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Whether, with respect to Mr. Newman, we have jurisdiction
over his partnership items depends upon whether he entered into a
binding settlement agreement with respondent. Underlying that
question is whether the period of limitations for making an
assessment may have run.
Settlement Agreements in TEFRA Proceedings
General principles of contract law govern the settlement of
tax cases. Dorchester Indus. Inc. v. Commissioner, 108 T.C. 320,
329-330 (1997). A prerequisite to the formation of a contract is
an objective manifestation of mutual assent to its essential
terms. Manko v. Commissioner, T.C. Memo. 1995-10. Mutual assent
generally requires an offer and an acceptance. Id. "'An offer
is the manifestation of willingness to enter into a bargain, so
made as to justify another person in understanding that his
assent to that bargain is invited and will conclude it.'"
Dorchester Indus. Inc. v. Commissioner, supra at 330 (quoting 1
Restatement, Contracts 2d, sec. 24 (1981)). Settlement offers
made and accepted by letters are enforced as binding agreements.
Dorchester Indus. Inc. v. Commissioner, supra at 330-333; Haiduk
v. Commissioner, T.C. Memo. 1990-506.
Respondent argues that only a properly executed Form 870-P
or a closing agreement (Form 906) constitutes a settlement
agreement for purposes of sections 6224(c) and 6231(b)(1)(C).7
7
Neither the Code nor respondent's regulations defines
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