Guideline for Section 118 Tax Incentives Information Document Request (Rev. 10/2008)

1.  During the tax year ____, did the corporation obtain or receive any state or local tax-related waiver, reduction, rebate, abatement, inducement, credit, discount, exemption, and/or refund from any state or local governmental entities (each, a “tax incentive”)?

2.  For each tax incentive, state the terms of the tax incentive and provide all documents (including but not limited to any and all letters, term sheets, contracts, agreements, memoranda of understanding, promotional materials, applications, emails, etc…) between the corporation (or intermediaries acting on the corporation’s  behalf) and the state or local entity responsible for providing the tax incentive.

3.  For each tax incentive, state the amount and explain the form in which the incentive was provided (such as in the form of a credit, coupon, cash refund, tax rate reduction, or otherwise) and provide a computation of how the amount was calculated.

4.  For each tax incentive, explain any conditions or requirements imposed by the state or local entities on allowance of the tax incentive.  If the corporation was required to provide receipts or other documentation to the state or local entity, please provide the receipts and all other documents provided in fulfilling the requirement.
 
5.  For each tax incentive, describe how the tax incentive was treated for book purposes and for federal income tax purposes, and provide all supporting workpapers and documents.

6.  (a)  For each tax incentive, indicate whether the corporation treated the tax incentive as a contribution to capital under IRC §118 with a corresponding basis reduction under IRC §362(c) for federal income tax purposes. 

      (b)  Identify the assets the bases of which were reduced under IRC § 362(c) and by how much.  Furnish the depreciation computations for each asset.

7.  (a)  State the amount of the IRC §164 deduction claimed in [year] and provide the computations and supporting workpapers.  State the amount of state and local taxes actually paid or refunded with respect to the same year and provide the computations and supporting workpapers.

      (b)  State the difference, if any, between the amount of the IRC §164 deduction claimed and the amount of state and local taxes actually paid and state the legal basis under which the corporation claims an IRC §164 deduction for taxes not actually paid.

8.  For the tax year _____, state the amount accrued in estimated state and local taxes for financial purposes.

9.  For each incentive excluded under IRC §118:
     (a)  Did Taxpayer or any of its affiliates or subsidiaries receive external advice from outside counsel, accountants, auditors, investment bankers, consultants, or any other third party professionals (the “Outside Professionals”) prior to forming its tax position regarding the tax treatment of any of the incentives discussed above?
     (b)  If so, for each excluded item where outside advice was received, please state the advice provided, and state the fee arrangement, provide the engagement letter, and provide copies of all communications, including, but not limited to, any legal opinions, comfort letters, analyses, memoranda, recommendations, and emails, discussing the tax treatment of the excluded item between Taxpayer and such Outside Professional(s).
    (c)  Did Taxpayer or any of its affiliates or subsidiaries receive advice from its own internal legal or tax departments regarding the tax treatment of any of the incentives discussed above?
    (d)  If so, for each excluded item where internal advice was received, please state the advice provided, who provided the advice, and provide copies of all communications, including, but not limited to, any meeting minutes or notes, analyses, memoranda, recommendations, and emails discussing the tax treatment of the excluded item between Taxpayer and members of its internal tax or legal departments.
    (e)  If the advice between Taxpayer’s outside professional and internal departments differed, state the basis of the difference and the steps that Taxpayer undertook to reconcile the difference in forming its tax position.
    (f)  State whether Taxpayer or any of its affiliates or subsidiaries relied upon the internal and/or the outside advice provided.