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* * * * * * *
(g) Qualified Offer.--For purposes of subsection
(c)(4)--
(1) In general.--The term “qualified offer” means a
written offer which--
(A) is made by the taxpayer to the United
States during the qualified offer period;
(B) specifies the offered amount of the
taxpayer’s liability (determined without regard to
interest);
(C) is designated at the time it is made as a
qualified offer for purposes of this section; and
(D) remains open during the period beginning on
the date it is made and ending on the earliest of
the date the offer is rejected, the date trial
begins, or the 90th day after the date the offer
is made.
The legislative history of section 7430 provides insight
into the purpose of section 7430:
The Committee believes that settlement of tax
cases should be encouraged whenever possible.
Accordingly, the Committee believes that the
application of a rule similar to FRCP 68 [rule 68 of
the Federal Rules of Civil Procedure] is appropriate to
provide an incentive for the IRS to settle taxpayers’
cases for appropriate amounts, by requiring
reimbursement of taxpayer’s costs when the IRS fails to
do so. [S. Rept. 105-174, at 48 (1998), 1998-3 C.B.
537, 584.]
Additionally, we have previously stated that “The purpose
underlying the qualified offer provision of section 7430(c)(4)(E)
* * * is to encourage settlements by imposing litigation costs on
the party not willing to settle.” Gladden v. Commissioner, 120
T.C. 446, 450 (2003).
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Last modified: May 25, 2011