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the agreement. Sec. 301.7121-1(d)(1), Proced. & Admin. Regs.
Both closing agreements in this case were executed on Forms 866,
Agreement as to Final Determination of Tax liability.
The closing agreements establish the tax liability of
Timothy Riffe, deceased, and Kathleen Pert for income tax
deficiencies and additions to tax for 1986, 1988, and 1989.
Sec. 7121(b); Estate of Magarian v. Commissioner, 97 T.C. 1, 4-5
(1991); Zaentz v. Commissioner, 90 T.C. at 753. Timothy Riffe,
deceased, Kathleen Pert and respondent are bound by the closing
agreements, absent a showing of fraud, malfeasance, or a
misrepresentation of material fact. Sec. 7121(b).2 Petitioner
does not allege that the closing agreements in this case were
obtained by fraud, malfeasance, or a misrepresentation of a
material fact.
3. Whether a Transferee Is Bound by a Closing Agreement Made by
the Transferor
We are not aware of any case that decides whether a
transferee or successor transferee is bound by a closing
agreement made under section 7121 by the transferor.
2 The standards for invalidating a closing agreement under
sec. 7121 are similar to the standards for vacating a stipulated
decision entered by a court; i.e., fraud, malfeasance, or the
misrepresentation of a material fact. See Korangy v.
Commissioner, 893 F.2d 69, 72 (4th Cir. 1990), affg. T.C. Memo.
1989-2; Stamm International Corp. v. Commissioner, 90 T.C. 315
(1988). Estate tax closing agreements (Form 870-AD) do not have
the same finality as closing agreements under sec. 7121.
Schwager v. Commissioner, 64 T.C. 781, 789 (1975).
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