1. Under the logical outgrowth test used by the court, would the outcome have been different if the.

1. Under the logical outgrowth test used by the court, would the outcome have been different if the IRS simply published a proposed rule saying that they were going to alter the calculation of membership dues by tax-exempt organizations and did not provide further details or methods? Why or why not?
2. Given the standard used by the court, can you think of an example of a charge that would not be considered a logical outgrowth provided that the appropriate notice is initially given?

The IRS proposed a rule concerning the allocation of membership dues paid to nonprofit organizations under which certain nondues revenue was to be treated as taxable revenue as determined by a seven-factor test. After the comment period, the IRS replaced the seven-factor test with a new three-factor method, which was published as a final rule without any additional comment period. This resulted in increased tax liability for AMA, a nonprofit corporation that chargers its members’ dues and they brought a lawsuit claiming that the new three-factor allocation regulation was invalid because the IRS had never given the proper public notice required by the APA when they departed from their original seven-factor test.

 

Looking for a Similar Assignment? Let us take care of your accounting classwork while you enjoy your free time! All papers are written from scratch and are 100% Original. Try us today! Active Discount Code FREE15