taxpayers' form_1128 requesting a change in accounting_period to a tax_year ending was due on or before the information furnished indicates that the application_for the change in accounting_period was filed late because of an error on the part of the taxpayers however the form was filed within days of the due_date sec_1_442-1 of the income_tax regulations provides that in order to secure the commissioner's consent to a change in accounting_period taxpayers must file an application on form_1128 with the commissioner on or before the 15th day of the second calendar month following the close of the short_period sec_301_9100-3 provides that requests for extensions of time for regulatory elections that do not meet the requirements of sec_301_9100-2 automatic extensions such as the instant case must be made under the rules of sec_301_9100-3 requests for relief subject_to sec_301_9100-3 will be granted when taxpayers provide evidence to establish that the taxpayers acted reasonably and in good_faith and that the granting of relief will not prejudice the interests of the government based on the facts and information submitted and the representations made it is held that the taxpayers have acted reasonably and in good_faith and that the granting of relief will not prejudice the interests of the government accordingly the requirements of the regulations for the granting of relief have been satisfied in this case and taxpayers’ late filed form_1128 requesting permission to change to a tax_year ending effective for the short_period of is considered timely filed pursuant to appendix a of revproc_99_1 1991_1_irb_6 an additional user_fee is required in order to process the form_1128 the user_fee will be requested in a separate correspondence we will begin processing the taxpayers’ application after the user_fee is received the ruling contained in this letter is based upon facts and representations submitted by the taxpayers and accompanied by a penalty of perjury statement executed by an appropriate party this office has not verified any of the material submitted in support of the request for a ruling verification of the factual information representations and other data may be required as part of an examination process this ruling addresses the granting of sec_301_9100-3 relief only no opinion is expressed regarding the tax treatment of the instant transaction under the provisions of any other sections of the code or regulations that may be applicable thereto or regarding the tax treatment of any conditions existing at the time of or effects resulting from the instant transaction specifically no opinion is expressed as to whether the taxpayers are permitted under the code and applicable regulations to change to the tax_year requested in the subject form_1128 in accordance with the provisions of a power_of_attorney currently on file we are sending this letter_ruling to the taxpayers' authorized representative and a copy to the taxpayers this ruling is directed only to the taxpayers that requested it sec_6110 of the internal_revenue_code provides that it may not be used or cited as precedent sincerely yours assistant chief_counsel income_tax and accounting s irwin a leib by irwin a leib deputy assistant chief_counsel enclosures copy of this letter copy for sec_6110 purposes


internal_revenue_service number release date index number --------------------------- -------------------------------- ----------------------------------------- ----------------------------------- - company company department of the treasury washington dc person to contact ---------------------- id no ------------- telephone number --------------------- refer reply to cc psi b03 plr-113314-07 date date ---------------------------- ---------------------------- ----------------------- -------------------- ------------------ --------------------- a ---------------------------------------------------- b ---------------------------------------------------- c ---------------------------------------------------- state llc -------------------------------------------------- llc2 a -------------------- ---------------------- ------------------------ -------- b c d e f ---------------------- ------------------- ---------------- -------------------------- ------------------ plr-113314-07 dear ------------ we received a letter dated date and subsequent correspondence submitted on behalf of company requesting a ruling under sec_1361 of the internal_revenue_code this letter responds to that request facts company incorporated under the laws of state on a and elected to be an s_corporation effective on b company’s current owners are individuals a and c on c pursuant to a plan of conversion company converted to a state limited_partnership and made an election under sec_301_7701-3 of the administration and procedure regulations to be classified as an association_taxable_as_a_corporation prior to the conversion company’s shareholders were a b and c upon the conversion company’s limited partners were a b and c and company’s general_partner was llc which was owned by a b and c and treated as a partnership after its conversion company continued to be treated as an s_corporation and conducted all activities consistent with that status on d company and its partners first became aware that as a result of the conversion company terminated its s_corporation_election to remedy the terminating event c purchased b’s membership interest in llc llc redeemed c’s membership interest in llc for half of llc’s general_partner interest in company c then transferred the general_partner interest in company to llc2 in exchange for all of the membership interests in llc2 thus llc and llc2 became disregarded entities wholly owned by a and c respectively on e b transferred all of b’s stock in company to c finally on f llc and llc2 transferred all of their stock in company to their respective member and company converted back to a corporation under state law as a result of these transfers company is owned by a and c company represents that neither a b nor c realized that company’s conversion to a state limited_partnership taxable as a corporation could result in the termination of company’s s_corporation_election in addition company represents that the possible terminating event was not motivated by tax_avoidance or retroactive tax planning company and its shareholders agree to make any necessary adjustments consistent with the treatment of company as an s_corporation plr-113314-07 law sec_1361 provides that for purposes of subchapter_s the term small_business_corporation means a domestic_corporation that is not an ineligible_corporation and that does not-- a have more than shareholders b have as a shareholder a person other than an estate a_trust described in sec_1361 or an organization described in sec_1361 who is not an individual c have a nonresident_alien as a shareholder and d have more than one class of stock sec_1_1361-1 of the income_tax regulations provides in part that a corporation that has more than one class of stock does not qualify as a small_business_corporation except as provided in sec_1_1361-1 a corporation is treated as having only one class of stock if all outstanding shares of stock of the corporation confer identical rights to distribution and liquidation proceeds sec_1362 provides that an election under sec_1362 shall be terminated whenever at any time on or after the first day of the first taxable_year for which the corporation is an s_corporation the corporation ceases to be a small_business_corporation for s_corporation elections made and terminations occurring before date sec_1362 provides that if an election under sec_1362 by any corporation a was not effective for the taxable_year for which made by reason of a failure to meet the requirements of sec_1361 or to obtain shareholder consents or b was terminated under sec_1362 or the secretary determines that the circumstances resulting in the ineffectiveness or termination were inadvertent no later than a reasonable period of time after discovery of the circumstances resulting in the ineffectiveness or termination steps were taken a so that the corporation is a small_business_corporation or b to acquire the required shareholder consents and the corporation and each person who was a shareholder of the corporation at any time during the period specified pursuant to sec_1362 agrees to make the adjustments consistent with the treatment of the corporation as an s_corporation as may be required by the secretary with respect to this period then notwithstanding the circumstances resulting in the ineffectiveness or termination the corporation shall be treated as an s_corporation during the period specified by the secretary conclusion based solely on the facts submitted and the representations made we conclude that company's s_corporation_election terminated on c upon the conversion of company to a state limited_partnership which resulted in company having an ineligible shareholder llc and which may have created a second class of stock in addition we plr-113314-07 conclude that the termination was inadvertent within the meaning of sec_1362 consequently we rule that company will continue to be treated as an s_corporation from c and thereafter provided company's s_corporation_election is not otherwise terminated under sec_1362 accordingly company’s shareholders must include their pro_rata shares of the separately and nonseparately computed items in their income as provided in sec_1366 make adjustments to the stock basis of those shares as provided in sec_1367 and take into account any distributions with respect to those shares as provided in sec_1368 except for the specific ruling above we express or imply no opinion concerning the federal_income_tax consequences of the facts of this case under any other provision of the code specifically we express or imply no opinion regarding company's eligibility to be an s_corporation under a power_of_attorney on file with this office we are sending a copy of this letter to company’s authorized representative this ruling is directed only to the taxpayer who requested it according to sec_6110 this ruling may not be used or cited as precedent sincerely s christine ellison chief branch office of associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes cc


internal_revenue_service number release date index number -------------------- ------------------------------------------------------------ - ----------------------------------------- ----------------------------------- ------------------------------------------ department of the treasury washington dc third party communication none date of communication not applicable_person to contact ----------------------- id no ------------------- --------------------------------------------------- telephone number ---------------------- refer reply to cc corp b04 plr-121964-18 date date legend parent ---------------------------------------------------------------------------------- ---------------------------------------------------------------------- -------------------------------------------------------------- acquired sub sub sub merger sub date a date b date c date d date e date f ------------------- ------------------- ---------------- ---------------------------- ------------------------------------ ------------------- ----------------------------- ------------------ --------------------------- -------------------- ---------------------------- plr-121964-18 year year year year year year year year year year year dollar_figurea dollar_figureb dollar_figurec dollar_figured dollar_figuree dollar_figuref dollar_figureg dollar_figureh dollar_figurei dollar_figurej dollar_figurek ------------------------------ ------------------------------ ------------------------------ --------------------------- ------------------------------ --------------------------- ------------------------------------------- ------------------------------------------- ---------------------------------------------- -------------------------------------------------- ------------------------------------------- -------------------- ------------------ ------------------ ------------------ ---------------------- -------------------- ------------------ ------------------ --------------------- ------------------ ---------------- plr-121964-18 dollar_figurel dollar_figurem dollar_figuren ---------------- -------------------- ------------------- company official ----------------------------------------------------------------------------- ------------------------------------------------------------------------- tax professional firm firm dear -------------- ---------------------------------------------------------------------- ---------------- ----------------------- this letter responds to a letter dated date submitted on behalf of parent requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations to file an election parent is requesting an extension of time to file an election under sec_1_1502-32 to treat loss_carryovers from certain separate_return limitation years as expiring immediately before acquired became a member of parent’s consolidated_group as described below the election the material information is summarized below parent is the common parent of an affiliated_group that files a consolidated federal_income_tax return on a calendar_year basis parent group on date d parent group through the formation of a new wholly-owned subsidiary merger sub acquired all of the issued and outstanding classes of equity interests of acquired the common parent of a consolidated_group acquired group through a reverse triangular cash_merger the transaction constituted a qualifying cost_basis transaction within the meaning of sec_1_1502-32 the former members of the acquired group became members of the parent group beginning on date e at the time of the acquisition acquired group had consolidated net operating losses cnols of dollar_figurea and no net_capital_loss carryovers within the meaning of sec_1_1502-22 those cnols were composed of losses arising within the acquired group and losses arising outside the acquired group with respect to certain members of the acquired group that were acquired prior to parent’s acquisition of acquired acquired group acquired sub on date c sub on date b and sub on date a on or before the due_date of the election parent’s tax team and its service providers firm and firm determined that some of the cnols would be unusable by parent plr-121964-18 group on account of sec_382 limitations and as such that an election should be made to treat such losses as expiring immediately before acquired became a member of the parent group for year through year sub had cnols totaling dollar_figureb on or before the due_date of the election parent’s tax team and firm determined that all of such net operating losses would be unusable in future years on account of sec_382 limitations accordingly parent intended to waive all dollar_figureb of such net operating losses for year through year sub had cnols totaling dollar_figurec on or before the due_date of the election parent’s tax team and firm determined that all of such net operating losses would be unusable in future years on account of sec_382 limitations accordingly parent intended to waive all dollar_figurec of such net operating losses for year through year more than three tax years sub had cnols totaling dollar_figured on or before the due_date of the election parent’s tax team and firm determined that all of such net operating losses would be unusable in future years on account of sec_382 limitations accordingly parent intended to waive all dollar_figured of such net operating losses for year year year year and year acquired group had cnols of dollar_figuree dollar_figuref dollar_figureg dollar_figureh and dollar_figurei respectively on or before the due_date of the election and after taking into account the use of a portion of the cnols in the years prior to the acquisition of acquired group and adjustments determined prior to that acquisition parent’s tax team and firm determined that dollar_figurej of the remaining cnol from year the entire cnols from year dollar_figuref and year dollar_figureg dollar_figurek of the remaining cnol from year and dollar_figurel of the remaining cnol from year for a total from year year year year and year of dollar_figurem would be unusable in future years on account of sec_382 limitations accordingly parent intended to waive such unusable amounts of nols in summary parent intended to treat as expiring cnols of dollar_figureb dollar_figurec dollar_figured and dollar_figurem for a total amount intended to be treated as expiring under the election of dollar_figuren sec_1_1502-32 provides rules for adjusting the basis of the stock of one member of a consolidated_group s owned by another member m to reflect s’s items of income gain deduction and loss in order to treat the group members as a single entity sec_1_1502-32 sec_1_1502-32 provides that m’s basis in s’s stock is adjusted to reflect among other things s’s noncapital nondeductible expenses an expiring loss carryover is such a noncapital nondeductible expense see sec_1_1502-32 sec_1_1502-32 provides that if s has a loss carryover from a separate_return_limitation_year when it becomes a member of a consolidated_group the group may make an irrevocable election to treat all or any portion of the loss carryover as expiring for all federal_income_tax purposes immediately before s becomes a member of the consolidated_group sec_1_1502-32 provides that such an election must be plr-121964-18 made in a separate statement filed with the consolidated group’s return for the year s becomes a member parent intended to make the election the election was due on date f the due_date including extensions of the year parent group consolidated federal_income_tax return but for various reasons a valid election was not filed subsequently this request was submitted under sec_301_9100-3 for an extension of time to file the election parent has represented that it is not seeking to alter a return position for which an accuracy-related_penalty has been or could be imposed under sec_6662 at the time of the request for relief under sec_301_9100-1 the commissioner has discretion to 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 internal_revenue_code except subtitles e g h and i sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make a regulatory election sec_301_9100-1 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 sec_301_9100-2 provides automatic extensions of time for making certain elections requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of the government sec_301_9100-3 the time for filing the election is fixed by the regulations ie sec_1_1502-32 therefore the commissioner has discretionary authority under sec_301_9100-3 to grant an extension of time for parent to file the election provided parent shows it acted reasonably and in good_faith the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and granting relief will not prejudice the interests of the government information affidavits and representations submitted by parent company official and tax professional explain the circumstances that resulted in the failure to timely file a valid election the information establishes that parent reasonably relied on a qualified_tax professional who failed to make or advise parent to make the election and that the request for relief was filed before the failure to timely make the election was discovered by the internal_revenue_service see sec_301_9100-3 and v based on the facts and information submitted including the representations made we conclude that parent has shown it acted reasonably and in good_faith the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied and granting relief will not prejudice the interests of the government accordingly an extension of time is granted under plr-121964-18 sec_301_9100-3 until days from the date on this letter for parent to amend the year parent group consolidated federal_income_tax return to include the election to treat a total amount of dollar_figuren of cnols as expiring immediately before acquired became a member of parent group as described above a copy of this letter must be attached to the return alternatively if parent group files its returns electronically parent group may satisfy this latter requirement by attaching a statement to its return that provides the date on and the control number plr-121964-18 of this letter_ruling the above extension of time is conditioned on the parent group’s tax_liability if any being not lower in the aggregate for all years to which the election applies than it would have been if the election had been timely made taking into account the time_value_of_money no opinion is expressed as to the amount of any cnols or as to parent group’s tax_liability for the years involved a determination thereof will be made by the applicable director’s office upon audit of the federal_income_tax returns involved further no opinion is expressed as to the federal_income_tax effect if any if it is determined that the taxpayers’ tax_liability is lower sec_301_9100-3 we express no opinion as to the tax consequences of filing the election late under the provisions of any other section of the code and regulations or as to the tax treatment of any conditions existing at the time of or resulting from filing the election late that are not specifically set forth in the above ruling for purposes of granting relief under sec_301 we relied on certain statements and representations made by parent company official and tax professional however the director should verify all essential facts in addition notwithstanding that an extension is granted under sec_301_9100-3 to file the election penalties and interest that would otherwise be applicable if any continue to apply this letter is directed only to the taxpayer s who requested it sec_6110 provides that it may not be used or cited as precedent pursuant to the power_of_attorney on file in this office a copy of this letter is being sent to your authorized representative sincerely _______________________ ken cohen senior technician reviewer branch office of associate chief_counsel corporate cc


internal_revenue_service number release date index number ------------------------------------------------------------ -------------------- ----------------------------------------------- -------------------------------------------------- ------------------------------ department of the treasury washington dc third party communication none date of communication not applicable_person to contact --------------------- id no ------------- telephone number --------------------- refer reply to cc psi b02 plr-100326-09 date date legend x ------------------------------------------- ------------------------------------------------ country -------------- date ------------------- dear -------------------- this responds to a letter dated date and subsequent correspondence submitted on behalf of x requesting that the service grant x an extension of time under sec_301_9100-3 of the procedure and administration regulations to elect to be treated as a disregarded_entity under sec_301_7701-3 the facts submitted and representations made are summarized as follows x was formed on date under the laws of country x is a foreign_entity eligible to elect to be treated as a disregarded_entity effective date however x inadvertently failed to timely file a form_8832 entity classification election sec_301_7701-3 provides guidance on the classification of a foreign_entity for federal_income_tax purposes generally a foreign eligible_entity is treated as an association_taxable_as_a_corporation if all members have limited_liability unless the entity makes an election to be treated otherwise if the foreign eligible_entity has one owner it may elect to be treated as a disregarded_entity pursuant to the rules in sec_301_7701-3 plr-100326-09 sec_301_7701-3 provides that an entity classification election must be filed on form_8832 and can be effective up to seventy-five days prior to the date the form is filed or up to twelve months after the date on which the form is filed sec_301_9100-1 provides that the commissioner may grant a reasonable extension of time to make a regulatory election or a statutory election but no more than months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code except subtitles e g h and i sec_301_9100-1 defines the term regulatory election as an election whose due_date is prescribed by a regulation published in the federal_register or a revenue_ruling revenue_procedure notice or announcement published in the internal_revenue_bulletin sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make the election sec_301_9100-2 provides the rules governing automatic extensions of time for making certain elections sec_301_9100-3 provides the standards the commissioner will use to determine whether to grant an extension of time for regulatory elections that do not meet the requirements of sec_301_9100-2 under sec_301_9100-3 a request for relief will be granted when the taxpayer provides evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and granting relief will not prejudice the interests of the government based solely 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 a form_8832 with the appropriate service_center to elect to be treated as a disregarded_entity for federal tax purposes effective date a copy of this letter should be attached to the form_8832 a copy is enclosed for that purpose except as specifically set forth above no opinion is expressed concerning the federal tax consequences of the facts described above under any other provision of the code this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent plr-100326-09 pursuant to a power_of_attorney on file with this office copies of this letter are being sent to x’s authorized representative sincerely curt g wilson associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes


internal_revenue_service number release date index number --------------------------- ------------------------------------------- ------------------------ ------------------------------------ - - department of the treasury washington dc person to contact -------------------- id no ------------ telephone number -------------------- refer reply to cc psi - plr-161429-04 date date company ------------------------------------------- ---------------------- ------------------- -------------------- shareholders --------------------------------------------------- --------------------------------------------------- state a b c ------------------- -------- --------------------------- --------------------------- dear ------------ this letter responds to a letter from your authorized representative dated date as well as additional correspondence requesting rulings for company under sec_1362 of the internal_revenue_code regarding a late s_corporation_election and sec_301_9100-1 of the procedure and administration regulations regarding a late fiscal_year election plr-161429-04 company was incorporated under the laws of state on a shareholders intended company to be treated as an s_corporation beginning a with a fiscal tax_year ending b however form_2553 election by a small_business_corporation and form_8716 election to have a tax_year other than a required tax_year inadvertently were not filed timely with the internal_revenue_service company has filed form_1120s u s income_tax return for an s_corporation for each of its tax years ending b and c consistent with company’s intended status as an s_corporation company also has timely filed form_8752 required_payment or refund under sec_7519 for each of these tax years sec_1362 provides in general that an election by a small_business_corporation under sec_1362 to be an s_corporation may be made for any_tax year a at any time during the preceding tax_year or b at any time during the tax_year and on or before the 15th day of the 3d month of the tax_year sec_1362 provides that if a a small_business_corporation makes an election under sec_1362 for any_tax year and b that election is made after the 15th day of the 3d month of the tax_year and on or before the 15th day of the 3d month of the following tax_year then that election shall be treated as made for the following tax_year sec_1362 provides that if a an election under sec_1362 is made for any_tax year determined without regard to sec_1362 after the date prescribed by sec_1362 for making the election for that tax_year or no such election is made for any_tax year and b the secretary determines that there was reasonable_cause for the failure to timely make the election the secretary may treat such election as timely made for that tax_year and sec_1362 shall not apply sec_444 provides that except as otherwise provided in sec_444 a partnership s_corporation or personal_service_corporation may elect to have a tax_year other than the required tax_year sec_1_444-3t of the temporary income_tax regulations provides that a sec_444 election shall be made by filing a properly prepared form_8716 with the service_center indicated by the instructions to the form except as provided in sec_1_444-3t and form_8716 must be filed by the earlier of i the 15th day of the fifth month following the month that includes the first day of the tax_year for which the election will first be effective or ii the due_date without regard to extensions of the income_tax return resulting from the sec_444 election plr-161429-04 under sec_301_9100-1 the commissioner may grant a reasonable extension of time to make a regulatory election as defined by sec_301_9100-1 or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the code except subtitles e g h and i sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make a regulatory 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 based on the facts and representations submitted we conclude that there was reasonable_cause for company’s failure to make a timely s_corporation_election under sec_1362 and that company has satisfied the requirements of sec_301_9100-1 and sec_301_9100-3 regarding a late sec_444 election consequently-- company's late election under sec_1362 is to be treated under sec_1362 as filed timely for its tax_year beginning a this ruling is contingent on company filing form_2553 to be effective on a with the appropriate service_center no later than days from the date of this letter a copy of this letter should be attached to the form_2553 company is granted an extension of days from the date of this letter for electing under sec_444 to have a tax_year ending b by indicating that intention on form_2553 and attaching a completed form_8716 for each year that a sec_444 election is in effect company must file a return on form_8752 as provided by sec_1_7519-2t and make any payments required by sec_1_7519-2t except for the specific rulings above we express or imply no opinion concerning the federal tax consequences of the facts of this case under any other provision of the code specifically we express or imply no opinion on whether company otherwise qualifies to be an s_corporation or is eligible to make a sec_444 election sec_301_9100-1 provides that the granting of an extension of time for making an election is not a determination that the taxpayer is otherwise eligible to make the election plr-161429-04 under a power_of_attorney on file with this office we are sending a copy of this letter to your authorized representative this ruling is directed only to the taxpayer on whose behalf it was requested according to sec_6110 this ruling may not be used or cited as precedent sincerely s heather maloy associate chief_counsel passthroughs and special industries enclosures copies of this letter copy for sec_6110 purposes cc