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The correspondence from CIGNA which petitioners received
after filing the amended returns contained information regarding
the ongoing negotiations. In addition, the correspondence
contained language implying that a settlement was currently
available, and that individual partners had begun entering into
final settlements with the IRS. One such letter, dated August
19, 1991, stated:
The number of inquiries [directed to the IRS regarding
settlement, sent pursuant to an earlier letter from CIGNA]
has prompted the IRS to request that we clarify what * * *
[the partners] view as the limitations of their involvement
in individual cases. Essentially, investors are requested
to contact the IRS by mail only after they have made the
decision to pursue the proposed settlement. * * * Those who
do not have a docketed case may either wait for the local
IRS Service Center to contact them with the settlement
offer, or simply file amended tax returns which reflect the
terms of the settlement * * * .
However, the letters also stated that the IRS was dealing first
with those cases which had been docketed in this Court, followed
by those which had not (those involving later tax years). As of
October 29, 1991, investors were informed that settlement offers
for nondocketed cases “should be communicated within the next few
months.” Petitioners did not have a case docketed in this Court.
Because no offer had been made directly to petitioners by the
IRS, petitioners’ accountant, William J. Quinn II, wrote to the
IRS on December 3, 1991, and again on January 22, 1992,
requesting a copy of the settlement offer which he had learned
about through the correspondence from CIGNA. Petitioners
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