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effectively rejected it.19
In or about February of 1988, a settlement offer (the
Plastics Recycling project settlement offer or the offer) was
made available by respondent in all docketed Plastics Recycling
cases, and subsequently in all nondocketed cases. Baratelli v.
Commissioner, T.C. Memo. 1994-484. Pursuant to the offer,
taxpayers had 30 days to accept the following terms: (1)
Allowance of a deduction for 50 percent of the amount of the cash
investment in the venture in the year(s) of investment to the
extent of loss claimed; (2) Government concession of the
substantial understatement of tax penalties under section 6661
and the negligence additions to tax under section 6653(a)(1) and
(2); (3) taxpayer concession of the section 6659 addition to tax
for valuation overstatement and the increased rate of interest
under section 6621; and (4) execution of a closing agreement
(Form 906) stating the settlement and resolving the entire matter
for all years.20 Petitioners assert that the Plastics Recycling
project settlement offer was extended to them, but they do not
19 In each of their motions for decision, petitioners state,
"After the lead counsel for taxpayers and Respondent had agreed
upon the designation of the lead cases, Respondent's counsel
prepared piggyback agreements and offered them to counsel for the
taxpayers in this case and to other taxpayers." (Emphasis added.)
20 Although the records do not include a settlement offer to
petitioners, petitioners have attached to their motions for
decision a copy of a settlement offer to another taxpayer with
respect to a plastics recycling case, and respondent has not
disputed the accuracy of the statement of the plastics recycling
settlement offer.
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