- 16 - and that respondent would waive the additions to tax if petitioners paid off the total principal balance plus interest. Consistent with this agreement, petitioners paid in full their outstanding tax liabilities for the years in issue. Petitioners allege, however, that respondent did not waive the penalties and thus failed to comply with the agreement. Sections 7121 and 7122 and the regulations thereunder set forth the exclusive means by which closing agreements and compromises between the Commissioner and a taxpayer concerning the latter’s tax liability may be accorded finality. Urbano v. Commissioner, 122 T.C. 384 (2004); Hudock v. Commissioner, 65 T.C. 351, 362 (1975); Rohn v. Commissioner, T.C. Memo. 1994-244; secs. 301.7121-1, 301.7122-1, Proced. & Admin. Regs. A closing agreement or compromise must be submitted on special forms prescribed by the Secretary and is not considered accepted until the taxpayer is notified of the acceptance in writing. Laurins v. Commissioner, 889 F.2d 910, 912 (9th Cir. 1989), affg. Norman v. Commissioner, T.C. Memo. 1987-265; sec. 301.7122-1(d)(1), (3), Proced. & Admin. Regs. Petitioners admitted at trial that the purported agreement was oral and that they do not have any written document or form to that effect. Based on the record, there was no compliance with section 7121 or 7122. Accordingly, we hold that petitioners and respondent did not enter into a binding agreement to waivePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011