CCA discusses when settlement correspondence may bind the Service

Number

200929017

Outcome

Advice

Document type

Chief Counsel Advice

IRS subject

Settlement Agreement

Topics

Procedure, penalties, and administration

Code sections

§ 6224, § 6110

Ruling dated

June 24, 2009

Publicly released

July 17, 2009

Source

View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2009, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.

About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.

View official IRS release (PDF)

Plain-English summary

Chief Counsel Advice discusses settlement agreements in a TEFRA partnership matter. The memorandum states that the Service styles its settlement agreements as taxpayer offers that do not become binding until the Service agrees to and signs them. It cautions that courts may nevertheless construe the Service's settlement solicitations as offers subject to taxpayer acceptance when the facts permit, citing Treaty Pines v. Commissioner as an example.

Ruling snapshot

Question: When may settlement correspondence create a binding agreement with the Service?
Outcome: Advice given, the memorandum describes how courts may construe settlement solicitations.
Key authorities: IRC § 6224; Treaty Pines v. Commissioner, 967 F.2d 206 (5th Cir. 1992); IRC § 6110(k)(3).

Full text (IRS public release)

ID: CCA_2009062409241637 Number: 200929017
Release Date: 7/17/2009
Office: --------------
UILC: 6224.01-01

From: -------------------
Sent: Wednesday, June 24, 2009 9:24:18 AM
To: -----------------
Cc: ---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Subject: RE: TEFRA Partnership

We style our settlement agreements as offers from the taxpayer that are not binding until agreed to and signed by the Service. I assume that these were similarly worded. But under various factual scenarios the courts have liberally construed solicitation of settlements by the Service as "offers" subject to "acceptance" by the taxpayer given any room to do so. See, e.g., Treaty Pines v. Commissioner, 967 F.2d 206 (5th Cir. 1992) (exchange of letters constituted offer and acceptance creating a binding settlement). ----------------------------------------------------------------------------------------------------------------------------
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