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Audit, Internal Revenue Manual (CCH), sec. 4023.4, at 7064-7065.
A no change letter is not a closing agreement under section 7121.
See sec. 301.7121-1(d), Proced & Admin. Regs.
i. Violation of Respondent’s Reopening Procedures Does Not
Invalidate a Notice of Deficiency.
In the face of hornbook law that respondent’s procedural
rules, including the reopening procedures under Rev. Proc. 94-68
and section 4023.2 of the Manual, supra, are merely directory,
not mandatory, see Collins v. Commissioner, 61 T.C. 693, 700-701
(1974), and that compliance with directory procedural rules is
not essential to the validity of a statutory notice, so that an
alleged violation of these rules provides no basis for
invalidating a statutory notice of deficiency, id., petitioner
cites Chrysler Corp. v. Brown, 441 U.S. 281 (1979), for the
proposition that respondent’s reopening procedures in Rev. Proc.
94-68, 1994-2 C.B. 803, should have “the force and effect of
law”.
Chrysler Corp. v. Brown, 441 U.S. at 302 (quoting Morton v.
Ruiz, 415 U.S. 199, 232, 235, 236 (1974)), establishes that a
regulation or procedure has the force and effect of law when it
is promulgated by an agency as a “‘substantive rule’” or a
“‘legislative-type rule’” pursuant to a mandate or delegation by
Congress “‘affecting individual rights or obligations.’”
Conversely, “interpretive rules, general statements of policy, or
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