internal_revenue_service department of the treasury index number number release date washington dc person to contact telephone number refer reply to cc dom p si plr-114415-98 date date company a company b company c shareholders company a properties plr-114415-98 area a b c d e f g h i j k dear this letter responds to a letter dated date as well as subsequent correspondence submitted on behalf of companies a and b the corporations by your authorized representative requesting a ruling under sec_1362 of the internal_revenue_code regarding the rental income received by the corporations from the properties as well as various rulings under sec_368 and related provisions regarding a plan_of_reorganization between companies a and b the corporations represent the following facts plr-114415-98 the corporations acquire develop construct lease and manage real_estate in the area company a formed in a performs management and finance activities for the corporations company b which began operations in b performs a majority of the operating activities of the corporations company b owns propertie sec_1 company b owns c percent of property as a member of company c and owns d percent of property as a tenant-in-common corporations have not requested a ruling and there has been no consideration as to whether the ownership of property actually results in a partnership with the other owners of the property company a is the common parent of an affilated group of corporations which includes company b company b is a e percent-owned subsidiary of company a whether the minority interest in company b will be redeemed or otherwise eliminated before the transaction discussed below is unknown company b has outstanding a single class of common_stock company a has issued and outstanding two classes of stock one class of common_stock and one class of convertible preferred_stock under the terms of company a’s articles of incorporation each holder of convertible preferred_stock has the right to convert all or any part of his convertible preferred_stock into f shares of company a common_stock in the event of a transfer of all or substantially_all of the assets of company a however the holder is entitled to convert these shares into the same kind and amount of stock as may be issuable or payable by the terms of the transfer with respect to the number of shares of common_stock that he would have been entitled to receive had he exercised the conversion privilege immediately before the transfer a convertible preferred stockholder has the right also to have the stock redeemed immediately before any such transfer of company a’s assets redemption though would not be in the best economic interests of the stockholder and company a’s board_of directors does not recommend redemption the corporations are engaging in the transaction in order to enhance efficiencies and realize savings through the reduction of state tax_liabilities costs associated with adhering to consolidated_return_regulations and costs incurred in completing multiple state and local_tax returns the transaction also will simplify and thereby reduce costs associated with the corporate and capital structures by eliminating unnecessary layers simplify business records combine certain overhead functions and provide economies of scale with respect to overhead functions accounting auditing legal and directors fees finally the transaction will facilitate a subchapter_s_election plr-114415-98 under sec_1362 pursuant to a plan_of_reorganization company a will transfer to company b all of its assets including its stock in company b in exchange for new company b common_stock and the assumption by company b of all company a's liabilities after the initial exchange and pursuant to the same plan_of_reorganization company a will distribute the company b stock pro_rata to its current shareholders in liquidation of all of its outstanding_stock company a then will dissolve with company b as the surviving corporation no fractional shares of company b will be issued in the transaction after the merger of the corporations company b will elect under sec_1362 to be an s_corporation effective g simultaneous with the s_corporation_election the trustees of the nongrantor trusts holding stock in company b currently shareholders of company a will elect under sec_1361 to treat the trusts as electing small_business trusts sec_1362 through company b's approximately h employees the corporations provide various services in its real_estate leasing and management business which is only part of a vertically integrated real_estate operation under all of the leases the corporations are responsible for maintaining the structural_components of the buildings including the roofs typically the tenant is responsible for routine maintenance but the corporations often perform this function in the common areas to enhance the lessor-lessee relationship the corporations employ and supervise remodelling maintenance and landscape crews to inspect properties on a regular basis to maintain and repair or replace property exteriors including roofs parking lots facades and sidewalks to monitor and assist tenants in complying with environmental laws to make leasehold improvements and to perform various other functions the corporations' office staff and maintenance crews respond to tenant calls regarding problems and take corrective action either directly or by means of subcontractors the cost of these repairs or other actions might be borne by the corporations or by the tenant depending on the problem and the action taken in addition to the services provided to tenants the corporations handle the usual leasing and administrative functions involved in leasing and managing real_estate the corporations received or accrued dollar_figurei in rents and paid_or_incurred dollar_figurej in relevant expenses on the properties for period k plr-114415-98 the corporations represent that these figures are consistent with the income and expense figures for prior periods except as provided in sec_1362 sec_1362 provides that a small_business_corporation may elect in accordance with the provisions of sec_1362 to be an s_corporation sec_1362 provides that an election under sec_1362 terminates whenever the corporation i has accumulated_earnings_and_profits at the close of each of three consecutive tax years and ii has gross_receipts for each of such tax years more than percent of which are passive_investment_income except as otherwise provided in subparagraph c sec_1362 provides that the term passive_investment_income means gross_receipts derived from royalties rents dividends interest annuities and sales or exchanges of stock_or_securities sec_1_1362-2 of the income_tax regulations provides that rents means amounts received for_the_use_of or the right to use property whether real or personal of the corporation sec_1_1362-2 provides that rents does not include rents derived in the active trade_or_business of renting property rents received by a corporation are derived in an active trade_or_business of renting property only if based on all the facts and circumstances the corporation provides significant services or incurs substantial costs in the rental business generally significant services are not rendered and substantial costs are not incurred in connection with net leases whether significant services are performed or substantial costs are incurred in the rental business is determined based upon all the facts and circumstances including but not limited to the number of persons employed to provide the services and the types and amounts of costs and expenses_incurred other than depreciation sec_1_1362-2 provides that rents does not include compensation however designated for_the_use_of or right to use any real or tangible_personal_property developed manufactured or produced_by_the_taxpayer if during the tax_year the taxpayer is engaged in substantial development manufacturing or production of real or tangible_personal_property of the same type sec_368 plr-114415-98 companies a and b make the following representations a the fair_market_value of the company b stock and other consideration if any received by each company a shareholder will be approximately equal to the fair_market_value of the company a stock surrendered in the exchange b there is no plan or intention by the shareholders of company a who own percent or more of the company a stock and to the best of the knowledge of the management of company a there is no plan or intention on the part of the remaining shareholders of company a to sell exchange or otherwise dispose_of a number of shares of company b stock received in the transaction that would reduce the company a shareholders’ ownership of company b stock to a number of shares having a value as of the date of the transaction of less than percent of the value of all of the formerly outstanding_stock of company a as of the same date for purposes of this representation shares of company a stock exchanged for cash or other_property if any surrendered by dissenters if any or exchanged for cash in lieu of fractional shares if any will be treated as outstanding on the date of the transaction moreover shares of company a stock and shares of company b stock held by company a shareholders and otherwise sold redeemed or disposed of prior or subsequent to the transaction have been considered in making this representation c company b will acquire at least percent of the fair_market_value of the net assets and at least percent of the gross assets held by company a immediately prior to the transaction for purposes of this representation amounts paid_by company a to dissenters amounts paid_by company a to shareholders who receive cash and or other_property amounts used by company a to pay its reorganization expenses and all redemptions and distributions except for regular normal dividends made by company a immediately before the transfer are included as assets of company a held immediately before the transaction d after the transaction the shareholders of company a will be in control of company b within the meaning of sec_368 e company b has no plan or intention to reacquire any of its stock issued in the transaction plr-114415-98 f company b has no plan or intention to sell or otherwise dispose_of any of the assets of company a acquired in the transaction except for dispositions made in the ordinary course of business g the liabilities of company a assumed by company b plus the liabilities if any to which the transferred assets were subject were incurred by company a in the ordinary course of its business and were associated with the assets transferred h following the transaction company b will continue the historic_business of company a or use a significant portion of company a’s historic_business_assets in a business i at the time of the transaction company b will not have outstanding any warrants options convertible securities or any other type of right pursuant to which any person could acquire stock in company b that if exercised or converted would affect the company a shareholders’ acquisition or retention of control of company b as defined in sec_368 j company b company a and the shareholders of company a will pay their respective expenses if any incurred in connection with the transaction k there is no intercorporate indebtedness existing between company a and company b that was issued acquired or will be settled at a discount l no two parties to the transaction are investment companies as defined in sec_368 and iv m the fair_market_value of the assets of company a transferred to company b will equal or exceed the sum of the liabilities assumed by company b plus the amount of liabilities if any to which the transferred assets are subject n the total adjusted_basis of the assets of company a transferred to company b will equal or exceed the sum of the liabilities assumed by company b plus the amount of liabilities if any to which the transferred assets are subject o company a is not under the jurisdiction of a court in a title_11_or_similar_case within the meaning of sec_368 plr-114415-98 p none of the compensation received by any shareholder- employees of company a will be separate consideration for or allocable to any of their shares of company a stock none of the shares of company b stock received by any shareholder-employees will be separate consideration for or allocable to any employment agreement and the compensation paid to any shareholder-employees will be for services actually rendered and will be commensurate with amounts paid to third parties bargaining at arm’s-length for similar services based solely on the facts as presented in this ruling_request and viewed in light of the applicable law and regulations we rule as follows the rents the corporations receive from the properties are not passive_investment_income under sec_1362 the transfer by company a of substantially_all of its assets to company b in exchange for company b stock and the assumption by company b of the liabilities of company a followed by the distribution by company a of the company b stock to the shareholders of company a will be a reorganization within the meaning of sec_368 for purposes of this ruling substantially_all means at least percent of the fair_market_value of the net assets and at least percent of the fair_market_value of the gross assets of company a companies a and b each will be a_party_to_a_reorganization within the meaning of sec_368 no gain_or_loss will be recognized by company a on the transfer of substantially_all of its assets to company b in exchange for company b stock and the assumption of its liabilities or on the distribution of the company b stock received pursuant to the plan_of_reorganization to its shareholders sec_361 sec_357 and sec_361 no gain_or_loss will be recognized by company b on the receipt of company a's assets in exchange for shares of company b stock and assumption of company a's liabilities sec_1032 the basis of the assets of company a in the hands of company b will be the same as the basis of those assets in the hands of company a immediately prior to the transaction sec_362 plr-114415-98 the holding_period for the assets of company a in the hands of company b will include the period during which those assets were held by company a sec_1223 no gain_or_loss will be recognized by the shareholders of company a on the exchange of their stock in company a for shares of company b stock sec_354 the basis of the company b stock to be received by shareholders of company a will be the same as the basis of the company a stock surrendered in exchange therefor sec_358 the holding_period of the company b stock to be received by shareholders of company a will include the holding_period of the company a stock surrendered in exchange therefor provided the company a stock was held as a capital_asset on the date of the exchange sec_1223 the tax_year of company a will end on the effective date of the transaction sec_1_381_b_-1 of the income_tax regulations and as provided in sec_381 and sec_1 a - company b will succeed to and take into account those attributes of company a described in sec_381 subject_to the provisions and limitations specified in sec_381 sec_382 sec_383 and sec_384 if applicable and the regulations thereunder pursuant to sec_381 and sec_1_381_c_2_-1 company b will succeed to and take into account the earnings_and_profits or deficit in earnings_and_profits of company a as of the date of transfer any deficit in earnings_and_profits of either company a or company b will be used only to offset the earnings_and_profits accumulated after the date of the transfer except for the specific rulings above no opinion is expressed or implied concerning the federal tax consequences of the facts of this case under any other provision of the code specifically no opinion is expressed regarding company b's eligibility under sec_1361 to be an s_corporation further the passive_investment_income rules of sec_1362 are completely independent of the passive_activity rules of sec_469 unless an exception under sec_469 applies the rental_activity remains passive for purposes of sec_469 in accordance with the power_of_attorney on file with this office we are sending copies of this letter to your authorized plr-114415-98 representatives this ruling is directed only to the taxpayer who requested it according to sec_6110 this ruling may not be used or cited as precedent sincerely william p o'shea chief branch office of the assistant chief_counsel passthroughs and special industries enclosure copy for sec_6110 purposes


internal_revenue_service number release date index no cc dom p si plr-104747-00 in re may legend taxpayer dear this is in response to a request for a private_letter_ruling dated date concerning the taxability of certain crane-carrying truck chassis under sec_4051 of the internal_revenue_code taxpayer manufactures truck mounted telescoping hydraulic cranes that have extended horizontal reaches in excess of feet taxpayer installs its cranes on standard over-the-road truck chassis it purchases all of the chassis are rated in excess of big_number pounds gross vehicle weight gvw some chassis may require shortening lengthening or strengthening but certain standard modifications are made to all the chassis in order to accommodate the cranes these modifications include bolting a torsion resistant subframe torsion box or subframe spacer to the chassis repositioning chassis cross-members mounting a bed to the subframe installing of front and side outriggers rear outriggers are required for rear-mounted cranes on the chassis installing of a power-take-off pto and modifying the transmission to power it modifying the electrical system reprogramming the electronic fuel injection computer and adding any necessary counter-weights to the chassis optional under- the-bed tool boxes and an air throttle are also available for installation the cranes are mounted either in the front or the rear of the trucks empty bed space exists beneath and on both sides of the boom of the crane the weight of a chassis with the crane installed is less than the gvw rating of the chassis depending on the model this allows for a remaining cargo capacity of between somewhat more that ½ ton to approximately ½ tons taxpayer represents that once the cranes are mounted on the vehicle the purpose of the chassis is to serve as a carrier to transport the crane on the job site and from one job site to another and a stable platform that allows the crane to operate properly taxpayer states that its sales of the modified chassis should not be subject_to the tax imposed by sec_4051 by virtue of the exception provided under sec_48 a - d i of the manufacturers and retailers excise_tax regulations it indicates that job site cranes have been permanently mounted on chassis that are specially designed and constructed solely as a mobile carriage mount and power source for the cranes taxpayer believes that the chassis of the completed vehicles have been substantially structurally modified to the extent that they fulfill the requirements of subparts a and b of the exception furthermore taxpayer believes that as modified the chassis differ in many respects to the type of chassis that would ordinarily be purchased for over-the-road transportation of a different load and that the chassis fulfill the requirements of subpart c of the exception because in order to transform the chassis into chassis that could transport another type of load in a reasonable and efficient manner certain major modifications would have to be made to the chassis additionally taxpayer argues that once the crane is mounted the remaining cargo capacity of the truck is much less than that of a similar truck chassis equipped with only a flatbed body sec_4051 imposes a percent excise_tax on the first_retail_sale of certain enumerated articles including automobile truck chassis including the parts and accessories sold on or in connection therewith or with the sale thereof suitable for use with a vehicle which has a gvw of more than big_number pounds sec_145_4051-1 of the temporary excise_tax regulations under the highway revenue act of pub l provides that a chassis is taxable only if the chassis is sold as a component part of a highway vehicle as defined in sec_48_4061_a_-1 sec_48_4061_a_-1 defines a highway vehicle as any self-propelled vehicle or any trailer or semitrailer designed to perform a function of transporting a load over public highways whether or not also designed to perform other functions but does not include a vehicle described in sec_48_4061_a_-1 sec_48_4061_a_-1 provides a three part test to determine if a vehicle meets the exception to the tax imposed by sec_4051 by virtue of the mounting of mobile_machinery to the chassis each part of this test must be met to qualify for the exception the first part of the test as described in subpart a of sec_48_4061_a_-1 requires that there has been permanently mounted by welding bolting riveting or other means machinery or equipment to perform a construction processing farming mining drilling timbering or similar operation if the operation of the machinery or equipment is unrelated to transportation on or off the public highways the a test subpart b of the exception requires that the chassis has been specially designed to serve only as a mobile carriage and mount and a power source where applicable for the particular machinery or equipment involved whether or not such machinery or equipment is in operation the b test subpart c requires that by reason of such special design such chassis could not without substantial structural modification be used as a component of a vehicle designed to perform a function of transporting any load other than that particular machinery or equipment or similar machinery or equipment requiring such a specially designed chassis the c test sec_48_4061_b_-2 a provides that the term parts or accessories includes any article the primary use of which is to improve repair replace or serve as a component part of an automobile truck or bus chassis or body or other automobile chassis or body or taxable tractor any article designed to be attached to or used in connection with such chassis body or tractor to add to its utility or ornamentation and any article the primary use of which is in connection with such chassis body or tractor whether or not essential to its operation or use an article is not a taxable part or accessory even though it is designed to be attached to the vehicle or to be primarily used in connection with the vehicle if the article is in effect the load being transported and the primary function of the article is to serve a purpose unrelated to the vehicle revrul_76_117 1976_1_cb_338 holds that an article is not subject_to tax if it is designed to perform a job site function in connection with the nontaxable equipment on a vehicle such as a power derrick ladder tower or earth borer rather than a function connected with the vehicle itself the fact that this article may be attached to or installed on a taxable body or chassis is not material this revenue_ruling refers to 366_fsupp_602 s d ohio in this case the court concluded that an outrigger assembly installed on a truck chassis was not a part or accessory of a taxable chassis the truck was used to transport a mobile aerial platform for workmen and the only function of the outrigger assembly was to stabilize the truck while this platform was in operation revrul_75_88 1975_1_cb_341 establishes a rebuttable_presumption that cranes that exceed feet in extended horizontal reach without readily removable extensions are not designed or primarily used for loading and unloading the trucks upon which they are mounted and are not taxable truck parts or accessories for purposes of the sec_4061 tax revrul_69_394 1969_2_cb_206 describes methods for determining the price of taxable articles when taxable articles are sold in combination with nontaxable items taxpayer contends that because of the substantial modifications performed on the chassis it has met the requirements of all three parts of the test under sec_48_4061_a_-1 for exception of its chassis from taxation under sec_4051 we believe that taxpayer has met the a test of the regulation in that it has permanently mounted nontransportation equipment job site cranes on the chassis however the chassis have the capacities to carry loads in addition to the cranes taxpayer installs the installation of the cranes does not cause the vehicles to exceed their weight capacities after installation of the cranes the vehicles’ flatbeds have empty space that can accommodate additional loads therefore the chassis’ load-carrying capacities are not limited to serving only as a mobile carriage and mount for the cranes the fact that the vehicles have considerably less cargo-carrying capacity after the cranes are installed than similar flatbed trucks is irrelevant the vehicles’ capacities to carry any additional loads regardless of size weight or frequency disqualify the vehicles from meeting the b test inasmuch as all three tests must be met for the exception to be applicable taxpayer's failure to meet the b test renders its argument as to the c test moot taxpayer’s cranes have extended horizontal reaches in excess of feet without readily removable extensions having these characteristics the cranes meet the presumption in revrul_75_88 that the cranes are not designed to load and unload the trucks upon which they are mounted and are not truck parts or accessories therefore the cranes are not taxable under sec_4051 the outriggers that serve to stabilize the cranes when in use are not parts or accessories of the taxable chassis because the outriggers perform a job site function in connection with the nontaxable cranes as described in revrul_76_117 the cranes and outriggers are not taxable however they are mounted on taxable chassis to determine the taxable sale price where as in this case taxable and nontaxable articles are sold as a unit taxpayer may use the methods described in revrul_69_394 this ruling is directed only to the taxpayer who requested it sec_6110 provides that it may not be used or cited as precedent sincerely assistant chief_counsel passthroughs and special industries by richard a kocak chief branch enclosures copy of this letter copy for sec_6110 purposes


internal_revenue_service number release date index numbers --------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------ department of the treasury washington dc person to contact ----------------------- id no ------------------- --------------------------------------------------- telephone number ---------------------- refer reply to cc psi b03 - plr-124056-14 date date legend x ------------------------------------------------------------ -------------------------------------------------- y ------------------------------------------------------------ ------------------------------------------------- z ------------------------------------------------------------ -------------------------------------- country country ---------------------------- ------------- sub1 ------------------------------------- sub2 --------------------------------------------------------------------------------- -------------------------------------------------------- ---------------------------------------------------------------- state parent -------------- ------------------------------- --------------------------------------------------------------------------------- --------------------------------------------------------------------------------- --------- -------------------- ------------ -------------------- ------------------- ------------------------ ----------------------- ----------------------- plr-124056-14 entity limited d1 d2 d3 d4 d5 dear ---------------- this letter responds to a letter dated date submitted on behalf of y requesting an extension of time under sec_301_9100-3 of the procedure and administration regulations to file an election under sec_301_7701-3 to be classified as a disregarded_entity for federal tax purposes facts the information submitted discloses that sub1 formed x on d1 under the laws of country sub1 is owned by sub2 a state corporation whose ultimate owner is parent also a state corporation and the parent of an affiliated_group that files a u s consolidated_return on d2 x formed y under the laws of country to use for the acquisition of entity after the acquisition y and entity merged on d3 and the surviving entity was converted to a limited and renamed z x y and z each intended to be classified as a disregarded_entity for federal tax purposes effective d4 d5 and d3 respectively however x y and z each failed to file timely a form_8832 entity classification election to be classified as a disregarded_entity for federal tax purposes x y and z represent that all u s tax and information returns have been filed consistent with x y and z being treated as disregarded entities effective d4 d5 and d3 respectively law and analysis sec_301_7701-3 provides in part that a business_entity that is not classified as a corporation under sec_301_7701-2 or an eligible_entity can elect its classification for federal tax purposes as provided in plr-124056-14 sec_301_7701-3 an eligible_entity with at least two members can elect to be classified as either an association and thus a corporation under sec_301_7701-2 or a partnership and 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 sec_301_7701-3 provides that except as provided in sec_301 b unless the entity elects otherwise a foreign eligible_entity is a a partnership if it has two or more members and at least one member does not have limited_liability b an association if all members have limited_liability or c disregarded as an entity separate from its owner if it has a single owner that does not have limited_liability sec_301_7701-3 provides in part that for purposes of sec_301_7701-3 a member of a foreign eligible_entity has limited_liability if the member has no personal liability for the debts of or claims against the entity by reason of being a member sec_301_7701-3 provides in part that except as provided in sec_301_7701-3 and v an eligible_entity may elect to be classified other than as provided under sec_301_7701-3 or to change its classification by filing form_8832 with the service_center designated on form_8832 sec_301_7701-3 provides in part that an election made under sec_301_7701-3 will be effective on the date specified by the entity on form_8832 or on the date filed if no such date is specified on the election form the effective date specified on form_8832 can not be more than days prior to the date on which the election is filed and can not be more than months after the date on which the election is filed under sec_301_9100-1 the commissioner may grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad under all subtitles of the internal_revenue_code code except subtitles e g h and i sec_301_9100-1 provides that the term regulatory election includes an election whose due_date is prescribed by a regulation published in the federal_register sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make an election sec_301_9100-2 provides automatic extensions of time for making certain elections sec_301_9100-3 provides extensions of time for regulatory elections that do not meet the requirements of sec_301_9100-2 sec_301_9100-3 provides that requests for relief under sec_301_9100-3 will be granted when the taxpayer provides the evidence including affidavits described in sec_301_9100-3 to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and the grant of relief will not prejudice the interests of the government plr-124056-14 conclusion based solely on the facts and representations submitted y has established that the requirements of sec_301_9100-1 and sec_301_9100-3 are satisfied consequently y is granted an extension of time of one hundred twenty days from the date of this letter to elect under sec_301_7701-3 to be treated as a disregarded_entity effective d5 y must file form_8832 within the extension period with the appropriate service_center with a copy of this letter attached except for the specific ruling above we express or imply no opinion concerning the federal tax consequences of the facts of this case under any other provision of the code in addition sec_301_9100-1 provides that the granting of an extension of time for making an election is not a determination that the taxpayer is otherwise eligible to make the election this ruling is directed only to the taxpayer requesting it according to sec_6110 of the code this ruling may not be used or cited as precedent under a power_of_attorney on file with this office we are sending a copy of this letter to y’s authorized representative 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 while this office has not verified any of the material submitted in support of the ruling_request it is subject_to verification on examination sincerely associate chief_counsel passthroughs special industries by s mary beth carchia senior technician reviewer branch office of the associate chief_counsel passthroughs special industries enclosures copy of this letter copy for sec_6110 purposes


department of the treasury internal_revenue_service washington d c dec number release date cc tege eoeg et1 - genin-149075-01 uilc memorandum for director internal_revenue_service center kansas city mo attn entity control from subject office of division counsel associate chief_counsel tax exempt and government entities cc tege eoeg et1 - genin-149075-01 railroad retirement act tax status in accordance with the coordination procedure established between the service and the railroad retirement board rrb the rrb has provided us with its opinion that the following business ceased to be an employer under the railroad retirement act and the railroad unemployment insurance act effective date we have reviewed the opinion of the rrb and based upon the information submitted to the rrb we also conclude that ceased to be an employer under the railroad_retirement_tax_act effective date please take the appropriate action regarding this business will e mcleod cc


internal_revenue_service number release date index number ----------------- ----------------------------------- -------------------------------------------------- --------------------- ---------------------------- department of the treasury washington dc third party communication none date of communication not applicable_person to contact ------------------------------- id no ------------ -------- telephone number -------------------- refer reply to cc ita b07 plr-147070-10 date date re request for extension of time to make the election to apply sec_168 legend taxpayer ------------------------------------------------------ new parent ------------------------------------------ date --------------------------- date --------------------------- date --------------------------- date --------------------------- date ---------------------- date --------------------------- date ------------------- a ------------------- b ------------------------- dear -------------- this letter responds to a letter dated date requesting an plr-147070-10 extension of time pursuant to sec_301_9100-3 of the procedure and administration regulations to make the election to apply sec_168 of the internal_revenue_code facts taxpayer represents that the facts are as follows taxpayer was the common parent of an affiliated_group_of_corporations that file a consolidated federal_income_tax return taxpayer’s consolidated_group on a calendar- year basis taxpayer is a manufacturer and marketer of specialty chemicals and related_services on date new parent acquired percent of the outstanding_stock of taxpayer new parent has a fiscal_year ending a as a result of the transaction the taxable_year of taxpayer and its subsidiaries ended on date which is taxpayer’s first taxable_year ending after date taxpayer and its subsidiaries were required to file a final consolidated federal_income_tax return for the short taxable_year beginning date and ending date and new parent was required to include income gain loss deductions and credits of taxpayer and its subsidiaries for the period date through date in its consolidated federal_income_tax return filed for the taxable_year ending date during the short taxable_year ending date taxpayer and its subsidiaries placed_in_service eligible qualified_property taxpayer also has unused alternative_minimum_tax amt credits and research tax_credits from taxable years beginning before date further taxpayer’s consolidated_group was not a member of any other controlled_group as defined in section dollar_figure of revproc_2009_16 i r b for the first taxable_year ending after date taxpayer used an outside tax preparer to prepare its consolidated federal_income_tax return for the short taxable_year ending date this return was timely filed on date which is after date as part of this original return taxpayer filed form_4562 depreciation and amortization including information on listed_property indicating that taxpayer used the straight-line method and did not claim the stimulus additional first year depreciation for any qualified_property as defined in sec_168 placed_in_service during the short taxable_year ending date and also included a statement indicating taxpayer was making the election to apply sec_168 taxpayer’s outside tax preparer advised taxpayer about the time and manner for making the election to apply sec_168 taxpayer’s outside tax preparer mistakenly advised taxpayer that they were required to file an amended_return for the short taxable_year ending on date on or before date which was the due_date including extensions of new parent’s consolidated federal_income_tax return for the taxable_year ending date when preparing this amended_return taxpayer’s outside tax preparer plr-147070-10 realized that the due_date for the amended_return was date which was the due_date without extensions of new parent’s consolidated federal_income_tax return for the taxable_year ending date on date taxpayer provided written notification to b and all other partnerships in which taxpayer owns a partnership_interest that taxpayer was making the sec_168 election for taxpayer’s short taxable_year ending on date ruling requested taxpayer requests on behalf of the consolidated_group of which taxpayer was the common parent an extension of time pursuant to sec_301_9100-3 of the procedure and administrative regulations to make the election to apply sec_168 for the short taxable_year ending date law and analysis sec_168 amended by sec_103 of the economic stimulus act of pub_l_no 122_stat_613 date and by sec_1201 of the american recovery and reinvestment tax act of div b of pub_l_no 123_stat_115 date allowed a 50-percent additional first year depreciation deduction stimulus additional first year depreciation deduction for the taxable_year in which qualified_property acquired by a taxpayer after is placed_in_service by the taxpayer before before in the case of property described in sec_168 or c section a of the housing and economic recovery act of pub_l_no 122_stat_2654 date housing act amended sec_168 by adding sec_168 sec_168 provides that a corporation may elect to apply sec_168 the sec_168 election if the corporation makes the sec_168 election sec_168 further provides that for the corporation’s first taxable_year ending after date and for each subsequent taxable_year the corporation must not claim the stimulus additional first year depreciation deduction for all eligible qualified_property must use the straight_line method_of_depreciation as the applicable_depreciation_method for all eligible qualified_property and must increase its business_credit limitation under sec_38 and the amt credit limitation under sec_53 by the bonus_depreciation amount as defined in sec_168 and as determined under sec_5 of revproc_2008_65 i r b that is determined for that taxable_year and allocated to such limitation specifically sec_168 and iv provides in general that the corporation will be able to claim unused credits from taxable years beginning before date that are allocable to research expenditures or amt liabilities section dollar_figure of revproc_2008_65 provides that except as provided in b of the housing act relating to certain automotive partnerships only a corporation may elect to apply sec_168 if the election to apply sec_168 is made plr-147070-10 the election applies to all eligible qualified_property placed_in_service by the taxpayer in the taxpayer’s first taxable_year ending after date and in any subsequent taxable_year taxpayer was the common parent of an affiliated_group_of_corporations that filed a consolidated federal_income_tax return for the short taxable_year ending date further taxpayer’s consolidated_group for the short taxable_year ending date was not a member of any other controlled_group accordingly on date the testing_date for determining the members of a controlled_group for the first taxable_year ending after date when that taxable_year ends on the same date for all members of a controlled_group taxpayer’s consolidated_group is treated as a controlled_group and as one taxpayer for purposes of applying sec_168 and revproc_2009_16 for the first taxable_year ending after date see sec_168 and sections dollar_figure and a of revproc_2009_16 sec_3 a of revproc_2009_16 provides that a sec_168 election made by any member of a controlled_group is binding on all other members of the controlled_group for all members’ first taxable_year ending after date sec_3 b of revproc_2009_16 provides that if all members of a controlled_group are members of an affiliated_group_of_corporations that file a consolidated_return a consolidated_group the common parent within the meaning of sec_1_1502-77 of the income_tax regulations of the consolidated_group makes the sec_168 election on behalf of all members of the consolidated_group the common parent makes this election within the time and in the manner provided in sec_3 or dollar_figure of revproc_2009_16 as applicable_section dollar_figure of revproc_2009_16 provides that a corporate taxpayer must make the sec_168 election by the due_date including extensions of the federal_income_tax return for the taxpayer’s first taxable_year ending after date section dollar_figure of revproc_2009_16 provides the manner for making the sec_168 election for a taxpayer whose first taxable_year ending after date ends before date if the taxpayer has not filed its original federal_income_tax return for such taxable_year on or before date sec_3 a of revproc_2009_16 provides that the taxpayer must complete three actions to make the sec_168 election first the taxpayer must either i claim the stimulus additional first year depreciation deduction for any eligible qualified_property placed_in_service by the taxpayer during such taxable_year on its timely-filed federal_income_tax return for such taxable_year such property must not be property in a class for which the taxpayer elects out of the stimulus additional first year depreciation deduction under sec_168 or ii file with its timely-filed federal_income_tax return for such taxable_year the form_4562 indicating that the taxpayer used the straight_line method and did not claim the stimulus additional first year depreciation deduction for all eligible qualified plr-147070-10 property taxpayers that choose to follow this option must not claim a refundable_credit on their original federal_income_tax return sec_3 a i of revproc_2009_16 second the taxpayer must file an amended federal_income_tax return for such taxable_year in the manner described in sec_3 of revproc_2009_16 on or before the due_date without regard to extensions of the taxpayer's federal_income_tax return for the succeeding taxable_year sec_3 a ii of revproc_2009_16 finally if the taxpayer is a partner in a partnership the taxpayer must notify the partnership in accordance with section dollar_figure of revproc_2009_16 sec_3 a iii of revproc_2009_16 if the taxpayer filing the amended federal_income_tax return under sec_3 a ii of revproc_2009_16 is not an s_corporation sec_3 a of revproc_2009_16 provides that the taxpayer i includes the amount of the refundable_credit allowed by the sec_168 election on line 5g of the form 1120x amended u s_corporation income_tax return ii makes appropriate adjustments to line sec_2 and of the form 1120x to reflect the requirements of sec_168 requiring that the depreciation deduction for all eligible qualified_property be determined by using the straight_line method and by not claiming the stimulus additional first year depreciation deduction and iii indicates in part ii of the form 1120x that the taxpayer is making the sec_168 election if the electing corporate_partner makes the sec_168 election by filing an amended_return under sec_3 a ii or of revproc_2009_16 section dollar_figure of revproc_2009_16 provides that the electing corporate_partner must notify the partnership on or before the date it files the amended_return containing the sec_168 election under sec_301_9100-1 of the procedure and administration regulations the commissioner has discretion to grant a reasonable extension of time under the rules set forth in sec_301_9100-2 and sec_301_9100-3 to make a regulatory election sec_301_9100-1 through provide the standards the commissioner will use to determine whether to grant an extension of time to make an election sec_301_9100-2 provides automatic extensions of time for making certain elections sec_301_9100-3 provides extensions of time for making elections that do not meet the requirements of sec_301_9100-2 sec_301_9100-3 provides that requests for relief under sec_301_9100-3 will be granted when the taxpayer provides evidence to establish to the satisfaction of the commissioner that the taxpayer acted reasonably and in good_faith and the grant of relief will not prejudice the interests of the government conclusions plr-147070-10 based solely on the facts and representations submitted we conclude that the requirements of sec_301_9100-1 and sec_301_9100-3 have been satisfied accordingly taxpayer is granted calendar days from the date of this letter to make the election to apply sec_168 for the short taxable_year ending date1 and subsequent taxable years this election must be made by taxpayer filing an amended consolidated federal_income_tax return for the short taxable_year ending date and in accordance with the procedures provided in sec_3 a of revproc_2009_16 except as specifically set forth above no opinion is expressed or implied concerning the tax consequences of the facts described above under any other provisions of the code specifically no opinion is expressed or implied on whether any item of depreciable_property placed_in_service by any member of taxpayer’s consolidated_group in the short taxable_year ending date1 is eligible for the stimulus additional first year depreciation deduction under sec_168 or is eligible qualified_property for purposes of sec_168 further no opinion is expressed or implied on whether the members of new parent’s controlled_group for the taxable_year ending date that were not members of taxpayer’s consolidated_group for the short taxable_year ending date are bound by the sec_168 election made by taxpayer in accordance with the power_of_attorney we are sending a copy of this letter to taxpayer’s authorized representative we are also sending a copy of this letter to the appropriate operating division director this ruling is directed only to the taxpayer requesting it sec_6110 provides that it may not be used or cited as precedent sincerely kathleen reed kathleen reed chief branch office of associate chief_counsel income_tax and accounting enclosures copy of this letter copy for sec_6110 purposes


department of the treasury internal_revenue_service washington d c aug 2s tax_exempt_and_government_entities_division uniform issue list set ep re t legend taxpayer a deceased b plan c ira d ira e company f company g financial_institution h partnership amount amount dear this is in response to your request dated date as supplemented by correspondence received on date date and date in which you through your authorized representative request a waiver of the day rollover requirement contained in sec_402 of the internal_revenue_code the code the following facts and representations have been submitted under penalty of perjury in support of the ruling requested taxpayer a represents that she received a total_distribution from plan c equal to amount taxpayer a asserts that the failure to accomplish a rollover of a portion of the total_distribution amount equal to amount within the 60-day period described in sec_402 of the code was due to financial_institution error taxpayer a is the surviving_spouse of deceased b who was a participant in plan c deceased b died on date taxpayer a was the sole beneficiary of deceased b’s account under plan c which included an interest in partnership equal to amount after the death of deceased b taxpayer a wanted to directly roll over amount into her own ira with the help of company g a financial planning group and company f which performed recordkeeping and tax reporting services for financial_institution h taxpayer a established ira d for purposes of rolling over amount from plan c on date taxpayer a signed an agreement with plan c to assign the partnership_interest in plan c equal to amount to the company f ira for the benefit of taxpayer a the documentation shows that financial_institution h which was affiliated with company f was to serve as the custodian of taxpayer a’s ira d ira d was established and the partnership_interest was reflected in the statements provided by company f taxpayer a also established ira e to roll over other assets from plan c ira e was also maintained by financial_institution h with company f as the recordkeeper taxpayer a received a form 1099-r from plan c which reported the distribution from plan c as having a zero taxable_amount in late taxpayer a first learned that the interest in partnership had been titled in the name of taxpayer a rather than the name of financial_institution h taxpayer a represents that she has not used amount for any other purpose based on the above facts and representations taxpayer a requests a waiver of the 60-day rollover requirement under sec_402 of the code with respect to the distribution of amount from plan c with respect to your ruling requests sec_401 of the code provides the qualification rules applicable to retirement plans set up by employers exclusively to benefit their employees and their beneficiaries sec_402 of the code provides that except as otherwise provided in this section 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 in the manner provided under sec_72 relating to annuities sec_402 of the code provides rules governing rollovers of amounts from exempt trusts to eligible retirement plans including iras sec_402 of the code provides generally that if any portion of an eligible_rollover_distribution from a qualified employees trust is paid to the employee in an eligible_rollover_distribution and the employee transfers any portion of the property received in such distribution to an eligible_retirement_plan and in the case of a distribution_of_property other than money the amount so transferred consists of the property distributed such 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 maximum amount of an eligible_rollover_distribution to which paragraph applies shall not exceed the portion of such distribution which is includible in gross_income determined without regard to paragraph the preceding sentence does not apply to the distribution to the extent that such portion is transferred to an eligible_retirement_plan described in sec_402 and ii sec_402 of the code provides generally that sec_402 shall not apply to any transfer of a distribution made after the 60th day following the day on which the distributee received the property distributed sec_402 of the code provides that the secretary may waive the day requirement under subparagraph a 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 occur after date are eligible for the waiver under sec_402 sec_402 of the code defines eligible_rollover_distribution as any distribution to an employee of all or a portion of the balance_to_the_credit of an 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 for the life or life expectancy of the employee or the joint lives or joint life expectancies of the employee and the employee's designated_beneficiary or ii for a specified period of years or more b any distribution to the extent the distribution is required under sec_401 and c any distribution which is made upon hardship of the employee sec_402 of the code provides that the transfer of an amount equal to any portion of the proceeds from the sale of property received in the distribution shall be treated as the transfer of property received in the distribution sec_402 of the code provides that the excess of the fair_market_value of property on sale over its fair_market_value on distribution shall be treated as property received in the distribution sec_402 of the code provides that no gain_or_loss shall be recognized on any sale described in subparagraph a to the extent that an amount equal to the proceeds is transferred pursuant to paragraph sec_402 of the code defines eligible_retirement_plan as i an individual_retirement_account described in sec_408 ii an individual_retirement_annuity described in sec_408 other than endowment_contract iii a qualified_trust iv an annuity plan described in sec_403 v an eligible_deferred_compensation_plan described in sec_457 maintained by an eligible_employer as described in sec_457 and vi an annuity_contract described in sec_403 revproc_2003_16 2003_4_irb_359 provides that in determining whether to grant a waiver of the 60-day rollover requirement pursuant to sec_402 of the code 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 and documentation submitted by taxpayer a support her assertion that the failure to timely roll over the distribution of amount from plan c into an ira was due to financial_institution error therefore pursuant to sec_402 of the code the service hereby waives the 60-day rollover requirement with respect to the distribution of amount provided all other requirements of sec_402 except the 60-day requirement will be met with respect to the contribution of amount to an ira amount will be considered a rollover_contribution within the meaning of sec_402 this ruling does not authorize the rollover of amounts that are required to be distributed by sec_401 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 which may be applicable thereto this letter 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 pursuant to a power_of_attorney on file with this office a copy of this letter_ruling is being sent to your authorized representative if you wish to inquire about this ruling please contact at please address all correspondence to se t ep ra t1 sincerely yours vattlew carlton a watkins manager employee_plans technical group enclosures notice of intention to disclose deleted copy of this letter ce


tcmemo_2008_257 united_states tax_court david cavazos petitioner v commissioner of internal revenue respondent docket no 28664-07l filed date p filed a federal_income_tax return reporting tax due for the year but did not fully pay the liability in p submitted to r an offer-in- compromise oic as to hi sec_2002 liability which r rejected because p had not complied with all return- filing_requirements r issued a notice_of_intent_to_levy and p requested a hearing under sec_6330 during the hearing p conceded that he was not current with all his filing_requirements p also failed to propose any collection alternatives other than his previously rejected oic or to provide r with requested financial information r’s appeals officer issued to p a final notice_of_determination in which she determined that a levy was appropriate p appealed that determination to this court r moved for summary_judgment and p opposed r’s motion held r’s motion for summary_judgment will be granted r’s appeals officer did not abuse her discretion in sustaining the levy when p failed to submit requested financial information p proposed no other collection alternatives and p was noncompliant with return-filing obligations frederick j o’laughlin for petitioner g chad barton for respondent memorandum opinion gustafson judge this case is an appeal by petitioner david cavazos pursuant to sec_6330 from the determination by an appeals officer of the internal_revenue_service irs to uphold the irs’s proposed use of a levy to collect mr cavazos’s unpaid federal_income_tax liability for the case is before us on a motion for summary_judgment filed by the respondent under rule background there is no dispute as to the following facts for the year mr cavazos filed a form_1040 u s individual_income_tax_return on which he reported that he was liable for dollar_figure in tax but he did not fully pay that self- reported liability on date mr cavazos submitted except as otherwise noted all section references are to the internal_revenue_code u s c and all rule references are to the tax_court rules_of_practice and procedure mr cavazos did remit dollar_figure with his return however mr cavazos’s failure to pay the tax_liability in full resulted continued to the irs an offer-in-compromise oic proposing to compromise his income_tax_liability for however the irs rejected that offer no later than date because of mr cavazos’s noncompliance with return-filing requirements on date the irs sent to mr cavazos pursuant to sec_6330 a notice_of_intent_to_levy and notice of your right to a hearing regarding unpaid taxes for pursuant to sec_6330 mr cavazos timely requested a hearing by sending to the irs on date a form request for a collection_due_process cdp or equivalent_hearing in his request for a hearing mr cavazos stated that a levy would cause him extreme hardship and that he had already submitted an oic regarding the liability on date an irs appeals resolution specialist sent mr cavazos a letter enclosing a blank form 433-a collection information statement for wage earners and self-employed continued in penalties and interest being added to his account at the time the irs issued the notice_of_intent_to_levy and notice of your right to a hearing mr cavazos’s outstanding liability for was dollar_figure 3there is no dispute that the irs rejected the date oic but the record bears some discrepancy about the date of that rejection a transcript shows rejection on date notes from the case activity log of the hearing officer show that the oic was returned and the attachment to the notice_of_determination states that the oic was returned emphasis added however the discrepancy is immaterial for present purposes since the relevant fact is that the oic was no longer pending at the time of the cdp hearing individuals and requesting that the form 433-a and all supporting documents be submitted to the irs by date to describe mr cavazos’s financial situation mr cavazos did not complete and submit the form 433-a by that deadline on date an irs settlement officer sent mr cavazos a letter acknowledging the receipt of mr cavazos’s request for a cdp hearing and advising mr cavazos that-- for me the settlement officer to consider alternative collection methods such as an installment_agreement or offer_in_compromise you must provide any items listed below in addition you must have filed all federal tax returns required to be filed the required items that were then listed in the june letter included a completed collection information statement form 433-a for individuals and or form 433-b for businesses 4the request was consistent with agency procedure in a sec_6330 hearing taxpayers will be expected to provide all relevant information requested by appeals including financial statements for its consideration of the facts and issues involved in the hearing sec_301_6330-1 proced admin regs furthermore an appeals officer may not consider a collection alternative unless the taxpayer has provided adequate financial information such as a current form 433-a see revproc_2003_71 sec_4 2003_2_cb_517 see also internal_revenue_manual irm pt date 5see sec_301_6330-1 q a-d8 proced admin regs the irs does not consider offers in compromise from taxpayers who have not filed required returns or have not made certain required deposits of tax see also irm pts date likewise a taxpayer must be in compliance with all filing and paying requirements before an installment_agreement can be considered see 129_tc_107 irm pts e d date on date mr cavazos requested that his collection review initially assigned to the memphis campus appeals_office be transferred to a local appeals_office for a face-to-face cdp hearing so the irs transferred the case to the oklahoma city appeals_office on date the irs settlement officer sent mr cavazos a letter acknowledging the receipt by the oklahoma city appeals_office of mr cavazos’s request for a cdp hearing in that letter the irs scheduled mr cavazos’s hearing and for a third time requested that mr cavazos provide financial information and submit his past-due returns for me the settlement officer to consider alternative collection methods such as an installment_agreement or offer_in_compromise you must provide any items listed below in addition you must have filed all federal tax returns required to be filed a completed and verifiable collection information statement form 433-a for individuals and or form 433-b for business-d c masonry llc proof of estimated_tax payments for the period current taxes will continue to be a recurring problem as long as you fail to make required estimate d payments in the year you did pay dollar_figure there is still however no return yet filed for appeals cannot assist you until you become compliant therefore prior to the cdp hearing i will require you to provide proof that you are current with all filing and paying the irs’s settlement officer conducted a telephone hearing with mr cavazos’s counsel on date during the hearing mr cavazos’s counsel acknowledged that mr cavazos was not current with his return filing_requirements neither before the hearing nor at the hearing did mr cavazos or his counsel provide the settlement officer with the form 433-a or other documentation requested in the irs’s letters of june june and date furthermore neither mr cavazos nor his counsel proposed any collection alternatives at the hearing as noted above more than two years earlier--on date--mr cavazos had submitted an oic to the irs relating to his income_tax_liability for but the irs had rejected that oic no later than date ie before the irs issued its notice_of_intent_to_levy and before mr cavazos submitted his request for a cdp hearing that particular collection alternative proposal had therefore been disposed of before the commencement of mr cavazos’s collection proceeding and at the time of his hearing mr cavazos therefore had no outstanding requests for any collection alternative for the appeals officer to consider on date the appeals_office issued to mr cavazos a notice_of_determination concerning collection action s under sec_6320 and or sustaining the levy action as the least intrusive collection alternative the notice reflected that the appeals_office had obtain ed verification that the requirements of any applicable law or administrative procedure ha d been met as required by sec_6330 and reported that the appeals_office had determined that the levy was appropriate the attachment to the notice_of_determination stated inter alia sec_6330 collection_due_process_hearing your poa ie your representative with a power_of_attorney requested the cdp hearing to be rescheduled for the request was granted however you were to provide the requested documents as set forth in the cdp hearing letter sent to you and your poa dated nothing has been received the cdp hearing was held with your poa via telephone he indicates you are not current with filing required tax reports form_1040 and you also have not provided the necessary documents to make a viable collection alternative thus the proposed levy action is deemed no more intrusive than necessary collection alternatives there were no collection alternatives proposed during the cdp hearing process other issues raised no relevant issues were raised during the cdp hearing process on date mr cavazos petitioned the tax_court seeking review pursuant to sec_6330 of the irs’s 6mr cavazos has not disputed that the verification required by sec_6330 was obtained nor that the preconditions for a levy see sec_6331 d had been satisfied an irs transcript in the hearing record shows that the irs had assessed mr cavazos’s self-reported liability pursuant to sec_6201 and within the time prescribed by sec_6501 and that the irs had made notice_and_demand pursuant to sec_6303 that mr cavazos pay the liability the notice_of_intent_to_levy and notice of your right to a hearing that the irs issued to mr cavazos on date fulfilled the requirements of sec_6330 and sec_6331 determination at the time he filed his petition mr cavazos resided in oklahoma in his petition mr cavazos assigns as error in the determination the findings that a levy is appropriate and b that the proposed levy is no more intrusive than necessary on date the irs filed a motion for summary_judgment contending that the determination did not constitute an abuse_of_discretion by the irs on date mr cavazos filed his response discussion where the pertinent facts are not in dispute a party may move for summary_judgment to expedite the litigation and avoid an unnecessary and potentially expensive trial fla peach corp v commissioner 90_tc_678 summary_judgment may be granted where there is no genuine issue as to any material fact and a decision may be rendered as a matter of law rule a and b see 98_tc_518 affd 17_f3d_965 7th cir 90_tc_753 the party moving for summary_judgment here the irs bears the burden of showing that there is no genuine issue as to any material fact and factual inferences will be drawn in the manner most favorable to the party opposing summary_judgment here mr cavazos 85_tc_812 79_tc_340 the instant case can be resolved on the basis of the undisputed facts if a taxpayer fails to pay any federal_income_tax liability within days of notice_and_demand the secretary is authorized to collect the tax by levy on the person’s property sec_6331 however congress has added certain provisions to the code in chapter subchapter_d part i as due process for collections and those provisions must be complied with before the irs can proceed with a levy before a levy the taxpayer must be notified of the right to an administrative hearing before the appeals_office of the irs sec_6330 and b at that hearing the taxpayer may generally raise relevant issues relating to the unpaid tax or the proposed levy including offers of collection alternatives which may include among other things an installment_agreement or an oic sec_6330 the appeals officer must then make a determination whether the proposed levy action may proceed the appeals officer is required to take into consideration verification from the secretary that the requirements of any applicable law and administrative procedure have been met see sec_6330 citing sec_6330 relevant issues 7the legislative_history of this provision explains that the irs is required to verify that all statutory regulatory and administrative requirements for the proposed collection action have been met h conf rept pincite continued raised by the taxpayer see sec_6330 citing sec_6330 and whether the proposed levy appropriately balances the need for efficient collection_of_taxes with a taxpayer’s concerns regarding the intrusiveness of the proposed levy action see sec_6330 if the appeals_office then issues a notice_of_determination upholding the continued 1998_3_cb_747 emphasis added see green-thapedi v commissioner 126_tc_1 in the case of a levy to collect self-reported income_tax_liability the basic requirements see sec_6331 d for which the appeals officer must obtain verification are the irs’s timely assessment of the liability sec_6201 sec_6501 the giving to the taxpayer of notice_and_demand for payment of the liability sec_6303 and the giving to the taxpayer of notice of intention to levy and of the taxpayer’s right to a hearing sec_6330 and sec_6331 see 126_tc_237 holding the verification requirement to be met where the appeals officer had secured formal or informal transcripts showing both that the taxes were properly assessed and that the taxpayer had been notified of those assessments through issuance of notices of balance due revd on other grounds 514_f3d_1119 10th cir as noted supra note those requirements were verified in this instance 8under sec_6330 a taxpayer may raise collection issues under subsection c a and may under certain circumstances challenge the underlying tax_liability under subsection c b where the underlying tax_liability is properly at issue in a sec_6330 hearing the court will review the matter de novo 115_tc_35 however where the underlying liability is not at issue we review the appeals officer’s determinations regarding the collection action for an abuse_of_discretion 114_tc_176 mr cavazos has not challenged his underlying liability accordingly we review the irs’s determination for abuse_of_discretion that is whether the determinations were arbitrary capricious or without sound basis in fact or law see 125_tc_301 affd 469_f3d_27 1st cir 114_tc_604 proposed levy the taxpayer may appeal the determination to this court within days see sec_6330 as mr cavazos has done in his petition mr cavazos disputes the determination that a levy is an appropriate action to collect his income_tax penalties and interest owing for but his position is without merit the appeals officer acted reasonably in rejecting collection alternatives and determining instead that the levy was appropriate for the reasons recounted in the attachment to the determination and addressed here first the appeals officer’s determination was reasonable in view of mr cavazos’s repeated failure to provide requested financial information especially the form 433-a it is not an abuse_of_discretion for an appeals officer to reject collection alternatives and sustain the proposed collection action on the basis of the taxpayer’s failure to submit requested financial information prater v commissioner tcmemo_2007_241 chandler v commissioner tcmemo_2005_99 roman v commissioner tcmemo_2004_20 in doing so the appeals officer followed the requirements of the regulations and revproc_2003_71 2003_2_cb_517 see supra note second the appeals officer’s determination was reasonable in view of mr cavazos’s failure to raise during the collection hearing any relevant issues or appropriate defenses pertaining to the proposed collection action and his failure to offer any collection alternatives for the appeals officer to consider it is not an abuse_of_discretion for an appeals officer to sustain a levy and not consider any collection alternatives when the taxpayer has proposed none 124_tc_69 third the appeals officer’s determination was reasonable in view of mr cavazos’s failure_to_file his income_tax return for mr cavazos had been advised that his return was overdue yet he never fulfilled this obligation it is not an abuse_of_discretion for an appeals officer to reject an oic on the ground that the taxpayer has a history of noncompliance with the tax laws or is noncompliant with current tax obligations 129_tc_107 in doing so the appeals officer followed the requirements of the regulations see supra note in response to the irs’s motion mr cavazos answers that the appeals officer’s determination constitutes an abuse_of_discretion because while r espondent has requested that 9as stated supra note the record shows that the only oic mr cavazos submitted in date had been rejected before the hearing commenced at one point during the hearing mr cavazos’s counsel appears to have suggested that he never received from the irs a response to that oic perhaps suggesting that the date oic might still have been pending in but mr cavazos did not raise this contention in his response to the motion for summary_judgment and we consider that if he ever did maintain this position he has abandoned it petitioner be current with all filing and paying requirement petitioner was not provided with notice of what respondent required for compliance in other words though appeals did advise mr cavazos that in order for appeals to consider any collection alternatives mr cavazos needed to be current with all filing and paying requirements there was nonetheless an abuse_of_discretion mr cavazos contends because the appeals officer did not advise mr cavazos on precisely how to become compliant specifically mr cavazos contends that the irs’s request is arbitrary when respondent’s requirements are not detailed so as to give petitioner notice of what is required by petitioner to become compliant we decline to hold--as petitioner’s argument would require-- that a sec_6330 hearing officer is obliged to remind every taxpayer that each year on april an income_tax return is due as a general_rule taxpayers are charged with knowledge of the law 99_tc_202 at issue here is not an esoteric requirement but the annual filing of form_1040 a taxpayer need not be an expert in tax law to know that tax returns must be filed and that taxes must be paid when they are due 469_us_241 consequently it was not the appeals officer’s responsibility to remind mr cavazos of the most basic tax obligation in fact however mr cavazos was given such explicit reminders in the letters of both june and date the irs expressly warned mr cavazos that before appeals could consider any collection alternatives mr cavazos needed to file all required federal tax returns furthermore in the letter of date the irs advised mr cavazos that the agency’s records showed that there was no return yet filed for there is also no es tax paid for and that mr cavazos still owe s for other non-cdp tax periods ie periods other than the irs further advised mr cavazos that before a collection alternative could be considered he would have to provide proof that he was current with all filing and paying requirements delineated above it cannot be seriously maintained that these instructions were not detailed so as to give petitioner notice of what is required by petitioner to become compliant as petitioner suggests rather the irs’s date letter clearly listed the specifics of mr cavazos’s noncompliance the irs’s request that mr cavazos provide proof of compliance in these areas before the agency would consider collection alternatives was hardly arbitrary we conclude that there is no genuine issue of material fact requiring a trial in this case and we hold that respondent is entitled to the entry of a decision sustaining the determination and proposed levy as a matter of law to reflect the foregoing an appropriate order and decision will be entered