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that "the basis for settlement was ultimately approved by the
National Office", and Mr. Berman testified that "I believe
authority was received [from the National Office] sometime in
December of 1987." Mr. Kletnick also testified that he was
instructed by Mr. Keightley to make the settlement offer.
In sum, the blanket settlement offer was properly authorized
by officials of the IRS who we note also had authority to enter
into closing agreements. It was made on instructions of Associate
Chief Counsel Keightley. Petitioners' acceptance was confirmed to
this Court by Regional Counsel Vorsanger.
D. Settlement Agreement Terms Included Respondent's Agreement
To Forgo Fraud Additions to Tax
Respondent argues that he may assert the fraud additions to
tax against petitioner because the imposition of these additions is
simply an "outgrowth" of petitioner's criminal conviction. We
disagree. Respondent agreed as part of the settlement to forgo the
assertion of penalties and additions to tax. The settlement terms
clearly included an agreement that respondent would not assert
additions to tax under "IRC section 6653"; that is the only section
under which the fraud additions could be imposed for the years in
issue. We give full effect to this specific settlement term.
We further believe that at the time of the settlement,
respondent did not intend to treat petitioner's case differently
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