SERVICE PROVIDES CHECKLIST TO ACCOMPANY ALL RULING REQUESTS ON LIMITED PARTNERSHIP CLASSIFICATION.
Rev. Proc. 91-13; 1991-1 C.B. 477
- Institutional AuthorsInternal Revenue Service
- Cross-Reference
Rev. Proc. 89-12, 1989-1 C.B. 798
- Code Sections
- Subject Areas/Tax Topics
- Index Termsbusiness organizations, classification
- Jurisdictions
- LanguageEnglish
- Tax Analysts Electronic Citation91 TNT 33-17
Rev. Proc. 91-13
SECTION 1. PURPOSE
This revenue procedure amplifies Rev. Proc. 89-12, 1989-1 C.B. 798, by providing a checklist to ensure that taxpayers requesting private letter rulings on limited partnership classification (under section 301.7701-2 of the Procedure and Administration Regulations) submit the necessary documents and representations to comply with Rev. Proc. 89-12. This revenue procedure provides a checklist that must accompany all such requests.
SEC. 2. BACKGROUND
The Internal Revenue Service receives many requests for rulings in which the information identified as necessary in the appropriate revenue procedure is not provided. In such a case, it is necessary to get additional information from the taxpayer before the ruling request can be considered. This is time consuming for both Service personnel and the taxpayer and delays issuance of the ruling letter.
Careful completion of this checklist will facilitate processing of a ruling request under section 301.7701-2 of the regulations because all of the information required by Rev. Proc. 89-12 will be in the request. This should avoid much needless delay and permit rulings to be issued sooner.
SEC. 3. CHECKLIST
See Appendix A.
SEC. 4. USE OF COPIES OR OTHER REPRODUCTIONS
Photocopies of this checklist from the Internal Revenue Bulletim or the Cumulative Bulletin may be used. If the I.R.B. or the C.B. is not available to copy, copies of this checklist may be obtained by calling T. Wayne Thomas at (202) 566-3129 (not a toll-free call). In addition, a reproduction of this checklist in substantially the same form as it appears in this revenue procedure may be used.
SEC. 5. COMMENTS OR INQUIRIES
Comments or inquiries regarding this revenue procedure should refer to its number and should be addressed to the Associate Chief Counsel (Technical), Attention: CC:P&SI:03, Internal Revenue Service, Washington, D.C. 20224.
SEC 6. EFFECT ON OTHER REVENUE PROCEDURES
Rev. Proc. 89-12 is amplified.
SEC. 7. EFFECTIVE DATE
This revenue procedure is effective March 13, 1991, thirty days after this revenue procedure was published in the Internal Revenue Bulletin.
DRAFTING INFORMATION
The principal author of this revenue procedure is John Kramer of the Office of Assistant Chief Counsel (Passthroughs and Special Industries). For further information regarding this revenue procedure, contact Mr. Kramer on (202) 377-9660 (not a toll-free call).
APPENDIX A
CHECKLIST FOR CLASSIFICATION OF AN ENTITY AS A LIMITED PARTNERSHIP
NAME OF TAXPAYER ____________________________________________________
INSTRUCTIONS
The Service will be able to respond more quickly to your ruling request if it is carefully prepared and complete. Please use this checklist to ensure that your request is in order.
Answer each question by circling the appropriate answer: "Yes," "No," or "N/A" (not applicable). Where space is provided, insert the page number of the request that contains the information necessary to substantiate the circled answer. The taxpayer or authorized representative should sign and date the checklist and place it on top of the request.
Failure to (1) provide the information required by Rev. Proc. 89-12, (2) provide any other information required by other revenue procedures referred to in this checklist, or (3) complete and submit the checklist with your ruling request will result in the request being returned to you. In extraordinary circumstances, the Service may retain the request and defer substantive consideration until the checklist is provided.
CIRCLE ONE ITEM
Yes No N/A 1. Have you read and complied with the requirements
and procedures of the Associate Chief Counsel
(Technical), including the checklist, as set forth
in the "-1" revenue procedure of the current
calendar year, e.g., Rev.
Proc. 91-1, 1991-1 I.R.B. 9? The "-1" revenue
procedure is published in the first I.R.B. of the
year.
Yes No N/A 2. Have you read section 3 of the "-3" revenue
procedure of the current calendar year, which sets
forth issues on which the Service will not rule?
The "-3" revenue procedure is published in the
first I.R.B. of the year.
Yes No N/A 3. Is the requested ruling within the no rule area in
the "-3" revenue procedure?
Yes No N/A 4. Will the interests (including limited partnership
interests) of all the general partners, taken
together, in each material item of partnership
income, gain, loss, deduction, or credit equal at
least 1 percent of each such item at all times
during the existence of the partnership? If the
answer to Item 4 is yes circle "N/A" for Items 5,
6, 7, 8 and 9 and proceed to Item 10.
Yes No N/A 5. Does the limited partnership have total
contributions in excess of $50 million?
Yes No N/A 6. If the answer to Item 5 is yes, will the general
partners' aggregate interest at all times in each
material partnership item be at least 1 percent
divided by the ratio of total contributions to $50
million?
Yes No N/A 7. Is the 1-percent standard referred to in Item 4 or
6 not satisfied because of a temporary allocation
required under section 704(b) of the Internal
Revenue Code, section 704(c), or corresponding
Income Tax Regulations?
Yes No N/A 8. If the answer to Item 7 is yes, does the ruling
Page __ request explain the entity's method of allocation?
Yes No N/A 9. Will the general partners' interest in net profits
and losses be material over the anticipated life of
the partnership?
Yes No N/A 10. Are the limited partnership's capital accounts
going to be maintained in accordance with section
704(b) of the Internal Revenue Code?
Yes No N/A 11. Will the general partners, taken together, maintain
a minimum capital account balance equal to either 1
percent of total positive capital account balances
for the partnership or $500,000, whichever is less?
If the answer to Item 11 is yes circle "N/A" for
Items 12 and 13 and proceed to Item 14.
Yes No N/A 12. Will at least one general partner contribute, or
has at least one general partner contributed,
substantial services in its capacity as a partner,
apart from services for which guaranteed payments
under section 707(c) of the Code are made?
Yes No N/A 13. Does the partnership agreement expressly provide
Page __ that, upon the dissolution and termination of the
partnership, the general partners will contribute
to the partnership an amount equal to: (a) the
deficit balances, if any, in their capital
accounts; or (b) the excess of 1.01 percent of the
total capital contributions of the limited partners
over the capital previously contributed by general
partners; or (c) the lesser of (a) or (b)?
Yes No N/A 14. Is the limited partnership formed in a state with a
statute that the Service has ruled corresponds to
the Uniform Limited Partnership Act or the Revised
Uniform Limited Partnership Act?
Yes No N/A 15. In the case of the removal of the last general
Page __ partner, does the partnership agreement permit
less than a majority in interest of limited
partners to elect a new general partner to continue
the partnership?
Yes No N/A 16. Do limited partnership interests, excluding those
held by general partners, exceed 80 percent of the
total interests in the partnership?
Yes No N/A 17. Has the limited partnership submitted information
(for example, balance sheets) to establish that the
net worth of the corporate general partners (not
counting their interest in the partnership) equals
at least 10 percent of the total contributions to
the limited partnership, and is expected to
continue to equal at least 10 percent of the total
contributions throughout the life of the
partnership?
Yes No N/A 18. If the answer to Item 17 is no, do the corporate
general partners have substantial assets, other
than their interests in the partnership, that could
be reached by a creditor of the partnership?
Yes No N/A 19. If the general partners are individuals, do they
have substantial assets, other than their interests
in the partnership, that could be reached by
creditors of the partnership?
Yes No N/A 20. If the limited partnership is seeking to lack free
Page __ transferability of interests, has it described the
provisions that restrict the transfer of interests?
The following Items concern general information that must be provided
in order for the Service to issue a letter ruling pursuant to
Rev. Proc. 89-12.
Yes No N/A 21. Has the limited partnership responded fully to
items of general information requested in sec. 3.03
of Rev. Proc. 89-12?
Page Number Insert the page number that contains the following
information:
_____ (1) The name and identification number of the
organization.
_____ (2) The business of the organization.
_____ (3) The date and place of filing the partnership
certificate, or the anticipated date and place.
_____ (4) The state whose law controls the formation and
operation of the organization, and whether or not
the controlling law is a statute corresponding to,
as applicable, the Uniform Partnership Act,
the Uniform Limited Partnership Act (1916), or the
Revised Uniform Limited Partnership Act (1976)
with or without amendments.
_____ (5) If the Service has not determined that the
controlling state statute corresponds to the
applicable Uniform Act for purposes of section
301.7701-2 of the regulations, a list of all
substantial differences.
_____ (6) A representation that the organization has been,
and will be at all times, in conformance with the
controlling state statute.
_____ (7) The nature, amount, and timing of the capital
contributions made and to be made by both the
general partners and the limited partners.
_____ (8) The extent of participation of the general
partners and the limited partners in profits and
losses, including any possible shift in the profit
and loss sharing ratios over time.
_____ (9) A description of the relationships, direct and
indirect, between the limited partners and the
general partners that suggest that the general
partners, individually or in the aggregate, may
not at all times act independently (because of
individual or aggregate limited partner influence
or control).
_____ (10) A representation of the net worth (based on assets
at current fair market value) of each general
partner, excluding interests in the partnership, a
description of all general partner assets and
liabilities arising from transactions with the
partnership or with a person related to any
general partner under section 267(b) or section
707(b)(1) of the Code, and a description of all
other partnerships in which any of the general
partners has an interest.
_____ (11) If, and to the extent that, section 4 of Rev.
Proc. 89-12 applies to the organization, a
detailed description of how each of the applicable
provisions therein is satisfied.
Yes No N/A 22. Has the limited partnership provided copies of all
necessary documents requested in sec. 3.04 of Rev.
Proc. 89-12?
Page Number Insert the page number that contains the following
information:
_____ (1) The partnership agreement.
_____ (2) The partnership certificate filed or to be filed
with the state in which the organization is
formed.
_____ (3) The registration statement filed or to be filed
with the Securities and Exchange Commission. (A
draft is acceptable.)
_____ (4) If a registration statement is not required to be
filed with the Securities and Exchange Commission,
then documents filed or to be filed with any
federal or state agency engaged in the regulation
of securities and any private offering memorandum.
(Drafts are acceptable.)
_____ (5) A copy of the applicable state or foreign
statutes, and amendments, under which the
organization was or will be formed.
_____ (6) An outline or copies of all promotional material
used to sell interests in the organization,
highlighting statements about probable tax
consequences and the effect of the requested
ruling upon the tax consequences.
____________________________________________________________________
Printed Name of Taxpayer or Authorized Representative
____________________________________________________________________
Signature of Taxpayer or Authorized Representative Date
- Institutional AuthorsInternal Revenue Service
- Cross-Reference
Rev. Proc. 89-12, 1989-1 C.B. 798
- Code Sections
- Subject Areas/Tax Topics
- Index Termsbusiness organizations, classification
- Jurisdictions
- LanguageEnglish
- Tax Analysts Electronic Citation91 TNT 33-17
