Page 4 - Is It Really Over? Closing Agreements with the IRS

tAx CoNtroVersY CorNer
5 Zaentz, 90 tC at 761–762 (citing 13 J. mertens, law of Federal income taxation, §52.01 (1987 rev.)).
6 Id.
7 Id.
8 Rink, 100 tC at 325 (internal quotations omit-
ted).
9 Id.
10 Id.
11 Marathon Oil Co., FedCl, 99-1 ustc ¶50,120,
42 FedCl 267 (1998) (upholding tax liability as stated in closing agreement even though the irs may have separately made an oral agreement to consider separately filed refund claims); see also E.B. Bennett, 56 tCm 796, dec. 45,206(m), tC memo. 1988-557 (1988) (oral side agreements or understandings concerning matters covered by the closing agreements “have no legal standing because they are not a product of the exclusive means for obtaining binding closing agreements prescribed in sec- tion 7121(a).”).
12 Zaentz, 90 tC at 762.
13 R.S. Lamson, 68 tCm 383, dec. 50,034(m), tC
memo. 1994-383 (1994).
14 Id., at *4. the enforceable terms of the clos-
ing agreement do not include the recitals. For instance, in Zaentz, the taxpayers argued that the closing agreements were based on the premise that certain entities were not shams, as reflected in the recitals at the beginning of the agreement. 90 tC at 760–762. the tax Court, however, held that the irs was not barred by the recitals from taking the position in a later tax year that the entities were shams, explaining that “[a]lthough the recitals in a closing agreement are important for interpret- ing the agreement, they are not binding upon the parties for purposes of resolving an issue concerning a matter other than the matter agreed upon.” Id., at 762.
15 G. Miller, BAP-9, 95-1 ustc ¶50,106, 174 Br 791, 796.
16 Id., at 797.
17 W.C. Kercheval, CA-4, 99-1 ustc ¶50,220, 172
F3d 863 (unpublished).
18 Id., at *1–2.
19 Id., at *3.
20 Id.
21 Hopkins, 146 F3d at 734 (holding that a tax-
payer who agreed to her income tax liabilities through a closing agreement with the irs could not later assert an innocent spouse defense); see also In re G. Miller, CA-9, 96-1 ustc ¶50,236, 81 F3d 169 (holding that the irs’s failure to tell the taxpayer that the statute of limitations for assessment had already expired before he entered into a closing agreement was not fraud or malfeasance on the part of the irs).
22 Marathon Oil Co., FedCl, 99-1 ustc ¶50,120, 42 FedCl 267, 278 (1998) (internal quotation omitted).
23 Id., at 336.
24 Act sec. 402 of the tax equity and Fiscal
responsibility Act of 1982 (“teFrA”) (P.l. 97-248), 96 stat. 324, enacted procedures for consistent treatment of all partners in a partnership and to reduce the irs’s administrative burden of determining partnership-level tax issues at the individual partner level. the Bipartisan Budget Act of 2015 (P.l. 114-74), 129 stat. 584, repealed teFrA, effective for tax years beginning after december 31, 2017.
25 See Code sec. 6231(a)(7).
26 Davis, 811 F3d at 336.
27 S.R. Milenbach, CA-9, 2003-1 ustc ¶50,229,
318 F3d 924 (appeal of tax Court decision regarding three transactions related to the raiders’ relocation of their team).
28 Davis, 811 F3d at 337–338. Paragraph q of the Closing Agreement stated:
unless the internal revenue Code provides otherwise and also prohibits an agreement contrary to its provisions, each partner of the taxpayer will be permitted at least 90 days to review and comment on computational adjust- ments proposed by the irs with respect to the implementation of this settlement (and at least 60 days to review any revised computational
adjustments) prior to the irs assessing such amounts.
Allen Davis et al., dC-CA, C-11-04316 edl (July 3, 2012), doc. #38, “order Granting Plaintiffs’ motion for summary Judgment and denying defendants’ motion for summary Judgment,” at 2.
29 Davis, 811 F3d at 338.
30 Id.
31 Allen Davis et al., dC-CA, C-11-04316 edl
(July 3, 2012), doc. #38, “order Granting Plaintiffs’ motion for summary Judgment and denying defendants’ motion for sum- mary Judgment,” at 22 (quoting Philadelphia & Reading Corp., CA-3, 91-2 ustc ¶50,448, 944 F2d 1063, 1070 (“Congress has created an elaborate system for the collection and dispute of tax matters. Adherence to these procedures is required by both citizens and the irs alike”) (quoting E.S. Richardson v. Smith, 62-1 ustc ¶12,072, 301 F2d 305, 306 (per curium)).
32 Davis, 811 F3d at 338.
33 Id., at 339 (citing States S.S. Co., CA-9, 82-2
ustc ¶9538, 683 F2d 1282, 1284; Nat’l Steel Corp., CA-7, 96-1 ustc ¶50,071, 75 F3d 1146, 1150).
34 Id., at 339.
35 Philadelphia & Reading Corp., CA-3, 91-2 ustc
¶50,448, 944 F2d 1063.
36 Id., at 1067.
37 Id., at 1068 and 1072.
38 Davis, 811 F3d at 339.
39 Id., at 339–340 (emphasis added).
40 Id., at 340.
41 Id.
42 Id. the Ninth Circuit does not discuss what
contractual remedies would be available to
davis. Id., at n. 6.
43 Allen Davis et al., dC-CA, C-11-04316 edl
(July 3, 2012), doc. #85, “Plaintiffs’ motion for Partial summary Judgment and shifting of Burden of Production and Proof,” filed June 10, 2016, at 1–2.
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62 Journal of Passthrough EntitiEs
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