Internal Revenue Bulletin: 2013-25
June 17, 2013
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 Moreover, the recommendation in the Action on Decision may be superseded by new legislation, regulations, rulings, cases, or Actions on Decisions.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.
Issues: Whether I.R.C. § 6015(e)(1) provides both a de novo standard and a de novo scope of review in section 6015(f) cases petitioned to the Tax Court.
Discussion: Petitioner requested equitable relief under section 6015(f) from the joint and several tax liabilities with her former husband. The Internal Revenue Service issued a notice of determination that denied her relief. Petitioner petitioned the Tax Court.
Under section 6015(e)(1)(A), the Tax Court has jurisdiction to “determine the appropriate relief available” to an individual who requests equitable relief under section 6015(f) and files a timely petition. In this case, the Tax Court, relying on its prior interpretation of section 6015(e)(1) in Porter v. Commissioner, 130 T.C. 115 (2008), and Porter v. Commissioner, 132 T.C. 203 (2009), applied both a de novo standard and a de novo scope of review to grant the taxpayer relief. Wilson v. Commissioner, T.C. Memo. 2010-134. The de novo scope of review allowed petitioner to introduce evidence outside the administrative record, and the de novo standard of review allowed the court to determine whether the taxpayer was entitled to relief without regard to the Service’s determination. The court observed that if it were not using the de novo standard and de novo scope of review, its findings on a number of factors would have been different.
The Service appealed. Affirming the Tax Court, the Ninth Circuit held that “determine,” as used in section 6015(e)(1)(A), provides both a de novo standard and a de novo scope of review in section 6015(f) cases. The circuit court interpreted section 6015(e)(1) in conjunction with the mandate under section 6015(f) “to consider the totality of the circumstances before making an equitable relief determination,” which the court noted would be impossible if the Tax Court limited its review to the administrative record. The majority rejected the Service’s argument that the phrase “the Secretary may relieve” in section 6015(f) means that the Tax Court should review the Service’s section 6015(f) determinations for an abuse of discretion, limiting its review to evidence in the administrative record.
Although the Service disagrees that section 6015(e)(1) provides both a de novo standard and a de novo scope of review, the Service will no longer argue that the Tax Court should review section 6015(f) cases for an abuse of discretion or that the court should limit its review to the administrative record.
THIS DOCUMENT IS NOT TO BE RELIED UPON OR OTHERWISE CITED AS PRECEDENT BY TAXPAYERS
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