An Action on Decision (AOD) is a formal memorandum prepared by the IRS Office of Chief Counsel that announces the future litigation position the IRS will take with regard to the court decision addressed by the AOD.

The following list initially presents these documents in reverse chronological order, from the present back to calendar year 1997.

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Number Decision Issue Release Date
2000-07 Kathy A. King v. Commissoner, 115 T.C. No. 8 (Aug 10, 2000). Reflects the Service's acquiescence in the Court's conclusion that held that the nonpetitionering spouse was entitled to notice and an opportunity to intervene. The Tax Court reasoned that the rationale for the notice and intervention rules of section 6015(e)(4), i.e., fairness to the nonelecting spouse to be heard in order to ensure that innocent spouse relief is granted on the merits after taking into account all relevant 09/25/2000
1997-02 United States v. Kao, 81 F.3d 114 (9th Cir. 1996). Reflects the Service's acquiescence in the result that the Service could not, by issuing summonses, compel taxpayers to sign consent directives authorizing the release of records from unidentified domestic and foreign banks. 03/03/2000
1998-04 Fredericks v. Commissioner, No. 96-7748. Reflects the Service's agreement with the circuit court's ruling that, based upon the particular facts of this case, the Service was equitably estopped from relying upon a Form 872-A to indefinitely extend the period of imitations for making an assessment when the Service's actions misled the taxpayer into believing that the form was not in effect. 03/03/2000
1997-12 Jackson v. Comm, 108 T.C. 130 (1997) ( T.C. # 23558-94). Reflects the Service's agreement that a former insurance agent is not required to pay tax under the Self-Employment Contributions Act (SECA) on specified contractual termination payments he received from an insurance company upon the termination of his contract with the insurance company. 03/03/2000
1997-04 Duncan v. U.S., Docket No. 95-228 (U.S. D.C.,E.D. Ky.) Reflects the Service's agreement that disability benefits paid from a Kentucky policemen and firefighter's retirement fund can be excluded from gross income under I.R.C. § 104(a)(1) as benefits paid under a statute in the nature of a workmen's compensation act. 03/03/2000
1998-01 Beatty v. Commissioner, 106 T.C. 268 (1996). Reflects the Service's agreement that a county sheriff was entitled to reduce his gross receipts by costs of goods sold in computing income from providing meals to prisoners. 03/03/2000
1997-01 Xerox Corporation v. United States, 41 F.3d 647 (Fed. Cir. 1994). Reflects the Service's disagreement that the U.S.-U.K. Income Tax Treaty allows a United States corporation to treat advance tax paid by a U.K. subsidiary as a creditable tax under I.R.C. § 902(a). 03/03/2000
2001-05 Mesa Oil, Inc. v. United States. Reflects the Service's nonacquiescence whether a verbatim recording of a collection due process (CDP) hearing is required under §§ 6320 and 6330 to create a judicially reviewable administrative record. The district court held the administrative record to be inadequate for judicial review under section 6330(d)(1)(B), because “no record of the hearing was made, and no analysis of the evidence or arguments was presented in the 08/23/2001
1999-17 Duke Energy Natural Gas Corporation v. Comm. Reflects the Service's nonacquiescence in the court's conclusion holding that natural gas gathering systems are property includible in asset class 13.2 and must be depreciated over a 7-year period. 03/03/2000
1999-12 RJR Nabisco, Inc. et al. v. Commissioner, T.C. Memo. 1998-252. Reflects the Service's nonacquiescence in the Court's conclusion that held the graphic design and advertising campaign costs incurred by petitioner are currently deductible business expenses under I.R.C. §162. The Tax Court characterized the graphic design and advertising campaign costs as advertising costs and held the costs were deductible on the ground that the Service had conceded the deductibility of advertising costs in Rev. Rul. 92-80, 03/03/2000
1997-14 Transwestern Pipeline Co. v. United States, 639 F.2d 679. Revised AOD reflects the Service's agreement with the Court of Claims' conclusion that recoverable line pack gas, which is used to maintain adequate pressure in gas pipelines, is appropriately treated as a capital asset rather than included in the taxpayer's inventory of gas available for sale. 03/03/2000
2002-04 Paul Pekar v. Commissioner, 113 T.C. 158 (1999). The Action on Decision reflects the Service''s acquiescence in result, as modified, only in the court''s conclusion the timely-mailing timely-filing provisions of section 7502 do not apply to foreign postmarks, and that "foreign postmarks do not effectively cause the filing date of a document to be the postmark date." Id., at 168. In order for a return timely mailed to be timely filed under section 7502, the postmark date appearing on the envelope containing the return must not only fall within the prescribed period for filing the return, but the envelope must be deposited in the mail of the United States. I.R.C. § 7502(a)(2)(A) and (B). Section 7502 does not apply to any document that is 03/11/2002
2000-08 John D. Shea v. Commissioner, 112 T.C. 183 (1999) The Tax Court held that the burden of proof should be placed on the Commissioner with respect to the section 66(b) issue. Rather than relying on established case law for its determination as to whether the section 66(b) issue was new matter, the court incorporated section 7522 into its analysis. Section 7522 requires the Commissioner to issue a notice of deficiency which contains a description of the basis for the Commissioner's tax 11/03/2000
2002-02 Sutherland Lumber-Southwest, Inc. v. Comm. The Action on Decision reflects the Service''s acquiescence in the Tax Court''s conclusion that the disallowance provisions of section 274(a) were inapplicable because "section 274(e) was intended to except certain categories of deduction from the effect of section 274." 114 T.C. 197, 203 (2000) [emphasis added]. Thus, the court concluded that "section 274(e)(2) acts to except the deductions in controversy from the effect of section 274, and, accordingly, [Sutherland''s] deduction [was] not limited to the value reportable by its employees." 114 T.C. at 206. On appeal, the United States Court of Appeals for the Eighth Circuit affirmed. The Service will no long 02/08/2002
2002-01 Intermet Corporation & Subs. v. Comm., 117 T.C. No. 13. The Action on Decision reflects the Service''s acquiescence in result only to the Court''s conclusion that deductions for state income tax deficiencies and interest thereon as well as interest on federal income tax deficiencies, all attributable to tax liabilities arising at least three years before the beginning of the taxable year, and taken into account in computing a net operating loss, qualify for a ten-year carryback as specified liability losses under former I.R.C. § 172(f)(1)(B). In addition, the Service recently lost Host Marriott Corp. v. United States, 113 F.Supp. 2d 790 (D. Md. 2000), aff''d in unpublished opinion, 02/11/2002
2001-07 Robert L. Beck v. Comm, T.C. 2001-198( filed 07/30/01). The Action on Decision reflects the Service's acquiescence in the court's conclusion that it had the authority to review respondent’s denial of equitable relief under section 66(c) in a deficiency proceeding. The Tax Court construed the taxpayer's contention as a prayer for relief under section 66(c), which may provide relief from income tax liability with respect to unreported community income. The Service argued that the taxpayer failed to meet the 01/01/2002
2003-04 General Electric Co. & Subs. v. Commissioner, T.C. Memo. 1995-306. The Action on Decision reflects the Service's acquiescence in result only as to whether aircraft engines and thrust reversers sold by the taxpayer through its wholly-owned domestic international sales corporation ("DISC") to airframe manufacturers for incorporation in the United States into aircraft that are delivered for use outside the United States constitute "export property" within the meaning of section 993(c)(1)(B) of the Internal Revenue Code and Treas. Reg. Section 1.993-3(d)(2)(iii). 12/08/2003
2003-03 Michael and Nancy B. McNamara v. Commissioner The Action on Decision reflects the Service's nonacquiescence as to whether farm rental income is includible in self-employment income if the lessor materially participates in farm production, but the lease agreement itself does not require the lessor to materially participate. 10/21/2003
2001-08 N.Dakota State Univ v. USA, 84 F. Supp. 1043 (D.N.D. 1999), The Eighth Circuit held that a payment made to a tenured faculty member under the taxpayer's early retirement program was made in exchange for the relinquishment of the tenured faculty member’s contractual and constitutionally-protected tenure rights rather than as remuneration for services to taxpayer. The court cited Rev. Rul. 58-301, 1958-1 C.B. 23, as support for its decision and rejected the government's argument that 01/01/2002
2007-05 Roosevelt Wallace v. Comm., 128 T.C. No. 11 (April 16, 2007). The Service will no longer litigate whether payments made by the Department of Veterans Affairs under the compensated work therapy program described in 38 U.S.C. section 1718 are tax exempt. RELEASE DATE: October 18, 2007 10/18/2007
2000-04 Smith v. Comm, 198 F.3d 515 (5th Cir. 1999), rev'g, 108 T.C. 412. The Tax Court upheld the Commissioner’s determination that the claim against the estate should be limited to the amount actually paid. The Tax Court held that, '[w]here a claim is disputed, contingent, or uncertain as of the date of the decedent's death, the estate is not entitled to a deduction until the claim is resolved and it is determined what amount, if any, will be paid. It is this latter amount that is allowed as a deduction.' 108 T.C. at 419. 05/09/2000
2004-03 U.S. v. Roland Harry Macher (In re Macher), 91 AFTR2d 2003-2654. This Action of Decision reflects the Service’s nonacquiescence as to whether a bankruptcy court has the authority to order the United States to process and consider a debtor’s plan of reorganization in accordance with procedures applicable to offers in compromise submitted by taxpayers who are not currently in bankruptcy. 08/03/2004
2000-02 Ahadpour v. Comm., T.C. Memo. 1999-9. This Action on Decision reflects the Service's acquiescence in the Court's conclusion, to the extent, that the Tax Court held that petitioners had only a conditional right to retain the escrow payments. In the court's view, the unconditional right to retain the escrow payments arose only after buyer paid the remainder of the purchase price and the deed was delivered. 03/03/2000
1997-13 Pacific Enterprises & Subs. v. Comm., 101 T.C. 1 (1993). This Action on decision reflects the Service's agreement that recoverable cushion gas and recoverable line pack gas, which are used to maintain adequate pressure in gas storage reservoirs and pipelines, respectively, are appropriately treated as nondepreciable capital assets. 03/03/2000
1999-01 Eisenberg v. Comm., 155 F. 3d 50 (2d Cir. 1998). This Action on Decision reflects the Service's acquiescence in the Court's conclusion, to the extent, that it held that there is no legal prohibition against the discount in the value of a gift of closely held stock by an amount attributed to the potential capital gains tax liability of the corporation upon liquidation, or upon the sale or distribution of its assets. The applicability of such a discount, as well as its amount, will hereafter be treated as factual matters to be determined by competent expert testimony. 03/03/2000
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