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 Moreover, the recommendation in the Action on Decision may be superseded by new legislation, regulations, rulings, cases, or Actions on Decisions.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 ‘‘acqui

escence’’ 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:

Buckeye Countrymark v. Commis- sioner, ¹ 103 T.C. 547 (1994)

Robert E. and Geneva U. Duncan v. United States, ² Docket No. 95–338

Cheng C. and Susan L. Kao v. United

1Acquiescence relating to whether section 277 of the Internal Revenue Code applies to nonexempt cooperatives subject to subchapter T of the Code.

4

States, ³ 81 F.3d 114 (9th Cir. 1996)

The Commissioner does NOT ACQUIESCE in the following decisions:

Xerox Corporation v. United States, ⁴ 41 F.3d 647 (Fed. Cir. 1994)

Charles E. Hurt v. United States, ⁵ 70 F.3d 1261, 76 AFTR2d 95–7815 (4th Cir. 1995)

Robert B. and Eleanor Risman v. Commissioner, ⁶ 100 T.C. 191 (1993)

2Acquiescence relating to whether disability benefits paid to taxpayer from the Policemen and Firefighter’s Retirement Fund of the LexingtonFayette Urban County Government can be excluded from gross income under Internal Revenue Code section 104(a)(1) as benefits paid under a statute in the nature of a workmen’s compensation act. 3Acquiescence in result only relating to whether the Service can issue summonses to compel a taxpayer to sign consent directives which authorize the release of records from unidentified domestic and foreign banks, consistent with the requirements of Internal Revenue Code section 7609. 4Nonacquiescence relating to whether, under Article 23(1)(c) of the U.S.–U.K. Income Tax Treaty, a U.S. corporation is entitled to continue to treat U.K. Advance Corporation Tax (ACT) as a creditable tax paid by a U.K. subsidiary in computing the allowable credit for foreign taxes deemed paid under section 902(a) of the Internal Revenue Code for the year in which the ACT was paid, when the subsidiary subsequently surrenders all or part of the ACT to lower-tier U.K. subsidiaries for use to satisfy their U.K. corporate tax liabilities. 5Nonacquiescence relating to whether the Service was entitled to assess and collect statutory interest on the amount of tax and additions to tax embodied in a Tax Court decision that resulted from a settlement agreement entered into by the taxpayers and the Service. 6Continued nonacquiescence, but that this action on decision be substituted for the action on decision reported at Risman v. Commissioner, AOD CC–1996–003 (March 4, 1996), relating to whether a remittance forwarded to the Service with a Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, constitutes a payment of tax or a deposit in the nature of a cash bond for purposes of the period of limitations for seeking a refund of such remittance.