Bernhard F. and Cynthia G. Manko - Page 3

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          See sec. 6221.  Respondent examined certain items relating to               
          Comco for the taxable years 1987 through 1991 and reached                   
          agreement with Mr. Manko and Comco’s other partner on these                 
          items.                                                                      
               The changes to the Comco items required changes to                     
          petitioners’ joint Federal income tax returns for the years at              
          issue.  To facilitate this process, petitioners agreed to extend            
          the time indefinitely for respondent to assess income taxes for             
          the years at issue.  Petitioners and respondent agreed on the               
          treatment of the Comco items on petitioners’ returns for the                
          years at issue and memorialized their agreement on Form 906,                
          Closing Agreement on Final Determination Covering Specific                  
          Matters (the closing agreement).                                            
               The preamble to the closing agreement explains that the                
          parties wish to determine with finality petitioners’ distributive           
          share of income, gains, losses, deductions, and credits with                
          respect to Comco for the years at issue.  The final paragraph of            
          the closing agreement provides that the agreement does not affect           
          or preclude later adjustments of any item (other than those                 
          relating to Comco) for the years at issue.                                  
               When the parties executed the closing agreement, respondent            
          was also examining petitioners’ returns for the years at issue              
          for issues unrelated to Comco (the non-Comco items).  After the             
          parties executed the closing agreement, respondent prepared an              






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