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that an offer must satisfy to be treated as a qualified offer
under section 7430(g)”. Preamble to sec. 301.7430-7, Proced. &
Admin. Regs., 68 Fed. Reg. 74848 (Dec. 29, 2003). We note that
the final regulations added Example 4 to sec. 301.7430-7(e),
Proced. & Admin. Regs., which briefly discusses whether a
taxpayer may reduce the amount the taxpayer will pay pursuant to
a qualified offer, after the offer is accepted by the
Commissioner, by applying net operating loss carryovers. The
language of Example 4 is as follows:
Example 4. Offer must resolve full liability. Assume
the same facts as in Example 1, except that A makes a
qualified offer that is accepted by the IRS. After the
offer is accepted, A attempts to reduce the amount A
will pay pursuant to the offer by applying net
operating loss carryovers to the years in issue.
Because the net operating losses were not at issue when
the offer was made, A’s offer was a qualified offer.
Whether A is entitled to apply net operating losses to
reduce the amount stated in the offer will depend upon
the application of contract principles, local court
rules, and, because net operating losses are at issue,
section 6511(d) and related provisions.
As stated, Example 4 was not part of the temporary regulations.
See sec. 301.7430-7T(e), Temporary Proced. & Admin. Regs., 66
Fed. Reg. 728 (Jan. 4, 2001). The final regulations are
applicable to qualified offers made after December 24, 2003.
Sec. 301.7430-7(f), Proced. & Admin. Regs. Petitioners’ offer
was made before that date.
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