- 28 -
Pursuant to the closing agreement that was signed by, inter alia,
the Service, MSSTA, and the Scotts, MSSTA was not liable for any
penalties. In any event, the first sentence of stipulation 25 is
not "Evidence of (1) furnishing or offering or promising to fur-
nish, or (2) accepting or offering or promising to accept, a
valuable consideration in compromising or attempting to compro-
mise a claim which was disputed as to either validity or amount".
Fed. R. Evid. 408. Nor is it "Evidence of conduct or statements
made in compromise negotiations". Id. Consequently, we do not
find the first sentence of stipulation 25 to be inadmissible
under FRE 408.8 Accordingly, we unconditionally admit that sen-
tence into evidence and make it a part of the record in this
case.
With respect to respondent's objection to Mr. Callison's
letter and certain of his testimony regarding that letter and his
recollection of his discussions with the revenue agent who was
auditing MSSTA's 1989 return, the record establishes that Mr.
Callison's letter was written at a time when there were ongoing
settlement negotiations between the Scotts and MSSTA and the
7(...continued)
had preliminarily proposed. We think that it is reasonable to
conclude that Mr. Scott so informed Mr. Callison.
8 In addition, we reject respondent's contention that the first
sentence of stipulation 25 should be excluded from evidence be-
cause it is an attempt to go behind the notices.
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