Ezel / IRS Rulings / 200913052

CCA 200913052: A parent was not liable for its subsidiary's employment taxes solely due to consolidation

Number
200913052
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Common Parent Agent for Subsidiaries
Topics
Corporate transactions and reorganizations
Code sections
§ 1502
Ruling dated
January 5, 2009
Publicly released
March 27, 2009
Source
View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2009, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2009
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

Chief Counsel distinguished a consolidated group's income tax liability from its members' employment tax obligations. Every group member was severally liable for the group's entire income tax. Each member, however, owed only its own employment taxes. The IRS therefore could not collect a subsidiary's employment taxes from the parent merely because both corporations belonged to the consolidated group.

Ruling snapshot

  • Question: Could the IRS collect a subsidiary's employment tax liability from the consolidated group's parent solely because they filed together?
  • Outcome: Advice given: no, each member owed its own employment tax obligations despite several liability for consolidated income tax.
  • Key authorities: IRC § 1502 and the consolidated-return rules.

Full text (IRS public release)

ID: CCA-151511-09 Number: 200913052
Release Date: 3/27/2009
Office: --------------
UILC: 1502.77-00

From: -----------------
Sent: Mon 1/5/2009 3:11 PM
To: ----------------------
Cc: ---------------------
Subject: RE: Collecting subsidiary's liability from parent

It is true that all members of the consolidated group are severally liable for the entire income tax the group owes. But I believe that each member of the group only owes its own employment tax obligations, so you could not collect the employment taxes of a sub from the parent just because they are in a consolidated group together. (I think there is also several liability for some type of liability relating to a pensio plans.)

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