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Upon receipt of information regarding volunteered
adjustments, respondent’s representatives would not automatically
accept the proposed adjustments. Rather, respondent’s
representatives would review, analyze, and audit the information
provided by Exxon’s representatives and would make determinations
after discussions and negotiations with Exxon's representatives
as to the appropriate adjustments, if any, and respondent’s
representatives would propose the adjustments so determined in
Forms 5701 that were given to Exxon’s representatives.2
2 IDR No. 85 (Trial Exhibit 137), bears upon the so-called
volunteered adjustments for the years 1974, 1975, and 1976. It
establishes: (1) Respondent’s representatives' awareness of and
expectation that volunteered adjustments would be received from
Exxon; and (2) respondent’s and Exxon’s representatives'
understanding that respondent's representatives would not
automatically accept the information with regard to volunteered
adjustments provided by Exxon's representatives but rather would
review and audit the information. Set forth below is language
from IDR No. 85 describing the information requested of Exxon by
respondent’s representatives:
IDR No. 85, Description of Documents Requested
(1) After a return is filed, taxpayers frequently discover errors
in the return that was filed which include the following:
(a) Deductions claimed which are not deductible
(b) Deductions not claimed which are deductible
(c) Income reported which is not taxable
(d) Income not reported which is taxable
(e) Credits not claimed which should be on the return
(f) Credits claimed which are not proper
(2) Please submit a list of any such items which have been
discovered subsequent to the filing of the returns for 1974, 1975,
and 1976.
(3) Please submit a detailed explanation of the items under (2) so
this agent can determine if the items should be corrected by
including them in the RAR as an adjustment.
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Last modified: May 25, 2011