PLR 201349006: Proposed spin-off qualifies as a tax-free reorganization

Plain-English summary

A parent corporation proposed to separate one business into a newly formed subsidiary and distribute the subsidiary's stock to the parent's shareholders. The plan also included exchanging some retained subsidiary stock for certain corporate debt, followed by a possible public offering. The IRS ruled that the contribution and distribution would qualify as a reorganization under IRC § 368(a)(1)(D), and that the parent, subsidiary, and shareholders generally would not recognize gain or loss on the covered steps. The ruling also addresses asset basis, holding periods, and allocation of earnings and profits. The IRS expressly did not rule on the business-purpose, device, and acquisition-plan requirements under several spin-off provisions.

Ruling snapshot

• Question: Would the proposed contribution, spin-off distribution, and related debt-for-equity exchange receive the requested federal income tax treatment?
• Outcome: approved
• Key authorities: IRC §§ 355, 357, 358, 361, 362, 368, 1032, 1223, 1502, and 312; Treas. Reg. §§ 1.355-2, 1.355-7, 1.358-2, 1.312-10, 1.1502-13, 1.1502-19, and 1.1502-33

Full text (IRS public release)

Internal Revenue Service                                      Department of the Treasury
                                                              Washington, DC 20224

Number: 201349006                                             Third Party Communication: None
Release Date: 12/6/2013                                       Date of Communication: Not Applicable
Index Number: 355.00-00, 355.01-00,
              368.00-00, 368.04-00                            Person To Contact:
                                                              -------------------, ID No. ------------------
--------------------------------                              Telephone Number:
-------------------------------                               ----------------------
-------------------------------------------                   Refer Reply To:
-----------------------------------                           CC:CORP:B02
 --------------------------------                             PLR-112884-13
                                                              Date:
                                                              September 10, 2013




Legend

Distributing          =      --------------------------------------------------------------------------------------------------------

Controlled            =      ----------------------------------------------------------------------------------------------------------
                             ------

Shareholder A         =      ----------------------------------------------------------------------------------------------------------
                             -----------------------------------

Shareholder B         =      -----------------------------------------------------------------------------------------------------

Shareholder C         =      ----------------------------------------------------------------------------------------------------------
                             -----------------------------------

Date 1                =      --------------------

Date 2                =      --------------------

Date 3                =      -------------------

Month 1               =      -----------------

Month 2               =      ---------------

Month 3               =      -----------------
PLR-112884-13                                       2

Month 4         =   ---------------

Month 5         =   ---------------

Sub 1           =   ----------------------------------------------------------------------------------------------------------
                    ----------------------------------------------------------------------------------------------------------
                    -------------------------------------------

Sub 2           =   ----------------------------------------------------------------------------------------------------------
                    ----------------------------------

Sub 3           =   ----------------------------------------------------------------------------------------------------------
                    -----------------------------------

State X         =   --------------

State Y         =   --------------

Business A      =   ----------------------------------------------------------------------------------------------------

Business A1     =   ---------------------------------

Business A2     =   -----------------------------

a               =   ------------

b               =   --------

c               =   ------

d               =   ------

e               =   ----

f               =   --------

g               =   ------------

h               =   ----

i               =   ----------------

j               =   ----------------
PLR-112884-13                                   3



k                    =     ----------------

l                    =     ----------------

m                    =     --------------

n                    =     ----

o                    =     --

p                    =     ----

q                    =     ----


Dear -----------------------:

This letter ruling responds to your representative’s March 19, 2013 request for rulings
on certain federal income tax consequences of a proposed transaction. The information
submitted in that request and in subsequent correspondence is summarized below.

The rulings contained in this letter are based on facts and representations submitted by
the taxpayer and accompanied by a “penalties of perjury” statement executed by an
appropriate party. This office has not verified any of the materials submitted in support
of the request for rulings. Verification of the facts, representations, and other
information may be required as part of the audit process.

In particular, this office has not reviewed any information pertaining to, and has made
no determination regarding, whether the Proposed Transaction (as defined below):
(i) satisfies the business purpose requirement of Treas. Reg. § 1.355-2(b); (ii) is being
used principally as a device for the distribution of earnings and profits of the distributing
corporation or the controlled corporation or both (see section 355(a)(1)(B) of the Internal
Revenue Code (the “Code”) and Treas. Reg. § 1.355-2(d)); or (iii) is part of a plan (or a
series of related transactions) pursuant to which one or more persons will acquire
directly or indirectly stock representing a 50-percent or greater interest in the distributing
corporation or the controlled corporation (see section 355(e) and Treas. Reg. § 1.355-
7).

                                              FACTS

Distributing, a privately owned State X corporation, is the common parent of an affiliated
group of corporations that files a consolidated federal income tax return. Distributing
PLR-112884-13                                4

and the members of its separate affiliated group (“SAG”), as defined in section
355(b)(3)(B) (the “Distributing SAG”), are engaged in Business A.

Distributing has two classes of common stock outstanding—Class A voting common
stock and Class B non-voting common stock. The terms of the Class A and Class B
stock are identical except with respect to voting rights and certain related rights (e.g.,
the right to call special meetings and to modify the corporate by-laws). As of Date 1, a
shares of Class A stock and b shares of Class B stock were issued and outstanding.
Shareholder A owns all of the Class A stock; Shareholder B owns c% of the Class B
stock, and Shareholder C owns the remaining d% of the Class B stock. Distributing has
no preferred stock outstanding.

Distributing directly owns 100% of the stock of both Sub 1 (a State X limited liability
company that is disregarded as separate from Distributing for federal income tax
purposes) and Sub 2 (a State X corporation). Sub 1 and its wholly owned subsidiaries
(collectively, the “Sub 1 Subgroup”) are engaged in Business A1. Distributing also
directly owns approximately e% of Sub 3, a State X corporation that is engaged in
Business A2. Sub 3 has two classes of stock outstanding—voting common stock and
non-voting preferred stock. As of Date 1, Distributing owned all f shares of the Sub 3
preferred stock and approximately e% of the g outstanding shares of Sub 3 common
stock. Various Sub 3 employees (the “Employee Shareholders”) own the remaining h%
of Sub 3 common stock.

Distributing has submitted financial information indicating that each of Business A1 and
Business A2 has had gross receipts and operating expenses representing the active
conduct of a trade or business for each of the past five years.

As of Date 1, Distributing (or one of its wholly owned subsidiaries that is disregarded as
an entity separate from Distributing for federal income tax purposes) had certain
outstanding debts, including but not limited to the following: (i) debt totaling $i that was
incurred in Months 1 and 2 to repurchase shares from former shareholders (such
shareholders, the “Former Shareholder Lenders,” and such debt, the “Stock Buy-Back
Debt”); (ii) debt to Shareholder A of $j (the “Shareholder Debt”) that was incurred in
Month 3; and (iii) a term loan facility with a third-party bank (the “Bank Lender”) of
approximately $k (the “Bank Debt”), which was drawn down in Month 4 to refinance
other Distributing obligations.

On Date 2, Sub 3 made a payment of $l to Distributing as a return of capital.
Additionally, on Date 3, Sub 3 paid a regular quarterly dividend on its preferred stock to
Distributing in the amount of $m. Sub 3 may pay an additional dividend on its preferred
stock to Distributing prior to the Contribution (as defined below). Distributing also
expects to redeem some (but not all) of the Class B shares held by Shareholder B
immediately before the Proposed Transaction (as defined below).
PLR-112884-13                               5

                             PROPOSED TRANSACTION

For what are represented to be valid business reasons, Distributing has undertaken or
proposes to undertake the following transactions pursuant to a single plan (together, the
“Proposed Transaction”):

(1)   Distributing formed a new State Y corporation (“Controlled”) as a direct, wholly
      owned subsidiary in Month 5. Controlled has one class of common stock (and no
      preferred stock) outstanding.

(2)   Distributing will transfer all of its common and preferred Sub 3 stock to Controlled
      in exchange for approximately e% of Controlled stock (the “Contribution”). At the
      same time, the Employee Shareholders will transfer all of their Sub 3 common
      stock to Controlled in exchange for the remaining h% of Controlled stock.

(3)   Distributing will distribute at least n% of Controlled stock to Distributing’s
      shareholders on a pro rata basis (the “Distribution”).

(4)   Distributing’s shareholders may contribute their shares of Controlled stock to a
      newly formed limited liability company classified as a partnership for federal
      income tax purposes (“New LLC”) in exchange for membership interests therein.

(5)   Distributing will exchange any retained Controlled stock (which will comprise no
      more than o% of all outstanding Controlled stock) (the “Retained Controlled
      Stock”) for a portion of the Stock Buy-Back Debt, the Shareholder Debt, and/or
      the Bank Debt. More specifically:

      (a)    Prior to the Distribution, Distributing will give Shareholder A and the
             Former Shareholder Lenders the option to enter into exchange
             agreements pursuant to which Distributing will exchange shares of
             Controlled stock for an amount of Shareholder Debt and Stock Buy-Back
             Debt, respectively.
      (b)    Prior to the Distribution, one or more investment banks (the “Investment
             Banks”), acting as principals for their own account, may purchase a
             portion of the Bank Debt from the Bank Lender (the “Bank Debt
             Purchase”). If the Bank Debt Purchase takes place, Distributing will enter
             into an exchange agreement with the Investment Banks (the “Bank Debt
             Exchange Agreement”) no sooner than five days after the Bank Debt
             Purchase.     Pursuant to the Bank Debt Exchange Agreement, the
             Investment Banks will exchange an amount of Bank Debt for shares of
             Controlled stock (the “Bank Debt Exchange”). The Bank Debt Exchange
             Agreement will provide that the pricing for the exchange will be
             determined based on the fair market value of the Bank Debt and the
PLR-112884-13                               6

             Controlled stock as of the date of the exchange, and that the exchange
             will occur at least 14 days after the Bank Debt Purchase.
      (c)    The Investment Banks are expected to sign an underwriting agreement
             with Distributing and Controlled to conduct a public offering (the “IPO”) of
             (i) the Controlled stock (if any) to be acquired by the Investment Banks in
             the Bank Debt Exchange, (ii) the Controlled stock (if any) to be acquired
             by the Investment Banks in the Controlled Stock Purchase (see Step 6
             below), and (iii) newly issued shares of Controlled stock.
      (d)    Distributing will exchange the Retained Controlled Stock (if any) for an
             amount of the Shareholder Debt, the Stock Buy-Back Debt, and/or the
             Bank Debt (the “Debt-for-Equity Exchange”; any such exchanged
             Distributing debt, the “Distributing Debt”). All Distributing Debt will be
             retired at face value. The Debt-for-Equity Exchange is expected to occur
             approximately simultaneously with the Distribution, and it will occur at
             least 14 days after the Bank Debt Purchase (if the Bank Debt Purchase
             takes place).

(6)   Immediately following the Debt-for-Equity Exchange, Shareholder A and the
      Former Shareholder Lenders are expected to sell their shares of Controlled stock
      received in the Debt-for-Equity Exchange to the Investment Banks for cash (the
      “Controlled Stock Purchase”).

(7)   At least one day after the Distribution, the Investment Banks are expected to
      issue the Controlled stock described above in Step 5(c) in the IPO. The IPO
      proceeds will be used by Controlled for general corporate purposes, including
      capital expenditures, the expansion of markets and services, and the future
      acquisition of businesses or companies. If Controlled receives more cash in the
      IPO than is required for these purposes, Controlled may use the excess
      proceeds to issue a special dividend to its shareholders of record before the IPO.

Following the Proposed Transaction, Distributing and Controlled will operate as two
independent companies. Immediately after the Proposed Transaction, a majority of
directors on the board of Controlled will be persons that are not directors, officers,
employees, or principal shareholders of Distributing. No person will serve as an officer
or employee of both Distributing and Controlled after the Proposed Transaction except
as described in the following paragraph.

In connection with the Proposed Transaction, Distributing and Controlled (or their
subsidiaries) have entered or will enter into certain agreements and arrangements,
including a tax-sharing agreement and a transitional services agreement. Pursuant to
the transitional services agreement, several Distributing employees will provide certain
services (the “Transitional Services”) for Controlled at cost for up to p months after the
Proposed Transaction, and the General Counsel of Distributing will serve as General
Counsel of Controlled for up to q months after the Proposed Transaction. In addition,
PLR-112884-13                                7

Sub 2 and Sub 3 have entered into a lease agreement with respect to real property
(with Sub 2 as landlord and Sub 3 as tenant) on terms intended to reflect arm’s-length
negotiation, including arm’s-length pricing. It is expected that there will be no material
changes to the lease following the Proposed Transaction other than the renegotiation of
the lease at the end of its term to the prevailing market rate. The foregoing agreements
or arrangements concerning the relationship between Distributing and Controlled after
the Proposed Transaction are collectively referred to herein as the “Continuing
Arrangements.”

                                 REPRESENTATIONS

Distributing has made the following representations in connection with the Proposed
Transaction:

(a)   No part of the consideration to be distributed by Distributing in the Distribution will
      be received by a shareholder of Distributing as a creditor or an employee or in
      any capacity other than that of a shareholder of Distributing. In addition, the
      distribution of Controlled stock to Distributing’s shareholders in the Distribution is
      with respect to their ownership of Distributing stock.

(b)   Distributing will treat all members of its separate affiliated group (within the
      meaning of section 355(b)(3)(B)) (“Distributing SAG”) as one corporation in
      determining whether it meets the requirements of section 355(b)(2)(A) regarding
      the active conduct of a trade or business.

(c)   Controlled will treat all members of its separate affiliated group (within the
      meaning of section 355(b)(3)(B)) (“Controlled SAG”) as one corporation in
      determining whether it meets the requirements of section 355(b)(2)(A) regarding
      the active conduct of a trade or business.

(d)   No intercorporate debt will exist between Distributing (or any member of the
      Distributing SAG) and Controlled (or any member of the Controlled SAG) at the
      time of, or subsequent to, the Distribution, other than any debt that arises under
      the Continuing Arrangements. Any indebtedness owed by Controlled (or any
      member of the Controlled SAG) to Distributing (or any member of the Distributing
      SAG) after the Distribution will not constitute stock or securities.

(e)   The five years of financial information submitted by Distributing with respect to
      each of Business A1 and Business A2 is representative of their present business
      operations, and with regard to each of Business A1 and Business A2, there have
      been no substantial operational changes since the date of the last financial
      statements submitted.
PLR-112884-13                                8

(f)   Neither Business A1 nor control of an entity conducting Business A1 will have
      been acquired during the five-year period ending on the date of the Distribution in
      a transaction in which gain or loss was recognized (or treated as recognized) in
      whole or in part. Throughout the five-year period ending on the date of the
      Distribution, the Distributing SAG will have been the principal owner of the
      goodwill and significant assets of Business A1, and it will continue to be the
      principal owner following the Distribution.

(g)   Neither Business A2 nor control of an entity conducting Business A2 will have
      been acquired during the five-year period ending on the date of the Distribution in
      a transaction in which gain or loss was recognized (or treated as recognized) in
      whole or in part. Throughout the five-year period ending on the date of the
      Distribution, the Distributing SAG will have been the principal owner of the
      goodwill and significant assets of Business A2, and the Controlled SAG will
      continue to be the principal owner following the Distribution.

(h)   Following the Distribution, the Distributing SAG will continue the active conduct of
      Business A1, independently and with its separate employees, except as provided
      pursuant to the Continuing Arrangements.

(i)   Following the Distribution, the Controlled SAG will continue the active conduct of
      Business A2, independently and with its separate employees, except as provided
      pursuant to the Continuing Arrangements.

(j)   The Distribution is being carried out for the following corporate business
      purposes: (i) enabling Controlled to raise significantly more funds per share in an
      IPO in order to pursue its business strategies; (ii) providing Controlled with
      currency in the form of publicly traded stock that may be used to make future
      acquisitions; (iii) enabling Controlled to implement more effective customized
      stock-based incentive compensation packages; and (iv) enabling Distributing to
      reduce its debt by means of the Debt-for-Equity Exchange. The Distribution is
      motivated, in whole or substantial part, by these corporate business purposes.

(k)   The Distribution is not being used principally as a device for the distribution of the
      earnings and profits of Distributing or Controlled or both.

(l)   The total adjusted basis and the fair market value of the assets to be transferred
      to Controlled by Distributing in the Contribution each will equal or exceed the
      sum of the liabilities to be assumed (within the meaning of section 357(d)), if any,
      by Controlled plus any liabilities to which the transferred assets are subject.

(m)   The liabilities, if any, to be assumed (within the meaning of section 357(d)) by
      Controlled in the Contribution and the liabilities to which the transferred assets
PLR-112884-13                              9

      are subject were incurred in the ordinary course of business and are associated
      with the assets being transferred.

(n)   The fair market value of the assets of Controlled will exceed the amount of its
      liabilities immediately after the Contribution.

(o)   The fair market value of the assets transferred to Controlled in the Contribution
      will equal or exceed Controlled’s aggregate basis in those assets immediately
      after the Contribution.

(p)   Distributing neither accumulated its receivables nor made extraordinary payment
      of its payables in anticipation of the Proposed Transaction.

(q)   Immediately before the Distribution, items of income, gain, loss, deduction, and
      credit will be taken into account as required by the applicable intercompany
      transaction regulations (see Treas. Reg. §§ 1.1502-13 and 1.1502-14 as in effect
      before the publication of T.D. 8597, 1995-2 C.B. 147, and as currently in effect;
      Treas. Reg. § 1.1502-13 as published by T.D. 8597). Further, any excess loss
      account of a member in the stock of another member that is required to be taken
      into account by Treas. Reg. § 1.1502-19 will be included in income as
      appropriate. At the time of the Distribution, neither Distributing nor any member
      of Distributing’s consolidated group will have an excess loss account in the stock
      of Controlled or in the stock of any subsidiary of Controlled.

(r)   For purposes of section 355(d), immediately after the Distribution, no person
      (determined after applying section 355(d)(7)) will hold stock possessing 50
      percent or more of the total combined voting power of all classes of Distributing
      stock entitled to vote, or 50 percent or more of the total value of shares of all
      classes of Distributing stock, that was acquired by purchase (as defined in
      section 355(d)(5) and (8)) during the five-year period (determined after applying
      section 355(d)(6)) ending on the date of the Distribution.

(s)   For purposes of section 355(d), immediately after the Distribution, no person
      (determined after applying section 355(d)(7)) will hold stock possessing 50
      percent or more of the total combined voting power of all classes of Controlled
      stock entitled to vote, or 50 percent or more of the total value of shares of all
      classes of Controlled stock, that was either (i) acquired by purchase (as defined
      in section 355(d)(5) and (8)) during the five-year period (determined after
      applying section 355(d)(6)) ending on the date of the Distribution, or
      (ii) attributable to distributions on Distributing stock or securities that was
      acquired by purchase (as defined in section 355(d)(5) and (8)) during the five-
      year period (determined after applying section 355(d)(6)) ending on the date of
      the Distribution.
PLR-112884-13                                10

(t)    Payments made in connection with all continuing transactions between
       Distributing (or any of its subsidiaries) and Controlled (or any of its subsidiaries)
       following the Distribution will be for fair market value based on terms and
       conditions arrived at by the parties bargaining at arm’s-length, except for certain
       payments made for Transitional Services (which will be provided at cost).

(u)    No two parties to the Distribution are investment companies as defined in section
       368(a)(2)(F)(iii) and (iv).

(v)    The Distribution is not part of a plan or series of related transactions (within the
       meaning of Treas. Reg. § 1.355-7) pursuant to which one or more persons will
       acquire, directly or indirectly, stock representing a 50-percent or greater interest
       (within the meaning of section 355(d)(4)) in either Distributing or Controlled
       (including any predecessor of or successor to any such corporation).

(w)    Immediately after the transaction (within the meaning of section 355(g)(4)), either
       (i) any person that holds a 50-percent or greater interest (within the meaning of
       section 355(g)(3)) in any disqualified investment corporation (within the meaning
       of section 355(g)(2)) will have held such an interest in such corporation
       immediately before the transaction, or (ii) neither Distributing or Controlled is or
       will be a disqualified investment corporation (within the meaning of section
       355(g)(2)).

(x)    Distributing and Controlled, and their respective shareholders, will each pay their
       own expenses, if any, incurred in connection with the Proposed Transaction.

(y)    The aggregate amount of Distributing Debt exchanged for Controlled stock in the
       Debt-for-Equity Exchange will not exceed the weighted quarterly average of
       Distributing debt owed to unrelated third parties for the 12-month period ending
       at the close of business on the last full business day before the date on which the
       separation of Business A1 and Business A2 was first presented to Distributing’s
       Board of Directors.

(z)    The Distributing Debt was incurred by Distributing in the ordinary course of
       business and was not incurred in connection with, or in contemplation of, the
       Contribution, the Distribution, or the Debt-for-Equity Exchange.

(aa)   Any money, property, or stock contributed by Distributing to Controlled in the
       Contribution will be exchanged solely for stock or securities in Controlled.

(bb)   No Controlled stock is being distributed in the Distribution in exchange for
       Distributing stock.

                                        RULINGS
PLR-112884-13                                11


Based solely on the information submitted and the representations set forth above, and
provided that (i) the distribution of Controlled stock to Distributing’s shareholders in the
Distribution is with respect to their ownership of Distributing stock, (ii) any money,
property, or stock contributed by Distributing to Controlled in the Contribution is
exchanged solely for stock or securities in Controlled, and (iii) any other transfer of
stock, money, or property between Distributing, Controlled, or any Distributing
shareholder and any person related to Distributing, Controlled, or any Distributing
shareholder is respected as a separate transaction, we rule as follows:

(1)    The Contribution, together with the Distribution, will qualify as a reorganization
       within the meaning of section 368(a)(1)(D). Distributing and Controlled each will
       be a “party to a reorganization” within the meaning of section 368(b).

(2)    Distributing will recognize no gain or loss on the Contribution. Sections 357(a)
       and 361(a).

(3)    Controlled will recognize no gain or loss on the Contribution. Section 1032(a).

(4)    Immediately after the Contribution, Controlled’s basis in each asset received in
       the Contribution will equal the basis of that asset in the hands of Distributing
       immediately before the Contribution. Section 362(b).

(5)    Controlled’s holding period for each asset received in the Contribution will include
       the period during which Distributing held that asset. Section 1223(2).

(6)    Distributing will recognize no gain or loss on the Distribution. Section 361(c)(1).

(7)    Distributing will recognize no income, gain, deduction, or loss upon the Debt-for-
       Equity Exchange, other than any (i) deductions attributable to the redemption of
       any Distributing Debt at a premium, (ii) income attributable to the redemption of
       any Distributing Debt at a discount, and (iii) interest expense accrued with
       respect to the Distributing Debt. Section 361(c).

(8)    Distributing’s shareholders will not recognize any gain or loss (and will not
       otherwise include any amount in income) upon their receipt of Controlled stock in
       the Distribution. Section 355(a)(1).

(9)    Immediately after the Distribution, the basis in the hands of each Distributing
       shareholder of the Distributing stock and the Controlled stock that is distributed in
       the Distribution will equal the basis of the Distributing stock with respect to which
       the Distribution is made, allocated in proportion to the fair market values of the
       Distributing and Controlled stock immediately after the Distribution in accordance
       with Treas. Reg. § 1.358-2(a). Sections 358(a)(1), (b), and (c).
PLR-112884-13                                 12


(10)    The holding period of the Controlled stock received by each Distributing
        shareholder in the Distribution will include the holding period of the Distributing
        stock with respect to which the Distribution is made, provided the Distributing
        stock is held as a capital asset on the date of the Distribution. Section 1223(1).

(11)    Earnings and profits will be allocated between Distributing and Controlled in
        accordance with section 312(h) and Treas. Reg. §§ 1.312-10(a) and 1.1502-
        33(e)(3).

                                        CAVEATS

Except as expressly provided herein, no opinion is expressed or implied concerning the
tax consequences of any aspect of any transaction or item discussed or referenced in
this letter. We express no opinion about the tax treatment of the Proposed Transaction
under other provisions of the Code and the Treasury regulations or the tax treatment of
any condition existing at the time of, or effect resulting from, the Proposed Transaction
that is not specifically covered by the above Rulings. In particular, no opinion is
expressed or implied regarding:

(i)     Whether the Distribution satisfies the business purpose requirement of Treas.
        Reg. § 1.355-2(b);

(ii)    Whether the Distribution is being used principally as a device for the distribution
        of the earnings and profits of Distributing, Controlled, or both (see section
        355(a)(1)(B) and Treas. Reg. § 1.355-2(d)); or

(iii)   Whether the Distribution and any acquisition or acquisitions are part of a plan (or
        series of related transactions) under section 355(e)(2)(A)(ii).

                             PROCEDURAL STATEMENTS

This ruling is directed only to the taxpayer requesting it. Section 6110(k)(3) of the Code
provides that it may not be used or cited as precedent.

A copy of this letter must be attached to any income tax return to which it is relevant.
Alternatively, taxpayers filing their returns electronically may satisfy this requirement by
attaching a statement to their return that provides the date and control number of the
letter ruling.
PLR-112884-13                                  13

In accordance with the Power of Attorney on file with this office, a copy of this letter is
being sent to your authorized representative.


                                  Sincerely,



                                  Russell G. Jones
                                  Assistant to the Branch Chief, Branch 2
                                  Office of Associate Chief Counsel (Corporate)