Current developments: this two-part article discusses recent legislation, cases, rulings, regulations and other developments in the S corporation area. Part I focuses on eligibility, election and termination issues.

EXECUTIVE SUMMARY

* Notice 2005-91 offers guidance on how to make the "family election."

* The transactions addressed in IRS letter rulings are becoming more complex.

* Many rulings were issued on shareholder eligibility.

**********

Part I of this two-part article discusses developments in S eligibility, election and termination issues during the past year (July 2005-June 2006), including changes related to the American Jobs Creation of Act of 2004 (AJCA), a notice that explains the family shareholder election procedure, and a case on permitted year-ends for S corporations. In addition, letter rulings on corporate and shareholder eligibility are addressed. Part II, in the November 2006, issue will cover S corporation operational issues.

Eligibility, Elections and Terminations

The general definition of an S corporation includes restrictions on the type and number of shareholders, as well as the type of corporation that may qualify for the election. If an S corporation violates any of these limits, its S stares automatically terminates. However, the taxpayer can request an inadvertent termination ruling under Sec. 1362(f) and, subject to IRS approval, retain S status continuously. Congress had requested that the Service be lenient in granting inadvertent election and termination relief and it is clear from the rulings presented below that the IRS has listened.

"Family Election"

Prior to the AJCA, an S corporation could have only 75 shareholders. A husband and wife (and their estates) were treated as one shareholder. For tax years beginning after 2004, the AJCA increased the shareholder limit to 100; all fanny members are counted as one shareholder, if a family member so elects under Sec. 1361(c)(1)(D). A family consists of a common ancestor, and his or her lineal descendants and their spouses (including former spouses), according to Sec. 1361(c)(1)(B). The common ancestor can be no more than six generations removed from the youngest generation of family shareholders. Indirect ownership, such as a beneficiary of an electing small business trust (ESBT) or qualified subchapter S trust (QSST), will also be included in the one-family-member count. Every member of the family group who owns stock on the election date must consent to the S election. This liberalized treatment does not include nephews, nieces and cousins, as they are not lineal descendants.

Notice 2005-91 (1) offered guidance on how to make the fanny election. According to the notice, any member of the family can make the election by notifying the S corporation. The notification should identify by name the family member making the election, the "common ancestor" of the family the election applies to and the first tax year for which the election applies. In addition, it should include (1) each potential current beneficiary of an ESBT who is a family member; (2) the income beneficiary of a QSST that makes the QSST election, if that income beneficiary is a family member; (3) each beneficiary of a trust who is a family member, if the trust was created primarily to exercise the voting power of stock transferred to it; (4) the family member for whose benefit a trust described in Sec. 1361(c) (2)(A)(vi) was created; (5) the deemed owner of a trust treated as wholly owned under subpart E of Part I of subchapter J of Chapter 1 of Subtitle A of the Code, if that deemed owner is a family member; and (6) the owner of a disregarded entity, if that owner is a qualified member of the family.

The vast majority of S corporations do not have an excess-shareholder issue, but this year an S corporation requested Sec. 1362(f) inadvertent termination relief due to its number of shareholders. (2) The articles of incorporation limited the number of shareholders. However, shares were issued to too many investors, thus violating the articles of incorporation. As soon as the corporation became aware of the problem, it took corrective action. The entire time it had too many shares outstanding, it filed returns as if it were an S corporation. The Service concluded the corporation's S status had not terminated.

Other Elections

Late elections: In an attempt to reduce the number of late-filing requests, the IRS issued Rev. Proc. 2003-43, (3) which grants S corporations, qualified subchapter S subsidiaries (QSubs), ESBTs and QSSTs a 24-month extension to file Form 2553, Election by a Small Business Corporation, Form 8869, Qualified Subchapter S Subsidiary Election, or a trust election, without obtaining a letter ruling. It appears that the procedure is having its intended effect. Even though the IRS continues to receive a number of late-filing requests, (4) the number of letter rulings issued this year is less than half the number issued in the year prior to the procedure's issuance. In all those rulings, the IRS allowed S status from inception under Sec. 1362(b)(5), as long as the taxpayer filed a valid Form 2553 within 60 days of the ruling.

In a number of these situations, (5) the corporate minutes reflected the company's desire to be an S corporation and it contended that Form 2553 had been filed, but the Internal Revenue Service Center had no record of the filing. In another ruling, (6) the corporation filed both Form SS-4, Application for Employer Identification Number, indicating it planned to be an S corporation, and Form 1120S, U.S. Income Tax Return for an S Corporation. The shareholders included the income on their returns, but the company failed to file Form 2553.

In another instance, (7) a corporation failed to timely file (1) Form 2553, (2) an ESBT election for a trust that was a shareholder and (3) QSub elections for its subsidiaries. The Service granted the corporation relief from termination for all three types of elections.

In some situations, an entity is formed as either a limited liability company or a limited liability partnership, but seeks to be treated as an S corporation. In the past, the entity had to file Form 8832, Entity Classification Election, and Form 2553. In several instances, (8) the entity planned to file Form 8832, electing to be treated as a corporation, and Form 2553 to be taxed as an S corporation. Neither election was actually filed. The Service granted these entities relief and allowed S status from inception, as long as both forms were filed within 60 days of the ruling.

Treasury issued final regulations in 2005 (9) that eliminate the need to file Form 8832. Instead, a partnership or disregarded entity that would otherwise qualify as an S corporation and that makes a timely and valid election to be treated as an S corporation on Form 2553, will be deemed to have elected to be classified as an association taxable as a corporation. This regulation is effective for elections after July 20, 2004. Even though Form 8832 does not need to be filed when the election is made, the corporation must attach a copy to its first tax return. With the issuance of this regulation, the number of late-ruling requests should be reduced significantly.

In another case, (10) a corporation intended to be an S corporation, but failed to timely file Form 2553. The state the business was incorporated in administratively dissolved the corporation for failure to file an annual report and pay franchise tax. The business then reincorporated. The IRS concluded that the business was a corporation for income tax purposes, even though its status was terminated by the state; thus, it would treat the company's S election as timely if filed within 60 days of the ruling.

Likewise, in another ruling, (11) an S corporation lost its corporate status through a state administrative dissolution. Later, it took action to reincorporate. The Service determined the company did not lose its S status because of the administrative dissolution and, thus, did not have to make a new S election.

Who signs Form 2553?: When a corporation files Form 2553, all share holders must consent to the election. The question is, who signs the form for trusts and estates? In one situation, (12) a corporation elected S status after one of its shareholders died. A dependent administrator with a limited right to act for the estate without court approval, consented to the election on the estate's behalf. The IRS determined the administrator might not have been eligible to make the consent for the estate, thus terminating the S election, but ruled the termination inadvertent.

Corporate Eligibility

Type of corporation: Sec. 1361 does not allow certain types of corporations to elect S status, including certain financial institutions, insurance companies, foreign corporations and corporations electing Sec. 936 status. Many small community banks were also prevented from electing S status, because they were often owned by directors' IRAs. The AJCA addressed this problem by allowing certain IRAs (including Roth IRAs) to be shareholders of a bank S corporation.

This year, in a different situation, (13) a corporation made an S election. During the first year the company became an ineligible corporation, but in the second year it became eligible again. The ruling did not specify why the company became ineligible. The corporation and its shareholders treated it as an S corporation at all times and filed returns accordingly. The IRS concluded that when the corporation became ineligible, its S status terminated, but the termination was inadvertent.

Year-end: Under Sec. 1378(a), an S corporation may use only a permitted year (i.e., a calendar year or any other accounting period for which the corporation establishes a business purpose to the IRS's satisfaction). In Arnold, (14) a corporation elected S status and adopted a January 31 year-end, stating that it was the corporation's natural business year. Later, the IRS determined the S election was not valid, because the company elected an invalid year-end. The year-end was invalid because the company could not prove that at least 25% of its gross receipts were regularly earned in the last two months of the year. The Tax Court agreed with the IRS and ruled that the corporation was not eligible for relief under Rev. Proc. 97-49 (15) (the predecessor to Rev. Proc. 2003-43, discussed above); it failed to qualify as an S corporation because it did not use a permitted year (not because the election was filed late).

One class of stock: Sec. 1361(b) (1)(D) prohibits an S corporation from having more than one class of stock, defined as equal rights to distributions and liquidations, but not necessarily equal voting rights. In Letter Ruling 200546027, (16) an S corporation could have been deemed to have a second class of stock due to its distributions to shareholders and the terms of shareholder agreements. As soon as the corporation realized the problem, it (1) recharacterized distributions in excess of a shareholder's rightful amount as loans between the corporation and the shareholder; (2) amended the current shareholder agreements to mandate that the purchase price for shares equal their fair market value (FMV); and (3) required that all distributions to shareholders be proportionate to stock ownership. The termination was inadvertent and the new agreement did not create a second class of stock.

In another instance, (17) a company had two classes of stock when it elected S status. The corporation's tax advisers were not aware of the second class of stock and the shareholders did not know that it would create a problem. In addition, the corporation contended that it did not treat the preferred stock as being issued and outstanding. When the owners were made aware of the problem, the common shareholders purchased the preferred stock from the other owners. After the purchase, the corporation converted the stock to common stock. The Service determined the operating agreement created a second class of stock that terminated the S election, but that the termination was inadvertent.

In another ruling, (18) two S corporations had identical shareholders and percentage ownership. The first corporation wanted to issue stock options to employees of the foreign affiliates of the second corporation. The option strike price would be equal to or greater than FMV. The IRS concluded that the options would not create a second class of stock.

QSub elections: A subsidiary that wants to be treated as an S corporation must be wholly owned by the parent S corporation and a QSub election must be properly filed. The election should be filed on Form 8869, by the 15th day of the third month after the effective date. In the past, there were numerous ruling requests on late filings of this election. However, the AJCA made an important change to the QSub rules. The IRS can now waive inadvertently invalid QSub elections and terminations that occur after 2004, if the conditions of Sec. 1362(f) are met. This is consistent with Rev. Proc. 2004-49, (19) which simplifies the procedure to request relief for a late QSub election, by allowing the S corporation to attach a completed Form 8869 to a timely filed return for the tax year the QSub was created. The form should note at the top of the page: "Filed under Rev. Proc. 2004-49." This year, only one ruling (20) requested relief for the late filling of a QSub election. The Service determined that good cause had been shown for the delay and granted a 60day extension from the ruling date to make the election.

E&P Issues

If an S corporation has subchapter C accumulated earnings and profits (AEP), it must carefully monitor the composition of its gross receipts. After passage of the AJCA, certain banks and bank and financial holding companies do not have to include in passive investment income (PII), interest income and dividends on assets required to be held by the bank or holding company (e.g., Federal Reserve, Federal Home Loan Bank stock or participation certificates). This change is effective for tax years beginning after 2004.

Par for the course, most of the rulings dealt with whether rental real estate activities were active or passive for Sec. 1362(d)(3)(C) purposes. Regs. Sec. 1.1362-2(c)(5)(ii)(B) requires either significant services be performed or significant costs be incurred to elevate an activity to nonpassive. Since the issuance of the regulations, the Service seems to be more lenient in its definition of passive income. As a result, the number of ruling requests is down significantly. This year, rental income from shopping centers was deemed to be active income. (21) The S corporation provided various services to the tenants, including utilities and maintenance for the common areas, landscaping, garbage removal and security. In addition, it handled leasing and administrative functions, including billing, collecting rent, finding new tenants and negotiating leases.

The IRS issued a couple of rulings this year in which the corporation's S status terminated because of its PII. In one situation, (22) an S corporation with AEP received more than 25% of its receipts from PII for three consecutive years. The first day of year 4, the company's S election terminated. It contended that the termination was inadvertent and not for tax-avoidance purposes, and it agreed to make any adjustments needed to retain S status. The Service decided that the termination was inadvertent and allowed the company to retain S status if, within 60 days, it filed an amended return for the third year, with an election under Regs. Sec. 1.1368-1(f)(3) to make a deemed dividend distribution of its AEP. If a corporation makes a deemed dividend election, it will be deemed to have paid a taxable dividend to the shareholders, followed by a capital contribution by them. Thus, each shareholder will have to file an amended return to include the additional dividend in income and pay the additional tax due. Each shareholder will also reflect an increase in stock basis for the deemed capital contribution.

Likewise, in another letter ruling, (23) an S corporation acquired all the stock of another corporation with AEP and elected to treat the subsidiary as a QSub. For three years, the S corporation had AEP and received more then 25% of its gross receipts from PII, thus terminating its S election. The deemed dividend result discussed above was the prescription for year 3 here, too.

Shareholder Eligibility

Sec. 1361(b) restricts S corporation share ownership to U.S. citizens, resident individuals, estates, certain trusts and certain tax-exempt organizations. In one instance, (24) two S shareholders gifted stock to an ineligible shareholder. When the corporation and shareholders became aware of the problem, the stock was transferred back to the original shareholders. The Service found the transfer terminated the S election, but the termination was inadvertent. The corporation would be treated as an S corporation as long as the ineligible shareholder was never treated as a shareholder. Thus, the two original shareholders would have to adjust their incomes to reflect the ineligible shareholder's share of income for the period it held the stock.

Likewise, (25) an ineligible shareholder purchased one share of an S corporation's stock. When the corporation discovered that the stock was held by an ineligible shareholder, it was transferred to an eligible shareholder. The IRS determined the termination was inadvertent. This ruling did not say who has to report the S corporation income during the period held by the ineligible shareholder. However, based on other rulings, it would appear that the eligible shareholder would be treated as the owner of the stock for that period.

In another situation, (26) S stock was originally purchased by an ineligible shareholder. Subsequently, it transferred the stock to eligible shareholders. The S corporation did not become aware of the problem until after the transfer. The entity and its shareholders agreed to make any adjustments required by the IRS (presumably, amending returns to reflect the eligible shareholders as the owners of the stock for the period it was held by the ineligible shareholder). The IRS ruled that the S election was inadvertently invalid.

A corporation (27) intended to be an S corporation, but never filed the election. In addition, shares were owned by an ineligible shareholder. Steps were taken to remove the ineligible shareholder, but the ruling did not detail them. Either the corporation could redeem the shareholder's stock, or eligible shareholders could purchase it. In either case, the ineligible shareholder might have to report a gain or loss on the stock sale. If the corporation redeemed the stock, the ineligible shareholder would have to report its share of the S corporation's income or loss while it held the stock. If other shareholders purchased the stock, the ineligible shareholder would probably be treated as never owning the stock, and the other shareholders would report the income or loss from the S corporation. The Service concluded that the corporation established reasonable cause for not making a timely S election; thus, the corporation will be treated as an S corporation.

In another situation, (28) S shares were issued to a nonresident alien (NRA), who was an ineligible shareholder. After the problem was discovered, all of the S stock was sold to an eligible shareholder. The IRS determined the transfer of the shares to the NRA terminated the S election, but that the termination was inadvertent. Inexplicably, it concluded that the NRA would be treated as a shareholder while he held the stock and, thus, he had to report his share of S corporation income in determining his U.S. tax liability.

Partnerships

In a unique situation, (29) a corporation elected S status. Pursuant to its accountant's recommendation, a portion of the stock was held by entities taxed as partnerships, as nominees of eligible shareholders. After the S election was filed, the accountant died; the new one recommended the partnerships distribute the stock to the eligible shareholders and request a letter ruling. The IRS concluded the transfer to the partnerships might have terminated S status, but that it was inadvertent. However, the eligible shareholders had to report the income for the entire time in question.

In another case, (30) two of the shareholders of a corporation electing S status transferred their interests to a partnership, an ineligible shareholder. Subsequent to the S election, the shares were transferred back to the partnership's owners. The Service found that the S election was invalid, but inadvertently so, and allowed S status. Because the ineligible shareholder was a passthrough entity, the original S shareholders were presumably treated as the shareholders for the entire period in question and would report the S income on their personal returns.

In another ruling, (31) an S corporation had a sole shareholder. He subsequently transferred all of the shares to a limited partnership, which was an ineligible shareholder. After the corporation's attorney informed him that the transfer terminated the S election, the limited partnership distributed the stock back to the partner. The Service found the termination inadvertent and the corporation was deemed an S corporation for the entire time, as long as the shareholder was treated as the owner of the stock for the period in question.

In a similar situation, (32) the IRS determined a corporation's S election was ineffective because one of its shareholders was an S corporation. When the corporation became aware of the problem, the S corporation shareholder transferred its shares to two trusts that were eligible shareholders. The Service allowed the S election contingent on the S corporation and the shareholders making the necessary adjustments consistent with the treatment of the corporation as an S corporation from inception.

IRAs

After the AJCA, IRAs can be S shareholders, but only if the S corporation is a bank S corporation. Every year, there are numerous rulings in which stock is erroneously transferred to an IRA. In one ruling, (33) an IRA, an ineligible shareholder, acquired S stock pursuant to a court order regarding the dissolution of the shareholder's marriage. The shareholder had held the S stock in a Sec. 401(k) account and was required to transfer it to his ex-wife's IRA. When the problem was discovered, the shares were transferred to the ex-wife. Because the issuance was not for tax-avoidance or retroactive tax planning purposes, the IRS ruled the termination inadvertent.

In another ruling, (34) an S corporation issued stock to two IRAs. When the company discovered the problem, the shares were transferred to the IRAs' beneficiaries. The Service determined that the termination of the S election was inadvertent, contingent on the S corporation treating the IRA beneficiaries as the shareholders from inception.

In another instance, (35) S stock was inadvertently issued to an IRA, rather than to the individual who owned the IRA. When the error was found, the corporation redeemed all the stock issued to the IRA. In addition, it treated the IRA owner as the owner of the stock. The Service concluded that the termination of the S election was inadvertent and the IRA owner would be treated as the stock's owner.

Trusts

Certain trusts are allowed to own S stock. However, trusts must comply with strict rules to continue to be an eligible shareholder. Thus, an S corporation and its tax advisers must constantly monitor its trust shareholders' elections, trust agreements and their subsequent modifications, for compliance with S eligibility rules.

Testamentary Trusts 

In one situation, (36) a trust was set up on the death of an S shareholder. The trust qualified as a QSST, but the beneficiary failed to file a QSST election.

The Service found that the company's S election terminated, but as the termination was inadvertent, it allowed the company to retain S status as long as the beneficiary filed a valid QSST election within 60 days of the ruling.

A trust set up under a will can own S stock for two years only. After the two-year period, the trust is an ineligible shareholder unless a qualified election is made. An S corporation (37) had a grantor trust as one of its shareholders. The owner of the trust died, causing the trust to become irrevocable. The trust was still a qualified shareholder for two years. At that point, the trust either had to distribute the stock to an eligible shareholder or make a QSST election. In this instance, the beneficiary meant to make a QSST election but failed to do so, thus terminating the S election. The Service determined the termination was inadvertent, but required the beneficiary to make any necessary adjustments to income and basis to reflect his share of the S corporation's income.

In a similar situation, (38) a trust tried to transfer its shares to another trust, but the transfer was deemed null and void under a shareholder agreement. The trust failed to distribute its shares within the two-year period. It subsequently transferred its shares to a QSST. The IRS allowed the corporation to retain S status.

Also (39) a trust did not distribute S stock in time and, thus, became an ineligible shareholder. The trust agreement called for it to distribute the stock to certain subtrusts, one a grantor trust owned by the decedent's wife. Some, but not all, of the stock was transferred within the two-year period. As discussed above, the Service found that the failure to distribute the assets terminated the S election, but the termination was inadvertent. This ruling was contingent on (1) all shareholders treating the company as an S corporation and (2) the trusts reporting their shares of S income on their fiduciary tax returns.

Other Trust Issues

Election requirements: Another problem is that for both a QSST and an ESBT, a separate election must be made for the trust to qualify as an eligible S shareholder. Often, this election is filed incorrectly and an inadvertent termination ruling is needed. This year, there were numerous instances (40) in which a trust was intended to be treated as either a QSST or an ESBT and met all the requirements, but the beneficiary failed to file the election. The IRS determined in each case that there was good cause for the failure to make the election and granted a 60-day extension from the ruling date to make it. In each of these cases, the ruling was contingent on the corporation being treated as an S corporation from the time the trust received the stock until the present. Thus, shareholders had to include their pro-rata shares of the corporation's income, make any needed adjustments to basis and take into account any distributions made by the S corporation. If necessary, amended tax returns for the corporation and its shareholders were required.

In a slightly different situation, (41) S stock was held by a trust. It divided into four successor trusts and distributed stock to each. Each of the four successor trusts was eligible to be a QSST. However, the beneficiary of only one of the successor trusts actually made the QSST election. The failure of the other three successor trusts to make the election terminated the S election. One requirement for a QSST is that it distribute all of its income annually. In a second terminating event, the trust that had made the QSST election failed to distribute all of its income. The Service determined both termination events were inadvertent and allowed the corporation to retain S status as long as the three trusts completed the QSST election properly. In addition, the corporation and the trust that had made the QSST election were required to file amended returns consistent with treating the trust as a QSST.

In another situation, (42) in addition to a Failure to make an ESBT election, S stock was owned by two IRAs. When both problems were discovered, the corporation initiated corrective action. The IRS found that either event would terminate the S election, but deemed both to be inadvertent.

In another instance, (43) the Service ruled on how a modification of a trust would affect its QSST status. A shareholder died; a testamentary trust was created that qualified as a QSST. The trustees petitioned a court to permit judicial modifications to the trust. Under the modifications, on the death of the trust beneficiary, the trustees would divide the trust into separate shares for each of the beneficiary's living children and grandchildren on a pro-rata basis. Each separate share would be held in a trust that would qualify as a QSST. Regs. Sec. 1.13611 (j) (3) provides that substantially separate and independent shares of a trust are treated as a separate trust. However, under Rev. Rul. 93-31, (44) a substantially separate and independent share of a trust is not a QSST if there is a remote possibility that the corpus will be distributed during the life of the current income beneficiary to someone other than the beneficiary. Based on the facts presented, the Service determine that the separate shares creat ed by the court-approved modification will qualify under Regs. Sec. 1.13611 (j) (3). Thus, the trust will continue to be a QSST and will not terminate the corporation's S status.

Terminations

Under Sec. 1362(g), if an S election is terminated, the corporation is not eligible to re-elect S status for five tax years. S and C corporation short years are treated as two separate tax years. In two instances, (45) a corporation had revoked its S election. All of the stock was then sold to new owners who wanted to elect S status. Even though the timeframe was not five years, the Service allowed the corporation to re-elect S status, because there was a more-than-50%-change in ownership.

In another situation, (46) a sole S shareholder transferred his stock to a trust that was an ineligible shareholder and terminated the S election. The trust sold the stock to unrelated persons. The corporation requested permission to re-elect S status prior to the five-year waiting period, which the Service allowed.

In another ruling, (47) an S corporation revoked its election. The shareholders intended to adopt an employee stock ownership plan (ESOP), under which the ESOP would purchase 100% of the stock from the shareholders. The corporation would then elect S status. The taxpayer was allowed to re-elect S status prior to the termination of the five-year waiting period, on the condition that the S shareholders did not make a Sec. 1042 election for the sale of their stock to the ESOP and the corporation did not consent to any such election under Secs. 4978 and 4979A.

Conclusion

The second part of this article, in the November 2006 issue, will examine recent S corporation operational issues.

Editor's note: Dr. Karlinsky is a member of the AICPA Tax Division's C Corporation Taxation Technical Resource Panel (TRP). Dr. Burton is a member of the AICPA Tax Division's S Corporation Taxation TRP.

(1) Notice 2005-91, IRB 2005-51, 1164.

(2) IRS Letter Ruling 200548012 (12/2/05).

(3) Rev. Proc. 2003-43, IRB 2003-23, 998.

(4) See, e.g., IRS Letter Rulings 200622012 (6/2/06), 200617032 (4/28/06), 200602010 (1/13/06) and 200543013 (10/28/05).

(5) See, e.g., IRS Letter Rulings 200616011 (4/21/06), 200602013 (1/13/06) and 200551004 (12/23/05).

(6) IRS Letter Ruling 200619017 (5/12/06).

(7) IRS Letter Ruling 200541035 (10/14/05).

(8) See, e.g., IRS Letter Rulings 200623064 (6/9/06), 200616006 (4/21/06), 200606025 (2/10/06) and 200550023 (12/16/05).

(9) TD 9203 (5/20/05).

(10) IRS Letter Ruling 200616002 (4/21/06).

(11) IRS Letter Ruling 200622019 (6/2/06).

(12) IRS Letter Ruling 200607004 (2/17/06).

(13) IRS Letter Ruling 200602014 (1/13/06).

(14) Edward Arnold, TC Memo 2005-256.

(15) Rev. Proc. 97-49, 1997-2 CB 523.

(16) IRS Letter Ruling 200546027 (11/18/05).

(17) IRS Letter Ruling 200541028 (10/14/05).

(18) IRS Letter Ruling 200617006 (4/28/06).

(19) Rev. Proc. 2004-49, IRB 2004-33, 10.

(20) IRS Letter Ruling 200548011 (12/2/05).

(21) IRS Letter Ruling 200546001 (11/18/05).

(22) IRS Letter Ruling 200610002 (3/10/06).

(23) IRS Letter Ruling 200618012 (5/5/06).

(24) IRS Letter Ruling 200548014 (12/2/05).

(25) IRS Letter Ruling 200620005 (5/19/06).

(26) IRS Letter Ruling 200620013 (5/19/06).

(27) IRS Letter Ruling 200613008 (3/31/06).

(28) IRS Letter Ruling 200621009 (5/26/06).

(29) IRS Letter Ruling 200550031 (12/16/05).

(30) IRS Letter Ruling 200605005 (2/3/06).

(31) IRS Letter Ruling 200603010 (1/20/06).

(32) IRS Letter Ruling 200602024 (1/13/06).

(33) IRS Letter Ruling 200621003 (2/8/06).

(34) IRS Letter Ruling 200619018 (5/12/06).

(35) IRS Letter Ruling 200542007 (10/21/05).

(36) IRS Letter Ruling 200606010 (2/10/06).

(37) IRS Letter Ruling 200618002 (5/5/06).

(38) IRS Letter Ruling 200602015 (1/13/06).

(39) IRS Letter Ruling 200542031 (10/21/05).

(40) See, e.g., IRS Letter Rulings 200620006 (5/19/06), 200617012 (4/28/06), 200608010 (2/24/06), 200607001 (2/17/06) and 200606026 (2/10/06).

(41) IRS Letter Ruling 200621008 (5/26/06).

(42) IRS Letter Ruling 200510024 (3/11/05).

(43) IRS Letter Ruling 200616024 (4/21/06).

(44) Rev. Rul. 93-31, 1993-1 CB 186.

(45) IRS Letter Rulings 200615016 (4/14/06) and 200542016 (10/21/05).

(46) IRS Letter Ruling 200614003 (4/7/06).

(47) IRS Letter Ruling 2006021 (1/13/06).