Estate of Donald H. Ray, Deceased, Patricia G. Ray, Independent Executrix, and Patricia G. Ray - Page 13

          following the conclusion of the partnership proceeding.  See sec.           
          6225(a); Maxwell v. Commissioner, 87 T.C. 783, 791 n.6 (1986).              
          The assessment of tax attributable to partnership items of a                
          partnership subject to the TEFRA provisions shall be made with              
          respect to any partner during the period provided by sections               
          6229(a) through (f).  A settlement agreement converts partnership           
          items to nonpartnership items, and the partner that enters into             
          the settlement agreement is no longer treated as a party in the             
          partnership proceeding.  Secs. 6226(d)(1)(A), 6231(b)(1)(C).  The           
          period for assessment shall not expire before 1 year after the              
          date on which the parties enter into a settlement agreement.                
          Sec. 6229(f).  RDB, as a pass-thru partner, entered into a                  
          settlement agreement with respondent with respect to the                    
          partnership items of Valley Cable for the taxable years 1983 and            
          1984.  The settlement agreement entered into by RDB binds                   
          indirect partners, such as the Rays and Dominguezes, with respect           
          to the partnership items of Valley Cable.  Sec. 6224(c)(1).  The            
          dispute in these cases centers on when the parties entered into             
          the settlement agreement.                                                   
               Petitioners argue that respondent made a settlement offer              
          which they accepted when they delivered the executed Form 870-              
          L(AD) to respondent on May 6, 1991.  Respondent argues that the             
          Form 870-L(AD) embodies the settlement agreement, and that the              
          agreement became binding when executed by respondent's authorized           
          representative on December 6, 1991.  Respondent contends that the           

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