Common use of Tax Payment Subaccount Clause in Contracts

Tax Payment Subaccount. As soon as practicable after the Trust Effective Date, the Trustee’s receipt of the Trust Funds from the Court Registry pursuant to subparagraph 2.0.4, and the funding of the State Mitigation Trust pursuant to Paragraph 2.1, the Trustee shall deduct an amount equal to the estimated taxes owed on earnings of the Trust Funds while on deposit in the Court Registry that have been allocated to the State Mitigation Trust pursuant to Paragraph 2.1. The amount of the deduction shall be based on applicable income tax withholding and reporting requirements, and consistent with Section 468B of the Internal Revenue Code, 26 U.S.C. § 468B, and related Treasury Regulations. Such amount shall be deposited into a dedicated, non-interest bearing account (“Tax Payment Subaccount”). In addition, prior to the allocation of any investment income pursuant to subparagraph 3.2.3, the Trustee shall deduct an amount equal to the estimated taxes owed on such earnings and deposit that sum into the Tax Payment Subaccount. The amounts in this Tax Payment Subaccount shall be used for the express purpose of paying all applicable taxes with respect to the State Trust in a manner consistent with Paragraph 6.7. If at any time the funds on deposit in this Tax Payment Subaccount are insufficient to pay all Taxes then due and owing, the Trustee shall seek to resolve any dispute pursuant to the dispute resolution procedures of Paragraph 6.2. 2.1.5.1 Within 30 Days of receipt of a Private Letter Ruling from the IRS determining that all investment income earned on the Trust Assets is excludible from gross income under Section 115 of the Internal Revenue Code, 26 U.S.C. § 115, the Trustee shall allocate all amounts held in the Tax Payment Subaccount to the Beneficiaries, consistent with the allocation rates included in Appendix D-1B. 2.1.5.2 Upon receipt of a Private Letter Ruling from the IRS, which determines that all or a portion of the investment income earned on the Trust Assets is not excludible from gross income under Section 115 of the Internal Revenue Code, 26 U.S.C. § 115, the Trustee shall pay any additional taxes owed from the Tax Payment Subaccount. Within 30 Days of receipt of such a letter ruling, the Trustee shall amend its calculation of estimated taxes and deposits to the Tax Payment Subaccount to reflect the proportion of investment income that is determined to be taxable by the IRS. 2.1.5.3 Within 120 Days of each tax-year end, the Trustee shall reconcile the amount of taxes owed and paid from the Tax Payment Subaccount, if any, and return all remaining amounts in the Tax Payment Subaccount to the Beneficiaries, consistent with the allocation rates included in Appendix D- 1B. All overpayments of estimated taxes or refunds of taxes paid by, or on behalf of, the Trust shall be allocated to the Beneficiaries consistent with the allocation rates included in Appendix D-1B. 2.1.5.4 Pursuant to the secure internet-based communication established in Paragraph 6.0, the Trustee shall provide the Beneficiaries a copy of all communications from the IRS related to the payment or non-payment of taxes within 15 Days of receipt.

Tax Payment Subaccount. As soon as practicable after the Trust Effective Date, the Trustee’s receipt of the Trust Funds from the Court Registry pursuant to subparagraph 2.0.4, and the funding of the State Mitigation Trust pursuant to Paragraph 2.1, the Trustee shall deduct an amount equal to the estimated taxes owed on earnings of the Trust Funds while on deposit in the Court Registry that have been allocated to the State Mitigation Trust pursuant to Paragraph 2.1. The amount of the deduction shall be based on applicable income tax withholding and reporting requirements, and consistent with Section 468B of the Internal Revenue Code, 26 U.S.C. § 468B, and related Treasury Regulations. Such amount shall be deposited into a dedicated, non-interest bearing account (“Tax Payment Subaccount”). In addition, prior to the allocation of any investment income pursuant to subparagraph 3.2.3, the Trustee shall deduct an amount equal to the estimated taxes owed on such earnings and deposit that sum into the Tax Payment Subaccount. The amounts in this Tax Payment Subaccount shall be used for the express purpose of paying all applicable taxes with respect to the State Trust in a manner consistent with Paragraph 6.7. If at any time the funds on deposit in this Tax Payment Subaccount are insufficient to pay all Taxes then due and owing, the Trustee shall seek to resolve any dispute pursuant to the dispute resolution procedures of Paragraph 6.2. 2.1.5.1 Within 30 Days of receipt of a Private Letter Ruling from the IRS determining that all investment income earned on the Trust Assets is excludible from gross income under Section 115 of the Internal Revenue Code, 26 U.S.C. § 115, the Trustee shall allocate all amounts held in the Tax Payment Subaccount to the Beneficiaries, consistent with the allocation rates included in Appendix D-1B. 2.1.5.2 Upon receipt of a Private Letter Ruling from the IRS, which determines that all or a portion of the investment income earned on the Trust Assets is not excludible from gross income under Section 115 of the Internal Revenue Code, 26 U.S.C. § 115, the Trustee shall pay any additional taxes owed from the Tax Payment Subaccount. Within 30 Days of receipt of such a letter ruling, the Trustee shall amend its calculation of estimated taxes and deposits to the Tax Payment Subaccount to reflect the proportion of investment income that is determined to be taxable by the IRS. 2.1.5.3 Within 120 Days of each tax-year end, the Trustee shall reconcile the amount of taxes owed and paid from the Tax Payment Subaccount, if any, and return all remaining amounts in the Tax Payment Subaccount to the Beneficiaries, consistent with the allocation rates included in Appendix D- D­ 1B. All overpayments of estimated taxes or refunds of taxes paid by, or on behalf of, the Trust shall be allocated to the Beneficiaries consistent with the allocation rates included in Appendix D-1B. 2.1.5.4 Pursuant to the secure internet-based communication established in Paragraph 6.0, the Trustee shall provide the Beneficiaries a copy of all communications from the IRS related to the payment or non-payment of taxes within 15 Days of receipt.