126 T.C. No. 9
UNITED STATES TAX COURT
BERNHARD F. AND CYNTHIA G. MANKO, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 24124-04L. Filed April 20, 2006.
Ps and R executed a closing agreement covering specific
matters relating to the treatment of certain partnership
items on Ps’ returns. R assessed Ps’ taxes without issuing
Ps a deficiency notice. R then commenced collection action
against Ps. Ps argue that R may not proceed with the
proposed collection action because R failed to issue a
statutory deficiency notice before R assessed Ps’ taxes.
Held: R may not proceed with collection because R
failed to issue a deficiency notice before assessing
Ps’ taxes. The requirement to issue a deficiency
notice before assessment is not altered by the closing
agreement covering the treatment of certain items on
Ps’ returns for the years at issue. Accordingly, R may
not proceed with collection of Ps’ liabilities.
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