David Jackson and Betty S. Jackson - Page 17

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          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 waive              






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