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to that bargain is invited and will conclude it.’
1 Restatement, Contracts 2d, sec. 24 (1981).
“In a tax case, it ‘is not necessary that the
parties execute a closing agreement under section 7121
in order to settle a case pending before this Court,
but, rather, a settlement agreement may be reached
through offer and acceptance made by letter, or even in
the absence of a writing.’ Lamborn v. Commissioner,
T.C. Memo. 1994-515. Settlement offers made and
accepted by letters are enforced as binding agreements.
Haiduk v. Commissioner, T.C. Memo. 1990-506; see also
Himmelwright v. Commissioner, T.C. Memo. 1988-114.”
In the circumstances we consider here, the authority to
settle is not the decisive element of whether a binding contract
was formed. Clearly, there was an offer of settlement in the
form of the January 6, 2006, letter from petitioners’ counsel to
Ms. Gonzalez. That offer sought to resolve the only issue then
pending in this case--the cash contributions disallowed in the
notice of deficiency. It is less clear whether that offer was
accepted and/or whether there was a meeting of the minds. It is
certain that Ms. Gonzalez did not make a written or oral
response, and hence did not accept the offer irrespective of
whether she had authority to do so.
To the extent there was an acceptance of the offer,
petitioners contend that it was made by Mr. Carriger. In the
circumstances of this case, we cannot conclude that Mr. Carriger
accepted petitioners’ offer. First, the offer was not made to
Mr. Carriger. Significantly, the negotiations were conducted by
Ms. Gonzalez and not by Mr. Carriger, and he was not aware of the
specifics of the offer. Mr. Carriger’s response to Mr. Stientjes
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