6
with a copy of the Form 870-L(AD). The relevant portion of the
Palka letter states:
Dear Mr. Wilder:
The Appeals Office has completed settlement
negotiations on the * * * [Valley Cable partnership]
and the results of those negotiations are shown on the
enclosed Form 870-L(AD) and attached schedule of
adjustments. We believe this settlement is a fair and
equitable resolution of the adjustments.
As a partner in the partnership, you have the
right to participate in the settlement. You may either
agree to the settlement of both the penalties and the
partnership items or agree to the settlement of only
the partnership items. (Penalties include interest
under section 6621(c) of the Internal Revenue Code.)
The following instructions explain how you should sign
the settlement agreement (Form 870-L(AD) to show the
extent of your agreement:
If you agree to both the partnership
adjustments and penalties, please sign Parts
I and II of Form 870-L(AD). This will allow
us to close your case with finality on both
the penalty and partnership items.
If you agree only to the settlement of
the partnership items, please sign Part I of
Form 870-L(AD). This will allow us to close
your case with finality for the partnership
items only and will leave open any penalty
issues. A separate report on the penalties
will be mailed to you later which will allow
you to either file a petition to the United
States Tax Court or to file a protest
requesting further Appeals consideration.
However, it is unlikely that the offer shown
in the agreement will be changed unless you
are able to submit facts not previously
considered by the Appeals office.
If you do not agree to the settlement of the
partnership items, a notice of Final Partnership
Administrative Adjustment will be mailed to you on
these items. This notice will allow you to file a
petition with the United States Tax Court, the Claims
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