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closing agreement as to the tax liability of any person can be
executed.”); Harbaugh v. Commissioner, T.C. Memo. 2003-316 (“It
is well settled that section 7122 and the regulations thereunder
provide the exclusive method of effectuating a valid compromise
of assessed tax liabilities.”); Ringgold v. Commissioner, T.C.
Memo. 2003-199 (“The law regarding compromises is well
established. The regulations and procedures under section 7122
provide the exclusive method of effectuating a compromise.”).
For instance, pertinent regulations require that any closing
agreement or offer-in-compromise be submitted and/or executed on
or in the specific form prescribed by the IRS. Secs. 301.7121-
1(d), 301.7122-1(d), Proced. & Admin. Regs.3
The above principle of exclusivity derives from the early
ruling by the U.S. Supreme Court in Botany Worsted Mills v.
United States, 278 U.S. 282 (1929). In construing a predecessor
of section 7122, the Supreme Court opined that “Congress intended
3 Sec. 301.7122-1, Proced. & Admin. Regs., contains an
effective date provision stating that the section applies to
offers-in-compromise pending on or submitted on or after July 18,
2002. Sec. 301.7122-1(k), Proced. & Admin. Regs. Previous
temporary regulations by their terms apply to offers-in-
compromise submitted on or after July 21, 1999, through July 19,
2002. Sec. 301.7122-1T(j), Temporary Proced. & Admin. Regs., 64
Fed. Reg. 39027 (July 21, 1999). The final and temporary
regulations do not differ materially in substance in any way
relevant here, and temporary regulations are entitled to the same
weight and binding effect as final regulations. Peterson Marital
Trust v. Commissioner, 102 T.C. 790, 797 (1994), affd. 78 F.3d
795 (2d Cir. 1996). For simplicity and convenience, citation is
to the final regulations.
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