Bernhard F. and Cynthia G. Manko - Page 20

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          acceptances were based on the understanding that the settlement             
          offer was applicable as a package to all years in which taxpayers           
          had Arbitrage Management investments.  Settlement offers made and           
          accepted by letters have been enforced as binding agreements.  See,         
          e.g., Haiduk v. Commissioner, T.C. Memo. 1990-506.  Petitioners             
          reached the settlement agreement, which we conclude under the               
          circumstances of this case is a binding contract, no later than             
          January 21, 1988.  See, e.g., Robbins Tire & Rubber Co. v.                  
          Commissioner, 52 T.C. 420, 435-436 (1969).                                  
               The joint status reports to the Court after the January 1988           
          settlement confirmed the parties' understanding that the settlement         
          offer applied to both docketed and nondocketed years.  In addition          
          to the documentary evidence, Mr. Nolan, Ms. Kaplan, and Mr. Janow           
          also testified that the Arbitrage Management settlement was                 
          intended to apply to all years in which there were Arbitrage                
          Management investments, both docketed and nondocketed. Messrs.              
          Kletnick and Berman also testified to this effect ("we agreed to            
          structure the settlement to encompass all years."  "The basis for           
          settlement acceded to Mr. Nolan's request that it cover all years.          
          * * * What the negotiators wanted was a general framework that              
          encompassed all years and we agreed to that.").2  Assuming Mr.              


               2    We note that even respondent's counsel conceded that              
                                                              (continued...)          






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