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was continuing to contemplate the preliminary question of whether
to permit deductions for Arbitrage Management losses.
Respondent's counsel and Arbitrage Management partners' counsel
eventually agreed upon a form of closing agreement to settle the
cases. A December 21, 1989, letter from Mr. Nolan to Mr. Kletnick
states:
I am writing to you on behalf of two
groups of partners that retained Miller &
Chevalier and Saltzman & Holloran to negotiate
a settlement for their Tax Court cases. At
long last, it is my pleasure to enclose with
this letter a copy of the standard language
for Form 906 closing agreements that we
anticipate the Internal Revenue Service will
offer to all of the partners in the following
Arbitrage Management partnerships
* * * * * * *
It is our understanding that the attached
language will be used to resolve the Arbitrage
Management issues for all partners (whether or
not they belong to one of the two groups we
represent) and for all years (whether or not
they are docketed in the Tax Court).
* * * * * * *
As you know, a Form 906 closing agreement
is a final determination covering specific
matters, and has no effect on matters that are
not discussed in the language of the
agreement. This is particularly important in
this case because the settlement we reached
for Arbitrage partners resolves the amount of
taxable income, deductions, gains and losses
from the Arbitrage partnerships for all
taxable years (past, present and future).
[Emphasis added.]
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