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Petitioner alleges that his agreement to the disallowance of
the $5,433 loss for 1998 was bargained for in exchange for
respondent’s agreement to allow the deduction for 1999. For such
a contract to exist and be binding, both parties must have agreed
to the above-stated essential terms. To determine if there was
mutual assent between the parties we must decide whether an offer
and acceptance occurred.
An offer is “'the manifestation of willingness to enter into
a bargain, so made as to justify another person in understanding
that his assent to that bargain is invited and will conclude
it.'” Id. (quoting 1 Restatement, Contracts 2d, sec. 24 (1981)).
Petitioner, through Mr. Koll, made the following proposal:
“Here’s what I’m suggesting. You will allow Barela’s loss,
disallow Mrs. Barela’s loss, but allow it to her in 1999, and
we’ll agree to that $7,000 Schedule A adjustment and two other
minor items”.
Even if we were to find that a valid offer was made, it must
be shown that respondent accepted it by manifesting his assent to
the offer. A prerequisite to the formation of an agreement is an
objective manifestation of mutual assent to its essential terms,
also known as a “meeting of the minds”. Estate of Halder v.
Commissioner, T.C. Memo. 2003-84 (citing various cases).
On that point, respondent’s counsel and the Appeals officer
indicated that the 1998 loss might be allowable in a subsequent
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