internal_revenue_service number release date index number ----------------------- ------------------------------------------------ -------------------- --------------------------- in re ---------------------------- ------------------------------ -------------------------- legend taxpayer department of the treasury washington dc third party communication none date of communication not applicable_person to contact ---------------- id no ------------- telephone number --------------------- refer reply to cc psi b09 plr-115579-04 date date ----------------------------------------------------------------------------------------------- ------------------------- ------------ ---------------------- ------------------ ------- ------- -------------------- -------------------------- -------------------------- -------------------------- -------------------- ---------------------- year year husband wife child child child child property --------------------------- state child date agreement ------------------------------------------------------------------------ date date addendum ------------------------------------------------------------------------------------------ property ---------------------------- dear ----------------- correspondence submitted on behalf of taxpayer requesting a ruling regarding the applicability of sec_2702 of the internal_revenue_code in year and year dates prior to date husband wife and five of their six children taxpayer child child child and child purchased property located in state for fair_market_value from an unrelated party wife acquired a life this is in response to your letter dated date and subsequent ------------------- ------------- the information submitted and representations made are summarized as follows plr-115579-04 interest husband acquired a life interest that would become effective upon the death of wife child acquired a one-third common undivided_interest in the remainder and taxpayer child child and child each acquired a one-sixth common undivided_interest in the remainder it is represented that husband wife and their five children each paid the actuarial value of their respective interest from their own resources and that none of the five children used any funds acquired from their parents to acquire their interests child did not participate in the initial acquisition of property because he was a minor on date husband wife taxpayer and children through executed an agreement in connection with the property acquisition the agreement provides generally for the parties’ respective rights duties and obligations in the acquisition ownership and disposition of property article of the agreement provides that wife the primary life_tenant and husband the secondary life_tenant shall pay toward the purchase of property including associated closing costs an amount equal to the actuarial value of their respective rights to the use of and the income from property wife shall have a legal_life_estate for her natural life and upon her death unless husband predeceases her husband shall have a legal_life_estate for his natural life remaindermen shall contribute to the purchase of property including associated closing costs the actuarially determined value of their respective remainder interests in such property article of the agreement provides that the parties to the agreement intend that no gift be made and agree that they shall take whatever actions are necessary to insure that no gift is in fact made it is the express intent of the parties that they shall pay fair_market_value for their respective interests in property if it is at any time determined by a court of law that the actuarial interest or value used herein represents less than fair and adequate_consideration with respect to each such interest then a re-computation shall be made and the parties which have not paid fair value shall re-contribute to the other parties the difference with interest thereon at the rate of percent per annum of prior to the expiration of the respective life tenancies the proceeds into which the property is converted shall be impressed with a_trust and the life tenants or the survivor shall be the trustees after the payment of income taxes the remaining proceeds shall be held by the trustees invested and reinvested and the trustees shall pay to the life tenants at least annually all income but not principal earned by the trust assets upon the death of both life tenants the trust shall terminate and the trust assets shall be immediately paid to the remaindermen in accordance with their respective interests article of the agreement provides in part that if property should be disposed article of the agreement provides that taxpayer and children through the the addendum modifies the agreement by adding a new article which article of the agreement provides that the parties agree that child may article of the agreement provides in part that the sale of property shall plr-115579-04 require the consent of the life tenants and the remaindermen transfer to child upon his attainment of age a one-sixth interest in the remainder estate being one-half of child 1’s interest without the consent of any party to this agreement provided that such transferee agrees to be bound by the terms of the agreement on date child attained the age of majority and received his one-sixth interest by conveyance from child on date husband wife taxpayer and children through executed an addendum to the agreement husband wife taxpayer and children through are collectively referred to as the family members provides that in the event the parties agree to collectively acquire any subsequent real_property as life tenants and remaindermen the newly acquired property shall be subject_to the same terms and conditions as between the life tenants and remaindermen as set forth in the agreement substantial improvements are made to any of the properties that are the subject of the agreement the life tenants and the remaindermen shall contribute toward the cost thereof the actuarial interest that they shall have therein notwithstanding the foregoing by agreement of the parties any such improvements may be made by wife or by husband upon the death of wife in which event such improvements shall belong to the party who paid for such improvements and may be thereafter severed and removed from the real_property upon such transfer by his sister child and that child agrees to be bound by all of the terms and conditions of the agreement as amended agreement additional property located in state in the same manner of holding title as they employed for property all of the properties so acquired other than property are referred to as property and remaindermen after date and that the current agreement has not been modified or amended after date the addendum also provides that child is added as a one-sixth remainderman subsequent to the initial acquisition of property the family members acquired the parties represent that they have not acquired any property as life tenants the addendum also adds a new article which provides that in the event the agreement and addendum are collectively referred to as the current taxpayer has requested the following rulings the proceeds of a sale or other conveyance of property and the principal the proceeds of a sale or other conveyance of all or a portion of property subject_to the receipt of a favorable ruling from the service the family members plr-115579-04 propose to sell property for fair_market_value to an unrelated party the family members intend to continue to own property however a decision to sell property could be made in the future upon any disposition of property the proceeds would be placed in trust pursuant to the provisions of the current agreement proceeds of any investments or reinvestments thereof that are held in trust pursuant to the provisions of the current agreement will continue to be treated as a transfer occurring prior to date for purposes of applying the provisions of chapter_14 of the code and therefore chapter_14 will not apply thereto and the principal proceeds of any investments or reinvestments thereof that are held in trust pursuant to the provisions of the current agreement will continue to be treated as a transfer occurring prior to date for purposes of applying the provisions of chapter_14 of the code and therefore chapter_14 will not apply thereto and acquired pursuant to a transfer occurring prior to date reconciliation act of and are effective for transfers occurring after date whether a transfer of an interest in trust to or for the benefit of a member of the transferor’s family is a gift and the value of such transfer the value of any interest in such trust retained by the transferor or any applicable_family_member shall be determined as provided in sec_2702 qualified_interest shall be treated as being zero the value of any retained interests which is a qualified_interest shall be determined under sec_7520 date the agreement and addendum relating to the acquisition of property and property were also executed prior to date neither the sale_or_other_disposition of property or property nor the deposit of the proceeds of such sale or disposition in trust pursuant to the current agreement will involve any transfer of value among the family members in addition the family members will have substantially identical interests both before and after the proposed transaction after the sale of property property will continue to be treated as property sec_2702 provides that the value of any retained_interest which is not a sec_2702 provides generally that solely for purposes of determining the provisions of chapter_14 of the code were added by the revenue in this case property and property were both acquired prior to the rulings contained in this letter are based upon information and based on the facts submitted and representations made we conclude that the plr-115579-04 proceeds of a sale or other conveyance of property and or all or a portion of property and the principal proceeds of any investments or reinvestments that are held in trust pursuant to the provisions of the current agreement will be treated as a transfer or transfers occurring prior to date for purposes of applying the provisions of chapter_14 of the code and therefore chapter_14 will not apply thereto further after the sale of property property will continue to be treated as property acquired pursuant to a transfer occurring prior to date representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party if there is a change in material fact or law local or federal before the transactions considered in this ruling take effect the ruling will have no force or effect 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 concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter specifically no opinion is expressed or implied with respect to the income estate or gift_tax consequences of any aspect of any transaction discussed in this letter the code provides that it may not be used or cited as precedent being sent to taxpayer this ruling is directed only to the taxpayer requesting it sec_6110 of pursuant to the power_of_attorney on file with this office a copy of this letter is except as expressly provided herein no opinion is expressed or implied sincerely stephanie n bland acting senior technician reviewer branch office of associate chief_counsel passthroughs special industries enclosure copy for sec_6110 purposes


t c memo united_states tax_court maine yankee atomic power company petitioner v commissioner of internal revenue respondent docket no filed date edwin a heisler and william k mckinley for petitioner marvis a knospe and barry laterman for respondent memorandum findings_of_fact and opinion cohen judge respondent determined deficiencies of dollar_figure and dollar_figure in petitioner’s federal_income_tax for and respectively after concessions the remaining issue for decision is whether petitioner is entitled to an investment_tax_credit with respect to nuclear fuel assemblies placed_in_service in unless otherwise indicated all section - - references are to the internal_revenue_code in effect for the years in issue and all rule references are to the tax_court rules_of_practice and procedure findings_of_fact some of the facts have been stipulated and the stipulated facts are incorporated in our findings by this reference petitioner maine yankee atomic power company was incorporated under the laws of maine in and had its principal_place_of_business in wiscasset maine at the time the petition in this case was filed petitioner owned and operated a nuclear power electric generating plant plant that utilized a pressurized water reactor fueled with slightly enriched uranium oxide the plant was located in wiscasset maine on an 820-acre site that was owned in fee by petitioner the stockholders of petitioner were investor-owned new england utility companies in petitioner was owned by investor-owned new england utility companies each of which was committed under a power contract dated date power contracts to purchase a percentage of the capacity and output of the plant equivalent to its percentage ownership the construction permit for the plant was issued in date by the atomic energy commission aec construction of the plant was completed in except for certain discharge temperature control facilities designed to meet the requirements of the maine board_of environmental protection which were completed in the plant began commercial operation in date under facility operating license no dpr-36 dated date operating license the plant was closed for economic reasons in date the nuclear regulatory commission nrc oversees the safety of all u s nuclear power plants nrc reviews the initial plans before issuing a construction permit and reviews the plant as built before issuing an operating license the nrc assumed the regulatory responsibilities of aec its predecessor organization in a reorganization petitioner’s nuclear power facility used fuel assemblies which contained fuel rods in the reactor core to generate energy the reactor core consisted of fuel assemblies before new fuel assemblies could be placed in the reactor core petitioner submitted an application to the nrc for an amendment to its operating license for purposes of this case a fuel cycle cycle begins upon the shutdown of the prior cycle continues through refueling followed by an operating cycle and ends upon shutdown during shutdown the plant is taken offline for refueling maintenance and planned construction activities the first reloads designated cycle 1a through cycle occurred one each in q4e- and for cycle sec_3 through there were fuel assemblies that were replaced with new fuel assemblies the fuel assemblies in issue in this case were for cycle and were placed_in_service on date cycle including the shutdown for reload and the operating cycle began on date and ended on date the total cost of the fuel assemblies for cycle was dollar_figure with an approximate cost of dollar_figure for each of the fuel assemblies the fuel assemblies that were used by petitioner had a class_life of years under the modified accelerated_cost_recovery_system macrs petitioner’s goal was to produce electricity as economically as possible and in order to minimize fuel costs petitioner used a variety of tail assays varied enrichment levels anda combination of uranium procurement and enrichments although fit and form of the fuel assemblies may have been essentially the same the function or performance of the fuel assemblies changed over the course of the operation of the plant for example higher enrichment levels in the fuel assemblies allowed for a longer operating cycle petitioner entered into general contracts for fuel assembly fabrication services because petitioner sought maximum - - flexibility in all of its contracts the actual number and specifications of the fuel assemblies ordered were established by purchase order and paid pursuant to invoices power contracts and amendments in regards to the operation and maintenance of the plant the power contracts entered into between petitioner and owners who were also purchasers state maine yankee petitioner will operate and maintain the unit plant in accordance with good utility practice under the circumstances and all applicable law including the applicable provisions of the atomic energy act of as amended and of any licenses issued thereunder to maine yankee within the limits imposed by good utility practice under the circumstances and applicable law the unit will be operated at its maximum capability and on a long hour use basis outages for inspection maintenance refueling and repairs and replacements will be scheduled in accordance with good utility practice and insofar as practicable shall be mutually agreed upon by maine yankee and the purchaser in the event of an outage maine yankee will use its best efforts to restore the unit to service as promptly as practicable emphasis added amendments to the power contracts were made in the purpose of amendment no to power contract dated date was to incorporate the costs of decommissioning the plant into the contractual payments from the owners the purpose of amendment no to power contract dated date was to change the formula for computing charges to the purchasers in order to allow for a higher return on equity than was provided in -- - the power contracts the purpose of amendment no to power contract dated date was to bring petitioner into compliance with an date order by the federal energy regulatory commission ferc requiring that the power contracts be amended to conform to ferc’s regulations regarding the treatment of nuclear fuel in process in rate base an additional power contract was dated date and its operative terms were to commence in date the additional power contracts had two purposes to extend the power contracts from their original date termination_date and to provide for the collection and handling of funds for the decommissioning of the plant the availability of the investment_tax_credit had no impact on the decision by petitioner to enter into the power contracts or the subsequent amendments to the power contracts also when petitioner entered into the power contracts in it could not have predicted whether any fuel assemblies would be put in service at the plant in operating license and amendments the operating license dated date authorized fuel loading low power testing and further operations at power levels not in excess of megawatts thermal mwt percent of the facility’s rated power level of mwt in the plant was authorized to increase its rated power level from - mwt to mwt in a second increase to mwt was authorized changes with respect to the plant including changes related to fuel assemblies were submitted by petitioner to the nrc and if considered safe the changes were approved through the issuance of an amendment to the operating license petitioner’s application_for amendment to the operating license for cycle was submitted to the nrc and dated date in response to petitioner’s application amendment no to the operating license was issued by the nrc on date amendment no states in part the nuclear regulatory commission the commission or the nrc has found that a the application_for amendment filed by maine yankee atomic power company petitioner the licensee dated date complies with the standards and requirements of the atomic energy act of as amended the act and the commission’s rules and regulations set forth in cfr chapter i c there is reasonable assurance that the activities authorized by this amendment can be conducted without endangering the health and safety of the public and that such activities will be conducted in compliance with the commission’s regulations set forth in cfr chapter i d the issuance of this amendment will not be inimical to the common defense and security or to the health and safety of the public tax returns petitioner did not claim an investment_tax_credit with respect to the nuclear fuel assemblies that were placed_in_service in on its form_1120 u s_corporation income_tax return based on the advice of its accountants petitioner filed a form 1120x amended u s_corporation income_tax return on date claiming an additional investment_tax_credit petitioner claimed an investment_tax_credit of dollar_figure with respect to the fuel assemblies placed_in_service in respondent disallowed petitioner’s claim_for_refund in a notice_of_deficiency that included other adjustments opinion the issue presented is whether petitioner is entitled to an investment_tax_credit with respect to the fuel assemblies that were placed_in_service in prior to an investment_tax_credit was available pursuant to sec_38 sec_46 and sec_48 for investments in certain types of tangible_property placed_in_service during the taxable_year the credit was repealed by sec_211 of the tax_reform_act_of_1986 tra publaw_99_514 100_stat_2166 which added sec_49 to the internal_revenue_code sec_49 made the investment_tax_credit inapplicable to property placed_in_service after date because tra did not become law until october - the repeal of the investment_tax_credit was necessarily retroactive several transition_rules were provided that preserve the investment_tax_credit for the costs of transition property placed_in_service after date and before date as long as the contracts relating to the costs of the property were entered into on or before date see tra sec a 100_stat_2146 as amended by tra sec_211 100_stat_2167 adding code sec_49 b to qualify for the transition_rules under section a transition property with a class_life of years or more must be placed_in_service before date see tra sec b a 100_stat_2144 section a of tra provides the transition rule for supply and service contracts tra sec a 100_stat_2149 as modified section a of tra states supply or service_contract --the amendments made by section shall not apply to any property which is readily identifiable with and necessary to carry out a written supply or service_contract or agreement to lease which was binding on date emphasis added the parties have stipulated that the power contracts and amendments as of date qualify as binding written supply or service contracts under section a of tra they disagree about whether the fuel assemblies installed in gualify under the transition rule_of section a of tra - previous cases have looked to h conf rept c b vol pincite for guidance in interpreting the phrase readily identifiable with and necessary to carry out in section a of tra id 235_f3d_11 lst cir 224_f3d_220 3d cir h conf rept c b vol pincite states this transitional rule is applicable only where the specifications and the amount of the property are readily ascertainable from the terms of the contract or from related documents a supply or service_contract or agreement to lease must satisfy the requirements of a binding contract emphasis added petitioner contends that the fuel assemblies placed_in_service in qualify as transition property under the provision for supply or service contracts in section a of tra because the fuel assemblies were readily identifiable in documents related to the power contracts and necessary to carry out the power contracts petitioner acknowledges that there were no documented specifications for the fuel assemblies in the power contracts however petitioner argues that the operating license and amendments and appendices thereto are documents related to the power contracts and that these related documents provide the amount and specifications of the nuclear fuel assemblies respondent does not dispute that the fuel assemblies were necessary for petitioner to carry out the terms of the power contracts instead respondent contends that the operating license and amendments and appendices thereto are not related documents to the power contracts in bell atl corp v united_states supra a telecommunications service provider claimed the investment_tax_credit for major improvements to its telephone systems the taxpayer asserted that the franchises tariffs and contracts with other local telephone_companies were written service contracts the court did not find it necessary to decide whether the franchises tariffs and contracts were written service contracts but instead focused on whether any of the property improvements were readily identifiable with and necessary to carry out the contracts the court found that the franchises tariffs and other contracts contain service quality standards that regulate telephone service impose conditions on service and set service goals id pincite the court reasoned that the property for which the taxpayer sought an investment_tax_credit cannot be determined from the terms of any of the tariffs franchises or other contracts because these alleged ‘contracts’ speak only of service quality standards never mentioning property of any sort id pincite the taxpayer in bell atl corp also asserted that its estimate files were related documents because the estimate files documented the purchase of and need for the new property under the service quality standard the court held that property cannot be shown to be ‘readily identifiable with’ a written service_contract by means of internally generated documents such as the estimate files that were not prepared contemporaneously with the contract that had no binding effect on anyone and that were not provided to the other contracting party id pincite in s multi-media communications inc v commissioner 113_tc_412 a cable television company claimed the investment_tax_credit for property used to make extensive improvements to some of its systems and to extend its lines in some of its service areas even though the company’s franchise required that the system be maintained in accordance with the highest accepted standards of the industry this court held that the general language of franchise agreements without more reflects only broad industry standards not specific contractual commitments to undertake rebuilds id pincite in united_states v commonwealth energy sys supra the taxpayer entered into a set of power contracts with other utilities in pursuant to which it agreed to build a power plant and the other utilities agreed to purchase the plant output for a specified period of years the contracts required the taxpayer to build a new conventional steam plant with a capability of approximately megawatts and the taxpayer was required to operate and maintain the plant in an economical and efficient manner and in accordance with good utility practice and all applicable law id pincite in and the taxpayer made several repairs and improvements to the plant and sought the investment_tax_credit under the transition_rules for supply and service contracts provided for in section a of tra the court_of_appeals for the first circuit stated that the conference_report was helpful because the requirement that the specifications and amount of the property be readily ascertainable indicates that the inguiry need be specific although not exact id pincite the court_of_appeals held that the taxpayer was not entitled to the investment_tax_credit under the transition_rules for the cost of repairs and improvements made to its plant because the contracts did not contain the amount or specifications of potential replacement parts and there was no contractual obligation for the taxpayer to replace parts on a specific schedule id we conclude that the operating license and amendments thereto in this case are not related documents to the power contracts here the operating license and amendments and appendices thereto were not incorporated by reference into the power contracts the only reference to the operating license in the power contracts was to a general standard of operation and maintenance that was in accordance with good utility practice and all applicable law including the applicable provisions of the atomic energy act of as amended and of any licenses this general standard of operation and maintenance without more does not incorporate the operating license or amendments or appendices thereto into the power contracts the operation of the plant was subject_to many laws and regulations for any changes that petitioner wanted to make in its plant equipment or operations it had to submit an application_for an amendment to its operating license to the nrc petitioner’s application was then subject_to the review and approval of the nrc thus the operating license and amendments and appendices thereto resulted from internally generated documents that were submitted to nrc by petitioner for approval the purpose of the nrc was to oversee nuclear power plants protect the health and safety of the public and assure compliance with the law nrc did not initiate or require petitioner to make modifications to its plant equipment or operations the operating license was not prepared contemporaneously with the power contracts the power contracts were entered into on date and the operating license was issued on -- - date petitioner’s application_for amendment no to its operating license with respect to the fuel assemblies for cycle was not submitted to the nrc until date and the amendment was not issued by the nrc until date the fuel assemblies for cycle were placed_in_service in date based on our conclusion that the operating license and amendments and appendices thereto are not related documents we look solely to the power contracts and amendments thereto that were entered into prior to date petitioner acknowledges in its brief that there were no documented specifications for the fuel assemblies in the power contracts we therefore conclude that the cycle fuel assemblies do not gualify as transition property under the supply or service_contract transitional rule set forth in section a of tra because the fuel assemblies were not readily identifiable with the power contracts or amendments thereto and the operating license and amendments and appendices thereto are not related documents to the power contracts thus we need not decide whether the cycle fuel assemblies meet the class_life and placed_in_service requirements under tra sections b and e as modified by sec_49 to reflect the foregoing decision will be entered under rule


internal_revenue_service department of the treasury number release date index number washington dc person to contact telephone number refer reply to cc intl br1-plr-122325-01 date date legend x country a dear this is in response to the letter submitted by x’s authorized representative dated requesting a ruling that article of the united states-country a income_tax treaty treaty is applicable and that x’s employees are not subject_to u s income_tax the information submitted for consideration is substantially as set forth below 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 article of the treaty states in relevant part wages salaries and similar remuneration including pensions or similar benefits paid_by or out of funds to which contributions are made by country a or local authority thereof to an individual who is a national of country a for labor or personal services performed for country a or for any of its local authorities in the discharge of governmental functions shall not be subject_to united_states tax if such individual is not a citizen_of_the_united_states and does not have immigrant status in the united_states x represents that it is an instrumentality of the government of country a it is not engaged in industrial or commercial activities it does not carry out functions of a bank rather its offices in the united stated are engaged in based on the foregoing it is concluded that x is not a bank and does not conduct banking_financing_or_similar_business in the united_states it is further concluded for purposes of article of the treaty that x performs governmental functions for country a in accordance with article of the treaty it is also concluded that wages salaries and similar remuneration for services performed for country a in the discharge of governmental functions paid_by x to its employees who are nationals of country a and who are not citizens of the united_states and do not have immigrant status in the united_states are exempt from u s income_tax 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 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_tax return to which it is relevant sincerely w edward williams senior technical reviewer office of the associate chief_counsel international


internal_revenue_service national_office technical_advice_memorandum date tam-164348-03 cc pa apjp b01 number release date third party contact index uil no case-mis no ---------------------------- ----------------------- taxpayer's name taxpayer's address taxpayer's identification no years involved date of conference legend ------------------------------------------------- --------------------------- -------------------------------- ------------- ----------------------------- ---------------- --------------------------------------------- no conference held taxpayer ----------------------------------------- a ------------------ issue whether timely refund claims lacking proper signatures should be rejected by the service because of that defect despite the taxpayer’s corrective efforts conclusion no the taxpayer cured the signature defect following the original submission of the claims assuming the service has no other objections to processing the claims the service should now consider the claims on their merits facts on september ------- three amended corporate_income_tax returns on irs form 1120x were filed on the taxpayer’s behalf relating to the taxable years ending december ------- july ------- and december ------- the filing for ------- claimed an increased net_operating_loss while the filings for ------- and ------- claimed refunds due to the carryback of that loss the refund claims reflected in the amended returns were timely with respect to the period of limitations provisions of sec_6511 of the internal_revenue_code tam-164348-03 each form 1120x was signed on september ------- by a a certified_public_accountant who was not an officer_or_employee of the taxpayer as of that date a held a power_of_attorney from the taxpayer on irs form to represent the taxpayer in tax matters for at least one of the three years represented by the forms 1120x this power_of_attorney however included no wording granting authority to a to sign tax returns for the taxpayer an agreement between the taxpayer and a executed approximately three years before the filing of the forms 1120x stated that a was authorized to pursue the filing of refund claims for the taxpayer within approximately three months of the execution of this agreement the taxpayer had reduced its number of employees to the point that it had virtually no remaining corporate staff following the filing of the forms 1120x and the expiration of the period of limitations on refund claims for the years involved the taxpayer executed a new power_of_attorney in a’s favor this power_of_attorney on irs form was executed date and stated that a was authorized to sign amended tax returns for the taxpayer for certain taxable years including the ones covered by the forms 1120x approximately two years after the original filing of the forms 1120x described above the forms were re- submitted to the service this time bearing the signature of the taxpayer’s president the service has not disallowed the refund claims reflected on the forms 1120x for either of the taxable years involved pending the resolution of the signature issues related to those forms the service has not considered the claims on their merits law and analysis sec_6061 provides in relevant part that any return or other document required to be filed under the internal revenue laws shall be signed in accordance with forms or regulations prescribed by the secretary_of_the_treasury sec_6062 provides in relevant part that corporate_income_tax returns shall be signed by the president vice-president treasurer assistant treasurer chief accounting officer or any other officer duly authorized so to act sec_1_6062-1 of the income_tax regulations states that corporate_income_tax returns must be signed by the president vice president treasurer assistant treasurer chief accounting officer or any other officer duly authorized to sign the sole exception in these regulations is that income_tax returns required to be made by an agent for a foreign_corporation shall be signed by the agent sec_1_6062-1 of the income_tax regulations provides generally that statements and other documents required to be made by or for corporations under subtitles a or f of the code with respect to income_tax must be signed in accordance with applicable regulations forms or instructions tam-164348-03 sec_6402 provides generally that the secretary within the applicable_period of limitations may credit the amount of an overpayment_of_tax including interest against any internal revenue tax_liability of the person who made the overpayment and shall refund the balance to the person sec_301_6402-3 of the regulations on procedure and administration states that corporate_income_tax refund claims filed after date shall be made on form 1120x assuming the corporation previously filed form_1120 for the year s involved the tax_return signature rules in sec_1_6062-1 are irrelevant to form 1120x because sec_6402 does not require amended returns and they are accepted solely as a matter of administrative policy see 148_f3d_70 2nd cir nevertheless the instructions to form 1120x provide that the form must be signed by the taxpayer’s president vice president treasurer assistant treasurer chief accounting officer or any other corporate officer authorized to sign the individual who signed the forms 1120x in the present case falls into none of these categories a is not the taxpayer’s president vice president treasurer assistant treasurer chief accounting officer or any other corporate officer authorized to sign in light of this defect in the claims as originally filed on september ------- the service had no obligation to process the claims however case law sets forth an informal claim doctrine regarding flawed refund claims such as the ones involved here a notice fairly advising the commissioner of the nature of a refund claim which the commissioner could reject because it violated the formal requirements of the regulations will nevertheless constitute a claim where the formal defects are corrected by amendment after the lapse of the statutory period 314_us_186 cf 536_fsupp_176 d mont unsigned refund claim properly disallowed where taxpayer did not respond to repeated requests from service to correct defect on date the taxpayer executed a revised power_of_attorney purporting to grant signature_authority to a with respect to refund claims approximately two years after the original filing of the forms 1120x the forms were resubmitted to the service with the signature of the taxpayer’s president in the present case the formal defect - the lack of a proper signature - was corrected when the taxpayer resubmitted the claims with the signature of its president moreover the actions following the filing of the imperfect amended returns were consistent with the written_agreement entered into prior to the expiration of the period of limitations that authorized a to pursue the filing of refund claims assuming that the original forms 1120x adequately advised the service of the nature of the taxpayer’s refund claim the taxpayer has satisfied the standard described in kales tam-164348-03 therefore despite the signature defects posed by those claims the taxpayer should be treated as having filed a refund claim prior to the running of the statute_of_limitations see also 783_f2d_190 fed cir held there are no rigid guidelines for an informal claim except that such claims must have a written component and should adequately apprise the internal_revenue_service that a refund is sought and for certain years assuming that the service had no reason other than the signature defects to decline to process the taxpayer’s refund claims for taxable years ------- and ------- those claims should now be considered on their merits caveat s a copy of this technical_advice_memorandum is to be given to the taxpayer s sec_6110 of the code provides that it may not be used or cited as precedent


internal_revenue_service p o box cincinnati oh number release date department of the treasury employer_identification_number contact person - id number date contact telephone number legend x name of county y state dear uil you asked for advance approval of your scholarship grant procedures under sec_4945 this approval is required because you are a private_foundation that is exempt from federal_income_tax you requested approval of your scholarship program to fund the education of certain qualifying students our determination we approved your procedures for awarding scholarships based on the information you submitted and assuming you will conduct your program as proposed we determined that your procedures for awarding scholarships meet the requirements of code sec_4945 as a result expenditures you make under these procedures will not be taxable also awards made under these procedures are scholarship or fellowship grants and are not taxable to the recipients if they use them for qualified_tuition_and_related_expenses subject_to the limitations provide in code sec_117 description of your request you provide scholarships to deserving and needy students who are residents of x in the state of y attending a junior college or a state college or a branch of the university of y located in x currently two universities meet the requirements the number of scholarships that will be awarded each year and the amount of each scholarship will vary depending on the amount of funds available to be distributed you are required to annually distribute the greater of the net_income of the trust or the amount that must be distributed to satisfy code sec_4942 you advertise this scholarship on the scholarship section of the school's website letter catalog number 58263t each year your trustees advise the selection committee of the amount of funds available to be awarded as scholarships the members of the selection committee review the scholarship applications and rank the applicants based on grade-point-average gpa and financial need the scholarship advisory committee then submits its recommendations to the trustee which makes the final selection all scholarships are awarded on an objective and non-discriminatory basis no scholarship may be awarded to any disqualified_person as defined in code sec_4946 your scholarships are non renewable you pay the scholarship proceeds directly to the university or college the recipient attends for the benefit of the recipient you provide a letter to each university or college specifying that the university or college's acceptance of the funds constitutes the university's or college's agreement to refund any unused portion of the scholarship if a scholarship recipient fails to meet any term or condition of the scholarship and notify you if the scholarship recipient fails to meet any term or condition of the scholarship if the university or school will not agree to such terms you will obtain the needed reports and grade transcripts from the scholarship recipient you will arrange to receive and review grantee reports annually and upon completion of the purpose for which the grant was awarded you will investigate diversions of funds from their intended purposes you will take all reasonable and appropriate steps to recover diverted funds you also represent that you will maintain all records relating to individual grants including information obtained to evaluate grantees you will identify whether a grantee is a disqualified_person establish the amount and purpose of each grant and establish that you undertook the supervision and investigation of grants basis for our determination the law imposes certain excise_taxes on the taxable_expenditures of private_foundations code sec_4945 a taxable_expenditure is any amount a private_foundation pays as a grant to an individual for travel study or other similar purposes however a grant that meets all of the following requirements of code sec_4945 is not a taxable_expenditure the foundation awards the grant on an objective and nondiscriminatory basis the irs approves in advance the procedure for awarding the grant the grant is a scholarship or fellowship subject_to the provisions of code sec_117 the grant is to be used for study at an educational_organization described in code sec_170 a ii letter catalog number 58263t other conditions that apply to this determination this determination only covers the grant program described above this approval will apply to succeeding grant programs only if their standards and procedures don't differ significantly from those described in your original request this determination applies only to you it may not be cited as a precedent you cannot rely on the conclusions in this letter if the facts you provided have changed substantially you must report any significant changes to your program to the cincinnati office of exempt_organizations at internal_revenue_service exempt_organizations determinations p o box cincinnati oh you cannot award grants to your creators officers directors trustees foundation managers or members of selection committees or their relatives all funds distributed to individuals must be made on a charitable basis and further the purposes of your organization you cannot award grants for a purpose that is inconsistent with code sec_170 b you should keep adequate_records and case histories so that you can substantiate your grant distributions with the irs if necessary please keep a copy of this letter in your records if you have questions please contact the person listed at the top of this letter sincerely director exempt_organizations letter catalog number 58263t


internal_revenue_service number release date index number ----------------------------------- ----------------- ------------------------------------ ----------------------------- - legend department of the treasury washington dc person to contact ---------------------- id no ------------- telephone number --------------------- refer reply to cc psi - plr-165150-02 date date ----------------------- --------------------------------------- ---------------------------------------------- ------------------------ company ------------------------------------------------------------------------- x date date country dear ---------------------- date requesting a ruling that company be given an extension of time under sec_301_9100-3 of the procedure and administration regulations to file a form_8832 entity classification election to change its classification pursuant to sec_301 c effective for date this letter responds to your submission on behalf of company dated --------------------- ---------------- facts according to the information submitted x a u s s_corporation formed company a limited_liability_company on date under the laws of the government of country company is not classified as a corporation under sec_301_7701-2 or plr-165150-02 company intended to elect its classification under sec_301_7701-3 effective on date however due to problems with x s accounting firm company inadvertently failed to file timely a form_8832 be granted relief under sec_301_9100-3 to retroactively elect its entity classification pursuant to sec_301_7701-3 effective to its formation on date company submitted a ruling_request on date asking that company 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 and thus a corporation under sec_301 b or to be disregarded as an entity separate from its owner an eligible_entity with at least two members can elect to be classified as either an association or a partnership sec_301_7701-3 provides default classifications for eligible entities that do not make an election under this section under sec_301_7701-3 a foreign eligible_entity unless the entity elects otherwise 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 that an eligible_entity may elect to be classified other than as provided under sec_301_7701-3 by filing form_8832 entity classification election with the appropriate service_center under sec_301 c iii this election will be effective on the date specified by the entity on form_8832 the date specified on form_8832 cannot be more than days prior to the date on which the election is filed under sec_301_9100-1 the commissioner has discretion to grant a reasonable extension of time to make a regulatory election or a statutory election but no more than six months except in the case of a taxpayer who is abroad of all subtitles of the code except subtitles e g h and i sec_301_9100-1 defines a regulatory election as an election having a due_date prescribed by a regulation published in the federal_register or a revenue_ruling revenue_procedure notice or announcement published in the internal_revenue_bulletin plr-165150-02 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 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 provides that requests for relief will be granted when the conclusion based solely on the information submitted and the representations made we conclude that the requirements of sec_301_9100-1 and sec_301_9100-3 have been satisfied accordingly company must file a form_8832 entity classification election by date in order to elect its entity classification as of date a copy of this letter should be attached with the election a copy is included for that purpose except as specifically set forth above we express or imply no opinion concerning the federal tax consequences of the facts described above under any other provision of the code this ruling is directed only to the taxpayer requesting it sec_6110 of the internal_revenue_code provides that it 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 the taxpayer s authorized representative sincerely s heather c maloy associate chief_counsel passthroughs and special industries enclosures copy of this letter copy for sec_6110 purposes cc


internal_revenue_service number release date index number ----------------------------- ------------------------------------ ------------------------------ ----------------------------------------------- -------------------------------- - department of the treasury washington dc third party communication none date of communication not applicable_person to contact --------------------- id no ------------- telephone number --------------------- refer reply to cc tege eb qp2 plr-159315-04 date date legend state x ------------- plan a ------------------------------------------------------------------------------------ plan b -------------------------------------------------- plan c ------------------------------------------------------------- county ---------------------------------------------------------- ein state x act --------------------------------------------------------------------------------------------------- ------- retirement law one ---------------------------------------------------------------- retirement law two ------------------------------------------------------- dear --- ------------ this responds to your letter requesting a ruling concerning plan a which the county intends to be an eligible_deferred_compensation_plan under sec_457 of the internal_revenue_code_of_1986 the code in addition to plan a the county sponsors at least two other deferred_compensation plans plan b and plan c plan b is intended to be a grandfathered 401_k_plan under section f b i of the tax_reform_act_of_1986 consistent with a determination_letter the county received from the internal plr-159315-04 revenue service dated date plan b was adopted prior to date plan c is intended to be an eligible_deferred_compensation_plan under sec_457 and a retirement_system for purposes of sec_3121 plan c is the subject matter of a separate ruling_request the ruling involved in this letter relates solely to plan a plan a is a collectively_bargained_plan that is codified under the county code and was adopted by the relevant authority it is represented that the county is a political_subdivision of state x and an eligible_employer within the meaning of sec_457 under plan a an eligible_employee becomes a participant by executing an agreement which authorizes the county to reduce the employee's compensation by a percentage or by a specific amount and to contribute such an amount into an investment account established on behalf of the participant no portion of the compensation of an employee shall be deferred for any calendar month unless the employee enters into the agreement to do so prior to the beginning of the month in addition to the participant’s elective contributions the participant also receives a vested contribution from the county matching each dollar contributed by the participant up to four percent of the participant’s_compensation plan a provides for a maximum amount that may be deferred by a participant in any taxable_year it also provides for a catch-up contribution for amounts deferred for one or more of the participant's last three taxable years ending before he or she attains normal_retirement_age under plan a the normal_retirement_age for purposes of the catch-up provisions may not be earlier than age_sixty-five or the earliest date at which the participant would be eligible to retire and receive a full pension benefit pursuant to retirement law one or retirement law two as applicable and may not be later than age seventy and a half a qualified firefighter or police officer as defined in sec_415 h ii i may designate a retirement date not earlier than age forty in addition plan a provides for age fifty-plus catch-up_contributions described in sec_457 the amounts that may be deferred under the annual maximum limitation and the catch- up provisions are within the limitations of sec_457 some plan a participants also participate in plan b and have elected to be subject_to a combined limit the combined limit as determined under plan b is dollar_figure adjusted annually to reflect cost of living increases under the combined limit the annual deferral limit includes the aggregate of the participant’s tax-deferred contributions under plan b the participant’s contributions under plan a and the matching_contributions under plan a a participant in plan b is precluded from making any age fifty plus catch-up_contributions participants are permitted to choose among various investment options under plan a subject_to the form and manner prescribed by plan a participants are permitted to change their investment at their discretion plan a provides for acceptance of transfers of a participant’s investment account from plan c under certain conditions it also plr-159315-04 provides for transfers to and from another eligible_deferred_compensation_plan as provided for in sec_457 plan a provides for acceptance of and distribution of eligible rollover distributions and the creation and maintenance of any necessary subaccounts plan a provides for direct trustee-to-trustee transfers of all or a portion of a participant’s account to a defined benefit government_plan in state x if the transfer is for the purchase of permissive service credits under the defined benefit governmental_plan or for a repayment of contributions and interest to a defined benefit governmental_plan with respect to an amount previously refunded upon forfeiture of service credits to which sec_415 does not apply by reason of sec_415 with certain limitations a participant may elect the manner in which his or her deferred amounts will be distributed benefits generally may be paid in the form of a lump-sum substantially equal payments provided monthly quarterly semi-annually or annually not extending over twenty years periodic_payments for the life of a participant or the joint lives of the participant and the designated_beneficiary or a combination of these methods plan a provides that the manner and time of benefit payout must meet the distribution_requirements of sec_457 and sec_401 of the code plan a also provides for additional distributions plan a provides for loans to be made to current participants plan a requires loans to be evidenced by a promissory note which provides for a reasonable rate of interest and repayment in equal installments at least quarterly further a loan must be repaid in five years or fifteen years if the loan is for the acquisition of a primary residence a loan is secured_by a first lien on the participant’s investment account the amount of the loan is subject_to limits provided in sec_72 of the code plan a also provides for a distribution due to an unforeseeable_emergency that is a severe financial hardship resulting from extraordinary and unforeseeable circumstances beyond the control of the participant in addition when an employee separates from service with an account balance of less than dollar_figure the account balance will automatically be distributed in a lump sum finally plan a provides for voluntary in-service distributions of an amount not in excess of the dollar limited provided in sec_401 ie dollar_figure adjusted for inflation if certain conditions are met the term spouse is not separately defined under plan a plan a provides that a certified domestic_relations_order cdro is a domestic_relations_order that the plan a administrator has determined satisfies the requirements of a qualified_domestic_relations_order as defined in sec_414 under plan a an alternate_payee is a spouse or former spouse of a participant who is recognized under a cdro as having a right to receive all or a portion of the benefits payable under plan a with respect to the participant several provisions under plan a the spouse provisions involve a participant’s spouse former spouse or surviving_spouse specific spouse provisions involve the applicable distribution period the appropriate life expectancy tables and the required plr-159315-04 beginning date for distribution these spouse provisions relate to the application of income_tax regulation sec_1_401_a_9_-3 sec_1_401_a_9_-5 and sec_1_401_a_9_-9 other spouse provisions under plan a relate to a spouse’s right to make rollover_contributions to plan a whether a surviving_spouse may roll over distributions from plan a into an eligible_retirement_plan in the same manner as if the spouse were the participant the treatment of an early distribution a spouse or former spouse receives pursuant to a domestic_relations_order and whether a spouse or former spouse may pursuant to a domestic_relations_order roll over distributions into any eligible_retirement_plan in the same manner as if the spouse were the participant these spouse provisions involve the application of income_tax regulation sec_1_402_c_-2 sec_1_457-10 and the definition of alternate_payee under sec_414 of the code in addition certain spouse provisions relate to whether a severe financial hardship that burdens a spouse for example an illness or accident can provide the proper basis for an unforeseeable_emergency distribution these spouse provisions involve the application of income_tax regulation sec_1 c state x act provides that registered domestic partners have the same rights protections and benefits and are subject_to the obligations and duties under law as granted to and imposed on spouses likewise former registered domestic partners and registered surviving domestic partners have the same rights protections and benefits and are subject_to the obligations and duties under law as granted to and imposed on former spouses and surviving spouses to the extent that provisions of state x law adopt refer to or rely upon provisions of federal_law in a way that otherwise would cause registered domestic partners to be treated differently than spouses registered domestic partners are to be treated under state x law as if federal_law recognized a domestic_partnership in the same manner as state x law accordingly if applicable with respect to the spouse provisions state x act requires that a domestic partner be treated in the same manner as a spouse under plan a however state x act expressly provides that it does not amend or modify federal_law or the benefits protections and responsibilities provided by federal_law plan a provides that amounts of compensation deferred under plan a are to be transferred to and invested in a_trust as described in sec_457 or a custodial_account as described in sec_457 and sec_401 for the exclusive benefit of the participants and their beneficiaries all amounts deferred under plan a must be transferred to the trust or custodial_account within an administratively reasonable_time period but in no event later than the fifteenth business_day of the month following the month in which the amount deferred would have been payable to the participant in cash the rights of any participant or beneficiary to payments pursuant to plan a are not subject_to alienation transfer assignment pledge attachment or encumbrance of any kind we note that the internal_revenue_service recently published revenue_procedure plr-159315-04 2004_35_irb_376 revproc_2004_56 which contains model amendments the model amendment designed for use by eligible governmental employers maintaining eligible sec_457 defined contribution plans that permit employees to elect to defer compensation that are maintained on the basis of the calendar_year and that provide for_the_use_of one or more trusts to satisfy the requirements of sec_457 of the code if an eligible governmental employer adopts one or more of the model amendments for its plan that is intended to be an eligible sec_457 governmental_plan the plan will be treated as meeting the plan requirements for eligibility under sec_457 with respect to the adopted provisions plan a has adopted several model amendment provisions on a word-for-word basis or in a manner that is substantially_similar in all material respects sec_457 of the code provides rules for the deferral of compensation by an individual participating in an eligible_deferred_compensation_plan as defined in sec_457 sec_457 of the code provides that in the case of a participant in an eligible governmental deferred_compensation plan any amount of compensation deferred under the plan and any income attributable to the amounts so deferred shall be includible in gross_income only for the taxable_year in which such compensation or other income is paid to the participant or beneficiary sec_457 provides that the term eligible_deferred_compensation_plan means a plan established and maintained by an eligible_employer in which only individuals who perform service for the employer may be participants and which meet the deferral limitations described in sec_457 which meets the distribution_requirements described in sec_457 which provides for deferral elections described in sec_457 and in the case of a governmental_plan which requires the plan assets and income to be held in trust for the exclusive benefit of participants and beneficiaries as described in sec_457 sec_457 provides that the term eligible_employer means a state political_subdivision of a state and any agency_or_instrumentality of a state or political_subdivision of a state and any other organization other than a governmental_unit exempt from income_tax sec_457 of the code provides that compensation will be deferred for any calendar month only if an agreement providing for such deferral has been entered into before the beginning of such month an eligible_plan may provide that if a participant enters into an agreement providing for deferral by salary reduction under the plan the agreement will remain in effect until the participant revokes or alters the terms of the agreement nonelective employer contributions are treated as being made under an agreement entered into before the first day of the calendar month sec_457 of the code provides the basic limits on the amount of eligible annual deferrals however a catch-up amount described in sec_457 may be added to this amount for participants that are within three years of the normal_retirement_age or for participants age or older a catch-up amount may be added as described in plr-159315-04 sec_457 a participant eligible for both catch-up provisions is entitled to use the higher limit of the two the total annual eligible deferral amount is limited by sec_457 coordination of the basic limits and the catch-up limits is described in sec_1_457-4 of the income_tax regulation regulations sec_1_457-4 of the regulations provides that a plan may define the normal_retirement_age for purposes of the last-three-years catch-up provision as any age that is on or after the earlier of age or the age at which participants have the right to retire and receive under the basic defined benefit pension_plan of the state or tax-exempt_entity or a money_purchase_pension_plan in which the participant also participates if the participant is not eligible to participate in a defined_benefit_plan immediate retirement benefits without actuarial or similar reduction because of retirement before some later specified age and that is not later than age seventy and a half alternatively a plan may provide that a participant is allowed to designate a normal_retirement_age within these ages for purposes of the three-year catch-up provision an entity sponsoring more than one eligible_plan may not permit a participant to have more than one normal_retirement_age under the eligible plans it sponsors sec_1_457-4 of the regulations provides a special exception for qualified police and firefighters to retire as early as age forty for purposes of the three-year catch-up provision sec_1_457-5 of the regulations provides that the sec_457 eligible-deferral amount limitation is applied to all eligible plans in which a participant participates in a tax_year and is determined on an aggregate basis if a participant has annual deferrals under more than one eligible_plan and the applicable catch-up amount is not the same for each such eligible_plan for the taxable_year sec_457 is applied using the catch-up amount under whichever plan has the largest catch-up amount applicable to the participant to the extent that the combined annual deferral amount exceeds the maximum deferral limitation the amount is treated as an excess_deferral under sec_1_457-4 of the regulations for purposes of determining whether there is an excess_deferral resulting from a failure of a plan to apply the deferral limitations all plans under which an individual participates by virtue of his or her relationship with a single employer are treated as a single_plan without regard to any differences in funding sec_457 of the code provides that amounts distributed under an eligible_plan will not be made available to participants or beneficiaries earlier than i the calendar_year in which the participant attains age ii when the participant has a severance_from_employment with the employer or iii when the participant is faced with an unforeseeable_emergency sec_1_457-6 of the regulations provides the requirements for a unforeseeable_emergency distribution an unforeseeable_emergency must be defined in the plan as a severe financial hardship of the participant or beneficiary resulting from an illness or accident of the participant or beneficiary the participant's or beneficiary's spouse or the participant's or beneficiary's dependent loss of the participant's or beneficiary's property due to casualty including the need to rebuild a home following damage to a home not plr-159315-04 otherwise covered by homeowner's insurance eg as a result of a natural disaster or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the participant or the beneficiary whether a participant or beneficiary is faced with an unforeseeable_emergency is determined based on the relevant facts and circumstances of each case however a distribution on account of unforeseeable_emergency may not be made to the extent that such emergency is or may be relieved through reimbursement or compensation from insurance or otherwise by liquidation of the participant's assets to the extent the liquidation of such assets would not itself cause severe financial hardship or by cessation of deferrals under the plan further distributions because of an unforeseeable_emergency must be limited to the amount reasonably necessary to satisfy the emergency need which may include any amounts necessary to pay any federal state or local_income_taxes or penalties reasonably anticipated to result from the distribution sec_457 of the code requires an eligible governmental_plan to meet requirements similar to the requirements of sec_401 sec_401 requires that mandatory distributions of more than dollar_figure from a plan qualified under sec_401 be paid in a direct_rollover to an individual_retirement_plan ie an individual_retirement_account as described in sec_408 or an individual_retirement_annuity described in sec_408 of a designated trustee or issuer if the distributee does not make an affirmative election to have the amount_paid in a direct_rollover to an eligible_retirement_plan or to receive the distribution directly recently published guidance notice_2005_5 2005_3_irb_337 provides that the automatic rollover provisions of sec_401 apply to sec_457 governmental eligible deferred_compensation plans however governmental plans will not be treated as failing to satisfy the requirements of sec_401 if the automatic rollover provisions are not applied to mandatory distributions from such plans that are made prior to the close of the first regular legislative session of the legislative body with the authority to amend the plan that begins on or after date sec_457 of the code requires a plan to meet the minimum distribution_requirements of sec_401 these requirements are described in income_tax regulation sec_1_401_a_9_-1 through a -9 sec_457 of the code provides that a governmental_plan will not fail to meet the distribution_requirements if it provides for in-service distributions of a limited-dollar amount which meet the requirements of sec_457 and sec_1_457-6 of the regulations sec_1_457-6 of the regulations is satisfied if the participant's total amount deferred the participant's total account balance which is not attributable to rollover_contributions is not in excess of the dollar limit under sec_411 ie dollar_figure adjusted for inflation no amount has been deferred under the plan by or for the participant during the two-year period ending on the date of the distribution and there has been no prior distribution under the plan to the participant of this kind the determination of whether the availability of a loan the making of a loan or a failure plr-159315-04 to repay a loan from an eligible governmental_plan to a participant or beneficiary is treated as a distribution and the determination of whether the availability of the loan the making of the loan or a failure to repay the loan is in any other respect a violation of the requirements of sec_457 depends on the facts and circumstances among the facts and circumstances are whether the loan has a fixed repayment schedule and bears a reasonable rate of interest and whether there are repayment safeguards to which a prudent lender would adhere any amount_loaned from an eligible governmental_plan to a participant or beneficiary is includible in the gross_income of the participant or beneficiary for the taxable_year in which the loan is made except to the extent a loan satisfies sec_72 sec_457 of the code provides that a participant shall not be required to include in gross_income any portion of the entire amount payable to such participant solely by reason of the transfer of such portion from one eligible_deferred_compensation_plan to another eligible_deferred_compensation_plan sec_1_457-10 of the regulations provides that an eligible government_plan may transfer amounts to and receive amounts from an eligible government_plan if certain conditions are met with regard to transfers from an eligible governmental_plan to another eligible governmental_plan of the same employer sec_1_457-10 of the regulations provides that a transfer from an eligible governmental_plan to another eligible governmental_plan is permitted if the following conditions are met i the transfer is from an eligible governmental_plan to another eligible governmental_plan of the same employer ii the transferor plan provides for transfers iii the receiving plan provides for the receipt of transfers iv the participant or beneficiary whose amounts deferred are being transferred will have an amount deferred immediately_after_the_transfer at least equal to the amount deferred with respect to that participant or beneficiary immediately before the transfer and v the participant or beneficiary whose deferred amounts are being transferred is not eligible for additional annual deferrals in the receiving plan unless the participant or beneficiary is performing services for the entity maintaining the receiving plan sec_457 of the code provides that with regard to rollover distributions for an eligible_deferred_compensation_plan if i any portion of the balance_to_the_credit of an employee in such plan is paid to such employee in an eligible_rollover_distribution within the meaning of sec_402 ii the employee transfers any portion of the property such employee receives in such distribution to an eligible_retirement_plan described in sec_402 and iii in the case of a distribution_of_property other than money the amount so transferred consists of the property distributed then such distribution to the extent so transferred shall not be includible in gross_income for the taxable_year in which paid under sec_1_457-10 of the regulations an eligible governmental_plan that permits eligible rollover distributions made from another eligible_retirement_plan to be paid into the eligible governmental_plan is required to provide that it will separately account for any eligible rollover distributions it receives amounts contributed to an eligible governmental_plan as eligible rollover distributions are not taken into account for plr-159315-04 purposes of the annual_limit on annual deferrals by a participant but are otherwise treated in the same manner as amounts deferred under the plan sec_1_402_c_-2 of the regulations provides that a distributee other than the employee or the employee's surviving_spouse or a spouse or former spouse who is an alternate_payee under a qualified_domestic_relations_order is not permitted to roll over distributions consistent with sec_414 of the code sec_1_457-10 of the regulations provides for distributions made pursuant to a quailed domestic_relations_order if a distribution or payment is made from an eligible_plan to an alternate_payee pursuant to a qualified_domestic_relations_order rules similar to the rules of sec_402 apply to the distribution sec_414 provides that the term alternate_payee means any spouse former spouse child or other dependent of a participant who is recognized by a domestic_relations_order as having a right to receive all or a portion of the benefits payable under a plan with respect to such participant sec_457 of the code provides that no amount shall be includible in gross_income by reason of a direct trustee-to-trustee transfer to a defined benefit governmental_plan as defined in sec_414 if such transfer is for the purchase of permissive_service_credit as defined in sec_415 under such plan or a repayment to which sec_415 does not apply sec_457 of the code provides that a plan maintained by an eligible governmental employer shall not be treated as an eligible_deferred_compensation_plan unless all assets and rights purchased with such deferred_compensation amounts and all income attributable to such amounts property or rights of the plan are held in trust for the exclusive benefit of participants and their beneficiaries sec_457 provides that a_trust described in sec_457 shall be treated as an organization exempt from tax under sec_501 sec_457 states that custodial accounts and contracts described in sec_401 shall be treated as trusts under rules similar to the rules under sec_401 amounts of compensation deferred under plan a including any income plan a is an eligible_deferred_compensation_plan as defined in sec_457 of plr-159315-04 revrul_58_66 1958_1_cb_60 provides that the marital status of individuals as determined under state law is recognized in the administration of tax laws however sec_3 of the defense of marriage act p l date provides that in determining the meaning of any act of congress or of any ruling regulation or interpretation of the various administrative bureaus or agencies of the united_states the word 'marriage' means only a legal union between one man and one woman as husband and wife and the word 'spouse' refers only to a person of the opposite sex who is a husband or a wife based upon the information submitted and the representations made we conclude as follows the code attributable to the deferred_compensation will be includible under sec_457 of the code in the recipient's gross_income for the taxable_year or years in which amounts are paid to a participant or beneficiary in accordance with the terms of plan a surviving registered domestic partner as defined in state x act is not a spouse a former spouse or a surviving_spouse for purposes of sec_457 accordingly in the event that the spouse provisions are not interpreted and applied in a manner consistent with the defense of marriage act the operation of plan a will not be in compliance with sec_457 except as expressly provided herein no opinion is expressed or implied concerning the federal tax consequences of any aspect of any transaction or item discussed or referenced in this letter if plan a is significantly modified this ruling will not necessarily remain applicable no opinion is expressed concerning the timing of the inclusion in income of amounts deferred under any deferred_compensation plan other than the plan described above in addition this ruling applies only to deferrals made after the date of this ruling 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 registered domestic partner a former registered domestic partner or a plr-159315-04 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 robert d patchell branch chief qualified_plans branch employee_benefits tax exempt government entities enclosure for purposes cc