Joseph P. and Marilyn Schneller - Page 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.  The                       

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