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authority to bind the Commissioner to a settlement and that,
therefore, a settlement did not occur.
A settlement is a contract, and, consequently, general
principles of contract law determine whether a settlement has
been reached. Robbins Tire & Rubber Co. v. Commissioner, 52 T.C.
420, 435-436 (1969), supplemented by 53 T.C. 275 (1969). In tax
cases, settlement offers made and accepted by letters have been
enforced as binding agreements. Dorchester Indus. Inc. v.
Commissioner, 108 T.C. 320, 333-334 (1997), affd. without
published opinion 208 F.3d 205 (3d Cir. 2000); Haiduk v.
Commissioner, T.C. Memo. 1990-506; Himmelwright v. Commissioner,
T.C. Memo. 1988-114. A settlement agreement may even be reached
in the absence of a writing. Haiduk v. Commissioner, supra
(citing Green v. John H. Lewis & Co., 436 F.2d 389 (3d Cir.
1971)).
A settlement agreement may be reached by authorized agents
or officials representing the parties. See Dorchester Indus.
Inc. v. Commissioner, supra at 331. Whether an attorney has
authority to settle a case on behalf of a taxpayer is a factual
question to be decided according to common law principles of
agency. Id.; see Adams v. Commissioner, 85 T.C. 359, 369-372
(1985); Kraasch v. Commissioner, 70 T.C. 623, 627-629 (1978).
The parties do not dispute that Mr. Leonard had authority to bind
petitioner to a settlement in the instant case.
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