First Blood Associates, Richard M. Greenberg, Tax Matters Partner, et al. - Page 12

                                       - 12 -                                         

          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)).  Settlements 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).10             

                    Neither the Code nor respondent's regulations define              
          what constitutes a "settlement agreement" for purposes of secs.             
          6224(c) and 6231(b)(1)(C).  A closing agreement (Form 906),                 
          statutorily authorized by secs. 7121 and 7122 has been used to              

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  Next

Last modified: May 25, 2011