CCA 200813040: Rail carrier is a covered employer for railroad retirement tax

Plain-English summary

The Railroad Retirement Board told the IRS that a rail business was a covered employer under the railroad retirement and unemployment insurance laws. After reviewing that opinion and the information provided, Chief Counsel also concluded that the business was covered by the Railroad Retirement Tax Act from the date it began operations. The memo relies on the Board's finding that the business was a rail carrier subject to the Surface Transportation Board's jurisdiction and directs IRS staff to reflect the decision.

Ruling snapshot

• Question: Is the rail business a covered employer under the Railroad Retirement Tax Act?
• Outcome: Advice given: treat it as a covered employer from the stated start date.
• Key authorities: IRC § 3231; Railroad Retirement Act; Railroad Unemployment Insurance Act.

Full text (IRS public release)

Office of Chief Counsel

Memorandum
Internal Revenue Service

Number: 200813040
Release Date: 3/28/2008
CC:TEGE:EOEG:ET1
POSTN-145866-07

UILC: 3231.01-00

date: December 11, 2007
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 is a covered employer under the Railroad Retirement Act and the Railroad Unemployment Insurance Act:

----------------------------------------------
-----------------------------------------------------------
------------------------------------------------------
--------------------------------------------------------------

We have reviewed the opinion of the RRB and, based upon the information submitted to us by the RRB, we also conclude that --------------------------------------------. is a covered employer under the Railroad Retirement Tax Act effective ---------------------------, the date on which it began operations with three employees using two locomotives leased from the ------------------- and ----------------------------. In this regard, we defer to the RRB’s determination under the facts that --------------------------------------------. is a rail carrier subject to the jurisdiction of the Surface Transportation Board under part A of subtitle IV of title 49, a determination that is equally relevant for establishing application of the Railroad Retirement Act, the Railroad Unemployment Insurance Act, and the Railroad Retirement Tax Act.
POSTN-145866-07
2

Please take the appropriate action to reflect this decision.

_____
Janine Cook

cc: