internal_revenue_service department of the treasury number release date index number washington dc person to contact telephone number refer reply to cc psi b09-plr-126203-01 date date legend decedent revocable_trust brother’s trust charitable_trust date date date date brother brother’s spouse co-trustee court state dear this is in response to your letter dated date in which you requested rulings under sec_2055 of the internal_revenue_code the facts submitted and representations made are as follows on date decedent established a revocable_trust agreement revocable_trust which he amended on three occasions prior to his death decedent died on date at which time the trust became irrevocable as finally amended the dispositive provisions of the revocable_trust provide inter alia that at decedent’s death a_trust be created for the benefit of decedent’s plr-126203-01 brother brother and decedent’s brother’s wife brother’s spouse the terms of this trust brother’s trust provide that the trustee shall pay all of the net_income quarter- annually to brother for his life at brother’s death if brother’s spouse survives him the trustee is to pay her dollar_figure per month for the duration of her life no discretionary distributions of principal from brother’s trust are authorized at the death of the survivor of brother and brother’s spouse the trust is to terminate and be distributed to charitable_trust brother’s trust does not qualify as a charitable_remainder_trust under sec_664 and therefore does not satisfy the requirements of sec_2055 for the estate_tax charitable deduction for the actuarial value of the remainder_interest that will pass to charitable_trust upon the death of the survivor of brother and brother’s spouse decedent’s federal estate_tax_return was timely filed on extension on date on date which is within days after the filing of the return the co-trustee of revocable_trust filed a petition in court requesting the court to reform brother’s trust in order to qualify the trust as a charitable_remainder_annuity_trust under the proposed reformation brother’s trust will be governed and administered under the following terms in each taxable_year which shall be the calendar_year of brother’s trust the trustees shall pay to brother during his lifetime and after his death to brother’s spouse for such time as she survives the annuity amount the annuity amount is that amount which is equal to of the initial net fair_market_value of the trust’s assets as finally determined for federal estate_tax purposes the annuity amount for each taxable_year shall be paid a in equal monthly payments on the first business_day of each month of each taxable_year and b from the income of brother’s trust and from the principal only to the extent that the trust income is not sufficient to make such payments income generated during a taxable_year that exceeds the annuity amount required to be distributed currently shall be accumulated and added to the principal of brother’s trust in the case of a taxable_year that is for a period of less than months the annuity amount that must be distributed shall be the annuity amount multiplied by a fraction the numerator of the fraction shall be the number of days in the taxable_year of brother’s trust and the denominator shall be or if february is a day included in the numerator in the case of the taxable_year in which the annuity interest terminates the annuity amount that must be distributed shall be the annuity amount multiplied by a fraction the numerator of the fraction shall be the number of days in the period beginning on the first day of such taxable_year and ending on the day the annuity interest terminates and the denominator of the fraction shall be or if february is included in the numerator notwithstanding the foregoing the obligation of the trustees to pay the annuity amount shall terminate with the payment next preceding the survivor recipient’s death plr-126203-01 the obligation to pay the annuity amount commences with the date of decedent’s death but the payment of the annuity amount may be deferred from such date until the end of the taxable_year of brother’s trust in which occurs the complete funding of the trust within a reasonable_time after the end of the taxable_year in which the complete funding of the trust occurs the trustees must pay to the recipients in the case of an underpayment or receive from the recipients in the case of an overpayment the difference between any annuity amounts actually paid plus interest compounded annually computed for any period at the rate of interest that the federal_income_tax regulations under sec_664 prescribe for such computation for such period and the annuity amounts payable plus interest compounded annually computed for any period at the rate of interest that the federal_income_tax regulations under sec_664 prescribe for such computation for such period if the initial net fair_market_value of the assets constituting brother’s trust is incorrectly determined then within a reasonable period after the final_determination of the correct value the trustees shall pay to the recipients in the case of an undervaluation or recover from the recipients in the case of an overvaluation an amount equal to the difference between the amount properly payable and the amount actually paid no additional contributions may be made to brother’s trust after it is funded the initial contribution however shall be deemed to consist of all property passing to the trust by reason of decedent’s death nothing in the trust instrument shall be construed to restrict the trustees from investing the trust assets in a manner that could result in the annual realization of a reasonable amount of net_income or gain from the sale or disposition of trust assets except for the payment of the annuity amount in the management investment and distribution of the trust the trustees shall not i engage in any act of self-dealing as defined in sec_4941 ii retain any excess_business_holdings as defined in sec_4943 which would subject the trust to tax under sec_4943 iii make any investments which would subject the trust to tax under sec_4944 or iv make any taxable_expenditures as defined in sec_4945 to the extent required the trustees shall distribute the net_income and to the extent the net_income is not sufficient the principal of the trust at such times and in such manner so as not to subject the trust to tax under sec_4942 upon the death of the survivor recipient the trustees shall distribute all of the then principal and income of brother’s trust other than any amount due to either of the recipients to charitable_trust if charitable_trust is not an organization described in sec_170 sec_2055 and sec_2522 at the time when any principal or income of the trust is to be distributed to it the trustees shall instead distribute such principal and accrued income to one or more organizations described in sec_170 sec_2055 and sec_2522 as the trustees may select in their sole discretion the trustees shall have the power upon written notice to and with the plr-126203-01 written consent of the attorney general’s office of state to amend brother’s trust in any manner required for the sole purpose of ensuring that the trust qualifies and continues to qualify as a charitable_remainder_annuity_trust within the meaning of sec_664 the operation of brother’s trust shall be governed by the laws of state the trustees however are prohibited from exercising any power or discretion granted under state laws that would be inconsistent with the qualification of the trust under sec_664 and the corresponding regulations you have requested the following rulings the interest passing to charitable_trust under brother’s trust is a reformable_interest under sec_2055 the petition for reformation if granted will result in a qualified_reformation as defined in sec_2055 a federal estate_tax charitable deduction will be allowed under sec_2055 for the present_value of the remainder_interest of brother’s trust as reformed law and analysis sec_2055 provides that for purposes of the federal estate_tax the value of the taxable_estate shall be determined by deducting from the value of the gross_estate the amount of all bequests legacies devises or transfers to or for_the_use_of any corporation organized and operated exclusively for religious charitable scientific literary or educational_purposes no part of the net_earnings of which inures to the benefit of any private stockholder or individual sec_2055 disallows the estate_tax charitable deduction where an interest in property other than an interest described in sec_170 passes or has passed_from_the_decedent to a person or for a use described in sec_2055 and an interest other than an interest which is extinguished upon the decedent's death in the same property passes or has passed for less than an adequate_and_full_consideration in money_or_money's_worth from the decedent to a person or for a use not described in sec_2055 unless - a in the case of a remainder_interest such interest is in a_trust which is a charitable_remainder_annuity_trust or a charitable_remainder_unitrust described in sec_664 or a pooled_income_fund described in sec_642 or b in the case of any other interest such interest is in the form of a guaranteed annuity or is a fixed percentage distributed yearly of the fair_market_value of the property to be determined yearly the charitable split interest rules of sec_2055 were enacted by the tax reform act of and are applicable with exceptions not relevant here to estates of decedents dying after date plr-126203-01 sec_2055 provides for reformations of interests to comply with the requirements of sec_2055 sec_2055 provides that a deduction shall be allowed under sec_2055 in respect of any qualified_reformation sec_2055 provides that the term qualified_reformation means a change_of a governing instrument by reformation amendment construction or otherwise which changes a reformable_interest into a qualified_interest but only if -- i any difference between i the actuarial value determined as of the date of the decedent's death of the qualified_interest and ii the actuarial value as so determined of the reformable_interest does not exceed five percent of the actuarial value as so determined of the reformable_interest ii in the case of i a charitable_remainder interest the nonremainder interest before and after the qualified_reformation terminated at the same time or ii any other interest the reformable_interest and the qualified_interest are for the same period and iii such change is effective as of the date of the decedent's death sec_2055 defines the term reformable_interest to mean any interest for which a deduction would be allowable under sec_2055 at the time of the decedent's death but for the split-interest rules of sec_2055 under sec_2055 the term reformable_interest does not include any interest unless before the remainder vests in possession all payments to persons other than an organization described in sec_2055 are expressed either in specified dollar amounts or a fixed percentage of the fair_market_value of the property sec_2055 provides however that sec_2055 shall not apply to any interest if a judicial proceeding is commenced to change such interest into a qualified_interest not later than the 90th day after the last date including extensions for filing an estate_tax_return if an estate_tax_return is required to be filed sec_2055 defines a qualified_interest as an interest for which a deduction is allowable under sec_2055 under the relevant provisions of sec_664 a_trust will be a charitable_remainder_annuity_trust if it is a_trust -- a from which a sum certain which is not less than percent nor more than percent of the initial net fair_market_value of all property placed in trust is to be paid not less often than annually to one or more persons at least one of which is not an organization described in sec_170 and in the case of individuals only to an individual who is living at the time of the creation of the trust for a plr-126203-01 term of years not in excess of years or for the life or lives of such individual or individuals b from which no amount other than the payments described in subparagraph a may be paid to or for_the_use_of any person other than an organization described in sec_170 c following the termination of the payments described in subparagraph a the remainder_interest in the trust is to be transferred to or for_the_use_of an organization described in sec_170 and d the value determined under sec_7520 of such remainder_interest is at least percent of the initial net fair_market_value of all property placed in the trust in this case the interest passing to charitable_trust under brother’s trust is a reformable_interest within the meaning of sec_2055 because the value of the charitable interest at the date of decedent’s death was ascertainable and hence severable from the non-charitable interest prior to the enactment of the split-interest rules of sec_2055 such an interest would have been deductible under sec_2055 pursuant to sec_20_2055-2 of the estate_tax regulations although the payments to the individual beneficiaries were not expressed in specified dollar amounts or a fixed percentage of the fair_market_value of the property as required by sec_2055 a judicial proceeding was commenced as provided under sec_2055 before the 90th day after the last date including extensions for filing decedent’s estate_tax_return the reformation is a qualified_reformation within the meaning of sec_2055 because the difference between the actuarial value determined as of the date of decedent’s death of the qualified_interest and the actuarial value as so determined of the reformable_interest does not exceed percent of the actuarial value as so determined of the reformable_interest the nonremainder interest terminates at the same time both before and after the qualified_reformation and the reformation is effective as of the date of decedent’s death additionally the value as determined under sec_7520 of the remainder_interest is at least percent of the initial net fair_market_value of all the property placed in the trust as required by sec_664 accordingly provided that the judicial reformation of brother’s trust conforms with the provisions of the proposed reformation as stated above and provided that the trust as judicially reformed is a valid trust under applicable state law we conclude that based on the facts submitted and representations made the interest passing to charitable_trust under brother’s trust is a reformable_interest as defined in sec_2055 the petition for reformation if granted will result in a qualified_reformation as defined in sec_2055 a federal estate_tax charitable deduction will be allowed under sec_2055 for the date of death present_value of the remainder_interest of brother’s trust as plr-126203-01 reformed except as we have specifically ruled herein we express no opinion on the federal tax consequences of the transaction under the cited provisions or under any other provisions of the code this ruling is directed only to the taxpayer who requested it sec_6110 of the code provides that it may not be used or cited as precedent sincerely katherine a mellody senior technician reviewer branch office of the associate chief_counsel passthroughs and special industries enclosures copy for sec_6110 purposes


internal_revenue_service department of the treasury significant index no dollar_figure washington dc person to contact telephone number refer reply to op e bp t date nov isg legend company a company b employer c plan x this is in response to your ruling_request dated date the application of sec_401 code to certain proposed distributions from plan xx in which you request a private_letter_ruling concerning of the internal revenue the following facts and representations have been submitted effective date company a sold substantially to employer c all of the assets of company b company a the activities of company b constituted a separate trade_or_business within the controlled_group of which company a and company b are a part employer c continues to operate the business formerly operated by company b and has hired former company b employees a wholly owned subsidiary of employer c was established date and is a iimited partnership under state law employer c was formed and the limited_partnership agreement drafted with the intent that the partnership would be treated as an association_taxable_as_a_corporation for federal_income_tax purposes employer c will file its federal_income_tax returns consistent with this tax treatment employer c has also filed a protective_election pursuant to sec_301_7701-3 of the procedure and administration regulations to confirm its treatmment as a corporation effective date page based on the foregoing facts company a requests the following ruling a separate trade_or_business to employer c assuming that company a has sold substantially_all of the assets of the sale will be considered one made to a corporation for purposes of sec_401 made pursuant to sec_401 k b i ii the code to those participants in plan x who terminated employment with company b and accepted employment with employer c in connection with the sale of the code such that distributions may be and k of sec_401 b of the code provides that distributions from a qualified_cash_or_deferred_arrangement may only be made upon the occurrence of specified events sec_401 k b i ii provides that distributions may be made upon the occurrence of any event described in sec_401 k sec_401 k a ii provides that distributions may be made from a qualified_cash_or_deferred_arrangement upon the disposition by a corporation of substantially_all of the assets within the meaning of sec_409 used by such corporation in a trade_or_business of such corporation but only with respect to an employee who continues employment with the corporation acquiring such assets sec_401 b and cc of the code further require that distributions must be lump sum distributions and that the transferor_corporation must continue to maintain the plan after the disposition of these assets sec_301_7701-3 i of the procedure and administration regulations provides that an eligible_entity in existence prior to january classification that the entity claimed under old sec_301_7701-1 through employer c was formed date accordingly employer c will be treated as an association taxable as i subject_to applicaton of sec_301_7701-3 for federal tax purposes a corporation pursuant to sec_301_7701-3 and claimed association status as of that date will have the same in view of the foregoing and the facts presented herein we a separate trade_or_business to employer c have determined that employer c should be treated as corporation for purposes of sec_401 k a ii therefore assuming that company a has sold substantially_all of the assets of that the sale will be considered one made to a corporation for purposes of sec_401 k a ii distributions that otherwise meet the requirements of sec_401 k b ii of the code such that of the code may be and k is concluded it a page made to those participants in plan x who terminated employment with company b and accepted employment with employer c connection with the sale in pursuant to a power_of_attorney on file in this office a copy of this ruling is being sent to your authorized representative sincerely yours gran u moen frances v sloan chief employee_plans technical branch enclosures deleted copy of letter_ruling form_437


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 b06 plr-147172-06 date date legend --------------------- taxpayer ----------------------------------------------------------- state commission a commission b order x y director ---------- ----------------------------------------------------------------------- ----------------------------------------------------- ----------------------------------------------------------------------------- ---------------------- --------------- -------------------------------------------------------------------------------- ----------------------------------------------------------------------------------- this letter responds to the request dated date of taxpayer for a ------------------------------------------------- dear --- - --------- ruling on the consequences of taxpayer’s accounting and regulatory treatment of the investment_tax_credit itc taxpayer is an investor-owned public_utility incorporated under the laws of state taxpayer’s primary business is the generation transmission and distribution of electric power it is subject_to the regulatory jurisdiction of commission a and commission b with regard to its retail rates and certain conditions of service both commission a and commission b require taxpayer to comply with tax normalization rules and taxpayer timely filed an affirmative election to account for its itc under former sec_46 of the internal_revenue_code of the representations set out in your letter follow historically taxpayer has determined depreciation expense for regulatory plr-147172-06 purposes by applying a composite annual percentage rate to the original cost of assets on a functional group basis the composite annual percentage rate is based on an estimate of average useful_life of the assets in the functional group and net salvage net salvage is the estimated amount to be received for the asset upon retirement less the estimated cost to retire or remove the asset while net salvage can be positive or negative depending on the functional group in the aggregate the taxpayer’s net salvage is negative meaning that the experience and expectation of taxpayer is that it will cost more for taxpayer to remove and retire an asset than will be received for such asset as salvage taxpayer has used composite annual percentage rates including the negative net salvage in determining depreciation expense for ratemaking purposes with the approval of commission a in ---------------------------------------------- in addition taxpayer used these same composite annual percentage rates including the negative_net_salvage_value for commission b ratemaking purposes both commission a and commission b relied on calculations by taxpayer and were not specifically aware that taxpayer was using composite annual percentage rates that included negative net salvage as part of the calculation taxpayer also used these same rates to calculate the asset life over which to amortize the deferred itc for ratemaking purposes percentage rate for calculating depreciation for regulatory purposes is that taxpayer recovers the original cost of the asset somewhat earlier than under a calculation that does not include negative_net_salvage_value similarly using these rates to calculate asset life for itc purposes results in a more rapid amortization of the deferred itc than using the expected asset life unmodified by salvage considerations during the period from ------- through ------- taxpayer amortized approximately dollar_figurey more in itc than would have been amortized if actual asset life had been used rather than asset life as modified by the depreciation rates that take negative_net_salvage_value into account in order commission a approved inter alia an increase in annual depreciation expense by allowing taxpayer to recover interim net salvage recognizing that parts of major structures are retired before the retirement of the entire structure and by allowing taxpayer to include in its depreciation calculation terminal net salvage for taxpayer’s steam electric generation facilities order was effective for rates as of x subject_to appeal several parties appealed various items to the state court_of_appeals the court ----------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------- ------------------------------------ the effect of including negative net salvage as part of the composite annual during preparation for the appeals of order taxpayer became uncertain whether it had correctly amortized the itc because of the use of net_salvage_value in its calculation of the asset life for itc purposes this ruling_request followed plr-147172-06 law and analysis in general the itc was introduced in and repealed for years after by the tax_reform_act_of_1986 former sec_46 and sec_1_46-6 of the income_tax regulations provide limitations on the use of tax_credits by public_utilities former sec_46 provides a general_rule that disallows tax_credits for public_utility_property if for ratemaking purposes such investment_tax_credit is used to reduce the taxpayer’s cost of service or to reduce the taxpayer’s rate base unless such base rate reduction is restored ratably or faster over the property’s useful_life for ratemaking purposes under which an elector may flow through the investment_tax_credit to cost of service however former f a provides that no investment_tax_credit is available if the taxpayer's cost of service for ratemaking purposes or in its regulated books of account is reduced by more than a ratable portion of the credit determined under former a and allowable by sec_38 also under former sec_46 no investment_tax_credit is available if the base to which the taxpayer's rate of return for ratemaking purposes is applied is reduced by reason of any portion of the credit determined under former a and allowable by sec_38 former sec_46 of the code provides an election for ratable flow through former sec_46 of the code provides that for purposes of determining ratable portions under former sec_46 the period of time used in computing depreciation expense for purposes of reflecting operating results in the taxpayer's regulated books of account shall be used under sec_1_46-6 of the regulations ratable for purposes of former sec_46 of the code is determined by considering the period of time actually used in computing the taxpayer's regulated depreciation expense for the property for which a credit is allowed regulated depreciation expense is the depreciation expense for the property used by a regulatory body for purposes of establishing the taxpayer's cost of service for ratemaking purposes such period of time shall be expressed in units of years or shorter periods units of production or machine hours and shall be determined in accordance with the individual useful_life or composite or other group asset account system actually used in computing the taxpayer's regulated expense a method of reducing is ratable if the amount to reduce cost of service is allocated ratably in proportion to the number of such units thus for example assume that the regulated depreciation expense is computed under the straight_line method by applying a composite annual percentage rate to original cost as defined for purposes of computing depreciation expense if cost of service is reduced annually by an amount computed by applying a composite annual percentage rate to the amount of the credit cost of service is reduced by a ratable portion if such composite annual percentage rate were revised for purposes of computing depreciation expense beginning with a particular plr-147172-06 accounting_period the computation of ratable portion must also be revised beginning with such period a composite annual percentage rate is determined solely by reference to the period of time actually used by the taxpayer in computing its regulated depreciation expense without reduction for salvage or other items such as over and under accruals a composite annual percentage rate determined by taking into account salvage_value or other items shall be considered to be ratable in the case of a determination whether or not final issued before date and any rate order whether or not final that is entered into before date in response to a rate case filed before date for this purpose the term rate order does not include an order by a regulatory body that perfunctorily adopts rates as filed if such rates are suspended or subject_to rebate sec_1_46-6 provides that the itc is disallowed for any sec_46 property placed_in_service by a taxpayer before the date a final_decision of a regulatory body that is inconsistent with sec_1_46-6 is put into effect on or after such date and before the date a subsequent decision consistent with sec_1_46-6 is put into effect sec_1_46-6 provides that there is no disallowance of a credit before the first_final_inconsistent_determination is put into effect for the taxpayer’s sec_46 property sec_1_46-6 provides that inconsistent refers to a determination that is inconsistent with sec_46 or for example a determination to reduce the taxpayer’s cost of service by more than a ratable portion of the credit would be a determination that is inconsistent with sec_46 senate report no 94th cong 1st sess 1975_1_cb_590 provides in its explanation of the ratemaking treatment to be accorded the additional itc allowed public_utilities under the act explains that the additional itc is to be disallowed if the regulatory agency requires the flowing-through of a company’s additional itc at a rate faster than permitted or insists upon a greater rate base adjustment than is permitted but only after a final_determination is put into effect that report further provides that the rules provided under existing law with respect to determinations made by a regulatory body and the finality of its orders would apply to this provision senate report no 92nd cong 1st sess 1972_2_cb_559 provides in its explanation of amendments to the revenue act of dealing with the limitations on the ratemaking treatment of the itc under sec_46 and e that the committee hopes that the sanctions of disallowance of the itc will not have to be imposed for the periods during which taxpayer included negative net salvage in its calculation of asset life for itc purposes it appears that the practical effect of that plr-147172-06 action was to flow the itc to ratepayers more rapidly than if calculated without the negative net salvage however this was not the intent of either the taxpayer or either commission a or commission b in accord with the senate reports quoted above disallowance or recapture of the itc should be imposed if at all only after a regulatory body has required or insisted upon such treatment by a utility because commission a and commission b at all times required that taxpayer comply with the normalization tax rules and because the matter of the itc flow-through calculation was not specifically addressed in the earlier orders by either of the commissions no disallowance or recapture is required in this case except as specifically determined above no opinion is expressed or implied concerning the federal_income_tax consequences of the matters described above in particular orders concerning this matter finalized by either of the commissions after the date of this ruling are not necessarily subject_to the same analysis as those considered above this ruling is directed only to the taxpayer who requested it sec_6110 of the code provides it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative we are also sending a copy of this letter_ruling to the director sincerely charles b ramsey chief branch passthroughs special industries


internal_revenue_service number release date index number ------------------------- --------------------------------------------------- -------------------------------------------------- -------------------------- ---------------------------------- in re -------------------------------------------------- -------------------------- --------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact ------------------------------------------ telephone number ---------------------- refer reply to ccita plr-131986-12 date january taxpayer -------------------------------------------------- ------------------------- exempt_organization business x state limited_partnership investor member date y w address z year --------------------------------------------------------------- ------------------------------------------- ---------------- -------------- ---------------------------------------------------- ------------------------------------------------------------------------ ------------------------------------------- -------------------------- ---- -------- -------------------------- --------------------------- ----- ------- plr-131986-12 dear ---------------- this letter responds to your private_letter_ruling request dated date regarding an extension of time to make an election under sec_301_9100-1 and sec_301_9100-3 of the procedure and administration regulations regulations specifically you requested an extension of time to make an election under sec_168 of the internal_revenue_code code for taxpayer a tax-exempt_controlled_entity under sec_168 facts taxpayer is organized under the laws of state and is a subchapter_c_corporation for federal_income_tax purposes taxpayer is engaged in business x uses the cash_method_of_accounting and has the fiscal_year ending october as its taxable_year taxpayer is wholly owned by exempt_organization which has received a determination that it is a tax-exempt_organization described in sec_501 of the code because exempt_organization owns more than percent in value of the stock of taxpayer taxpayer is a tax-exempt_controlled_entity within the meaning of sec_168 on date limited_partnership was formed taxpayer is the general_partner of limited_partnership with an ownership_interest of y percent the limited_partnership was organized to build and operate a multiple-family residential building at address the building contains z units of multi-family rental housing development and other improvements to be rehabilitated developed constructed owned and operated by limited_partnership investor member owns a w percent interest in limited_partnership the taxable investors in limited_partnership required taxpayer to make an election pursuant to sec_168 for year when taxpayer filed its federal_income_tax for year in fact investor member’s contribution was predicated on taxpayer making an election under sec_168 for year the election was necessary to ensure a more favorable depreciable life for the residential_rental_property taxpayer filed a timely federal_income_tax return for year but failed to make the sec_168 election on that return however from the affidavit and other materials submitted it is clear that taxpayer at all times intended to make the sec_168 election upon discovering its failure taxpayer promptly sought an extension of time in which to file the election applicable law sec_167 of the code provides generally for a depreciation deduction for property used in a trade_or_business under sec_168 the alternative_depreciation_system must be used for any_tax exempt use property as defined in sec_168 plr-131986-12 sec_168 provides that for purposes of sec_168 if any property that is not tax-exempt-use property is owned by a partnership having both a tax-exempt_entity and a nontax-exempt entity as partners and any allocation to the tax-exempt_entity is not a qualified_allocation then an amount equal to such tax-exempt entity’s proportionate share of such property is treated as tax-exempt_use_property sec_168 provides generally that any tax-exempt_controlled_entity is treated as a tax-exempt_entity for purposes of sec_168 and under sec_168 a tax-exempt_controlled_entity can elect not to treated as a tax- exempt entity such an election is irrevocable and will bind all tax-exempt entities holding an interest in the tax-exempt_controlled_entity under sec_301_9100-7t of the regulations an election under sec_168 must be made by the due_date of the tax_return for the first taxable_year for which the election is to be effective sec_301_9100-1 provides that the commissioner of internal revenue has discretion to grant a reasonable extension of time to make a regulatory election sec_301_9100-1 defines the term regulatory election as including any election the due_date for which is prescribed by a regulation sec_301_9100-1 through sec_301_9100-3 provides the standards that the service will use to determine whether to grant an extension of time to make a regulatory election sec_301_9100-3 provides that requests for extensions of time for regulatory elections other than automatic changes covered in sec_301_9100-2 will be granted when the taxpayer provides evidence including affidavits to establish that the taxpayer acted reasonably and in good_faith and granting relief will not prejudice the interests of the government sec_301_9100-3 provides that a taxpayer will be deemed to have acted reasonably and in good_faith if the taxpayer-- i ii iii requests relief before the failure to make the regulatory election is discovered by the service failed to make the election because of intervening events beyond the taxpayer's control failed to make the election because after exercising due diligence the taxpayer was unaware of the necessity for the election iv reasonably relied on the written advice of the service or plr-131986-12 v reasonably relied on a qualified_tax professional and the tax professional failed to make or advise the taxpayer to make the election under sec_301_9100-3 a taxpayer will not be considered to have acted reasonably and in good_faith if the taxpayer- i ii iii seeks to alter a return position for which an accuracy-related_penalty could be imposed under sec_6662 at the time the taxpayer requests relief and the new position requires a regulatory election for which relief is requested was fully informed of the required election and related tax consequences but chose not to file the election or uses hindsight in requesting relief if specific facts have changed since the original deadline that make the election advantageous to a taxpayer the service will not ordinarily grant relief sec_301_9100-3 provides that the service will grant a reasonable extension of time only when the interests of the government will not be prejudiced by the granting of relief the interests of the government are prejudiced if granting relief would result in a taxpayer having a lower tax_liability in the aggregate for all taxable years affected by the election than the taxpayer would have had if the election had been timely made analysis it is apparent from the facts submitted by taxpayer that taxpayer intended from the outset to make the sec_168 election that its failure to make the election on its original return was inadvertent and that taxpayer is not using hindsight in requesting relief moreover taxpayer requested relief before the failure to make the election was discovered by the service finally taxpayer acted reasonably and in good_faith and the interests of the government will not be prejudiced by the granting of relief under sec_301_9100-3 conclusion based solely on the facts as represented and the applicable law we conclude that the request for relief under sec_301_9100-3 should be granted accordingly taxpayer is granted an extension of time of days from the date of this letter_ruling to file an amended_return making the election under sec_168 taxpayer should attach this letter to its amended_return plr-131986-12 although this office has not verified any of the material submitted or facts assumed in support of the request_for_ruling they are subject_to verification on examination except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter this ruling is directed only to the taxpayer requesting it sec_6110 of the code provides that it may not be used or cited as precedent enclosed is a copy of the letter showing the deletions proposed to be made when it is disclosed under sec_6110 if you have any questions concerning this matter please contact the individual whose name and telephone number appear at the beginning of the letter sincerely income_tax accounting michael j montemurro chief branch associate chief_counsel enclosure copy for sec_6110 purposes cc


department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division release number release date date date u l il nos _employer identification_number legend x y a b c c s x x i n dear this is in response to x's request dated date supplemented by a letter dated x requested a ruling under date and modified by a letter dated date sec_513 of the internal_revenue_code regarding the federal tax consequences associated -- with the transactions described below the request was submitted by x's legal_representative x is exempt from federal_income_tax as an organization described in sec_501 of the code x represents the a industry to government media business and consumers y is a for-profit entity that owns and operates several trade shows for the a industry the trade shows are held annually around the world and promote and stimulate interest in the a industry the industry is promoted through exhibits and educational programming the trade shows provide a gathering place for industry professionals to exchange ideas know-how and exhibit their wares the educational programming provides ideas for solutions to industry problems offers trends and innovations and promotes awareness of the industry legislative objectives and legal compliance imperatives the trade shows draw a wide variety of members of the industry and also attract many consumers of industry products they attract be approximately u attendees and approximately v exhibitors and related staff numete e x and y entered into a b agreement and subsequently executed a c agreement that provide the terms and conditions by which x will sponsor two of the annual trade shows in its letter dated date x made the following representations conducted by y regarding the activities it conducts with x pursuant to the terms of the two agreements xa inf a ctively participates in two events owned by y per year urtherance of the trade shows x engages in the following -x provides pre-show publicity in its e-newsletter for the trade shows two to three - months preceding the events links to the websites for the trade shows are embedded in the newsletter information regarding the trade shows is provided in the newsletter and participation is encouraged and an x sponsored party which occurs at the trade shows is publicized if requested by y x sends out e-mails to its members to promote a trade_show usually when registration for a trade_show is lagging x and y share exhibit space at the trade shows x stocks its exhibit space with materials about its membership and provides members who are in need of information regarding the trade_show with general assistance x and y collaborate on details regarding the set up the booth and on providing manpower for the booth x and y co-sponsor a lounge at the trade_show site which is furnished with chairs and couches for x members to unwind during the day an x staff member serves as a hostess and food water coffee and tea are provided a trade_show committee consisting of six x members and two x board members provides y with advice on best practices at the trade shows such as information on hotel transportation the exhibits and the exhibit hall the trade shows are jointly managed by x and y annual planning meeting with y focusing exclusively on the trade shows x staff attends and plans a party that is provided by an x member sponsor y receives complimentary tickets to distribute to key buyers those who buy targe quantities of a the purpose of the party is to bring major buyers and sellers of a together in an informal setting to enjoy the product and talk about it to the best of x's knowledge no endorsement or promotion of y occurs beyond the -general promotion of the trade shows owned by y man the x booth promoting its membership and providing information about the industry direct x staff and members to points where they can best target their support for the industry interact with media to publicize the industry new developments in the industry and the show act as hosts for the x member lounge provide research industry know-how knowledge and experience at industry xsends staff members to the trade shows to x senior management attends an a b g cc a f g meetings meet with x members on a one on one basis to develop relationships that help x to ‘understand the differing needs of suppliers resellers and end-users informally promote dialogue and interaction among show participants and within the overall industry y owns an industry periodical for which it provides all copy and sells all advertising x provides suggestions for stories x's staff and members are often featured init x provides general industry and know-how to the publication and x provides a quarterly editorial x has no control_over the periodical’s content and does not share in any of the periodical’s revenues y pays x a percentage of various show related revenue streams exhibit space catalog advertising sponsorships conferences w x y z x has requested the following rulings payments received by x from y under the c agreement constitute a payment for by x for y and not passive royalty payments under section sovnor b from of organizations described in sec_501 sec_501 c of the code provides for the exemption from federal_income_tax of the services performed by the x under the agreement constitute the conduct of a sec_511 of the code generally imposes a tax on the unrelated_business_taxable_income qualified convention or trade_show by a qualifying_organization under sec_513 the space sales revenue conference net profit revenue and sponsorship revenue received by the substantially related to the activities of the organization and the income therefore is not unrelated_business_income business_leagues chambers_of_commerce real-estate boards or boards_of_trade not organized for profit and no part of the net_earnings of which inures to the benefit of any private_shareholder_or_individual sec_512 of the code defines the term unrelated_business_taxable_income to mean the gross_income with certain modifications derived by any organization from any unrelated_trade_or_business defined in sec_513 regularly carried on by it including overriding royalties whether measured by production or by gross or taxable_income_from_the_property and all deductions directly connected with such income from the term unrelated_business_taxable_income sec_512 of the code a modification of sec_512 excludes all royalties _ sec_513 of the code provides that the term- unrelated_trade_or_business means in case of any organization subject_to the tax imposed by sec_511 any trade_or_business thé the clinduct of which is not substantially related to the exercise or performance by such organization of its charitable educational or other purpose or function constituting the basis for its exemption ’ sec_513 of the code provides that the term trade_or_business includes any activity which is carried on for the production_of_income from the sale_of_goods or the performance of services for purposes of the preceding sentence an activity does not lose identity as a trade -- - or business merely because it is carried on within a larger aggregate of similar activities or within a larger complex of other endeavors which may or may not be related to the exempt purposes of the organization where an activity carried on for profit constitutes an unrelated_trade_or_business no part of such trade_or_business shall be excluded from such classification merely because it does not result in profit - sec_513 of the code provides in part that the term unrelated_trade_or_business does not include qualified convention and trade_show activities of an organization described in sec_513 section d a of the code defines the term convention_and_trade_show_activity as any activity of a kind traditionally conducted at conventions annual meetings or trade shows aconvention and trade_show activity includes but is not limited to any activity one of the purposes of which is to attract persons in an industry generally without regard to membership in the sponsoring_organization as well as members of the public to the show for the purpose of displaying industry products or to stimulate interest in and demand for industry products or services or to educate persons engaged in the industry in the development of new products and services or new rules and regulations affecting the industry sec_513 of the code defines the term qualified_convention_and_trade_show_activity as a convention_and_trade_show_activity carried out by a qualifying_organization described in sec_513 in conjunction with an international national state regional or local convention annua meeting or show conducted by an organization described in sec_513 if one of the purposes of such organization in sponsoring the activity is the promotion and stimulation of interest in and demand for the products and services of that industry in genera or to educate persons in attendance regarding new developments or products and services related to the exempt_activities of the organization and the show is designed to achieve such purpose through the character of the exhibits and the extent of the industry products displayed sec_513 of the code defines the term qualifying_organization as an organization described in sec_501 or which regularly conducts as one of its substantial exempt purposes a show which stimulates interest in and demand for the products of a particular industry or segment of such industry or which educates persons in attendance regarding new developments or products and services related to the exempt_activities of the organization sec_1_501_c_6_-1 of the income_tax regulations in part provides that a business league is an association of persons having some common business_interest the purpose of which is to promote such common interest and not to engage in a regular business of a kind ordinarily carried on for profit the regulation provides that organizations otherwise exempt from tax under this section are taxable on their unrelated_business_taxable_income sec_1_512_b_-1 of the regulations provides that whether a particular item_of_income falls within any of the modifications provided in sec_512 of the code shall be determined by all the facts and circumstances of each case section d iv of the regulations provides that an organization in the performance’ of exempt functions may generate good will or other intangibles which are capable of being exploited in commercial endeavors where an organization exploits such an intangible in commercial activities the mere fact that the resultant income depends in part upon an exempt_function does not make it gross_income from related trade_or_business unless the commercial activities themselves contribute importantly to the accomplishment of an exempt_purpose the following examples illustrate this principle in examples and gross_income derived from advertising in journals published by an organization exempt under sec_501 is gross_income from unrelated_trade_or_business although continuing education of its members in matters pertaining to their profession is one of the purposes for which the organization is granted exemption the publication of advertising designed and selected in the manner of ordinary commercial advertising is not an educational activity of the kind contemplated by the exemption statute it differs fundamentally from such an activity both in its governing objective and in its method neither the publication of advertisements nor the performance of services for commercial advertisers contributes importantly to the accomplishment of any purpose for which the exemption is granted even if the advertisements promoted only products which are within the general area of professional interest of the organization’s members and contained certain information the informational function of the advertising is incidental to the controlling aim of stimulating demand for the advertised products and differs in no essential respect from the informational function of any commercial advertising - section’ a of the regulations explains that generally sec_513 and section b provide that convention and trade_show activities carried on by a qualifying_organization in connection with a qualified convention or trade_show will not be treated as unrelated_trade_or_business consequently income from qualified convention or trade_show activities derived by a qualifying_organization that sponsors the qualified convention or trade_show will not be subject_to the tax imposed by sec_511 sec_1_513-3 of the regulations provides that convention and trade_show activities carried on by a qualifying_organization in connection with a qualified convention and trade_show will not be treated as unrelated_trade_or_business a qualifying_organization is defined in section big_number c of the regulations as an organization described in sec_501 or of the code which regularly conducts as one of its substantial exempt purposes a qualified convention __ or trade_show sec_1_513-3 of the regulations indicates that to be a qualified convention or trade_show at least one purpose of the sponsoring_organization in conducting the show must be the education of its members or the promotion and stimulation of interest in and demand for the - prodticts or services of the industry of the members of the qualifying_organization and the show must be designed to achieve either one of those purposes through the character of a significant portion of the exhibits or the character of conferences and seminars held at a convention or meeting sec_1_513-3 of the regulations provides that convention_and_trade_show_activity means any activity of a kind traditionally carried on at such shows sec_1_513-3of the regulations states that the rental of display space to exhibitors including exhibitors who are suppliers at a qualified convention and trade_show will not be considered unrelated_trade_or_business even though the exhibitors who rent the space are permitted to sell or solicit orders revrul_78_240 1978_1_cb_170 holds that a business league exempt under sec_501 that received reasonable_compensation for sponsoring and endorsing an international commercial trade_show which was not a sales facility and at which the league performed educational and supporting services was not engaged in unrelated_trade_or_business under sec_513 in the revenue_ruling the irs stated that the organization was formed for the purpose of encouraging the creation and adoption of trends and modern methods of the industry under an agreement with the producers of an international commercial trade_show the organization received reasonable_compensation for sponsoring and lending its name and good will to the show and for performing certain supporting services the organization's involvement in the trade_show was limited to permitting the producer to use its name in connection with the show promoting attendance planning educational exhibits and __ demonstrations and providing lectures for the exhibits and demonstrations by planning and staffing educational portions of the trade_show the business league contributed importantly to the accomplishment of its own exempt purposes since the show as a whole stimulated interest in and demand for services of the professional while educating members on matters of professional interest furthermore the irs pointed out that the business league's endorsement of the show attracted to the event more members of the profession and the public enhancing the show's educational and demand-creating impact revrul_81_178 1981_2_cb_135 holds that payments an exempt_organization receives from a business_enterprise for_the_use_of the organization’s trademark and similar properties are royalties within the meaning of sec_512 of the code and are not taken into account in determining unrelated taxable_income however payments the organization receives for personal services provided by its members are not royalties but are compensation_for taxable_income revrul_2004_112 2004_2_cb_985 holds that i t is the nature of the activities and their connection to a specific convention annual meeting or trade_show that distinguishes ‘qualified convention and trade_show activity’ within the meaning of sec_501 and the regulations from other types of advertising and promotional activities conducted by organizations described -- in sec_501 _ conducted by sec_501 organizations would or would not come within the qualified trade in the revenue_ruling several situations are presented in which activities - show or convention exception of sec_513 situation provides an example of a qualifying_organization it holds semi-annual trade shows which include conferences seminars and a wide variety of exhibits sponsored by members and suppliers it provides information that is useful to those in the industry it takes place at a limited time at one physical location and the organization’s members suppliers and potential customers meet together in person and interact face to face x is substantially involved in the production of two of the annual international trade shows x shares in some of the revenues from the shows which it conducted by y a for-profit entity endorses plans and for which it provides staffing through its activities x stimulates interest in the trade shows attracting the public and its members to them in providing services to y in addition to its endorsement of the trade shows the income received by x would net be excluded from its income under sec_512 as royalty income see also revrul_81_178 supra in addition sec_513 of the code provides that generally activities carried on for the production_of_income would constitute a trade_or_business however an exception to what constitutes an unrelated_trade_or_business applies to certain activities conducted by a qualifying_organization in connection with a convention annual meeting or trade_show in furtherance of the organization’s exempt purposes sec_513 of the code x is a qualifying_organization within the meaning of sec_513 of the code in order for the shows that it co-sponsors to be qualified convention or trade shows they must regularly be conducted by a qualified_organization with one of their purposes being to stimulate interest in and demand for the products and services of the a industry the shows must be designed to achieve the promotional purpose through their exhibits and the extent of industry products displayed sec_1_513-3 of the treas regs see also revrul_2004_113 supra convention_and_trade_show_activity is defined as any activity traditionally carried on at shows it includes activities designed to attract members and the public to view the products and services to stimulate interest in and demand for such products and services to educate persons in the industry on regulations affecting the industry and includes incidental activities such as furnishing refreshments sec_1_513-3 of the regulations see also revrul_2004_112 supra x's activities which are substantially related to x's exempt purposes are qualified convention and trade_show activities as defined in d a of the code and sec_1 c of the regulations see also revrul_2004_112 supra x publicizes the annual tradé shows during periods of time that coincide with a particular trade_show 's activities and exhibits are directed towards informing and educating its members and the public about the a industry x engages in activities that stimulate an interest in and a demand for products provided by the a industry it does so by promoting the shows their exhibits and the educational material that is made available at the shows x provides support services to y at the trade shows by planning and participating in the trade shows and by providing staffing these activities serve to further x’s exempt purposes of stimulating an interest in the industry educating the public and x members and bringing members of the industry together with suppliers and potential customers the fact that x conducts its trade_show activities through sponsoring and participating in commercial trade shows with a for-profit entity does not change their nature as qualified trade_show activities sec_513 of the code revrul_78_240 supra therefore income x derives from the qualified trade_show activity in which it engages is excluded from taxation under sec_511 sec_513 of the code sec_1_513-3 of the regulations sec_1 d of the regulations revrul_78_240 supra rev_rul supra see also sec_1_513-1 accordingly based upon the information furnished we rule as follows payments received by x from y under the c agreement constitute a payment for soe periormed by x for y and not passive royalty payments under sec_512 the services performed by the x under the agreement constitute the conduct of a qualified convention or trade_show by a qualifying_organization under sec_513 the space sales revenue conference net profit revenue and sponsorship revenue ' received by the‘ from substantially related to the activities of the organization and the income therefore is not unrelated_business_income this ruling applies the applicability of sections to the facts represented above we express no opinion as to the tax consequences of the transaction under any other provisions of the code this ruling is conditioned on the understanding that there will be no material changes in the facts upon which it is based please keep a copy of this ruling in your organization's permanent records this ruling will be made available for public inspection under sec_6110 of the code after certain deletions of identifying information are made for details see enclosed notice notice of intention to disclose a copy of this ruling with deletions that we intend to make available for public inspection is attached to notice if you disagree with our proposed deletions you should follow the instructions in notice this ruling is directed only to the organization that requested it sec_6110 of the code provides that it may not be used or cited by others as precedent if you have any questions about this ruling please contact the person whose name and telephone number are shown in the heading of this letter sincerely michael c seto manager exempt_organizations technical guidance and quality assurance group cc poa


internal_revenue_service number info release date june cc psi 1-genin-125574-03 uilc dear we are responding to a request submitted on your behalf by cpa seeking late s_corporation relief under sec_1362 of the internal_revenue_code for an effective taxable_year of based on the information submitted and your account history it appears that you are eligible for automatic late s_corporation relief pursuant to revproc_97_48 in revproc_97_48 copy attached the internal_revenue_service provides special procedures that permit taxpayers in certain situations to obtain automatic late s_corporation relief instead of applying for a private_letter_ruling normally to receive relief one must follow the procedural requirements described in sec_4 however we have intervened on your behalf and asked the irs to update your account for the effective taxable_year that you requested you should have recently received an acceptance letter regarding the new effective date if you would like to check the status of your account you may call the business specialty tax line pincite-829-4933 pre sec_3 then again please keep this letter with your tax records and feel free to provide a copy of it to your authorized representative we hope that the above information proves helpful s dianna k miosi sincerely yours dianna k miosi chief branch associate chief_counsel passthroughs and special industries enclosure revproc_97_48


significant index no department of the treasury internal_revenue_service washington d c tax_exempt_and_government_entities_division jan ti ep rat k2 in re dear this letter constitutes notice that a conditional waiver of the minimum_funding_standard has been granted for the above-named pension_plan for the plan_year ending date the conditional waiver has been granted in accordance with sec_412 of the internal_revenue_code the code and sec_303 of the employee_retirement_income_security_act_of_1974 erisa the amount for which the waiver has been granted is the contribution that would otherwise be required to reduce the balance in the funding_standard_account of the plan to zero as of the end of the plan_year for which the waiver has been granted the company’ is in the business of contract manufacturing of for the industry the company is a wholly owned subsidiary of _ with no changes in ownership since date the the plan became effective date a total of employees are covered- under the plan oe the primary factor resulting in the company's temporary substantial business hardship is the overall downturn in the comprises a major portion of the company’s customer base a year-to-date comparison through the end of date versu sec_2001 show an approximate decline in total revenues that resulted in an approximate decline in net_income which the company has taken action commencing prior to the downturn in sales to reduce material and production_costs by outsourcing some manufacturing to off- shore partners establishing contacts with foreign raw material sources and putting in place letter of intent agreements with domestic suppliers in the company changed its benefit formula from of average monthly compensation multiplied by years_of_service from date up to a maximum of years to of average monthly compensation multiplied by years_of_service from date up to a maximum of years this waiver has been granted subject_to the following condition which you have agreed to the company will make contributions necessary to satisfy the minimum_funding requirement including the waiver amortization payment for the plan_year ended date of the plan for the plan_year ending date by date if the company fails to meet the above condition this waiver is retroactively null and void your attention is called to sec_412 of the code and sec_304 of erisa which describes the consequences which result in the event the plan is amended to increase benefits to change the rate in the accrual_of_benefits or to change the rate of vesting while any portion of the waived amount remains unamortized this ruling is directed only to the organization that requested it sec_6110 of the code provides that it may not be used or cited as others as precedent when filing form_5500 for the plan_year ending date the date of this letter should be entered on schedule b actuarial information we have sent a copy of this letter to the authorized representative listed on power_of_attorney form and to the area manager in if you have any questions concerning this matter please contact i ore sincerely s a hindi’ oy if inppins martin l pippins manager employee_plans actuarial group


t c no united_states tax_court joseph b williams iii petitioner v commissioner of internal revenue respondent docket no filed date p filed a petition timely seeking redetermination of deficiencies in income_tax for and attempting to put at issue certain liabilities for which he received no notice from r p’s income_tax_liability for his potential liability for unassessed interest on asserted tax_liabilities and his liability for a so-called fbar penalty under u s c sec a r moved to dismiss in part as to the three liabilities not included in the deficiency_notice held the tax_court lacks jurisdiction to redetermine p’s income_tax_liability for liability for unassessed interest and liability for the fbar penalty david h dickieson for petitioner john c mcdougal for respondent opinion gustafson judge this matter is before us on respondent’s motion to dismiss for lack of jurisdiction and to strike as to the taxable_year as to interest and as to fbar foreign_bank_account_report penalties the motion petitioner objects the objection we shall grant the motion background by notice_of_deficiency dated date respondent determined deficiencies in petitioner’s through federal_income_tax along with penalties and additions to tax by the petition petitioner assigned error to those determinations we have jurisdiction to consider petitioner’s assignments of error the petition however also addresses three other matters that are the subject of respondent’s motion petitioner appears to seek relief as to the year the first year after the years that are the subject of the notice_of_deficiency he states that the tax periods involved in this petition are income taxes for emphasis added he seeks an abatement of any interest which may be assessed for certain periods on the deficiencies at issue here and he cites sec_6404 abatement of interest 1except as otherwise noted section references are to the internal_revenue_code u s c and rule references are to the tax_court rules_of_practice and procedure attributable to unreasonable errors and delays by the internal_revenue_service he discusses penalties imposed on him under u s c section for failure_to_file foreign bank account reports fbars disclosing swiss bank accounts the petition ends with a prayer that any_tax deficiency fbar penalty and or interest be abated discussion the tax_court is a court of limited jurisdiction we may therefore exercise jurisdiction only to the extent expressly provided by statute 66_tc_61 congress has not conferred jurisdiction on this court to consider the matters that are the subject of the motion tax_year in a case seeking redetermination of a deficiency jurisdiction depends on the issuance by the commissioner of a notice_of_deficiency sec_6212 sec_6214 the objection acknowledges that taxable_year is not included in the notice_of_deficiency because it is not the court does not have jurisdiction to determine petitioner’s tax_liability for taxable_year and we shall deem stricken from paragraph of the petition the reference to see rule the court may order stricken from any pleading any insufficient claim or any immaterial or impertinent matter cf fed r civ p f 120_tc_102 n interest this court has only limited jurisdiction to address issues related to statutory interest see 13_f3d_54 2d cir here petitioner invokes sec_6404 which authorizes the commissioner to abate the assessment of all or any part of such interest by implication petitioner invokes sec_6404 which authorizes this court in certain circumstances to determine whether the secretary’s failure to abate interest under this section was an abuse_of_discretion however the petition seeks not an abatement of interest that has been assessed but rather an abatement of any interest which may be assessed emphasis added the remedy available under sec_6404 is for the commissioner to abate the assessment of interest emphasis added thus as this court has observed sec_6404 by its very terms does not operate until after there has been an assessment of interest 89_tc_352 as a result jurisdiction under sec_6404 for this court to review the commissioner’s determination 2the petition also states the sheer size of this potential interest liability mandates that any errors on its calculation be raised in this petition and addressed by the tax_court emphasis added under sec_6404 is lacking unless and until an assessment of interest has occurred and the secretary has mailed his final_determination not to abate such interest sec_6404 see rule 110_tc_20 petitioner seeks instead a preassessment review by this court which congress has not empowered the court to undertake rather the supreme court has characterized sec_6404 as a precisely drawn detailed statute that pre-empts more general remedies 127_sct_2011 quoting ec term of years trust v united_states u s ___ ___ 127_sct_1763 we therefore lack jurisdiction over the petition to the extent it seeks relief pertaining to interest and we shall deem stricken from the petition paragraph sec_5 and and the reference to interest in the prayer for relief fbar penalties the fbar penalties that the petitioner alleges have been imposed on him are authorized in title money and finance of the united_states_code not title_26 the internal_revenue_code the fbar provisions originated in the bank secrecy act publaw_91_508 84_stat_1114 and after the terrorist attacks of date congress directed in the usa patriot act that attempts should be made to improve compliance with these provisions title u s c sec_5314 authorizes the secretary_of_the_treasury to require a citizen_of_the_united_states to keep records and file reports when the citizen maintains a relation for any person with a foreign financial agency the secretary_of_the_treasury exercised that authority by requiring that citizens report their foreign bank accounts see c f_r sec dollar_figure and by ordering that the reports be made on forms to be filed with the internal_revenue_service irs see id sec_103 c - e section a of title provides for civil penalties for violations of the reporting requirements of sec_5314 and section b provides that the secretary_of_the_treasury may assess those penalties section b provides that the secretary may commence a civil_action to recover the penalty the secretary’s authority to assess the civil fbar 3see usa patriot act publaw_107_56 115_stat_272 the secretary_of_the_treasury shall study methods for improving compliance with the reporting requirements established in sec_5314 of title united_states_code and shall submit a report on such study to the congress by the end of the 6-month period beginning on the date of enactment of this act and each 1-year period thereafter penalties has been delegated to the irs see c f_r sec_103 g the petition states that such fbar penalties were imposed on the petitioner not specifying whether they have been assessed or merely proposed states that the irs appeals_office in baltimore upheld the imposition of the penalties urges that the appeals_office abused its discretion in so doing and asks this court to abate the fbar penalties we cannot do so the tax_court and its divisions shall have such jurisdiction as is conferred on them by this title ie title_26 and predecessor internal revenue statutes see sec_7442 petitioner does not point to any grant of jurisdiction to this court that would extend to fbar penalties and we find none the fbar penalties provided in title are nowhere made subject_to the deficiency procedures of title_26 see secs on which procedures the bulk of this court’s jurisdiction is predicated for certain taxes sec_6212 authorizes the commissioner to issue a notice_of_deficiency sec_6213 provides that the tax may not be assessed until such a notice has been issued and it provides that the assessment of the tax must be delayed pending a possible redetermination by the tax_court if the taxpayer files a timely petition with the court however under sec_6212 and sec_6213 such a notice_of_deficiency is to be sent in the case of a deficiency in respect of any_tax imposed by subtitle a income taxes or b estate_and_gift_taxes or chapter or in subtitle d miscellaneous excise_taxes by negative implication any other taxes--even if imposed in title 26--fall outside this court’s deficiency jurisdiction the same conclusion must be reached as to the fbar penalties imposed in title the secretary_of_the_treasury is authorized by u s c sec b to assess the fbar penalty no notice_of_deficiency is authorized by sec_6212 nor required by sec_6213 before that assessment may be made and the penalty therefore falls outside our jurisdiction to review deficiency determinations petitioner does not allege here that he received any notice_of_deficiency for the fbar penalties nor does he allege having 4for example the assessable_penalties provided under chapter ie within subtitle f procedure and administra- tion fall outside the deficiency_notice regime of sec_6212 to and thus fall outside this court’s deficiency jurisdiction see eg sec_6682 deficiency procedures not to apply sec_6703 deficiency procedures shall not apply with respect to the assessment or collection of the penalties provided by sec_6700 sec_6701 and sec_6702 115_tc_324 the tax_court does not have jurisdiction to redetermine liability for sec_6702 penalties 60_tc_977 trust fund recovery penalties under sec_6672 fall outside the tax court’s deficiency jurisdiction whether the tax court’s collection_due_process jurisdiction extends to the review of collection efforts directed to the assessable_penalties is a different question to which the answer is now affirmative in view of a amendment to sec_6330 see 130_tc_44 received any other notice that might confer jurisdiction on this court such as a notice pertaining to a lien under sec_6321 or to a levy under sec_6331 both of which are procedures applicable to any person liable to pay any_tax emphasis added such collection activities give rise to a notice and opportunity for a hearing under sec_6320 or sec_6330 both of which explicitly presume unpaid tax that notice may result in an agency determination that this court would then have jurisdiction to review in the lien and levy context see sec_6320 sec_6330 under sec_6330 this court’s authority to review irs collection activity depends on the commissioner’s prior issuance of such a notice_of_determination under sec_6330 see 114_tc_176 and in the absence of such a notice this court lacks jurisdiction to review the commissioner’s collection activity the statutes creating the collection_due_process procedures and the statutes creating the lien and levy collection mechanisms reviewed by those procedures all 5the lien created in sec_6321 arises only in the case of any_tax including any interest additional_amount addition_to_tax or assessable penalty together with any costs that may accrue in addition thereto emphasis added the assessable penalt ies referred to in sec_6321 are evidently those denominated as such in chapter subchapter_b assessable_penalties sections similarly collection by levy is authorized in sec_6331 only for any_tax and such further sum as shall be sufficient to cover the expenses of the levy emphasis added explicitly pertain to tax not to the fbar penalty that petitioner attempts to put at issue here petitioner does not allege that he received any notice_of_determination under sec_6320 or sec_6330 upholding any lien or proposed levy as to fbar penalties nor does he allege any_action whatsoever by the secretary leading toward the collection of the fbar penalty the tax_court has no jurisdiction to review the secretary’s determination as to petitioner’s liability for fbar penalties as a result respondent’s motion must be granted and we shall deem stricken from the petition paragraph sec_5 and and the reference to fbar penalty in the prayer for relief to reflect the foregoing an appropriate order will be issued 6the definition of the word tax in sec_6320 sec_6321 sec_6330 and sec_6331 is broadened by sec_6665 to include addi- tions to the tax additional_amounts and penalties provided by this chapter ie ch secs but we are aware of no statute that would expand tax as used in the lien and levy statutes in title_26 to include the fbar penalty of title the collection mechanism authorized in the fbar statute itself is not lien or levy but a civil_action to recover a civil penalty u s c sec b