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liability" in the notation area of the check. On the back of the
check in the endorsement area, petitioner wrote "Full payment of
1993 Fed Tax, penalties & interest for Tom & Brenda Kelly".
Along with the check, petitioner sent a letter dated June 10,
1996, which stated:
IRS
Find enclosed check for $2513 for full payment on
tax, penalty & interest for 1993 for Tom & Brenda
Kelly.
Thanks, please spend the money wisely.
Petitioner also sent with the check and the letter a Form
1040-V (Payment Voucher) which he had found in the instructions
for his 1995 tax return. He wrote on the voucher a note similar
to the above-quoted statement. Respondent's service center in
St. Louis, Missouri, received the check and cashed it on or about
June 15, 1996.
On July 5, 1996, respondent issued the statutory notice of
deficiency in this case.
Petitioner argues that the respondent's act of cashing the
check with a restrictive endorsement constituted an accord and
satisfaction of petitioners' Federal income tax liability for
their 1993 taxable year. We disagree.
It is well established that as a general rule the
Commissioner is finally and conclusively bound by an agreement
with a taxpayer only if the parties enter into a closing
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Last modified: May 25, 2011