Announcement Relating to Court Decisions

It is the policy of the Internal Revenue Service to announce at an early date whether it will follow the holdings in certain cases. An Action on Decision is the document making such an announcement. An Action on Decision will be issued at the discretion of the Service only on unappealed issues decided adverse to the government. Generally, an Action on Decision is issued where its guidance would be helpful to Service personnel working with the same or similar issues. Unlike a Treasury Regulation or a Revenue Ruling, an Action on Decision is not an affirmative statement of Service position. It is not intended to serve as public guidance and may not be cited as precedent.

Actions on Decisions shall be relied upon within the Service only as conclusions applying the law to the facts in the particular case at the time the Action on Decision was issued. Caution should be exercised in extending the recommendation of the Action on Decision to similar cases where the facts are different. Moreover, the recommendation in the Action on Decision may be superseded by new legislation, regulations, rulings, cases, or Actions on Decisions.

Prior to 1991, the Service published acquiescence or nonacquiescence only in certain regular Tax Court opinions. The Service has expanded its acquiescence program to include other civil tax cases where guidance is determined to be helpful. Accordingly, the Service now may acquiesce or nonacquiesce in the holdings of memorandum Tax Court opinions, as well as those of the United States District Courts, Claims Court, and Circuit Courts of Appeal. Regardless of the court deciding the case, the recommendation of any Action on Decision will be published in the Internal Revenue Bulletin.

The recommendation in every Action on Decision will be summarized as acquiescence, acquiescence in result only, or nonacquiescence. Both ‘‘acquiescence’’ and ‘‘acquiescence in result

only’’ mean that the Service accepts the holding of the court in a case and that the Service will follow it in disposing of cases with the same controlling facts. However, ‘‘acquiescence’’ indicates neither approval nor disapproval of the reasons assigned by the court for its conclusions; whereas, ‘‘acquiescence in result only’’ indicates disagreement or concern with some or all of those reasons. Nonacquiescence signifies that, although no further review was sought, the Service does not agree with the holding of the court and, generally, will not follow the decision in disposing of cases involving other taxpayers. In reference to an opinion of a circuit court of appeals, a nonacquiescence indicates that the Service will not follow the holding on a nationwide basis. However, the Service will recognize the precedential impact of the opinion on cases arising within the venue of the deciding circuit.

The announcements published in the weekly Internal Revenue Bulletins are consolidated semiannually and annually. The semiannual consolidation appears in the first Bulletin for July and in the Cumulative Bulletin for the first half of the year, and the annual consolidation appears in the first Bulletin for the following January and in the Cumulative Bulletin for the last half of the year.

The Commissioner ACQUIESCES in the following decisions: Alan K. Lauckner v. United States, ¹

68 F.3d 69 (3d Cir. 1995) Tele-Communications, Inc. v. Com- missioner, ²

12 F.3d 1005 (10th Cir. 1993) William H. Murphy v. Commissioner, ³

103 T.C. 111 (1994)

1Acquiescence relating to whether assessments of the trust fund recovery penalty (TFRP) under section 6672 of the Code are subject to the 3-year statute of limitations contained in section 6501(a) of the Code.

4

Clack, Est. of v. Commissioner, ⁴

106 T.C. 6 (1996) Cristofani, Est. of Maria, Deceased, Frank Cristofani, Executor v. Com- missioner, ⁵

97 T.C. 74 (1991)

The Commissioner does NOT ACQUIESCE in the following decisions: Fisher v. Commissioner, ⁶

45 F.3d 396 (10th Cir. 1995) Richard L. and Fiona Simon v. Com- missioner, ⁷

68 F.3d 41 (2d Cir. 1995)

2Acquiescence relating to whether cable television franchises issued by local governments are franchises within the meaning of section 1253 of the Code. 3Acquiescence relating to whether the nonrecognition provision of section 1034 of the Code for a divorced or separated taxpayer may compute the gain on a jointly owned residence, by taking into account only his or her allowable share of the basis and net proceeds from the sale of the jointly owned residence when the taxpayer’s former spouse has not met the section 1034 requirements for deferral. 4Acquiescence in result relating to whether the surviving spouse has a ‘‘qualifying income interest for life’’ in property where (1) the extent of the surviving spouse’s income interest is contingent on the executor’s qualified terminable interest property (QTIP) election and where (2) any part (or all) of the property for which QTIP treatment is not elected will go to someone other than the surviving spouse. 5Acquiescence in result relating to whether transfers of property to a trust, whose contingent remainder beneficiaries have the right to withdraw an amount not exceeding the section 2503(b) exclusion within 15 days following such transfers, constitute gifts of present interests in property within the meaning of section 2503(b) of the Code. 6Nonacquiescence relating to whether the United States Court of Appeals for the Tenth Circuit erred in determining that the Commissioner abused her discretion by not waiving the substantial understatement additions to tax under section 6661(c) of the Code. 7Nonacquiescence relating to whether professional musicians are entitled, under section 168 of the Code, to depreciate their antique musical instruments used in their trade or business, notwithstanding that the instruments have no determinable useful lives.