CCA 200850032: a railroad employer left the system at the close of business on the day it handed over its assets

Plain-English summary

Another one page memorandum on the same template as its neighbours in this release, routed "CC:TEGE:EOEG:ET1" under control number "POSTN-137996-08", dated "date: September 05, 2008" and released 12/12/2008. It goes from the "from: Office of Division Counsel/Associate Chief Counsel" for "Tax Exempt & Government Entities" to the "to: Director, Submission Processing" in "Cincinnati, OH", marked "Attn: Entity Unit", under the subject line "subject: Railroad Retirement Tax Act Status".

This one runs in the opposite direction from most of the coordination traffic. Rather than adding a business to the railroad retirement system, it takes one out. The Board's opinion, relayed in the first sentence, is that the business "ceased to be a covered employer under the Railroad Retirement Act and the Railroad Unemployment Insurance Act effective" a redacted date, and Chief Counsel reaches the same conclusion under the tax statute.

The detail that sets this memorandum apart from the others in the run is how precisely it fixes the moment. The business "ceased to be a covered employer under the Railroad Retirement Tax Act effective close of business on" the redacted date. The companion memoranda in this release date the change to a day. This one dates it to the end of a day. That is not decoration. Coverage determines whose payroll the compensation sits on, and a business that stops being a covered employer at the close of business on a date was still a covered employer for everything that happened during it. The phrase puts the final day inside the period of coverage rather than outside it.

The reason given is a single compound event: it was "the date it ceased operations and transferred its assets and common carrier obligations to another entity. Please take the appropriate action regarding this business." Two things had to happen together. The business stopped running, and what made it a railroad in the first place moved elsewhere. The phrase common carrier obligations is the tell that this was a rail carrier in its own right rather than a service company or an affiliate swept in by common control, since common carrier duties are the licensed obligation to hold oneself out to carry for the public. Those obligations went to one recipient, described in the singular as another entity, which fits a straightforward succession rather than a break up.

Set beside the memorandum released immediately after it, the pair shows both ends of the same rule being handled on the same page and over the same signature. The file docs/2008/0850033.md brings a business into coverage on "first compensated an employee", the first moment there is any compensation to tax. This one takes a business out at the close of business on the day the operations and the carrier obligations leave. Entry is keyed to the first payroll; exit is keyed to the last day of operations. Between them they mark the outer edges of the taxable period without either document explaining the rule it is applying.

As in the rest of this group, the division of labour is stated rather than implied: "We have reviewed the opinion of the RRB and, based upon the information submitted to us by the RRB, we also conclude that" the same result follows. The Board gathers the facts and forms the view, Counsel tests it against the tax statute, the Entity Unit carries it out. The memorandum is signed "Janine Cook" above a rule, over an empty "cc:" line.

Redaction is by overstriking with runs of hyphens rather than by lettered legend tokens, so the business name and its address survive as four dash runs and the effective date is a dash run in both places. Unlike its companion in this release, the dash runs here do not collide with the words that follow them, and the sentence reads cleanly across the break. The text came from a clean text layer rather than a scan, and nothing has been corrected.

The same two absences recur and are recorded rather than repaired. There is no section 6110 disclosure paragraph, and the string 6110 appears nowhere in the document. No numeric Code section appears anywhere either, in any form: the memorandum names the Railroad Retirement Act, the Railroad Unemployment Insurance Act and the Railroad Retirement Tax Act by title and cites nothing else. The index assigns UILC 3231.01-00, pointing at section 3231, but since the document never prints that section, code_sections records that none was cited rather than importing a number the document does not contain. The index subject, Employers v. Not Employers, fits this document exactly.

The citation check this corpus normally runs could not be performed, because the legal research tool is unavailable in this session. There is nothing here for it to reach: no case, no regulation, no numbered provision. Nothing has been supplied or corrected from memory.

Ruling snapshot

• Question: When did a business stop being a covered employer under the Railroad Retirement Tax Act after it wound up and passed its assets and common carrier obligations on?
• Outcome: Advice given. Chief Counsel agreed with the Railroad Retirement Board that coverage ended at the close of business on the date the business ceased operations and transferred its assets and common carrier obligations to another entity, and told Submission Processing to take the appropriate action.
• Key authorities: The Railroad Retirement Tax Act, the Railroad Retirement Act and the Railroad Unemployment Insurance Act, each named by title only. No numeric Code section, regulation or case is cited.

Full text (IRS public release)

```text
Office of Chief Counsel
Internal Revenue Service
Memorandum
Number: 200850032
Release Date: 12/12/2008
CC:TEGE:EOEG:ET1
POSTN-137996-08

UILC: 3231.01-00

date: September 05, 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 to be a covered employer under the Railroad Retirement Act
       and the Railroad Unemployment Insurance Act effective ----------------------:

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

       We have reviewed the opinion of the RRB and, based upon the information submitted to
       us by the RRB, we also conclude that ------------------------------------------------------------------
       ---------------- ceased to be a covered employer under the Railroad Retirement Tax Act
       effective close of business on ----------------------, the date it ceased operations and
       transferred its assets and common carrier obligations to another entity. Please take the
       appropriate action regarding this business.

                                                             _____________________________
                                                                      Janine Cook

       cc:

```