Harvey M. Pert, Transferee - Page 9

                                        - 9 -                                         

          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).                          



Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  Next

Last modified: May 25, 2011