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Section 7121 envisages an agreement knowingly entered into
by both parties. Harrington v. Commissioner, 48 T.C. 939, 953
(1967), affd. on another issue 404 F.2d 237 (5th Cir. 1968).
Petitioner and respondent did not enter into a valid closing
agreement. The closing letter issued by the IRS to petitioner is
not a closing agreement under the provisions found in section
7121 and does not affect petitioner’s liability for tax. We hold
that petitioner is liable under section 72(t) for the additional
10 percent tax on the $37,848 of early distributions from his
qualified retirement plans.
Reviewed and adopted as the report of the Small Tax Case
Division.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011