Tom and Brenda Kelly - Page 3

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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:                                                         
                    Find enclosed check for $2513 for full payment on                 
               tax, penalty & interest for 1993 for Tom & Brenda                      
                    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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