CCA 201138033: IRS considered disregarding an abusive trust arrangement

Number

201138033

Outcome

Advice

Document type

Chief Counsel Advice

IRS subject

Trust Income, Deductions, and Credits Attributable to Grantors and OthersAs Substantial Owners

Topics

Trusts and fiduciary income

Code sections

§ 671, § 6110

Ruling dated

July 7, 2011

Publicly released

September 23, 2011

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 2011, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

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 Advice concerned a case that the authors believed involved an abusive trust arrangement. They stated that the IRS should possibly disregard the trust and disallow deductions for the trustee's personal expenses paid by the trust and other entities involved in the arrangement. The advice was sent while the case was being reassigned and invited further technical questions as the examination developed. The release does not state a final determination on the taxpayer's deductions.

Ruling snapshot

Question: Should the IRS consider disregarding a trust and disallowing deductions for the trustee's personal expenses in an alleged abusive trust arrangement?
Outcome: advice given
Key authorities: IRC § 671

Full text (IRS public release)

ID: CCA_2011070715582951 Number: 201138033
Release Date: 9/23/2011
Office:
UILC: 671.00-00

From: -----------------
Sent: Thursday, July 07, 2011 3:58:31 PM
To: ---------------------------------------------
Cc: -------------------------
Subject: [ ------------------------------ ]

Hi ------

We just spoke with -------------------, and he told us that he reassigned the ---------------------------case to you. We had been assisting ------------------with this case before his recent move to the Washington field office. We realize that you have probably not had time to review the case, but we wanted to go ahead and send you our thoughts after reviewing the information -------- gathered in response to our earlier questions. We believe the taxpayer in this case engaged in an abusive trust arrangement, and we should possibly disregard the trust and disallow the deduction of the trustee's personal expenses paid by the trust and the other entities involved in the arrangement. ----------------------------------------------------------------------------------
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-------------------------------------- If any specific technical issues arise during your further development of the case, please do not hesitate to contact us.

Thank you,

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