internal_revenue_service department of the treasury washington dc uic contact person telephone number in reference to t ep ra t3 id -03192 date nov legend taxpayer a taxpayer b date ll date date ira ira tra dear - this is in response to the letter submitted by your authorized representative on your behalf in which you ask for a series of letter rulings under sec_401 following facts and representations support your ruling requests of the internal_revenue_code the taxpayer a whose date of birth was date died on date having taxpayer a's required_beginning_date as that term is attained age used in code sec_401 was date oy page2 this is in response to the letter submitted by your authorized representative on your behalf in which you ask for a series of letter rulings under sec_401 the following facts and representations support your ruling requests of the internal_revenue_code taxpayer a whose date of birth was date died on date resident of state having attained age beginning date as that term is used in code sec_401 a c taxpayer a's required a was april at his death taxpayer a maintained three individual retirement ira holds amounts arrangements iras and transferred by taxpayer a from ira required_beginning_date taxpayer a had named taxpayer b beneficiary of his ira in his name prior to his code sec_401 as the his son ira sec_1 with respect to his ira prior to his required_beginning_date as that term is defined in code sec_401 a c taxpayer a changed his beneficiary designation to read trust x furthermore prior to his required_beginning_date taxpayer a provided a copy of trust x to company y as the beneficiary thereof the custodian of his ira taxpayer b’s date of birth was date trust x provides in relevant part is irrevocable and that taxpayer a relinquished the power to alter amend revoke or terminate it additionally taxpayer b was named the beneficiary of trust x that it trust x provides in relevant part that it additionally trust x provides that distributions to made over the joint life expectancies of taxpayers a and b_trust x also provides that after the death of taxpayer a taxpayer b receive all of the amounts distributed to trust x from ira furthermore is to is funded solely by ira it from ira are to be your authorized representative has asserted on your behalf that trust x is valid under the laws of state z taxpayer a elected to receive distributions from his ira over the joint life expectancies of taxpayer a and taxpayer b ira taxpayer a had elected the term certain method of computing his minimum required distributions recalculate his life expectancy eligible for recalculation taxpayer b’s life expectancy was not in other words taxpayer a had elected to not with respect to said during his life code sec_401 a minimum required distributions from ira were made in accordance with the minimum distribution incidental benefit mdib required distributions from his ira prior to his death during said calendar_year taxpayer a had not received his calendar_year rule for calendar years subsequent to calendar_year taxpayer c the trustee of trust x intends to receive minimum distributions required under page3 code sec_401 taxpayers a and b from ira over the remaining joint life expectancy of based on the above facts and representations you through your authorized representative request the following letter rulings that taxpayer a timely designated taxpayer b beneficiary of his ira as the that taxpayer a elected not to have his life expectancy recalculated for purposes of determining code sec_401 a required distributions from his ira that with respect to determining minimum required distributions for calendar_year from ira trust x and taxpayer b as the beneficiary thereof must calculate said required distributions in accordance with the mdib requirements and for purposes of determining code section with respect to ira a required distributions for calendar years beginning with trust x and taxpayer b as the beneficiary thereof may use the remaining joint life expectancy of taxpayers a and b designated_beneficiary thereof reduced by one for each subsequent calendar_year the with respect to your ruling requests sec_408 of the code provides that under regulations prescribed by the secretary rules similar to the rules of sec_401 and the incidental death_benefit requirements of sec_401 shall apply to the distribution of the entire_interest of individual for whose benefit the ira trust is maintained an code sec_401 a provides in general that a_trust will not be considered qualified unless the plan provides that the entire_interest of each employee- i ii will be distributed to such employee not later than the required_beginning_date or will be distributed beginning not later than the required_beginning_date such employee and a designated_beneficiary or over a period not extending beyond the life expectancy of such employee and a designated_beneficiary over the life of such employee or over the lives of sec_401 a c for purposes of this paragraph the term required_beginning_date means april of the calendar_year following the calendar_year in which the employee ira holder attains age of the code provides in relevant part that ' code sec_401 a b i provides that where distributions have begun over life expectancy cies in accordance with subparagraph a ii trust shali not constitute a qualified_trust under this section unless the a page4 plan provides that distributed to him at least as rapidly as under the method of distribution being used under subparagraph a ii if the employee dies before his entire_interest has been the remaining portion of such interest will be distributed of the date of death as sec_401 -1 of the proposed income_tax regulations question and answer d-3 provides that for purposes of calculating the distribution period for distributions that begin prior to death the designated_beneficiary will be determined as of the plan participant’s ira holder’s required_beginning_date sec_401 dollar_figure -1 of the proposed_regulations q a f-l a provides in the form of an individual_account and to be distributed over a period not extending beyond the life expectancy of that where an employee’s benefit is is the employee or the joint life and last survivor expectancy of the employee ang his designated_beneficiary the amount required to be distributed for each calendar_year beginning with the first calendar_year for which distributions are required and for each succeeding calendar_year must be at least equal to the quotient obtained by dividing the employee's benefit by the applicable life expectancy sec_1 a -1 of the proposed_regulations q a f-l d provides that the term applicable life expectancy means the life expectancy or the point and last survivor expectancy determined in accordance with e-1 through e-5 of the proposed_regulations reduced by one for each calendar_year which has elapsed since the date on which the life expectancy or joint and last survivor expectancy was calculated however pursuant to e-6 through e-8 life expectancy is recalculated the applicable life expectancy will be the life expectancy so recalculated sec_1 a -1 of the proposed_regulations q a e-6 provides in general that the life expectancy of a designated_beneficiary may be recalculated if the designated_beneficiary is the ira holder's spouse sec_1 a -1 of the proposed_regulations q a f-3a provides generally that with respect to individual_account_plans from which distributions have commenced prior to the employee's death post death distributions will comply with the at least as rapidly as under the method of gistribution being used under sec_401 a a ii distributions are made in accordance with o a f-1 rule if said sec_1_401_a_9_-1 of the proposed_regulations q a e-8 provides in that the life expectancy of a non-spouse beneficiary may not that if the life pertinent part be recaiculated expectancy of either a plan participant ira holder or his beneficiary is being recalculated the recalculated life expectancy is reduced to end of the calendar_year following the calendar_year of the ira holder’s or beneficiary’s death q a e-8 also provides in pertinent part at the sec_1 a -1 of the proposed_regulations q a d -2a provides that only individuals may be designated beneficiaries for purposes of sec_401 a person who is not an individual such as the employee's estate page5 a designated_beneficiary may not be however o a d-5 of sec_1 a l provides that beneficiaries of a_trust with respect to the trust's interest in following requirements are met an employee's benefit may be treated as designated beneficiaries if the that there is no corpus the trust is valid under state law or would be but for the fact effect it becomes irrevocable upon the death of the employee the trust is irrevocable or the trust contains language to the the beneficiaries of the trust who are peneficiaries with respect toe the trust's interest in the employee's benefit are identifiable from the trust instrument the documentation described in d-7 of this section has been provided to the plan_administrator sec_1_401_a_9_-1 of the proposed_regulations q a d-6 provides that in the case in which a_trust is named as the beneficiary of an employee all beneficiaries of the trust with respect to the trust's interest in the employee's benefit are treated as designated beneficiaries of the employee under the plan for purposes of determining the distribution period under sec_401 a b iii above of the documentation described in month beginning after the employee's death are satisfied as of the date of the employee's death or if the requirements in paragraph a of this section by the end of the ninth in the case and iv of d-5 d-7 sec_1_401_a_9_-1 of the proposed_regulations q a d-7 provides in general that the plan_administrator be provided with either a list of all trust beneficiaries as gocument for the trust which is named as beneficiary of the plan as employee's date of death in general with respect to required distributions which commence after death the necessary documentation must be furnished no later than the end of the ninth month beginning after the death of the employee ira holder of the date of death or with a copy of the trust of the sec_1 a -2 of the proposed_regulations qs a sec_1 through sets down the minimum distribution incidental benefit mdib requirements applicable to qualified_retirement_plans and iras sec_1 the proposed_regulations qsa-3 provides in relevant part requirements do not apply to distributions after an employee's death that the mdib a -2 of in this case taxpayer a prior to his code sec_40l a required as the beneficiary of his ira is irrevocable and is valid under the laws of state z beginning date named his trust trust x noted above trust x the state of taxpayer a’s domicile and is entitled to all amounts distributed from ira to trust x which distributions are to be computed using the joint life expectancies of taxpayers a and b computed using the joint life expectancies of taxpayers a and b during taxpayer a’s life distributions from ira were is the beneficiary of trust x taxpayer b as modified as old page6 by the mdib requirements custodian of ira a copy of trust x was provided to company y the thus with respect to your ruling requests the service concludes as follows o f that taxpayer a timely designated taxpayer b as the beneficiary of his ira that taxpayer a elected not to have his life expectancy recalculated for purposes of determining code sec_401 required distributions from his ira that with respect to determining minimum required distributions for calendar_year from ira trust x and taxpayer b as the beneficiary thereof must calculate said required distributions in accordance with the mdib requirements found at sec_1 a -2 of the proposed_regulations and that with respect to ira a required distributions for calendar years beginning with trust x and taxpayer b as the beneficiary thereof may use the remaining joint life expectancy of taxpayers a and b designated_beneficiary thereof reduced by one for each subsequent calendar_year for purposes of determining code section the this ruling letter assumes that taxpayer a’s ira either has met or will meet the requirements of code sec_408 thereto at all times relevant this ruling is directed solely to the taxpayer who requested it sec_6110 of the code provides that it may not be used or cited by others as precedent oehe page7 pursuant to a power_of_attorney on file in this office letter_ruling is being sent to your authorized representative a copy of this sincerely yours frances v sloan manager employee_plans technical group tax_exempt_and_government_entities_division 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 ita b04 plr-101621-17 date date taxpayer ein ------------------------------- ----------------- exempt_organization ein state city limited_partnership --------------------------------------------- ----------------- -------------------- --------------- ---------------------------------------- the project ----------------------------------- taxable_year ------- dear ---------------- this letter responds to your private_letter_ruling request dated date regarding an extension of time to make an election under sec_168 of the internal_revenue_code specifically you requested an extension of time to make an election under sec_168 for taxpayer a tax-exempt_controlled_entity seeking to not be treated as a tax-exempt_entity plr-101621-17 facts taxpayer is organized under the laws of state and is a limited_liability_company for federal_income_tax purposes taxpayer uses the accrual_method of accounting and the calendar_year 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 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 taxpayer is the general_partner of limited_partnership limited_partnership owns the project which does research development job creation and training focused on the energy industry limited_partnership acquired developed and rehabilitated constructed the project and took advantage of the rehabilitation_credit under sec_47 taxpayer’s intent was to make an election under sec_168 to be treated as a taxable entity so that the rehabilitation_credit would not be limited as a result of a portion of the property being treated as tax-exempt_use_property taxpayer relied on its tax preparer to make the election on taxpayer’s taxable_year federal_income_tax return however the tax preparer inadvertently failed to attach the election to the return the tax preparer was unaware of the oversight until a copy of taxpayer’s taxable_year federal_income_tax return was requested by an equity investor’s legal counsel in connection with the financial closing of the project soon after the tax preparer learned of the mistake he filed this request on behalf of taxpayer for permission to make a late election applicable law under sec_47 a rehabilitation_credit is provided for percent of the qualified_rehabilitation_expenditures with respect to any certified_historic_structure section sec_168 provides that if any property which is not tax-exempt_use_property is owned by a partnership with both a tax-exempt_entity and a person who is not a tax-exempt_entity as partners and any allocation to the tax-exempt_entity of partnership items is not a qualified_allocation then an amount equal to the tax-exempt entity's proportionate share of such property is treated as tax-exempt_use_property sec_47 provides that expenditures allocable to the portion of a certified_historic_structure that is tax-exempt_use_property are not qualified_rehabilitation_expenditures a tax-exempt_controlled_entity is treated as a tax-exempt_entity under sec_168 sec_168 defines a tax-exempt_controlled_entity as any corporation if percent or more of the corporation’s stock is held by one or more tax-exempt entities plr-101621-17 sec_168 provides that for purposes of sec_168 a tax-exempt_controlled_entity may elect not to be treated as a tax-exempt_entity this election is irrevocable and will bind all tax-exempt entities holding an interest in the tax-exempt_controlled_entity sec_301_9100-7t of the procedure and administration regulations requires elections under sec_168 to be made by the due_date of the tax_return for the first taxable_year for which the election is to be effective under sec_301_9100-1 and sec_301_9100-3 the commissioner has discretion to grant a reasonable extension of time to make a regulatory election provided the taxpayer demonstrates 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 analysis based on the facts and information submitted we conclude that taxpayer has satisfied the requirements of the regulations for granting an extension of time to file its sec_168 election accordingly taxpayer is treated as if it had made the sec_168 election with the tax_return it filed for taxable_year provided that taxpayer attaches a copy of this letter to the next tax_return it files in addition pursuant to sec_301_9100-7t a copy of the election statement should be attached to the federal_income_tax returns of each of the tax-exempt shareholders or beneficiaries of taxpayer if taxpayer files electronically it may satisfy this requirement by attaching a statement to the return that provides the date and control number of this letter_ruling 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 provides that it may not be used or cited as precedent in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative the rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination plr-101621-17 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 stephen j toomey senior counsel office of associate chief_counsel income_tax accounting


internal_revenue_service number release date index number -------------------------- ---------------------------- ------------------------------ legend legend department of the treasury washington dc third party communication none date of communication not applicable_person to contact ------------------- id no ------------ telephone number --------------------- refer reply to cc ita b05 plr-104996-10 date july ------------------------------------------- asset ------------------------------------------------------------------------------------------------------------------ date date exchange company ------------------------------------------------------------------------------------------------------------------ purchaser state revenue department taxpayer -------------------- ----------------------- --------------------------------------------------------------- -------------------------------------------- ----------------------------------------- -------------------- -------------------------- ------- ------------ ------------ year dollar_figurex dollar_figurey dear --------------- this is in reply to your request pursuant to sec_453 of the internal_revenue_code and sec_15a_453-1 of the temporary income_tax regulations for consent to revoke an election out of the installment_method during year the taxpayer entered into an exchange_agreement with the exchange company and transferred asset to the exchange company with the objective of exchanging it for like-kind_property asset was used in the taxpayer’s rental business each of the properties which the taxpayer identified as potential replacement_property for asset in an exchange transaction was sold to someone else or otherwise became unavailable on date the exchange company sold asset to purchaser the taxpayer and purchaser are related parties within the meaning of sec_453 of the code but are not treated as related_persons for purposes of sec_453 the terms of sale plr-104996-10 provided for consideration which included the purchaser’s assumption of existing mortgage indebtedness of approximately dollar_figurex and the provision of the purchaser’s dollar_figurey interest only note with a three year maturity the note the exchange company was indicated as the obligee on the note the purchaser executed an assignment of rents from asset to the exchange company as additional security for the note during year the purchaser made payments on the note to the exchange company the exchange company transferred the payments to the state revenue department to facilitate withholding of state_income_tax the purchaser’s note and the payments made by the purchaser were ultimately transferred and assigned to the taxpayer athough it is evident from the structure and terms of the transactions that the taxpayer intended the sale of asset to be reported on the installment_method the taxpayer’s return preparer failed to recognize that the sale qualified for the installment_method and reported all of the gain from the sale of asset on the taxpayer’s year federal_income_tax return which was filed on extension on date within a short time of the purchaser’s acquisition of asset mold problems were discovered neither of two inspections conducted by professionals prior to closing disclosed the existence of mold as a result of the necessity and cost of addressing the mold problem the taxpayer and the purchaser agreed to an indefinite suspension of the purchaser’s obligation to make payments interest only on the his note held by the taxpayer the discovery of mold is not indicative that the taxpayer’s request to revoke her election out of the installment_method is based on hindsight the mold problems were discovered before the taxpayer’s return for year was filed on date the taxpayer had knowledge of the mold problem when her year return was filed law and analysis sec_453 of the code provides that generally income from an installment_sale shall be reported under the installment_method sec_453 defines an installment_sale as a disposition of property for which at least one payment is to be received after the close of the taxable_year of the disposition sec_15a_453-1 of the temporary regulations provides that a taxpayer may elect out of the installment_method in the manner prescribed by the regulations sec_15a_453-1 of the temporary regulations provides that a taxpayer who reports an amount_realized equal to the selling_price including the full face_amount of an installment_obligation on a timely filed tax_return for the taxable_year in which the installment_sale occurs is considered to have elected out of the installment_method except as otherwise provided in the regulations sec_453 of the code requires a taxpayer who desires to elect out of the installment_method to do so on or before the plr-104996-10 due_date including extensions of the taxpayer’s federal_income_tax return for the taxable_year of the sale sec_15a_453-1 of the temporary regulations provides that an election under sec_453 of the code is generally irrevocable an election may be revoked only with the consent of the internal_revenue_service sec_15a_453-1 provides that revocation of an election out of the installment_method is retroactive and will not be permitted when one of its purposes is the avoidance of federal income taxes conclusion based on the information submitted and the representations made and subject_to the conditions indicated below the taxpayer will be allowed to revoke her election out of the installment_method with respect to the year sale of asset permission to revoke the election out of the installment_method of reporting the year sale of asset is granted for the period that end sec_75 days after the date of this letter in order to revoke the election out of the installment_method for the sale at issue the taxpayer must file an amended federal_income_tax return for year and any other previously filed returns on which a portion of the gain from the sale is or should be reported under the installment_method a copy of this letter_ruling must be attached to each of the amended_return s caveats and conditions the ruling contained in this letter is subject_to the following caveats and conditions except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter specifically no opinion is expressed concerning the characterization of the transaction between the taxpayer and purchaser as a valid sale the computation of gain to be reported on the transaction between the taxpayer and purchaser or the application of sec_453b in the subject circumstances the ruling contained in this letter is based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party the ruling is conditioned upon the accuracy of that information and those representations while this office has not verified any of the material submitted in support of the request for a ruling it is subject_to verification on examination the ruling contained in this letter is subject_to the following additional conditions the taxpayer did not incur any significant capital or ordinary losses in any year subsequent to year the taxpayer had no unrealized_loss es that she intends to realize to offset installment gain reported as a result of the revocation of her election out of the plr-104996-10 installment_method the taxpayer made no installment_sales prior to or subsequent to year that were reported on the installment_method that all amounts due under the terms of the installment_obligation are paid on or before the unmodified original maturity_date of the installment_obligation and there is no current or anticipated arrangement between the taxpayer and purchaser for sharing income from asset or any amounts realized on the purchaser’s disposition or refinancing of asset 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 in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to your authorized representative a copy of this letter must be attached to any income_tax return to which it is relevant alternatively taxpayers filing their returns electronically may satisfy this requirement by attaching a statement to their return that indicates the date and control number of this letter_ruling sincerely william a jackson chief branch income_tax accounting ------------------------- ----------------------------------------------- ---------------------------------------------- ---------------------------------------- -------------------- -------------------------------------------- ------------------------------ ---------------------------------------------


department of the treasury internal_revenue_service washington d c date lg ls f e20 or ul kh -ou contact person identification_number telephone number t cb pe employer_identification_number legend m n dear sir or madam this is in reply to the letter of date as modified by the letter of date concerning n's use of certain excess funds to provide premium holidays to its members m is a trade group and has been recognized as exempt under sec_501 of the internal_revenue_code m offers various services to its members including permitting them to provide certain health and welfare benefits to their employees through n n is a welfare_benefit_fund within the meaning of sec_419 of the code and has never been recognized as exempt under sec_50i c it is a multiple employer trust established to provide individual and group health dental life disability and other similar insurance policies to the employees of m's members it appears that the employer members of m in many cases pay the entire amount of premiums due on behalf of their employees however in other cases there may be a certain amount of employee contributions who are appointed by the management committee of m n is governed by a board_of trustees n contracts with an insurance provider to provide for the payment of medical and dental benefits both employer and employee premiums are sent directly to the insurer n provides some administrative services for the health care plan and also provides multiple administrative services including collection of premiums for the life and disability insurance programs the submitted information indicates that there may be times when n has more funds than are needed to satisfy the required premium payments for the insurance provided to the employees of m's members the trustees of n have developed a plan under which it will from time to time as determined by the trustees or other persons designated to administer n provide a premium holiday for at least some of the insurance programs provided to the participating employers and their covered employees re because the insurance programs vary as to the amount if any of employee contributions n proposes to notify each eligible_plan participant employed at the time a premium holiday is declared that he or she will be receiving the benefit of the premium holiday such notice will be individually mailed to the last_known_address of each such participant and will explain the nature of and reasons for the premium holiday the notice will describe the instructions that the trustees will have given to the participating member organizations with regard to their duty to pass-through the benefit of the premium holiday to their participating employees as stated in the date submission and as modified by the letter of date rulings have been requested that the payment of medical and dental insurance premiums by n on behalf of participating member organizations will not result in a prohibited inurement of income for the benefit of a shareholder or individuals which would jeopardize m's exempt status under sec_50i c of the code the payment of medical and dental insurance premiums by n on behalf of participating member employers does not result in the imposition of the sec_4976 excise_tax sec_419 of the code defines a welfare_benefit_fund as including any trust corporation or other organization not exempt from tax which is part of a plan of the employer and through which the employer provides welfare benefits to employees or their beneficiaries sec_501 of the code provides in part for the exemption from federal_income_tax of business_leagues chambers_of_commerce real-estate boards and boards_of_trade not organized for profit no part of the net_earnings of which inures to the benefit of any private_shareholder_or_individual sec_4976 of the code imposes an excise_tax on an employer equal to percent of any disqualified_benefit provided by an employer-maintained welfare_benefit_fund sec_4976 of the code defines a disqualified_benefit to include any portion of a welfare_benefit_fund reverting to the benefit of the employer revrul_81_60 1981_1_cb_335 holds that the refund of excess dues to members of an exempt agricultural_organization in the same proportion as the dues are paid does not constitute inurement and does not disqualify the organization from exemption m has been recognized as exempt under sec_501 of the code and is subject_to a prohibition against its earnings inuring to the benefit of its members m appoints the members of the board_of trustees of n therefore any transaction undertaken by n can be attributable to m the reversion of funds to the benefit of an employer is a disqualifying benefit for the purposes of n is a welfare_benefit_fund and subject_to the provisions of sec_4976 of the code re sec_4946 the provision of a premium holiday by n insurance benefits for its members presuming that this activity is carried on in a manner which treats participants in n equally an act of inurement such as could jeopardize m's sec_501 tax exempt status is not present see the holding in revrul_81_60 is a continuation of its program of providing n declaring a premium holiday is merely continuing to provide for the payment of benefits to its participating members by making the employees of the members of m aware of the premium holiday n has taken reasonable measures to ensure that the employer members of m will not divert the refund of funds for their own private purposes based on the submitted information we rule that the payment of medical and dental insurance premiums by n on behalf of participating member organizations will not result in a prohibited inurement of income for the benefit of a shareholder or individuals which would jeopardize m's exempt status under sec_501 of the code the payment of medical and dental insurance premiums by n on behalf of participating member employers does not result in the imposition of the sec_4976 excise_tax except as specifically ruled upon above no opinion is expressed concerning the federal_income_tax consequences of the transactions described above under any other provision of the code this letter is based on the presumptions that the premium holiday will treat all participating members equally and that the employer members of m will take no actions to cause its participating employees not to benefit from the premium holiday this ruling is directed only to the organization that requested it code provides that it may not be used or cited as precedent sec_61 k of the 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 for other matters including questions concerning reporting requirements please contact the at sincerely yours joseph chasin acting manager exempt_organizations technical group


internal_revenue_service department of the treasury number release date index number washington dc person to contact telephone number refer reply to cc psi b1-plr-103199-03 date date legend x d1 state dear this responds to the letter dated date and related correspondence submitted on behalf of x requesting relief under sec_1362 of the internal_revenue_code facts x was incorporated on d1 under the laws of the state x intended to be treated as an s_corporation for federal tax purposes effective d1 but the s election was not timely filed law and analysis sec_1362 provides that a small_business_corporation may elect to be an s_corporation sec_1362 provides the rule on when an s election will be effective if an s election is made within the first two and one-half months of a corporation’s taxable_year then the corporation will be treated as an s_corporation for the year in which the election plr-103199-03 is made if the election is made after the first two and one-half months of a corporation’s taxable_year then the corporation will not be treated as an s_corporation until the taxable_year after the year in which the s election is made sec_1362 provides that if no election is made pursuant to sec_1362 or if made the election is made after the date prescribed for making such an election and the secretary determines there was reasonable_cause for the failure to timely make the election then the secretary may treat such an election as timely made for such taxable_year and effective as of the first day of that tax_year x did not file a timely election to be treated as an s_corporation under sec_1362 effective d1 x has however established reasonable_cause for not making a timely election and is entitled to relief under sec_1362 conclusion based solely on the facts submitted and representations made and provided that x otherwise qualifies as a subchapter_s_corporation we conclude that x will be recognized as an s_corporation effective d1 within days from the date of this letter x should submit a properly completed form_2553 with a copy of this letter attached to the relevant service_center except as expressly provided herein no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter this ruling is directed only to the taxpayer 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 mailed to x s dianna k miosi sincerely dianna k miosi chief branch associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes


internal_revenue_service department of the treasury index number washington dc person to contact telephone number refer reply to cc dom p si br 1-plr-116271-99 date dec this letter responds to your letter dated date submitted on behalf of x requesting a time extension under sec_301_9100-3 of the procedure and administration regulations for x to elect to be treated as a corporation for federal tax purposes facts x formed on d1 intended from inception to be treated as an association_taxable_as_a_corporation however x’s legal_representative failed to advise x and x's sole member that absent an affirmative election x would be disregarded and not taxed as a corporation 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 elect its classification for federal tax purposes an eligible_entity with a single owner can elect to be classified as an association or to be disregarded as an entity separate from its owner plr-116271-99 sec_301_7701-3 provides that an eligible_entity with a single owner will be disregarded as an entity separate from its owner unless it elects otherwise sec_301_7701-3 allows an eligible_entity to elect to change its classification by filing form_8832 entity classification election with the service_center designated on that form sec_301_7701-3 provides that all such elections become effective on the date specified by the entity on form_8832 or on the date filed if no effective date is specified the specified effective date must not be earlier than days prior to the filing_date of form_8832 nor sater than twelve months after the filing_date sec_301_9100-1 gives the commissioner discretion to grant reasonable extensions of time to make regulatory elections under the rules of sec_301_9100-2 and sec_301_9100-3 under sec_301_9100-1 a regulatory election includes an election whose due_date is prescribed by a regulation published in the federal_register sec_301_9100-3 sets forth the standards which the commissioner uses to determine whether to grant a discretionary extension of time these standards indicate that the commissioner should grant relief when the taxpayer provides evidence proving to the satisfaction of the commissioner tnat the taxpayer acted reasonably and in good_faith and that granting relief will not prejudice the interests of government conclusion x has satisfied the requirements of sec_301_9100-1 and sec_301_9100-3 asa result x is granted an extension of time for making the election to be treated as a corporation for federal tax purposes effective d1 until days following the date of this letter x should make the election by filing form_8832 a copy of this letter should be attached to that form except as expressly provided herein no opinion is expressed or impliéd concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this fetter this ruling is directed only to the taxpayer s requesting it sec_6110 of the code provides that it may not be used or cited as precedent plr-116271-99 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 ll f to fe if paul f kugler assistant chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes


covenant eee department of the treasury internal_revenue_service washington d c bet eppa uniform issue list ko legend plan x company a amount c date d date e date f date g dear this is in response to a ruling_request submitted by you on as supplemented by additional letters dated kkkekkekeakeerrer eere reerererererererrrreeee for a waiver of the 60-day rollover requirement contained in sec_402 of the internal_revenue_code the code’ the following facts and representations have been submitted in support of the ruling requested you were a participant in plan x maintained by your former employer company a you separated from the service of company a on date d and received a distribution of amount c on date e amount c represented the total_distribution due you from plan x less federal withholding it was your intent to redeposit amount c into an ira however amount c was mistakenly deposited into a regular savings account on date g at a local bank where it remains at the time you received amount c you were caring for your terminally ill mother your mother passed away shortly thereafter on date f based on the above facts and representations you request that the service waive the day rollover requirement with respect to amount c because the failure to waive such requirement would be against equity or good conscience sec_402 of the code provides except as otherwise provided in this section that any amount actually distributed to any distributee by any employees’ trust described in sec_401 which is exempt from tax under sec_501 shall be taxable to the distributee in the taxable_year of the distributee in which distributed under sec_72 relating to annuities in general sec_402 provides that if an eligible_rollover_distribution is sec_402 of the code provides rules applicable to rollovers from exempt trusts transferred to an eligible_retirement_plan such as an ira or a qualified_trust the distribution to the extent so transferred shall not be includible in gross_income for the taxable_year in which paid sec_402 of the code provides that the term eligible_rollover_distribution means any distribution to an employee of all or any portion of the balance_to_the_credit of the employee in a qualified_trust except that such term shall not include a any distribution which is one of a series of substantially_equal_periodic_payments not less frequently than annually made- i ii for the life or life expectancy of the employee or the joint lives or life expectancies of the employee and the employee’s designated_beneficiary or for a period of ten years or more b any distribution to the extent such distribution is required under sec_401 and c any distribution which is made upon the hardship of the employee sec_402 of the code requires that an eligible_rollover_distribution from a qualified_retirement_plan must be transferred to an eligible_retirement_plan no later than the day after the day of receipt in order to avoid having to include that distribution in the distributee’s gross_income for that year sec_402 of the code provides in part that an eligible_retirement_plan includes an ira a qualified sec_401 trust and certain other designated plans sec_402 of the code provides that the secretary may waive the 60-day requirement under sec_402 where the failure to waive such requirement would be against equity or good conscience including casualty disaster or other events beyond the reasonable control of the individual subject_to such requirement only distributions that occurred after date are eligible for the waiver under sec_402 of the code revproc_2003_16 r b provides that in determining whether to grant a waiver of the 60-day rollover requirement pursuant to sec_402 the service will consider all relevant facts and circumstances including errors committed by a financial_institution inability to complete a rollover due to death disability hospitalization incarceration restrictions imposed by a foreign_country or postal error the use of the amount distributed for example in the case of payment by check whether the check was cashed and the time elapsed since the distribution occurred the information presented demonstrates that the events caused by the illness and death of individual a’s mother resulted in amount c not being rolled over into an ira within days as individual a intended therefore pursuant to sec_402 of the code the service hereby waives the 60-day rollover requirement with respect to amount c you are granted a period of days from the issuance of this ruling letter to contribute amount c into an ira provided all other requirements of sec_402 of the code except the 60-day rollover requirement are met with respect to such contribution amount c will be considered a rollover_contribution within the meaning of sec_402 of the code no opinion is expressed as to the tax treatment of the transaction described herein under the provisions of any other section of either the code or regulations that may be applicable hereto this ruling is directed solely to the taxpayer who requested it sec_6110 of the code provides that it may not be used or cited as precedent if you have any questions regarding this ruling you may contact krerkeerrere ree eere re rerrerrerererererrerererreer sincerely yours delp manager donzelllittléjonn employee_plans technical group enclosures notice of intention to disclose deleted copy of letter


internal_revenue_service department of the treasury number release date index number washington dc person to contact telephone number refer reply to cc psi - plr-144083-02 date date trust donor a b c d d1 d2 charity charity bank dear this letter responds to the letter dated date and subsequent correspondence submitted on behalf of the trust by its authorized representative requesting certain rulings regarding the proposed termination of the trust plr-144083-02 the information submitted states that the trust was created on d1 by the donor and was intended to qualify as a charitable_remainder_unitrust crut under sec_664 of the internal_revenue_code the current trustees of the trust are charity and bank the trustees donor was the initial beneficiary of the trust with a right to receive the unitrust_amount as defined in the trust for life after the death of donor the unitrust_amount is divided between two shares as defined in a formula provided in the trust the first share is payable to a for life then to b for life then to c for life then to d for life the second share is payable to c for life then to d for life then to a for life then to b for life however all unitrust payments must terminate no later than the twentieth anniversary of the death of the donor upon the earlier of the twentieth anniversary of the death of the donor or the death of the last of a b c and d the trust will terminate and the trust property will be distributed to charity and charity in the proportions set forth in the trust the donor retained a power under the trust to terminate the interest of any of a b c or d the donor died on d2 donor’s will included an exercise of the power resulting in the termination of the interests of c and d a b bank charity both as a trustee and a remainder beneficiary and charity have agreed that the trust should be terminated the trustees propose to determine the actuarial value of the income interests of a and b and the remainder interests of charity and charity pursuant to sec_7520 and distribute trust assets equal to such values to the beneficiaries at the termination of the trust the distributions will be made in lump sums equal to the respective value of the beneficiaries’ interest as of the date of termination the values will be determined using the discount rate in effect under sec_7520 on the date of termination and using the methodology under sec_1_664-4 of the income_tax regulations for valuing interests in cruts any distribution of assets in_kind will be made in a pro-rata manner the termination procedure will comply with applicable state law which is represented as permitting early termination of a charitable_trust upon the petition of the trustee of such trust with the appropriate state court the trustees represent that the termination will be made only upon such petition to the appropriate court by the trustees and pursuant to an order of such court approving such termination a’s physician is represented as being a specialist in neurology has been practicing medicine for twenty-seven years and has been a’s physician for eight years the physician has recently conducted a physical examination of a and has signed an affidavit under penalties of perjury that to the best of the physician’s knowledge and belief a has no medical_condition that is expected to result in a shorter longevity than that set forth in the regulations for a person of a’s age b’s physician is represented as being a specialist in obstetrics and gynecology has been practicing medicine for eight years and has been b’s physician for one year the physician has recently conducted a physical examination of b and has signed an affidavit under penalties of perjury that to the best of the physician’s knowledge and plr-144083-02 belief b has no medical_condition that is expected to result in a shorter longevity than that set forth in the regulations for a person of b’s age a and b have also signed affidavits under penalties of perjury that to the best of their knowledge and belief they have no medical conditions that are expected to result in a shorter longevity than that set forth in the regulations for persons of their ages sec_61 of the code provides that gross_income includes gains derived from dealings in property sec_507 provides that except as provided in sec_507 a private_foundation may terminate its private_foundation_status only under the specific rules set forth in sec_507 sec_507 provides for the imposition of a termination_tax on certain private_foundation terminations described in sec_507 sec_1001 provides that the gain from the sale_or_other_disposition of property shall be the excess of the amount_realized therefrom over the adjusted_basis provided in sec_1011 for determining gain and the loss shall be the excess of the adjusted_basis provided in such section for determining loss over the amount_realized sec_1001 provides that the amount_realized from the sale_or_other_disposition of property shall be the sum of any money received plus the fair_market_value of any property received sec_1001 provides that the entire amount of the gain_or_loss determined under sec_1001 on the sale_or_exchange of property shall be recognized sec_1001 provides that in determining gain_or_loss from the sale_or_other_disposition of a term_interest_in_property the portion of the adjusted_basis of such interest which is determined pursuant to sec_1015 to the extent that such adjusted_basis is a portion of the entire adjusted_basis of the property shall be disregarded under sec_1001 a term_interest_in_property includes an income_interest in a_trust sec_1001 provides that the general_rule of sec_1001 does not apply to a sale_or_other_disposition which is part of a transaction in which the entire_interest in property is transferred to any person or persons sec_1015 provides that if property was acquired after date by a transfer in trust other than by a transfer in trust by a gift bequest or devise the basis shall be the same as it would be in the hands of the grantor increased by the amount of gain or decreased by the amount of loss recognized to the grantor on such transfer sec_4941 imposes an excise_tax on each act of self-dealing between a disqualified_person and a private_foundation plr-144083-02 sec_4941 provides that the term self-dealing means any direct or indirect transfer to or for the use by or the benefit of a disqualified_person of the income or assets of a private_foundation sec_4946 provides that the term disqualified_person with respect to a private_foundation includes a substantial_contributor to the foundation including the creator of a_trust a family_member of a substantial_contributor including children and foundation_manager including a trustee sec_4946 together with sec_4946 defines the term disqualified_person to include a spouse of a substantial_contributor among others sec_4947 provides generally that split-interest_trusts are subject_to the provisions of sec_507 sec_4941 and sec_4945 in the same manner as if such trusts were private_foundations but under sec_4947 not with respect to any amounts payable under the terms of such trusts to income beneficiaries unless a deduction was allowed under sec_170 sec_2055 or sec_2522 sec_1_1001-1 of the income_tax regulations provides that for purposes of determining the gain_or_loss from the sale_or_other_disposition of a term_interest_in_property a taxpayer shall not take into account that portion of the adjusted_basis of such interest that is determined pursuant to sec_1015 relating to the basis_of_property acquired by gift or by a transfer in trust to the extent that such adjusted_basis is a portion of the adjusted uniform basis of the entire property as defined in sec_1_1014-5 sec_1_1014-5 defines the term adjusted uniform basis as the uniform basis of the entire property adjusted as required by sec_1016 and sec_1017 on the date of sale_or_other_disposition of any interest in the property sec_1_1015-1 provides that property acquired by gift has a single or uniform basis although more than one person may acquire an interest in such property the uniform basis of the property remains fixed subject_to proper adjustment for items under sec_1016 and sec_1017 however the value of the proportionate parts of the uniform basis represented for instance by the respective interests of the life_tenant and remainderman are adjustable to reflect the change in the relative values of such interests on account of the lapse of time the portion of the basis attributable to an interest at the time of its sale_or_other_disposition shall be determined under the rule provided in sec_1_1014-5 in determining gain_or_loss from the sale_or_other_disposition after date of a term_interest_in_property as defined in sec_1_1001-1 the adjusted_basis of which is determined pursuant or by reference to sec_1015 that part of the adjusted uniform basis assignable under the rules of sec_1_1014-5 to the interest sold or otherwise_disposed_of shall be disregarded to the extent and in the same manner provided by sec_1001 and sec_1_1001-1 sec_53_4947-1 of the foundation and similar excise_taxes regulations provides that under sec_4947 sec_4941 does not apply to any amounts payable under the terms of a split-interest trust to income beneficiaries unless plr-144083-02 a deduction was allowed under sec_170 sec_2055 or sec_2522 with respect to the income_interest of such beneficiary sec_53_4947-1 provides that sec_507 does not apply to payments to an income_beneficiary of a_trust that are considered payable under the terms of such trust and directed by the terms of the governing instrument of the trust and not discretionary with the trustee revrul_72_243 1972_1_cb_233 provides that the sale of an income_interest in a_trust is a sale of a capital_asset within the meaning of sec_1221 and sec_1222 the holding_period for purposes of determining whether gain_or_loss from the disposition of an income_interest is long-term or short-term commences on the date the taxpayer first held such interest as a crut under sec_664 the trust is a split-interest trust described in sec_4947 and therefore subject_to sec_4941 which imposes an excise_tax on acts of self-dealing a and b are disqualified persons with respect to the trust under sec_4946 because they are members of the family of the substantial_contributor because the trust is a split-interest trust it is treated as a private_foundation under sec_4947 a critical question is whether early termination may be expected to result in a greater allocation of the trust’s assets to the income beneficiaries to the detriment of the charitable beneficiaries than a non-early termination the trust’s proposed allocation method is reasonable if the income beneficiaries have no knowledge of medical conditions or other circumstances likely to result in a shorter life expectancy than that predicted by the actuarial_tables otherwise an early termination would tend to deprive the charitable beneficiaries of their benefit and would be inconsistent with the charitable deduction allowed to the donor of the trust we conclude that the proposed termination of the trust will not constitute a direct or indirect act of self-dealing within the meaning of sec_4941 because of all of the following circumstances state law allows the early termination all beneficiaries favor the early termination the trustees will use the regulations’ formula for determining the present values of the income and remainder interests in a charitable_remainder_trust the income beneficiaries’ physicians have conducted examinations of the income beneficiaries and stated under penalty of perjury that they find no medical conditions expected to result in shorter-than-average longevity under sec_1_72-9 the income beneficiaries have signed similar statements and any distribution of assets in_kind will be made in a pro-rata manner sec_507 provides for the imposition of a termination_tax on certain private_foundation terminations described in sec_507 sec_507 does not apply however to payments to an income_beneficiary of a_trust that are considered payable under the terms of such trust and directed by the terms of the governing instrument of the trust and not discretionary with the trustee see sec_53_4947-1 as discussed above the payments to the income beneficiaries as the result of the proposed termination should be viewed as payable under the terms of the trust in addition the proposed early plr-144083-02 termination will not result in a greater allocation of the trust assets to the income beneficiaries to the detriment of the charitable_remainder beneficiaries than a non- early termination and is not discretionary with the trustees the proposed allocation method is reasonable because the income beneficiaries and their physicians have no knowledge of medical conditions or other circumstances likely to result in shorter life expectancies than those predicted by the actuarial_tables therefore we additionally conclude that the trust is permitted to terminate early without resulting in the imposition of termination_tax under sec_507 we further conclude as follows the life income beneficiaries are selling their interests in the trust to the remaindermen provided that the money and other_property received by the life income beneficiaries are distributed to them in accordance with their interests in the trust the amount the life interest beneficiaries will realize from the sale of their interests in the trust will be the amount of money and the fair_market_value of the property received by them pursuant to sec_1001 the portion of the adjusted uniform basis assigned to the life income beneficiaries' interests in the trust is disregarded the exception contained in sec_1001 is not applicable because the entire_interest in the trust's assets is not being sold or otherwise_disposed_of to a third party accordingly for purposes of this proposed transaction the life income beneficiaries have no bases in their interests in the trust therefore the amount of gain the life beneficiaries must recognize under sec_1001 is the amount they realize from the disposition of their interests in the trust the gain realized by the life income beneficiaries from the disposition of their interests in the trust will be long-term_capital_gain except as specifically set forth above no opinion is expressed concerning the federal tax consequences of the proposed transaction in particular we express no opinion as to whether the trust meets the definition of a crut under sec_664 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 pursuant to a power_of_attorney on file with this office copies of this letter are being forwarded to the trust's authorized representatives sincerely yours j thomas hines chief branch office of the associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes


internal_revenue_service number release date index numbers 9100-dollar_figure ------------------------- -------------------------------------- --------------------------------------------- -------------------------- ------------------------------------------------------------ ----- department of the treasury washington dc person to contact ----------------- id no ------------- telephone number --------------------- refer reply to cc corp b06 - plr-104083-04 date date --------------------- ---------------------------------- -------------------------------------- -------------------------------------------------------- legend parent -------------------------------------------------------------------- --------------------- sub1 sub2 seller buyer date date date business -------------------------------------------------------------------------------------------------------------- loss co vice president tax dear ------------------ ---------------------------- ---------------------------- ---------------------------- --------------------------- ------------------------- ---------------------- --------------------------------------------------------------------------------- plr-104083-04 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 to file a sec_1_337_d_-2t c statement under sec_1_337_d_-2t c the election that was supposed to be filed with its consolidated federal_income_tax return filed on date additional information was received in a letter dated date the information submitted is summarized below parent is the common parent of an affiliated_group_of_corporations filing a consolidated federal_income_tax return parent owns all of the stock of sub1 which owns all of the stock of sub2 which owned all of the stock of seller buyer is an unrelated corporation on date parent sub1 and seller entered into an agreement to sell seller’s business to buyer the transaction closed on date one of the assets of business sold in the transaction was the stock of lossco an election under sec_1_337_d_-2t c to recognize some or all of a loss upon the disposition of the stock of a subsidiary lossco was required to be filed with or as part of parent's consolidated group’s return for the year of the disposition the year that includes date parent intended to attach the election to its consolidated federal_income_tax return filed for that taxable_year but for various reasons the election was not attached the return was filed consistent with the election having been made the statute_of_limitations on assessment under sec_6501 has not expired for parent's consolidated group’s taxable_year for which it wants to make the election or for any taxable years that would be affected by the election had it been timely filed sec_1_337_d_-2t a provides that no deduction is allowed for any loss recognized by a member of a consolidated_group with respect to the disposition of stock of a subsidiary sec_1_337_d_-2t c provides that sec_1_337_d_-2t c applies with respect to stock of a subsidiary only if a separate statement entitled sec_1_337_d_-2t c statement is included with the return in accordance with sec_1_337_d_-2t c sec_1_337_d_-2t c provides that loss is not disallowed under sec_1_337_d_-2t a to the extent the taxpayer establishes that the loss is not attributable to the recognition of built-in_gain on the disposition of an asset including stock and securities sec_1_337_d_-2t c provides that the statement required under sec_1 d - 2t c must be included with or as part of the taxpayer’s return for the year of the disposition 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 plr-104083-04 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_9100-2 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 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 in this case the time for filing the election is fixed by the regulations ie sec_1 d - 2t c 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 that it acted reasonably and in good_faith the requirements of sec_301_9100-1 and sec_301 are satisfied and granting relief will not prejudice the interests of the government information affidavits and representations submitted by parent and vice president tax explain the circumstances that resulted in the failure to timely file the election the information establishes that parent reasonably relied on a qualified_tax professional who failed to make or advise parent to make the election the request for relief was filed before the failure to make the election was discovered by the internal_revenue_service and that the government will not be prejudiced if relief is granted see b i and v based on the facts and information submitted including the representations made we conclude that parent has shown that 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 sec_301_9100-3 until days from the date on this letter for parent to file the election the above extension of time is conditioned on parent’s consolidated 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 parent’s consolidated group’s tax_liability for the years involved a determination thereof will be made by the 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' liability is lower sec_301_9100-3 we express no opinion with respect to whether in fact parent qualifies substantively to make the election in addition we express no opinion as to the tax effects or consequences of filing the election late under the provisions of any other section of the code or regulations or as to the tax treatment of any conditions existing at the time of plr-104083-04 or effects resulting from filing the election late that are not specifically set forth in the above ruling for purposes of granting relief under sec_301_9100-3 we relied on certain statements and representations made by parent and vice president tax however the director should verify all essential facts moreover notwithstanding that the extension is granted under sec_301_9100-3 to file the election any penalties and interest that would otherwise be applicable still apply 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 a copy of this letter must be attached to any income_tax return to which it is relevant in accordance with the power_of_attorney on file with this office a copy of this letter is being sent to parent sincerely ken cohen senior technician reviewer branch office of associate chief_counsel corporate


internal_revenue_service department of the treasury number release date index number washington dc person to contact telephone number refer reply to cc corp b03-plr-130587-01 date date legend foreign parent foreign transferee controlled distributing ftsub1 ftsub1sub business a business b business c plr-130587-01 business d business e business d segment country a state w state x state y z x y this letter responds to your letter dated date requesting rulings on the federal_income_tax consequences of a proposed transaction the information submitted in that request and in the subsequent correspondence of date is substantially as set forth below foreign parent is a publicly traded country a z which is treated as a corporation for federal_income_tax purposes foreign parent is engaged in business a business b business c and business d through its numerous subsidiaries distributing a wholly-owned subsidiary of foreign parent is a domestic_corporation incorporated in state x distributing is the common parent of an affiliated_group filing a consolidated federal_income_tax return distributing is directly engaged in business d segment distributing uses the accrual_method of accounting plr-130587-01 controlled is a domestic_corporation incorporated in state y distributing owns x of controlled which is greater than and foreign transferee owns y of controlled equaling controlled is engaged in business e controlled has no subsidiaries and uses the accrual_method of accounting foreign transferee is a wholly-owned subsidiary of foreign parent and was formed in country a it is classified as a partnership for country a purposes and is an association for united_states tax purposes foreign transferee is engaged in business e directly and through its subsidiaries ftsub1 is a wholly owned subsidiary of foreign transferee ftsub1 is a domestic_corporation incorporated in state w ftsub1 is a holding_company for operating subsidiaries engaged in business e in various countries including the united_states ftsub1sub is a domestic_corporation incorporated in state w ftsub1 owns all of the stock of ftsub1sub which is involved in business e the taxpayer has supplied information which indicates that distributing’s business d segment and controlled’s business e each have had gross_receipts and operating_expenses representative of the active_conduct of such businesses for each of the past five years to improve the fit and focus of controlled’s business within the foreign parent corporate structure and enhance controlled’s performance the taxpayer has proposed the following transaction distributing will distribute to foreign parent all of its ownership_interest constituting x greater than in controlled distributing will not retain any stock_or_securities of controlled no other_property will be distributed to foreign parent and foreign parent will retain all its stock in distributing foreign parent will transfer all the controlled stock received from distributing to foreign transferee in a non-recognition transaction foreign parent will continue to own all the stock of distributing and all the stock of foreign transferee foreign transferee will own all the stock of controlled and all the stock of ftsub1 plr-130587-01 the following representations have been made in connection with the proposed transaction no part of the consideration to be distributed by distributing will be received by a shareholder as a creditor as an employee or in any capacity other than that of a shareholder of the corporation the five years of financial information submitted on behalf of distributing is representative of the corporation’s present operation and with regard to such corporation there have been no substantial operational changes since the date of the last financial statements submitted the gross assets of business d segment have a fair_market_value that is greater than of the total fair_market_value of distributing’s gross assets the five years of financial information submitted on behalf of controlled is representative of the corporation’s present operation and with regard to such corporation there have been no substantial operational changes since the date of the last financial statements submitted the gross assets of controlled’s business e have a fair_market_value that is greater than of the total fair_market_value of controlled’s gross assets following the transaction distributing and controlled will each continue the active_conduct of its business independently and with its separate employees the distribution of the stock of controlled is carried out for the following corporate business_purpose to improve the fit and focus of controlled’s business within the foreign parent corporate structure and enhance controlled’s performance by a allowing controlled’s business and transferee’s business to function as a single worldwide enterprise under common management b freeing controlled from distributing’s corporate policies and practices which are suitable for distributing’s businesses but not for controlled’s business including policies and practices relating to management compensation inventory management capital spending and worker safety practices and c allowing plr-130587-01 controlled to install human resources software that is needed for its business but is not a priority for distributing’s businesses the transaction is motivated in whole or substantial part by this corporate business_purpose other than the transfer of the controlled stock to foreign transferee there is no plan or intention by the shareholders or security holders of the distributing to sell exchange transfer by gift or otherwise dispose_of any of their stock in or securities of either distributing or controlled_corporation after the transaction there is no plan or intention by either distributing or controlled directly or through any subsidiary_corporation to purchase any of its outstanding_stock after the transaction other than through stock purchases meeting the requirements of sec_4 b of revproc_96_30 except for a possible merger of ftsub1sub with controlled in a transaction qualifying under sec_368 there is no plan or intention to liquidate either distributing or controlled to merge either corporation with any other corporation or to sell or otherwise dispose_of the assets of either corporation after the transaction except in the ordinary course of business no intercorporate debt will exist between distributing and controlled at the time of or subsequent to the distribution of controlled stock immediately before the distribution items of income gain loss deduction and credit will be taken into account as required by the applicable intercompany_transaction regulations further distributing’s excess_loss_account with respect to the controlled stock if any will be included in income immediately before the distribution payments made in connection with all continuing transactions if any between distributing and controlled will be for fair_market_value based on terms and conditions arrived at by the parties bargaining at arms’ length the distribution is not part of a plan or series of related transactions within the meaning of sec_355 pursuant to plr-130587-01 which one or more persons will acquire directly or indirectly stock possessing or more of the total combined voting power of all classes of stock or either distributing or controlled or stock possessing or more of the total value of all classes of stock or either distributing or controlled neither distributing nor controlled was or will be a united_states_real_property_holding_corporation as defined in sec_897 at any time during the five-year period ending on the date of distributing’s distribution of controlled or immediately after the distribution based solely on the information submitted and on the representations set forth above it is held as follows no gain_or_loss will be recognized by distributing upon the distribution of its stock in controlled to foreign parent sec_355 no gain_or_loss will be recognized by and no amount will be included in the income of foreign parent upon the receipt of the controlled stock sec_355 the aggregate basis of the distributing stock and of the controlled stock in the hands of foreign parent after the distribution to foreign parent will be the same as the aggregate basis of distributing stock in the hands of foreign parent immediately prior to the distribution allocated between the distributing stock and the controlled stock in proportion to the fair_market_value of each corporation’s stock in accordance with sec_1_358-2 of the income_tax regulations sec_358 b and c the holding_period of the controlled stock received by foreign parent will include the holding_period of the distributing stock held by foreign parent with respect to which the distribution will be made provided that the distributing stock is held as a capital_asset on the date of the distribution sec_1223 proper allocation of earnings_and_profits between distributing and controlled will be made under sec_1 b and plr-130587-01 distributing will not recognize gain under sec_367 on the distribution of controlled stock to foreign parent sec_1_367_e_-1 no opinion is expressed or implied concerning the tax consequences of any aspect of the transaction or item not discussed or referenced in the letter specifically no opinion is expressed regarding whether any or all of the foreign_corporations involved in the transaction are passive foreign investment companies within the meaning of sec_1297 if it is determined that any of the foreign_corporations are passive foreign investment companies no opinion is expressed with respect to the application of sec_1291 through to the proposed transaction in particular in a transaction in which gain is not otherwise recognized regulations under sec_1291 may require gain recognition notwithstanding any other provision of the code this ruling is directed only to the taxpayer s requesting it sec_6110 of the code provides that it may not be used or cited as precedent each affected taxpayer should attach a copy of this letter to the taxpayer’s federal_income_tax returns for the taxable_year in which the transaction covered by this ruling is consummated the rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party while this office has not verified any of the material submitted in support of the request for rulings it is subject_to verification on examination sincerely yours ken cohen senior technician reviewer branch office of the associate chief_counsel corporate


id office uilc cca_2010042813571237 ---------- number release date from ------------------- sent wednesday date pm to -------------------- cc --------------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------- subject re 872-f for subs years ----------------------- the correct cite for the years in issue i sec_1_1502-77 not 77a which applied to prior years


tcmemo_2010_215 united_states tax_court curtis f zastrow petitioner v commissioner of internal revenue respondent docket no 2994-09l filed date curtis f zastrow pro_se alicia a mazurek and alexandra e nicholaides for respondent memorandum opinion paris judge on date respondent mailed to petitioner a notice_of_determination concerning collection action s which sustained the filing of a notice_of_federal_tax_lien nftl with respect to petitioner’s assessed income_tax_liability for tax years and petitioner alleges that he never received a notice_of_deficiency for those tax years and was denied an opportunity to contest the underlying tax_liabilities the issues for decision are whether petitioner was provided the opportunity to challenge the assessed tax_liability for tax years and and whether respondent’s determination to sustain the filing of the nftl was an abuse_of_discretion background some of the facts and exhibits have been stipulated and are incorporated herein by reference at the time the petition was filed and during the tax years and petitioner resided and received his mail at midland michigan petitioner is employed as a consultant for nonprofit_organizations petitioner failed to file income_tax returns for tax years and pursuant to sec_6020 respondent filed for each of those years a substitute for return using third-party reporting of income paid to curtis zastrow of midland michigan respondent sent petitioner notices of deficiency for tax years and on date and date respectively petitioner failed to file a petition contesting either notice_of_deficiency and the tax wa sec_1all section references are to the internal_revenue_code_of_1986 as amended assessed respondent sent petitioner a notice_of_intent_to_levy pursuant to sec_6330 in date petitioner timely requested and was granted a collection_due_process cdp levy hearing in may of for tax years and where he was advised that he was ineligible for any collection alternative unless and until he filed his delinquent tax returns for tax years and petitioner never filed those returns and respondent ultimately issued a notice_of_determination sustaining the levy respondent mailed petitioner a notice_of_deficiency for tax_year on date yet again petitioner did not file a petition with this court on date respondent filed a nftl against petitioner for unpaid income taxes for tax years and subsequently petitioner filed a timely request with respondent for a cdp hearing petitioner was assigned an appeals account resolution specialist aar specialist who corresponded with petitioner and informed him that to qualify for collection alternatives he would need to file his income_tax returns for and and submit a form 433-a collection information statement for wage earners and self-employed individuals to assist respondent in determining feasible collection 2the levy is not at issue and the court notes the proceedings therein for purposes of establishing the chronology of events leading to the nftl and that petitioner has had one or more opportunities to dispute the underlying tax_liabilities for tax years and alternatives petitioner neither filed income_tax returns for tax years and nor provided the aar specialist with the collection information statement the aar specialist scheduled a telephone cdp hearing with petitioner for date however petitioner did not participate in the scheduled hearing the aar specialist then rescheduled the cdp hearing for date and requested that petitioner provide further information for consideration petitioner did not take part in the rescheduled hearing but requested a face-to-face hearing the aar specialist denied this request and subsequently sent to petitioner a notice_of_determination sustaining the nftl for tax years and petitioner then filed a timely petition with this court discussion petitioner argues that he did not receive a notice_of_deficiency for tax_year or that respondent’s aar specialist abused her discretion by denying him a face-to- face hearing and that respondent’s aar specialist abused her discretion when she sustained the filing of the nftl this court holds that the validity of the underlying liability is not properly before the court and that respondent’s aar specialist 3trial was held on date with posttrial briefs due on date petitioner failed to file a timely brief on date this court granted petitioner’s motion for an extension of time to file his brief to date petitioner has failed to file the brief did not abuse her discretion when she denied petitioner a face- to-face hearing or when she sustained the filing of the nftl for tax years and a standard of review under sec_6321 if a person liable to pay any_tax neglects or refuses to pay the same after demand the amount shall be a lien in favor of the united_states upon all property and rights to property belonging to such person a taxpayer may appeal the filing of a nftl to the internal_revenue_service under sec_6320 by requesting an administrative hearing if the hearing culminates in an adverse determination the taxpayer is afforded the opportunity for judicial review of the determination in the tax_court pursuant to sec_6330 petitioner seeks review of respondent’s determination where the validity of the underlying tax_liability is properly at issue the court will review the matter de novo 115_tc_35 where the underlying tax_liability is not properly at issue the court will review the commissioner’s administrative determination for abuse_of_discretion 114_tc_604 114_tc_176 the court has described the standard by which the commissioner’s determinations in cdp cases are reviewed for abuse_of_discretion as entailing an inquiry whether the determination is arbitrary capricious clearly unlawful or without sound basis in fact or law 122_tc_32 revd on other grounds 439_f3d_1009 9th cir see also 112_tc_19 when a taxpayer seeks judicial review of a notice_of_determination the court has authority to consider a sec_6330 issue only if it was properly raised in the cdp hearing 129_tc_107 sec_301_6320-1 q a-f3 proced admin regs an issue is not properly raised if the taxpayer fails to present appeals any evidence with respect to that issue after being given a reasonable opportunity to do so sec_6330 provides that at a cdp hearing a person may challenge the existence or amount of the underlying tax_liability if the person did not receive any statutory_notice_of_deficiency for such tax_liability or did not otherwise have an opportunity to dispute such tax_liability petitioner argues that he did not receive a notice_of_deficiency for tax_year or and therefore he can challenge the underlying liabilities the court disagrees respondent presented evidence that the notices of deficiency were mailed to petitioner’s last_known_address and the record reflects that petitioner continues to reside at the same address petitioner failed to provide any evidence other than his own uncorroborated testimony to prove that he did not receive those notices on the basis of the evidence respondent provided the court is satisfied that those notices were sent to the proper address and received by petitioner therefore the court determines that petitioner cannot challenge the underlying liabilities for tax years and because he has received a notice_of_deficiency for each year at issue and had a prior opportunity to challenge the tax_liability for each year furthermore petitioner had a previous opportunity to challenge his underlying tax_liabilities for the tax years and a due process hearing on the notice_of_intent_to_levy constitutes a prior opportunity to raise and challenge an underlying tax_liability within the meaning of sec_6330 and the regulations 126_tc_356 b face-to-face hearings petitioner contends that his hearing was not fair and impartial because he was denied a face-to-face hearing the court disagrees petitioner was not improperly deprived of a face-to-face cdp hearing see lindberg v commissioner tcmemo_2010_67 granger v commissioner tcmemo_2009_258 citing 464_fsupp2d_474 d md and 372_fsupp2d_1053 s d ohio generally there is no abuse_of_discretion in the irs’ refusal of a face-to-face hearing when a taxpayer fails to present nonfrivolous arguments file past-due returns and submit financial statements as a prerequisite to a collection alternative see 363_fedappx_675 10th cir affg tcmemo_2009_110 rice v commissioner tcmemo_2009_169 summers v commissioner tcmemo_2006_219 the aar specialist considered the information offered by petitioner and gave him the opportunity to provide the appropriate information in order to qualify for a face-to-face hearing petitioner neither provided the requested information nor filed past-due returns as was also requested consequently the aar specialist did not abuse her discretion when she denied petitioner a face-to-face hearing c filing of the nftl because petitioner was not in compliance with his tax obligations respondent’s filing of a tax_lien was appropriate it is not an abuse_of_discretion for appeals to reject collection alternatives where a taxpayer has not complied with current tax obligations giamelli v commissioner supra pincite other than the cdp request form and despite being provided with two opportunities to do so petitioner presented no evidence to the aar specialist to support any of his claims the aar specialist based her review on the case file and transcripts of prior correspondence with petitioner and found that petitioner failed to file delinquent tax returns failed to provide a requested collection information statement and did not qualify for any collection alternatives therefore the court finds that the aar specialist did not abuse her discretion when she sustained the filing of the nftl on the basis of the record the court finds that petitioner was given the opportunity to challenge the underlying tax_liabilities and that the aar specialist did not abuse her discretion in determining that the nftl filing was appropriate to reflect the foregoing decision will be entered for respondent