- 15 - however, to settle all issues related to petitioners’ tax liabilities for the years at issue. We conclude that the closing agreement here, which covers specific matters only, does not absolve respondent from issuing a deficiency notice before assessing petitioners’ liabilities. Accordingly, we hold that respondent may not proceed with collection. See sec. 6213(a). C. Our Holding Does Not Violate Section 7121(b)(2) Respondent argues that section 7121(b) requires us to give full effect to the closing agreement in this proceeding. Section 7121(b) provides that a closing agreement (or any assessment in accordance with a closing agreement) shall not be annulled, modified, set aside, or disregarded in any subsequent suit, action or proceeding. We hold that collection may not proceed because respondent failed to follow the law regarding assessments, not because we are disregarding the parties’ closing agreement. See secs. 6212 and 6213. We are not constrained to hold that respondent may proceed with collection simply because the collection proceeding is for a year in which there was a closing agreement between the parties. III. Conclusion Respondent assessed petitioners’ tax liabilities without first issuing petitioners the statutorily required deficiencyPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
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