- 15 -
Commissioner, 122 T.C. 133, 138 (2004); Robbins Tire & Rubber Co.
v. Commissioner, supra at 435-436. In general, such settlements
will not be set aside in absence of fraud or mutual mistake.
Dutton v. Commissioner, supra at 138; Dorchester Indus. Inc. v.
Commissioner, supra at 330; Stamm Intl. Corp. v. Commissioner, 90
T.C. 315, 320-321 (1988); Korangy v. Commissioner, T.C. Memo.
1989-2, affd. 893 F.2d 69 (4th Cir. 1990); see also sec.
301.7122-1(e)(5), Proced. & Admin. Regs. A unilateral mistake is
not enough to justify relief from an otherwise valid settlement.
Stamm Intl. Corp. v. Commissioner, supra at 320-321; Korangy v.
Commissioner, supra. As noted by this Court in quoting 3 Corbin
on Contracts, section 608 (1960):
“If the mistake of one party to a written
instrument is in thinking that it contains a larger
promise by the other party than in fact it does, and
the other party has no reason to know of this mistake,
of course the mistaken party cannot hold the other to
the large promise that he did not make, by getting
reformation or otherwise. * * * ” [Korangy v.
Commissioner, supra.]
II. Analysis
The petition in the instant case was filed on June 30, 2003.
The parties had agreed to the $4,244.75 figure at issue here on
May 29, 2002, and had executed the pertinent Form 12257 in June
of 2002. Hence, we deal in this scenario with the import of a
prepetition administrative settlement.
As previously mentioned, petitioner’s argument here rests on
the idea that she settled or compromised her 1998 liabilities in
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