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law applied to agreement to extend the period for making
assessments).
Mistake is defined in 1 Restatement, Contracts 2d, sec. 152
(1981), as follows:
(1) Where a mistake of both parties at the time a
contract was made as to a basic assumption on which the
contract was made has a material effect on the agreed
exchange of performances, the contract is voidable by
the adversely affected party unless he bears the risk
of the mistake under the rule stated in sec. 154.
(2) In determining whether the mistake has a
material effect on the agreed exchange of performances,
account is taken of any relief by way of reformation,
restitution, or otherwise. [Emphasis supplied.]
A mutual mistake exists where there has been a meeting of the
minds of the parties and an agreement actually entered into but
the agreement in its written form does not express the actual
intention of the parties. Woods v. Commissioner, supra at 782.
A material fact is one “that is significant or essential to the
issue or matter at hand”. Black’s Law Dictionary 611 (7th ed.
1999).
In Hopkins v. Commissioner, 120 T.C. 451, 462-463 (2003), we
held that a taxpayer was entitled to raise a claim for relief
under section 6015 where a closing agreement under section 7121
was signed before the effective date of section 6015, and the tax
liabilities assessed pursuant to the agreement remained unpaid as
of the effective date. The instant case is distinguishable
because it involves an offer in compromise under section 7122
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