Thomas E. Johnston and Thomas E. Johnston, Successor in Interest to Shirley L. Johnston, Deceased - Page 10

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               Petitioners contend that temporary regulations promulgated             
          under section 7430 support their position that new issues may be            
          raised after an agreement is reached if the agreement is reached            
          by way of the qualified offer provision.  We reject this                    
          contention.                                                                 
               Section 301.7430-7T(c)(3), Temporary Proced. & Admin. Regs.,           
          66 Fed. Reg. 728 (Jan. 4, 2001), provides, in part:                         
               A qualified offer specifies the offered amount if it                   
               specifies the dollar amount for the liability of the                   
               taxpayer * * *.  This amount must be with respect to                   
               all of the adjustments at issue in the administrative                  
               or court proceeding at the time the offer is made and                  
               only those adjustments.  The specified amount must be                  
               that amount, the acceptance of which by the United                     
               States will fully resolve the taxpayer’s liability, and                
               only that liability, (determined without regard to                     
               adjustments stipulated by the parties to be fully                      
               resolved through another pending court or                              
               administrative proceeding, or interest, unless interest                
               is a contested issue in the proceeding) for the type or                
               types of tax and the taxable year or years at issue in                 
               the proceeding.                                                        
               Thus, the regulation contains three requirements:  (1) The             
          offered amount must specify the dollar amount for the liability,            
          (2) the offered amount must be with respect to all adjustments at           
          issue and only those adjustments, and (3) the offered amount must           
          be an amount that will fully resolve the taxpayer’s liability for           
          the type(s) of tax and tax year(s) at issue.                                
               Petitioners focus on the second requirement of this                    
          regulation, arguing that the language “and only those                       








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