- 12 -
believe, however, that his testimony would have been different
and, indeed, his June 24, 1993, memorandum to the limited
partners and his November 30, 1993, letter to Mr. Long recognized
that further documents were required. Although there may have
been a general understanding of the terms of settlement, to
effectuate the settlement it was understood that the taxpayer
would execute either a Form 870 or a closing agreement.
Furthermore, all the parties understood that the settlement
terms were not limited to the Greenberg Brothers cases that were
currently before the Court. It also included issues involving
the additions to tax that are affected items and the applicable
interest, issues that were not before the Court. Moreover, the
settlement terms dealt with the tax effects of the Greenberg
Brothers partnerships in future years. At that time, Mr. Long
was of the opinion that either a closing agreement or a Form 870
was necessary to effect a settlement of a partner's various
liabilities.7
The Nirschls may have attempted to accept an offer from
respondent to settle the case. It is clear, however, that all
the parties directly connected with the settlement negotiations
understood that to effectuate the settlement either a closing
agreement or a Form 870 had to be executed. It is also clear
7 Whether this opinion was correct or not is beside the
point.
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