Question

Which of the following statements is INCORRECT regarding Actions on Decisions (AODs)?

a. AODs are prepared when the IRS loses a case in a court.
b. AODs are published in the Internal Revenue Bulletin.
c. AODs are published when the IRS wins a case in court.
d. The IRS's decisions on AODs are driven by litigation costs, revenue effects, and administrative and policy directives.
e. All of the above statements are correct.

Answer 1

The correct statement is option c: AODs are published when the IRS wins a case in court. AODs are issued to provide internal guidance to IRS personnel on how to apply court decisions.

Step-by-step explanation:

The correct statement regarding Actions on Decisions (AODs) is option c: AODs are published when the IRS wins a case in court.

AODs are memoranda that are prepared by the IRS Office of Chief Counsel and issued by the Associate Chief Counsel (Procedure and Administration) to provide internal guidance to IRS personnel on how to apply court decisions and other legal authorities to similar cases. They are used to establish the official position for the IRS on specific issues of tax law.

Option a is incorrect because AODs are prepared when the IRS wins a case in court, not when they lose. Option b is incorrect because AODs are not typically published in the Internal Revenue Bulletin, which is a weekly publication that provides guidance for taxpayers and IRS personnel. Option d is incorrect because while the IRS's decisions on AODs can be influenced by litigation costs, revenue effects, and administrative and policy directives, these factors are not the sole drivers for their decisions.