What is a Technical Advice Memorandum (TAM) from the IRS?

A Technical Advice Memorandum (TAM) is a written statement issued by the IRS National Office to, or furnished to, a Director of a Taxpayer Service Center or a District Director. It provides guidance and interpretations of tax law on a specific issue or question raised by the IRS field office during an examination, audit, or other administrative proceeding. In this case, it provides a definitive ruling on the 'placed-in-service' status of Marriott's synthetic fuel facilities.

What was the IRS field auditors' challenge, and how does this TAM resolve it?

The IRS field auditors had challenged whether Marriott's synthetic fuel facilities met the 'placed-in-service' requirement under Section 29. The IRS National Office's TAM provides a higher level of review and confirms that, in their opinion, the facilities do meet this requirement. This ruling effectively overrides or resolves the field auditors' challenge, providing clarity and certainty for Marriott regarding the tax treatment of these ventures.

Does this ruling directly impact Marriott's reported earnings or stock price immediately?

This filing is an 8-K reporting an event, specifically a tax-related clarification. While it's a positive development that resolves a potential tax issue and secures the benefit of tax credits, the immediate impact on reported earnings or stock price isn't guaranteed by this filing alone. Investors will likely look for further details in subsequent financial reports (like 10-Q or 10-K) to see how the secured tax credits are reflected in the company's financials and to assess any potential impact on future earnings and cash flow.

MAR 8-K SEC Disclosure — Jun 27, 2005

Q: Why is the 'placed-in-service' requirement under Section 29 of the Internal Revenue Code important for Marriott?

Section 29 of the Internal Revenue Code provides tax credits for the production of certain types of fuels, including synthetic fuels. For a facility to qualify for these tax credits, it generally must be 'placed in service' by a certain date and meet other criteria. Confirmation that Marriott's facilities meet this requirement is essential for the company to claim and benefit from these valuable tax credits, potentially reducing its overall tax burden.

Summary

Marriott International, Inc. (MAR) announced on June 27, 2005, a significant development regarding its synthetic fuel ventures. The IRS National Office issued a Technical Advice Memorandum (TAM) confirming that the synthetic fuel facilities owned by these ventures meet the crucial 'placed-in-service' requirement under Section 29 of the Internal Revenue Code. This ruling is a positive outcome for Marriott, as it addresses a prior challenge by IRS field auditors regarding these facilities. The confirmation from the IRS National Office is important because it relates to tax credits available under Section 29 of the Internal Revenue Code, which provides incentives for the production of synthetic fuels. This favorable ruling mitigates potential tax liabilities and strengthens the financial position of Marriott's synthetic fuel ventures, potentially impacting the company's overall tax benefits and profitability.

Key Highlights

1IRS National Office issued a Technical Advice Memorandum (TAM) favorable to Marriott's synthetic fuel ventures.
2The TAM confirms that the synthetic fuel facilities meet the 'placed-in-service' requirement under Section 29 of the Internal Revenue Code.
3This ruling resolves a challenge previously raised by IRS field auditors.
4The development is positive for Marriott's synthetic fuel investments.
5Confirmation of the 'placed-in-service' status is critical for claiming tax credits under Section 29.
6The press release dated June 27, 2005, details this event and is included as an exhibit.

MARRIOTT INTERNATIONAL INC /MD/ 8-K Report, Corporate Update (Jun 27, 2005)

Summary

Key Highlights

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