Case: Form 870-AD Not Forcible Contract (T.C. Memo) (IRC §7122)

Settlement agreement embodied in Form 870-AD did equitably estop the IRS from setting aside the agreement and issuing a notice of deficiency which increases the parties’ agreed-to deficiency, the U.S. Tax Court held in a memorandum opinion. Form 870-AD is not a binding settlement agreement under Section 7122, the court continued. The IRS and Taxpayer entered into an agreement regarding the at-risk amounts of investments in entities reported on Schedule E and the ability to take losses. The issue was the representation of loans between Taxpayer and the companies. The court determined that Taxpayer did not prove that ...