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South Bay. She was not required to draft closing agreements for
petitioners or for the other investors beyond the Redwood partner
level. To calculate the settlement numbers, Ms. Sullivan relied
on investment records provided by the Swanton Corp. These
records stated each partner’s cash account, which included the
cash each partner had contributed and any distributions that each
partner had received. The records also listed the tax years in
which any contributions or distributions had been made. For each
closing agreement, Ms. Sullivan had to divide the partner’s cash
account, as listed on the Swanton records, in half. The
resulting number, which represented the partner’s allowable
deduction under the settlement terms, was inserted into the
closing agreement.
Ms. Sullivan sent out closing agreements to Redwood’s
counsel and tax matters partner (TMP) in February or March 1996.
In late 1997, Redwood’s TMP notified Ms. Sullivan that the
investment amounts on which she based the Redwood calculations
were incorrect. After recalculating the Redwood numbers, Ms.
Sullivan sent the final set of closing agreements for Redwood’s
partners to Redwood’s TMP and counsel during the first quarter of
1998. South Bay’s TMP signed a closing agreement with respect to
South Bay’s tax liabilities on March 13, 1999. Respondent
countersigned the closing agreement on July 19, 1999.
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Last modified: May 25, 2011