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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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