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- 1. Chapter 2 Tax Research, Practice, and Procedure ©2012 CCH. All Rights Reserved. 4025 W. Peterson Ave. Chicago, IL 60646-6085 1 800 248 3248 www.CCHGroup.com
- 2. Chapter 2 Exhibits 1. Classification of Materials 2. Judicial Authority 3. Five-Step Research Method 4. Research Sources for Legislative Authority 5. Research Sources for Administrative Authority 6. Research Sources for Judicial Authority 7. Commercial Publishers of Comprehensive Services 8. Commercial Publishers of Judicial Decisions 9. Commercial Publishers of Current Developments Chapter 2, Exhibit Contents A CCH Federal Taxation Basic Principles 2 of 32
- 3. Chapter 2 Exhibits 10. Organization of the IRS 11. IRS Communications 12. Examination of Returns 13. Appeals Administrative Process 14. Taxpayer Bill of Rights 15. Choice of Tax Forum 16. Penalties Chapter 2, Exhibit Contents B CCH Federal Taxation Basic Principles 3 of 32
- 4. Classification of Materials Primary or “authoritative” Internal Revenue Code (statutory authority) Treasury Regulations (administrative authority) Internal Revenue Service Rulings (administrative authority) Judicial Authority Secondary or “reference” Looseleaf tax reference services Periodicals Textbooks Treatises Published papers from tax institutes Symposia Newsletters Chapter 2, Exhibit 1 CCH Federal Taxation Basic Principles 4 of 32
- 5. SOURCES OF INFORMATION INTERNAL REVENUE CODE TREASURY REGULATIONS REVENUE RULINGS AND REVENUE PROCEDURES PRIVATE LETTER RULINGS JUDICIAL SOURCES OF THE TAX LAW CCH Federal Taxation Basic
- 6. INTERNAL REVENUE CODE The code is compiled and published in the United States Code (U.S.C.) under Title 26.
- 7. TREASURY REGULATIONS Section 7805 of the IRC grants authority for the commissioner of the IRS to prescribe rules and regulations for the enforcement of the IRC. The regulations interpret the Code. They are arranged in the same sequence. Regulations are, however, prefixed by a number which designates the type of tax or administrative, procedural or definitional matter to which they relate.
- 8. REVENUE RULINGS AND REVENUE PROCEDURES Revenue Rulings provide interpretation of the tax law. They do not, however, have the same legal weight as do the regulations and usually deal with more restricted problems. Revenue Procedures deal with internal management practices and procedures of the IRS.
- 9. PRIVATE LETTER RULINGS Letter rulings are issued upon a taxpayer's request and describe how the IRS will treat a proposed transaction for tax purposes. The IRS limits the issuance of individual letter rulings to restricted, preannounced areas of taxation. The IRS will not rule in areas when they involve fact oriented situations.
- 10. JUDICIAL SOURCES OF THE TAX LAW Cases involving Federal tax litigation may be brought in either the U.S. Tax Court, Federal District Court or Claims Court. However, in order to petition the Federal District Court or the Claims Court, the taxpayer must first pay the tax and file a claim for refund. Such refund would have to be denied by the IRS and a statutory notice of claim disallowance issued.
- 11. Judicial Authority The three courts of original jurisdiction are: U.S. Tax Court U.S. District Court U.S. Court of Federal Claims Chapter 2, Exhibit 2a CCH Federal Taxation Basic Principles 11 of 32
- 12. Judicial Authority The appellate courts are: U.S. Circuit Courts of Appeals U.S. Court of Appeals for the Federal Circuit U.S. Supreme Court Chapter 2, Exhibit 2b CCH Federal Taxation Basic Principles 12 of 32
- 13. Five-Step Research Method 1. Gather the facts and identify the tax issues. 2. Locate and study the primary and secondary authorities relevant to the enumerated tax issues. 3. Update and evaluate the weight of the various authorities. 4. Re-examine various facets of the research. 5. Arrive at conclusions; communicate these conclusions to the client. Chapter 2, Exhibit 3 CCH Federal Taxation Basic Principles 13 of 32
- 14. Research Sources for Legislative Authority Authoritative Research Authorship Binding Persuasive Documents Source 16th Amendment Constitution Congress √ Internal Revenue CCH, RIA, Congress √ Code and West tax services Chapter 2, Exhibit 4a CCH Federal Taxation Basic Principles 14 of 32
- 15. Research Sources for Legislative Authority Authoritative Research Source Authorship Binding Persuasive Documents Tax Treaties • Tax Treaties (CCH) Congress √ (to render mutual • Worldwide Tax (overrides assistance between the Code if U.S. and foreign Treaty Library (Tax more countries in tax Analysts) recent) enforcement and to avoid double • International Tax taxation.) Treaties of All Nations (Oceana Publications) Chapter 2, Exhibit 4b CCH Federal Taxation Basic Principles 15 of 32
- 16. Research Sources for Legislative Authority Authoritative Research Source Authorship Binding Persuasive Documents Committee Reports Cumulative House Ways √ (useful for determining Bulletins [CB] (U.S. and Means (no legal effect; Congressional intent when only guidance) Code and Regs. are unclear) Government.). Committee Internal Revenue Senate Bulletin [IRB] if Finance written within 6 Committee months Joint Conference Committee Bluebook Bluebook Joint Committee √ (interprets new legislation) (a government-issued, blue- on Taxation (no legal effect; covered book) only guidance) Chapter 2, Exhibit 4c CCH Federal Taxation Basic Principles 16 of 32
- 17. Research Sources for Administrative Authority Authoritative Documents Research Sources Authorship Binding Persuasive Final Regulations Federal register U.S. Treasury √ (Treasury Decisions) (U.S. Government.) Department Tax services (CCH, RIA and West). Temporary Regulations Federal Register U.S. Treasury √ √ (U.S. Government) Department (binding (nonbinding if (issued without Cumulative Bulletin if < 3 over 3 years opportunity for public (U.S. Government) years old) old) comment because Tax services timing is critical) (CCH, RIA, and West). Proposed Regulations Federal Register U.S. Treasury √ (U.S. Government) Department (nonbinding Cumulative Bulletin preview of (U.S. Government) final Regs.) Tax services (CCH, RIA, and West). Chapter 2, Exhibit 5a CCH Federal Taxation Basic Principles 17 of 32
- 18. Research Sources for Administrative Authority Authoritative Research Sources Authorship Binding Persuasive Documents Revenue Rulings Cumulative Bulletins National office √ (interprets tax laws) (U.S. Government) of IRS (not approved by the Treasury) Revenue Procedures Cumulative Bulletins National office √ (addresses internal (U.S. Government) of IRS (not approved procedures of IRS) by the Treasury) Letter Rulings (explains IRS Letters Rulings Reports National office √ how IRS will treat a (CCH) of IRS (only precedent proposed transaction for Private Letter Rulings value is for the tax purposes; issued to taxpayer taxpayers) (RIA) addressed in Daily Tax Reports (BNA) letter) Tax Analysts & Advocates, TAX NOTES Chapter 2, Exhibit 5b CCH Federal Taxation Basic Principles 18 of 32
- 19. Research Sources for Administrative Authority Authoritative Research Sources Authorship Binding Persuasive Documents Technical Advice IRS Position Reporter National office √ Memoranda [TAMs] (CCH) of IRS (only precedent (addresses how IRS will Tax Notes (Tax Analysts) value is for the treat a completed taxpayer transaction for tax Internal Memoranda of the addressed in purposes; issued to District IRS (RIA) memo) Office, hence “memorandum”) Determination Letters Not published, but available by District Director √ (mainly deal with IRS for public inspection of IRS (only precedent pension plans and tax- value is for the exempt organizations) taxpayer addressed in letter) Chapter 2, Exhibit 5c CCH Federal Taxation Basic Principles 19 of 32
- 20. Research Sources for Judicial Authority Authority Research Source Binding Persuasive U.S. Supreme Court USTC (CCH) √ (4 of 9 justices needed to AFTR (RIA) (highest grant certiorari – often judicial S.Ct. Series (West) granted only when there is conflict among the appellate L.Ed. body) courts or where the tax issue (Lawyer’s Co-op) is extremely important) U.S. Series (U.S. Government) Chapter 2, Exhibit 6a CCH Federal Taxation Basic Principles 20 of 32
- 21. Research Sources for Judicial Authority Authority Research Source Binding Persuasive U.S. Court of Appeal USTC (CCH) √ decisions AFTR (RIA) (binding to (hears appeals from any of the lower courts Federal 3d (West) in same three lower courts; the Federal Circuit Appellate Court hears all circuit) appeals from the Court of Federal Claims) U.S. Tax Court decisions – CCH services √ regular RIA services (binding to other tax (deals with novel issues not U.S. Government courts in same previously resolved by TC; Printing Office circuit) advance payment of tax not allowed) Chapter 2, Exhibit 6b CCH Federal Taxation Basic Principles 21 of 32
- 22. Research Sources for Judicial Authority Authority Research Source Binding Persuasive U.S. Tax Court decisions TCM (CCH) √ — T.C. Memo (RIA) (binding to other tax Memorandum courts in same (deals with factual issues circuit) necessitating application of established principles of tax law; advance payment of tax not allowed) Small Cases Division of Tax Not published No precedent Court authority (informal hearing for disputes of $50,000 or less; appeals process not available) Chapter 2, Exhibit 6c CCH Federal Taxation Basic Principles 22 of 32
- 23. Research Sources for Judicial Authority Authority Research Source Binding Persuasive U.S. District Court USTC (CCH) √ (jury trial available for factual AFTR (RIA) (binding to issues but not for legal issues) courts in same F. Supp. Series district) (West) U.S. Court of Federal USTC (CCH) √ Claims (hears any claims AFTR (RIA) (binding to against U.S. that is based on same court) the Constitution, Federal Claims an Act of Congress, or a Reporter (West) Regulation of any executive department) Chapter 2, Exhibit 6d CCH Federal Taxation Basic Principles 23 of 32
- 24. Commercial Publishers of Comprehensive Services Service Description Standard Federal Comprehensive, self-contained reference service. 25 coordinated and cross- Tax Reporter referenced loose-leaf volumes that provide comprehensive coverage of the (“Standard”), CCH income tax law. Compiles legislative, administrative, and judicial aspects of the income tax law, arranged in Code section order. Also contains weekly supplements concerning current legislative, administrative, or judicial changes in tax law. United States Tax Comprehensive, self-contained reference service. 18 coordinated loose-leaf Reporter, volumes organized by Code sections and updated weekly. Similar to CCH. RIA RIA is known for its willingness to take a stand on controversial issues not covered by legislation or tax law. Federal Tax Contains several volumes of compilation material organized by topic. The Service, Code, Regulations, and Committee Reports are contained in separate volumes. CCH The chapters are prepared by over 250 practitioners. Chapter 2, Exhibit 7a CCH Federal Taxation Basic Principles 24 of 32
- 25. Commercial Publishers of Comprehensive Services Service Description Federal Tax 26-volume service organized by topic, rather than Code sections. Popular Coordinator, features include editorial explanations, illustrations, planning ideas, and RIA warnings of potential tax traps. Merten’s, Law of Useful complement to traditional reference services. In-depth discussions of Federal Income general concepts of tax law. Often quoted in judicial decisions. Sometimes Taxation, difficult reading due to its legalistic style. Also, updating is less frequent than Thomson West most other services and not as accessible. Tax Management Useful complement to traditional reference services. Each booklet ranges in Portfolios, length from 50 to 200 pages and deals exclusively with a special tax topic BNA covering Code, Regulations, reference to primary authorities, and extensive editorial discussion, including numerous tax planning ideas. Problems of inconvenience may develop when there is no one portfolio squarely on point and the research effort requires reference to many portfolios. Updates are convenient though not extensive. Chapter 2, Exhibit 7b CCH Federal Taxation Basic Principles 25 of 32
- 26. Commercial Publishers of Comprehensive Services Service Description CCH ONLINE An electronic research service. Incorporates practitioner-oriented access methods to successfully located the desired tax information and to retrieve documents of special interest. Available in many different “libraries” addressing tax and nontax topics. LEXIS/NEXIS, An electronic research service. LEXIS accesses federal statutes, regulations, Reed Elsevier, Inc. IRS rulings, and judicial decisions. NEXIS contains the full text of over 500 publications. WESTLAW, West An electronic research service. Provides much of the same data as Lexis. Publishing Co. Available online or CD-ROM. Chapter 2, Exhibit 7c CCH Federal Taxation Basic Principles 26 of 32
- 27. Commercial Publishers of Judicial Decisions Service Description CCH Citator, CCH Two-volume, loose-leaf reference service. Contains alphabetical listing of Tax Court (formerly Board of Tax Appeals, “BTA”) and federal court decisions since 1913. Indicates a paragraph reference where each case is digested in the Compilation Volumes of the Standard Federal Tax Reporter. Each listing outlines the judicial history of a selected case beginning with the highest court to have ruled on that issue. Chapter 2, Exhibit 8a CCH Federal Taxation Basic Principles 27 of 32
- 28. Commercial Publishers of Judicial Decisions Service Description Federal Tax Seven-volume citator service organized in a manner consistent with Citator, CCH Citator. Provides an alphabetical list of court cases followed RIA by a descriptive legislative history of each case. U.S. Tax Cases Series of volumes that cover Supreme Court, Courts of Appeals, (USTC), District Courts, and Court of Federal Claims cases since 1913. CCH Chapter 2, Exhibit 8b CCH Federal Taxation Basic Principles 28 of 32
- 29. Commercial Publishers of Judicial Decisions Service Description American Federal Comparable to USTC above. Tax Reports (AFTR), RIA Tax Court Publishes memorandum decisions of the Tax Court. Memorandum Decisions (TCM), CCH TC Memorandum Similar to TCM above. Decisions (TC Memo), RIA Chapter 2, Exhibit 8c CCH Federal Taxation Basic Principles 29 of 32
- 30. Commercial Publishers of Current Developments Service Description Standard Federal Tax Reports, CCH Weekly highlights of latest tax developments Weekly Alert, Weekly highlights of latest tax developments RIA Tax Notes, Weekly digests of new tax decisions. Tax Analysts Journal of Taxation Monthly tax journal. Tax Adviser Monthly tax journal published by the AICPA. Chapter 2, Exhibit 9 CCH Federal Taxation Basic Principles 30 of 32
- 31. Organization of the IRS The four Operating Divisions include: Wage and Investment Income Division Small Business and Self-Employed Division Large Business and International Division Tax-Exempt Organizations and Governmental Entities Division Chapter 2, Exhibit 10a CCH Federal Taxation Basic Principles 31 of 32
- 32. Organization of the IRS Other units include: Criminal Investigation IRS Appeals Office National Taxpayer Advocate Office of Chief Counsel Office of Professional Responsibility Whistleblower Office Communications and Liaison Office of Privacy, Governmental Liaison and Disclosure Chapter 2, Exhibit 10b CCH Federal Taxation Basic Principles 32 of 32
- 33. IRS Communications The IRS issues communications to individual taxpayers and IRS personnel in three primary ways: Letter rulings Determination letters Technical advice memoranda IRS Publications also address a variety of general and special topics of concern to taxpayers. Chapter 2, Exhibit 11 CCH Federal Taxation Basic Principles 33 of 32
- 34. Examination of Returns Correspondence Examinations—These involve relatively simple problems that can generally be resolved by mail. District Office Examinations—These are conducted by a tax auditor either by correspondence or by interview. Field Examinations—These are conducted by revenue agents and involve more complex issues. Chapter 2, Exhibit 12 CCH Federal Taxation Basic Principles 34 of 32
- 35. Appeals Administrative Process If the taxpayer and the agent do not agree, the taxpayer has several options: Request a conference in the IRS Appeals Office File a petition in the Tax Court Wait for the 90-day period to expire, pay the assessment, and start a refund suit in the District Court or the Court of Federal Claims Chapter 2, Exhibit 13 CCH Federal Taxation Basic Principles 35 of 32
- 36. Taxpayer Bill of Rights The Taxpayer Bill of Rights is divided into four major categories: Taxpayer rights and IRS obligations Levy and lien provisions Proceedings by taxpayers Authority of the Tax Court Chapter 2, Exhibit 14 CCH Federal Taxation Basic Principles 36 of 32
- 37. Choice of Tax Forum Factors to consider in deciding whether to litigate a case and where to litigate: Jurisdiction Publicity Payment of tax Legal precedent Jury trial Factual precedent Rules of evidence Statute of limitations Expertise of judges Discovery Chapter 2, Exhibit 15 CCH Federal Taxation Basic Principles 37 of 32
- 38. Penalties Delinquency penalties Estate of gift tax valuation Accuracy-related and understatements fraud penalties Penalty for aiding Negligence penalty understatement of tax Substantial liability understatement of tax Civil fraud penalty liability Criminal fraud penalty Substantial valuation Estimated taxes and misstatement penalty underpayment penalties Substantial overstatement Failure to make deposits of of pension liabilities taxes Tax preparer penalties Chapter 2, Exhibit 16 CCH Federal Taxation Basic Principles 38 of 32
Notes de l'éditeur
- Tax practice involves the preparation of tax returns and representation of clients before the audit or appellate divisions of the Internal Revenue Service. To become a competent professional, skilled in these three functional areas of tax practice, it is necessary to be proficient in the art of tax research. The tax specialist needs to understand the organizational structure of the IRS and its administrative procedures to provide fully informed tax consulting services to taxpayers involved in disputes with the IRS. Thus, this chapter includes a discussion of the internal organization of the IRS, the functions of the various administrative groups, the rules relating to practice before the IRS, and the procedures for examination of returns, including correspondence examinations, office examinations, and field examinations.
- Classification of Materials Tax reference materials are usually classified as primary “authoritative” sources or secondary “reference” sources. Primary source materials include the Internal Revenue Code (Statutory Authority), Treasury Regulations and Internal Revenue Service Rulings (Administrative Authority), and the various decisions of the trial courts and the appellate courts (Judicial Authority). Secondary reference materials consist primarily of the various loose-leaf tax reference services. Additional secondary materials include periodicals, textbooks and treatises, published papers from tax institutes and symposia, newsletters, and, more recently, the various computer-assisted research services.
- The authority of the U.S. government to raise revenue through a federal income tax is derived from the Sixteenth Amendment to the Constitution, enacted in 1913. In subsequent years, with the growing complexity of the tax law, the multitude of revenue acts were codified into Title 26 of the United States Code, known as the Internal Revenue Code of 1939. The Code was later revised and rewritten as the Internal Revenue Code of 1954. However, as a result of the sweeping changes made by the Tax Reform Act of 1986, the Code has been renamed the Internal Revenue Code of 1986. The major portion of the Code dealing with federal income tax is located in Chapter 1 of Subtitle A. This extremely important chapter, entitled “Normal Taxes and Surtaxes,” is further divided into subchapters (A-W), and each subchapter is then generally divided into parts and subparts which are then divided into numbered sections. These sections are typically referred to as “Code Sections.”
- This is the law and must be followed by all parties, the IRS, the Courts and by taxpayers.
- The regulations are interpretations of the Internal Revenue Code by the Commissioner of the Internal Revenue Service. Section 7805(a) of the Internal Revenue Code authorizes the Treasury Department (part of the executive branch of government) to issue rules and regulations and to interpret the Code. Treasury Regulations have the authority of law when dealing with the Internal Revenue Service. Even in court they have significant judicial weight. However, the courts are not bound to follow these administrative interpretations if they are in conflict with the law. Treasury Decisions . Final Regulations are issued as Treasury Decisions (TDs) in the Federal Register. The types of treasury regulations issued are: Final Regulations . Represent binding authority. Temporary Regulations . Represent binding for up to 3 years. Proposed Regulations . Represent non-binding, persuasive authority.
- Revenue Rulings take a particular set of facts and apply the Commissioner’s interpretation to them. For example, Revenue Ruling 2007-69 asked whether payments made by the U.S. Department of Veterans Affairs (VA) under the compensated work therapy program are exempt from federal income tax as veterans' benefits. The ruling will go through the facts and the law and render a conclusion. In this ruling it was determined that the amounts were exempt from federal income tax. Most IRS employees have to strictly follow Revenue Rulings and Revenue Procedures.
- Federal District Court. Tax and non-tax jurisdiction . District Courts have jurisdiction over questions that involve any point of federal law, including such diverse topics as labor relations, civil rights and criminal offenses. Thus, while they occasionally hear tax cases, they do not specialize in tax matters. Jury trial option . Only in a District Court can the taxpayer request a jury trial, but only for issues of fact, not issues of law. Pay in advance . For a dispute to be heard before the District Court, however, the taxpayer first must pay the tax in dispute and sue the federal government for a refund. U.S. Court of Federal Claims. Tax and non-tax jurisdiction . The U.S. Court of Federal Claims has jurisdiction over any monetary claim brought against the U.S. government. Like the District Courts, the U.S. Court of Federal Claims does not specialize in tax matters. Pay in advance . Another aspect similar to the District Court is that the taxpayer must pay the alleged deficiency and sue the government for a refund.
- Essentially, there are two types of tax research situations—“after-the-facts compliance” and “before-the-facts planning.” The “closed fact” case, sometimes referred to as ex post facto research, involves the legal interpretation of historical events. In contrast, the “open-fact” case typically involves events that have not yet been finalized (i.e., controllable facts). However, whether the primary facts of a research engagement is for tax compliance or tax planning, the underlying methods and techniques should be systematic, thorough, properly documented, and effectively communicated to the client.
- Operating Divisions Wage and Investment Income Division (W&I) . W&I covers individual taxpayers who only receive wage and/or investment income, which includes approximately 88 million filers. Most of these taxpayers only deal with the IRS when filing their tax returns each year. Compliance matters are limited to such issues as dependency exemption, credits, filing status, and deductions. Small Business and Self-Employed Division (SB&SE) . SB&SE is comprised of fully or partially self-employed individuals and small businesses. It includes corporations and partnerships with assets less than or equal to $5 million. Also, estate and gift taxpayers, fiduciary returns and all individuals who file international returns are examined by this group, which includes approximately 45 million filers. Large Business and International Division (LB&I) . LB&I includes businesses with assets over $10 million or about 210,000 filers. Many complex matters such as tax law interpretation, accounting and regulation issues are common. The largest taxpayers in this group deal with the IRS on an almost continuous basis. Tax-Exempt Organizations and Governmental Entities Division (TE&GE) . TE&GE includes pension plans, exempt organizations and the governmental entities, and is comprised of about 24 million filers.
- Criminal Investigation (CI) . CI reports directly to the Service Commissioner and Deputy Commissioner. It operates as a nationwide unit with 35 Special Agent In Charge Offices. CI’s mission is to the serve the public by investigating potential criminal violations of the Internal Revenue Code and related financial crimes. National Taxpayer Advocate (NTA) . The NTA was designed to help taxpayers who have problems with the IRS, and who were not able to get them resolved through the normal administrative process. The new NTA is organized around two major functions: (1) the casework function—to resolve all individual taxpayer problems; and (2) the systemic analysis and the advocacy function—to work with the operating divisions to identify systemic problems, analyze root causes, implement solutions and proactively identify potential problems with new systems and procedures. Office of Professional Responsibility . The Office of Professional Responsibility establishes and enforces consistent standards of competence, integrity, and conduct for tax professionals. Whistleblower Office . The IRS Whistleblower Office processes tips received from individuals who spot tax problems in their workplace, while conducting day-to-day personal business or anywhere else they may be entountered. The Whistleblower Office is responsible for assessing and analyzing the tips and after determining their degree of credibility, the case is assigned to the appropriate IRS office for further investigation.
- Delinquency Penalties. There is a penalty for failure to file a return on the due tax and also a penalty for failure to pay the amount of tax due on a tax return. The failure to file penalty is reduced by the 0.5 percent failure to pay penalty for any month in which both apply. Accuracy-Related Penalties. The penalties relating to the accuracy of tax returns have been consolidated into one accuracy-related penalty equal to 20 percent of the portion of the underpayment to which the penalty applies. The penalty applies to the portion of underpayment attributable to one or more of the following areas. Negligence Penalty . A 20 percent penalty is imposed for underpayment of tax due to negligence or intentional disregard of rules or regulations. Substantial Understatement of Tax Liability . If there is a substantial understatement of income tax, an amount equal to 20 percent of the amount of the understatement can be assessed. Substantial Valuation Misstatement Penalty . There are penalties for valuation misstatements of property. Substantial Overstatement of Pension Liabilities . The 20 percent penalty for substantial overstatement of pension liabilities applies only if the actuarial determination of pension liabilities is 200 percent or more of the amount determined to be correct. Estate or Gift Tax Valuation Understatements . A 20 percent penalty is imposed for estate or gift tax valuation understatement if the value of any property claimed on an estate or gift tax return is 65 percent or less of the amount determined to be the correct amount of the valuation. Understatements Resulting from Listed and Reportable Transactions . The penalty is 20 percent of the understatement if the taxpayer disclosed the transaction, and 30 percent if the transaction was not disclosed.