Stuart O. Bronstein wrote:

- quote -

But, in this case, they haven't lost at the Court of Appeals
level yet. Rather, they have lost in a reported Tax Court
decision and, as such, unless they appeal and win they will
lose this issue every time they go to Tax Court.

Paul Hood wrote a discussion that was published in Steve
Leimberg's electronic estate planning newsletter today of
the IRS's acquiescence in Walton and the use of GRATs where
he summarized the issue we're talking about here in this
manner:

---begin quoted text

The IRS did what it had to do. Walton was a reviewed
decision that wasn=92t appealed. Tax practitioners of any
caliber would not have taken an Example 5 issue anywhere
else but the Tax Court unless they just couldn=92t have done
so.

The point is that Notice 2003-72 has little practical effect
except for refund claims based on the issue.

---end quoted text

I think the same can be said here--if the IRS gives up its
appeal rights on this one (and I don't recall if the time
has passed for that now), then you have a practical
acquiescence on the issue even if not a formal one. Only in
the context of a claim for refund (which would generally
arise from a 1040X that attempted to change the original
treatment) would there still be an issue unless the IRS were
willing to appeal.

As Paul notes, if the IRS questioned this on a client under
exam, the client could file under the small claims
procedures in the Tax Court and the IRS would lose the case.

The only way to lose the issue on exam at the trial court
level would be to pay the tax and then take the case to
District Court or the Court of Claims--and if this were the
only issue in play, there seems absolutely no reason to do
that. Even then, the odds likely are still stacked against
the IRS due to the loss in Tax Court--while not binding on
judges in either of those venues, they are likely to pay
some attention to the Tax Court's holding on the matter.

Frankly, I have my doubts about whether they'd really want
to deny a claim for refund either, but at least there it
wouldn't be an automatic loss in the trial court (just a
fairly likely one <grin> ).

--
Ed Zollars, CPA
Phoenix, Arizona

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Richard Gardner" <rbgardner[at]cox.net> wrote:
- quote -

It's getting hot and heavy..... they just issued another one.
A non-acq on M. McNamara, CA-8, 2001-1 USTC ¶50,188.

Alan
http://taxtopics.net

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A.G. Kalman <agk202[at]netscape.net> wrote:

- quote -

Aha! I found the link to those via your (excellent!) website. I
guess what threw me is that some of the CD services DON'T cover
AODs. Thus, I thought they had disappeared altogether. In any
event, there are far fewer of these than in the days of old. <g
MTW

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"A.G. Kalman" <agk202[at]netscape.net> wrote:

- quote -

Actually, the IRS just acquiesced (Notice 2003-72) on
Walton v. Commission (115 T.C. 589).

---
Richard B. Gardner, EA

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"Ed Zollars, CPA" <ezollar[at]mindspring.com> wrote:
- quote -

They get the same result from a non-acquiescence - they
acknowledge that they lost with respect to a certain federal
circuit, but in essence stated that they would continue to
push their point in other circuits.

I think they did it to announce to people in other parts of
the country that they shouldn't try the same thing.

But without a non-acquiescence they might be more likely to
have lots of others doing the same thing, and the courts
might be more inclined to follow the ruling established by
the other court.

Stu

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Michael T Wing CPA" <mtwingcpa[at]yahoo.com> wrote:
- quote -

The IRS issued 6 AODs(5 Acq & 1 NonAcq) in 2002 and so far
this year have issued 2, both Acq. The last one was issued
4/30/03.

Alan
http://taxtopics.net

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Michael T Wing CPA wrote:
- quote -

The person whose job that was had his job eliminated in a
budget cut. :-)

(Serious answer: I have no idea....)

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Michael T Wing CPA wrote:

- quote -

I suspect someone decided that doing that created
problems--if they give in on the case, then they really give
up for good. However, if they do the opposite, then it
pretty much forces them to push the issue up the line
immediately or have their bluff called.

By doing nothing, they preserve flexibility in the future
<grin> .

--
Ed Zollars, CPA
Phoenix, Arizona

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Arthur L. Rubin wrote:
- quote -

Well, if they can get a Court of Appeals or Billy and the
Supremes to go along with them, it may not be binding there
either.

However, as a published decision the IRS is *not* going to
prevail in Tax Court in another case unless they *do* get a
reversal up the line. If the Court of Appeals reverses and
Billy and the Supremes either don't get asked to jump in
*OR* they decline to do so, then the IRS still likely has a
problem in the other Circuits if they go to Tax Court (the
"rule of thumb" appears to be that the Tax Court doesn't
reconsider till they lose the issue in 3 circuits with none
going for the position <grin> ).

Now, if Billy and the Supremes rule, that *is* binding on
the IRS, period. At least unless they can differentiate the
current case <grin> or Congress has since changed the law.

That said, published Tax Court decisions generally are not
*lightly* dismissed by the IRS. So, in great scheme of
things, such a case *normally* is going to be treated as
"binding" by an IRS agent (certainly seems like a pretty
argument that this interpretation *is* the law, which is
what the agent in theory has to work from) or, at the worst,
factor into the "hazards of litigation" factor in appeals
(sure loss in Tax Court certainly would appear to be a
negative factor <grin> ).

--
Ed Zollars, CPA
Phoenix, Arizona

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Ed Zollars, CPA <ezollar[at]mindspring.com> wrote:

- quote -

I seem to recall that years ago the IRS would routinely
announce "acquiescence" or "non" on cases they lost. It
doesn't seem that they do that anymore. Do you know what
happened or changed in this regard?

MTW

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Arthur L. Rubin wrote:
- quote -

Ooops. What I meant to ask is, "except for that case, are
they binding?" (I knew that! lol)

C$,
HL

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Ed Zollars, CPA wrote:
- quote -

"non acquiescence; that's the phrase. They used to do that
a lot, as I recall.

C$,
HL

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Harlan Lunsford wrote:

- quote -

With respect to THAT TAXPAYER, yes.

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Harlan Lunsford wrote:

- quote -

Well, in one sense *nothing* has to be followed by the IRS.
However, ignoring a published Tax Court decision is not a
real good move--because the *Tax Court* has indicated they
will rule this way each time the case comes before them
(remember, it's a published decision). So if the IRS raises
the issue, the taxpayer could simply say "give me the 90
day letter" and would be granted the win in Tax Court--with
the IRS facing possible sanction.

From a practical standpoint, the IRS *could* announce
non-acquiescence with the opinion, but they would have a
number of practical problems unless they also took this
particular case up on appeal (they really need to be able
to get the Tax Court on their side). And then they have
the problem that the appellate court could very well rule
against them--then the situation just got worse unless
Billy & the Supremes will pick up the case.

--
Ed Zollars, CPA
Phoenix, Arizona

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Dick wrote:
- quote -

WEll, at least down this way, I prefer to get a city license to
do tax returns; just cost 64$. If I instead got one as a palm
reader, it would cost me 2,500$.

Go figure.

Cheer$,
HL

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Michael T Wing CPA wrote:

- quote -

statement that the form did not apply in a situation where
the taxpayers were never married, and didn't disclose that
there *could* be an issue here (the Code section itself is
interesting, to say the least <grin> ) then you may have a
problem if the client relied on that advice to his/her
detriment (the couple worked under the assumption they could
not "move" the dependency exemption, and having it there
could have been used to allow the IRS to partially
"subsidize" <grin> payments for child support).

- quote -

I think it's important that clients understand there are
various degrees of "uncertainty" and that, in many cases,
our answers are based on our best guess as to the probable
outcome, and that the possibility of an alternative result
should be considered to see if that happening would impact
what the client plans to do.

That said, clearly this ruling *could* be overturned on
appeal, though I have my doubts that the IRS is going to
worry about it--so the published Tax Court decision *should*
hold up, at least until someone who wants it *not* to apply
(the person who signed it wants out <grin> ) decides to
litigate the issue in another venue.

The "good news" is that they'd have to go outside the Tax
Court and the economics would almost certainly not make
sense (the tax in question would be far less than the
expense involved in litigating in District Court or the
Court of Claims). The "bad news" is that when you are
dealing with "ex-not-quite-spouses" sometimes emotions run
high, and someone wants to fight just for the sake of
fighting ("it's the principal of the thing"). Even then,
though, I think it's unlikely that most District Courts
would ignore the Tax Court's decision--and, even then, a
District Court decision wouldn't count for much unless it
got appealed and then upheld on appeal.

So while I think it's unlikely that someone will get this
overturned, it is still possible...

--
Ed Zollars, CPA
Phoenix, Arizona

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Ed Zollars, CPA wrote:

- quote -

(snipped....)

thanks for the cite, Ed. Makes for very interesting reading.

However, I may have "oldzimmer's" , but can't remember
whether or not tax court decisions have to be followed by
IRS. Are they binding?

Cheer$,
HL

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"Michael T Wing CPA" <mtwingcpa[at]yahoo.com> wrote

- quote -

Au contraire, mon ami.

Are you not a "READER & ADVISER"? How many times have you been
handed a a piece of paper along with the standard plea of
"Please read this and tell me what to do?"

Dick

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"Michael T Wing CPA" <mtwingcpa[at]yahoo.com> wrote

- quote -

I have had to tell many of my clients "That due to budgetary
constraints, I have had to let my psychic go, so don't expect
me to know what your income/expenses were."

- quote -


About taxes, not much.

--
Paul A. Thomas, CPA
taxman at negia.net

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Ed Zollars, CPA wrote:

- quote -

This isn't the only time in the past few months where
the Court has deviated from what statute or regulation
unambiguously stated.....

Apparently, the non-aggregration rule of IRC 170(f)(8)
regarding acknowledgement of contributions of $250/more now
applies to a summation of contributions to the same charity
where the individual amounts on each transaction was less
than $250 (but their total exceeds $250).

Kiss the last sentence of TR 1.170A-13(f)(1) goodbye, as of
August 4, 2003.

This has me wondering: Is the Court showing due dilligence
in its opinions?

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