Bruce and Lois Zenkel, et al. - Page 80

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          (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.  Petitioners assert that the Plastics Recycling              
          project settlement offer was extended to them, but they do not              
          claim to have accepted the offer timely, so they effectively                
          rejected it.                                                                
               In December 1988, the Miller cases were disposed of by                 
          settlement agreement between the taxpayers and respondent.9  This           
          Court entered decisions based upon those settlements on December            
          22, 1988.  The settlement provided that the taxpayers in the                
          Miller cases were liable for the addition to tax under section              
          6659 for valuation overstatement, but not for the additions to              
          tax under sections 6661 and 6653(a).  The increased interest                

          9         Although it is not otherwise a part of the record in              
          these cases, respondent attached copies of the Miller closing               
          agreement and disclosure waiver to her objections to petitioners'           
          motion for leave, and petitioners do not dispute the accuracy of            
          the document.                                                               






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