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extended by subsequent agreements in writing made before
the expiration of the period previously agreed upon.
Sec. 6501(c)(4).
In analyzing a consent to extend the limitations period, it is
well settled that such a consent is not a contract but rather a
unilateral waiver of a defense by the taxpayer. Stange v.
Commissioner, 282 U.S. 270, 276 (1931); Kronish v. Commissioner, 90
T.C. 684, 693 (1988). Nevertheless, contract principles are
significant because section 6501(c)(4) requires the agreement to be
in writing. Piarulle v. Commissioner, 80 T.C. 1035, 1042 (1983).
Consequently, we examine the objective manifestations of mutual
assent to determine the terms of the agreement. Kronish v.
Commissioner, supra at 693; Piarulle v. Commissioner, supra at
1042.
The restricted consent in this case limited the extension of
the limitations period to:
The Service's proposed adjustment relating to the
disallowance of Microsoft's use of the profit split
method of computing taxable income for purposes of
section 936(h) of the Internal Revenue Code of 1986 with
respect to its transactions with Microsoft Puerto Rico
and any transfer pricing adjustments resulting from such
disallowance; * * *
Because the 1991 notice of deficiency was issued on May 9,
1996, which was after the expiration of the final general consent
extending the limitations period to March 15, 1996, respondent's
alternative adjustment may be made only if it comes within the
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