Estate of Donald H. Ray, Deceased, Patricia G. Ray, Independent Executrix, and Patricia G. Ray - Page 14

          notices of deficiency dated December 4, 1992, were issued prior             
          to the expiration of the period of limitations.  We agree with              
               General contract law principles govern tax case settlements.           
          Robbins Tire & Rubber Co. v. Commissioner, 52 T.C. 420, 435-436,            
          supplemented by 53 T.C. 275 (1969); Smith v. Commissioner, T.C.             
          Memo. 1991-412.  Where the intent of the parties to settle is               
          evident and the terms of the settlement are otherwise                       
          ascertainable, then a tax settlement agreement may be binding               
          even if it consists only of letters of offer and acceptance.                
          Treaty Pines Invs. Partnership v. Commissioner, 967 F.2d 206, 211           
          (5th Cir. 1992); Haiduk v. Commissioner, T.C. Memo. 1990-506.               
               Petitioners argue that the Form 870-L(AD) is ambiguous as to           
          which party is making an offer and which party is accepting the             
          offer.  Respondent argues that the Form 870-L(AD) is not                    
          ambiguous and that it constitutes the settlement agreement                  
          between the parties.  Contract law principles generally direct              
          that we look within the "four corners" of the agreement, unless             
          it is ambiguous as to essential terms.  Rink v. Commissioner, 100           
          T.C. 319, 325 (1993), affd. 47 F.3d 168 (6th Cir. 1995).                    
               Petitioners contend that the Form 870-L(AD) is ambiguous in            
          that it sets forth two offers:  (1) An offer to enter into a                
          settlement agreement, and (2) an offer to waive the restrictions            
          on the assessment and collection of any deficiency.  Petitioners            

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