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The assessment of tax attributable to partnership items of a
partnership subject to the TEFRA provisions shall be made with
respect to any partner during the period provided by section
6229(a) through (f). A settlement agreement converts partnership
items to nonpartnership items, and the partner that enters into
the settlement agreement is no longer treated as a party in the
partnership proceeding. Secs. 6226(d)(1)(A), 6231(b)(1)(C). The
period for assessment shall not expire before 1 year after the
settlement agreement is entered into. Sec. 6229(f).
Fensterheim argues that by virtue of settlement agreements
entered into with respondent for Transpac partnerships 1982-15
and 1982-21, he is no longer a party to these partnership
proceedings. Respondent argues that Fensterheim and respondent
have not entered into settlement agreements in Transpac
partnerships 1982-15 and 1982-21, and, therefore, Fensterheim
remains a party to these partnership proceedings.
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.
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