CCA 200825039: IRS cannot determine a railroad employer's status from the record

Plain-English summary

The Railroad Retirement Board reported that a business had ceased being a covered employer under railroad retirement and unemployment insurance laws. IRS counsel could not determine whether an entity was a covered employer under the Railroad Retirement Tax Act from the information provided. The Board viewed it as a separate legal entity, while the entity claimed it was a shell corporation that never operated or employed workers. Counsel said the record did not show which entity employed workers in the overall operation. The memorandum therefore makes no status determination.

Ruling snapshot

• Question: Was the entity a covered employer under the Railroad Retirement Tax Act?
• Outcome: No determination because the record did not identify which entity employed the workers.
• Key authorities: Railroad Retirement Tax Act.

Full text (IRS public release)

Office of Chief Counsel

Memorandum
Internal Revenue Service

Number: 200825039
Release Date: 6/20/2008
CC:TEGE:EOEG:ET1
POSTN-103259-08

UILC: 3231.01-00

date: March 18, 2008
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 that the following business ceased being a covered employer under the jurisdiction of the Railroad Retirement Act and the Railroad Unemployment Insurance Act as of ------------- -------:

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We have reviewed the opinion of the RRB but cannot determine from the information submitted to us by the RRB, whether the -------------------------------------------------------------- ------------------------------ is a covered employer under the jurisdiction of the Railroad Retirement Tax Act. The RRB indicates that ---------------- appears to be a separate legal entity but ---------------- claims it is a “shell corporation” that never operated and never had employees. Further, it claims if it did have employees they would all be reported under ---------------------------------------------------------. We cannot make a determination in this case because we do not have sufficient information to determine which entity employs the workers in the overall operation.

POSTN-103259-08
2

Please take the appropriate action regarding this business.

_____
Janine Cook

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