-8- the agent’s testimony. Instead, petitioners proved only that the agent did not conduct a new examination of the nature of each shareholder distribution. A deficiency determination generally is afforded a presumption of correctness unless it is without any foundation. United States v. Janis, 428 U.S. 433, 440-441 (1976). The agent had the results of the 1982 through 1984 examination, petitioners’ records of the accounts and the entries charging them off, and the applicable individual and corporate returns. The documents showed that interest had been computed on the pre-1982 shareholder loan balances and the portion of the 1982 through 1984 account increases that was treated as loans. Hence, there was a sufficient basis for the agent’s determination in this case. Issue 1. Estoppel The first issue for decision is whether respondent is estopped, as petitioners contend, from asserting that the corporate advances written off in 1990 were loans. As the basis for this argument, petitioners rely on their settlement with the IRS for years 1982-84, wherein the IRS and petitioners characterized approximately 38 percent of the additions to the accounts at issue as dividends with the remainder as loans. We believe petitioners’ estoppel argument to be without merit. A settlement agreement is binding only with respect to the years specified by the agreement. Goldman v. Commissioner, 39 F.3d 402, 405-406 (2d Cir. 1994), affg. T.C. Memo. 1993-480. ThePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
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