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963, 966 (1988); sec. 301.7430-1(g), Example (11), Proced. &
Admin. Regs.
Qualified Offer
Because the Court has found that petitioners failed to
exhaust their available administrative remedies, the Court need
not decide whether the qualified offer provision under section
7430(c)(4)(E) applies. The Court nevertheless notes that the
application of the qualified offer provision would have been
precluded by the settlement limitation under section
7430(c)(4)(E)(ii)(I).1
Section 7430(c)(4)(E)(ii)(I) provides that the qualified
offer provision does not apply where the parties settle a tax
adjustment rather than litigate and obtain a court determination
of the adjustment. In this case, the entire tax liability was
settled by the parties before this matter was brought before the
Court. Therefore, any judgment in this case will be issued
pursuant to a settlement rather than a judicial determination.
1The statutory language in sec. 7430(c)(4)(E) reflecting the
settlement limitation to the qualified offer provision, in
relevant part, provides:
(ii) Exceptions.--This subparagraph shall not apply to–-
(I) any judgment issued pursuant to a settlement * * *
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