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the liabilities set forth in the qualified offer, petitioners
should have at least stated that the offered amount was subject
to reduction by application of NOLs. We agree with respondent.
Petitioners’ interpretation of the regulation renders the
third requirement meaningless. In order to give effect to the
third requirement, an offered amount must be one that will fully
resolve a taxpayer’s liability for the type(s) of tax and tax
year(s) at issue. If taxpayers were allowed to reduce the amount
of the qualified offer after the qualified offer was made, then
the qualified offer would not be one that, if accepted, would
fully resolve the taxpayer’s liability, thus giving no effect to
the third requirement. In the current case, petitioners’
qualified offer would not fully resolve their liabilities for the
type of tax and tax years at issue if petitioners were now able
to apply the NOLs to reduce the offered amount.
Additionally, the fact that the NOLs were not in dispute at
the time the qualified offer was made is a matter of petitioners’
own doing. Petitioners admittedly raised the issue of the NOLs
for the first time after the agreement was entered into. In
petitioners’ Opposition to Respondent’s Motion for Summary
Judgment, petitioners state that, immediately upon acceptance of
the qualified offer by respondent, petitioners “reminded”
respondent that petitioners had several years of tax loss
carryforwards and carrybacks.
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Last modified: May 25, 2011