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1983 tax liability until the partnership litigation concluded in
1999, even though the settlement agreements were not based on the
outcome of the partnership litigation.
Under the circumstances, respondent’s position that there
were no delays in the performance of a ministerial act lacked a
reasonable basis in both fact and law. Considering the
explicitness of the settlement agreements and the absence of
petitioner’s taxable year 1983 from the partnership litigation,
there is no reasonable explanation for respondent’s delay in
performing the ministerial act of assessment. If Appeals Officer
Sivick had consulted the Internal Revenue Manual, the section
pertaining to “Agreement Forms” for the settlement of tax shelter
cases would have informed him of the following:
Closing agreements should be avoided in settlements
when subsequent years are TEFRA. On the date they are
executed by the Service these agreements convert
partnership items to nonpartnership items for the
future years involved, triggering a one year assessment
period under I.R.C. Section 6229(f) for those years.
See 4 Administration, Internal Revenue Manual (CCH), sec.
8.3.1.2.4, at 27,134 (Apr. 13, 1998). Furthermore, the record
contains no evidence that any significant aspect of the delay was
attributable to petitioner. See S. Rept. 99-313, supra at 208,
1986-3 C.B. (Vol. 3) at 208.
The record also indicates that petitioner appropriately
provided all relevant information under his control and all
relevant legal arguments supporting his position. See sec.
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