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As the very purpose of the qualified offer provision is to
encourage settlements, we conclude that there is no persuasive
reason why a settlement reached by way of the qualified offer
provision should be treated any differently from the way this
Court treats settlement agreements reached outside the parameters
of the qualified offer provision.
As contracts, settlements are governed by general principles
of contract law. Dorchester Indus. Inc. v. Commissioner, 108
T.C. 320, 330 (1997), affd. without published opinion 208 F.3d
205 (3d Cir. 2000). Settlement of an issue before the Court does
not require any particular method or form and can be accomplished
by letters of offer and acceptance. Id. Settlement agreements
are effective and binding once there has been an offer and an
acceptance; filing the agreement with the Court is not required
for the agreement to be effective and binding. Id. at 338.
We are convinced that the proposed figures conveyed to
respondent’s counsel by way of the January 31, 2003, letter from
petitioners’ counsel constitute the definite and material terms
of an offer to settle the docketed cases, and we so hold. The
terms of that offer were accepted by respondent, as evidenced by
the February 10, 2003, letter. We believe that the parties
entered into a contract to settle the docketed cases, and we so
hold.
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