CCA 200650015: Railroad employer coverage begins with a separate prior payroll entity noted

Plain-English summary

Chief Counsel reviewed the Railroad Retirement Board's opinion that a redacted business had become a covered railroad employer. Based on the board's information, it agreed that Railroad Retirement Tax Act coverage began on the redacted effective date. The memorandum also notes that another entity had paid the employees before a redacted date and directs Submission Processing to take appropriate action. It provides no further analysis of that payroll arrangement or specific tax amounts.

Ruling snapshot

• Question: Did the identified business become a covered employer under the Railroad Retirement Tax Act?
• Outcome: Advice: employer coverage begins on the redacted date, with earlier payroll by another entity noted.
• Key authorities: Railroad Retirement Tax Act; IRC § 3231 (index classification).

Full text (IRS public release)

Office of Chief Counsel
memorandum
Internal Revenue Service

CC:TEGE:EOEG:ET1
POSTN-141844-06

Number: 200650015
Release Date: 12/15/2006

UILC: 3231.01-00

date: October 23, 2006
to: Director, Submission Processing
Cincinnati, OH
Attn: Entity Unit

from: Office of Division Counsel/Associate Chief Counsel (Tax Exempt & Government Entities)

subject: Railroad Retirement Tax Act 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 dated ----------------------, that the following business became a covered employer under the Railroad Retirement Act and the Railroad Unemployment Insurance Act effective ------ -------------------:
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We have reviewed the opinion of the RRB and, based upon the information submitted to us by the RRB, we also conclude that ------------------------------------------------------ became a covered employer under the Railroad Retirement Tax Act effective -------------------.
However, the RRB opinion indicates that its employees were paid by another entity, -- ----------------------------------------, prior to ----------------------. Please take the appropriate action regarding this business.

____
Janine Cook
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