In American Medical Association V

In American Medical Association v. United States Internal Revenue Service, the IRS had proposed a rule that would change the way dues and memberships were allocated and taxed, with tax liability based on a seven-factor test. After the comment period the IRS revised the rule, changing to a three-factor test, and published it as final. The AMA claimed that this rule was invalid because there had been no comment period for the revision. The court held that:

A) the IRS should have given proper notice of the revision and because it had not done so, the new rule was invalid.
B) the IRS should have given proper notice of the revision but lack of notice did not invalidate the rule because the IRS is not required to go through formal rulemaking procedure.
C) the IRS did not need to give public notice of the revision because the change was a logical outgrowth of the original rule.
D) the IRS did not need to give public notice because the new test was based on the same public policy as the original rule.