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reasons, the Judgment is not a QDRO under section 414(p)(1).
Petitioner’s distribution was not a payment to an alternate payee
pursuant to a QDRO and does not fall within the section
72(t)(2)(C) exception to the section 72(t) additional tax.
Petitioner further argues that he is not liable for the
72(t) additional tax because he received a closing letter from
the Internal Revenue Service (IRS) accepting the additional
information he provided and informing him that he would not:
“need to file a petition with the United States Tax Court to
reconsider the tax [he owed]. If you have already filed a
petition, the office of the District Counsel will contact you on
[sic] the final closing of this case.” Petitioner took this to
mean that the case was closed based on the heading, “Closing
Letter”.
A closing letter is to be sharply distinguished from a
closing agreement entered under section 7121. Kiourtsis v.
Commissioner, T.C. Memo. 1996-534. A closing agreement is
entered into by both the taxpayer and the Commissioner and is
binding in accordance with its terms. Id. Section 7121 sets
forth the exclusive procedure under which a final closing
agreement as to the tax liability of any person can be executed.
Botany Worsted Mills v. United States, 278 U.S. 282, 288 (1929);
Estate of Meyer v. Commissioner, 58 T.C. 69, 70-71 (1972);
Reynolds v. Commissioner, T.C. Memo. 2000-20.
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Last modified: May 25, 2011