T.C. Mem o. 2 01 5- 92

UNITED STAT ES TAX COURT
BONNIE J. ANGLE, Peti ti on er v . COMM ISSI ONER OF INTERNAL REVENUE, Resp on de nt

Doc ke t No s. 2 94 18 -1 1, 4 35 -1 2L. Fi le d M ay 11 , 20 15
.
W il li am E. Tagg art , Jr., fo r pe ti ti on er. Audra M. Di ne en , forres po nd en t.- 2 -

[* 2] MEMORANDUM OPINION LARO, Ju dg e: Curren tl y be fo re the Co urt i s p et it io ne r’s m ot io n fo r reas on ab le li ti ga ti on co st s p ur su an t t o s ect io n 7 43 0 an d R ul e 2 31 . Peti ti on er 1
res id edinCal ifo rn iaat t he ti m e sh e fi le d h er p et it io n. Bac kg ro un d On Ap ril 15 , 19 96 , pet it io ne r an d h er n ow d ecea se d h us ba nd , Clo y d An gl e, fil eda joi ntFed eral in co m e ta x re tu rnfor19 95 . Peti ti on er’s 1 99 5 t ax li ab il ity ha s gi ve n ri se to no fewer tha n fo urcas es , th ree o f whi chwe de sc rib e in tu rn . 2 I. Defi ci en cy

Cas e On Se pt em

be r 26 , 20 01 , res po nd en t i ss ue d t o p et it io ne r an d M r. Ang le a no ti ce o f de fic ie nc y

for19 95 . On Dece m

be r 6, 2 00 1, p et it io ne r an d M r. Ang le

Unl es s o th erwi se in di cat ed , sec ti on refe ren ces are t o the Int ern al Rev enue 1 Co de ineffe ctat a ll rel ev an t t im es , andRu le refe ren ces are t o the Tax C ou rt Rul es of Prac ti ce an d P ro cedur e. The fou rth cas e p ert ai ne d t o re sp on de nt ’s col le ct io n e ffo rts forpe ti ti on er 2 an d M r. Ang le ’s exc is e ta x l iabi li ty und er s ec. 1 49 1 fo r 19 95 . On Aug us t 1 3, 20 12 , pet it io ne r fi le d ape ti ti oninth is Co urt s eek in g re vi ew of res po nd en t’s co ll ect io n a ct iv it ie s, wh ic h was ass ig ne d d oc ke t No . 20 24 0- 12 L. On Sep te m be r 12 , 20 13 , th e Co urt en te reda st ip ul at edde ci si on set ti ng forth th e p art ie s’ ag reem en t tha t re sp on de nt ’s det erm in at io ns reg ard in g the co ll ect io n o f pe ti ti on er’s ex ci se tax li ab il ity

wou ldno t b e su st ai ne d.- 3 -

[* 3] fil eda pe ti ti on with thi s C ou rt, wh ic h was ass ig ne d d oc ke t No . 13 71 8- 01 (d efi ci en cy

cas e). Mr. An gl e d ie d i n M ay

20 04 , andpe ti ti on er b ecame the adm in is tra to r of hi s es ta te . On Ju ne 28 , 20 05 , th e p art ie s en te redin to a st ip ul at io n o f se tt le d i ss ue s i n th e d efi ci en cy

cas e inwhi chpe ti ti on er ag reedto all of t he ad jus tm en ts inth e no ti ce o f de fic ie nc y , with the ex cep ti on of acap it al ga in ad jus tm en t fo r th e sa le of cert ai n s to ck . Duri ng th atcas e p et it io ne r al so att em pt edto arg ue forrel ie f fro m joi ntan d s ev eral li ab il ity un de r se ct io n 6 01 5. Ho wev er, b ecau se pe ti ti on er d idno t fo rm al ly rais e h er s ect io n 6 01 5 c la im un ti l tria l, the Co urt d en ie d h er m ot io n t o am en d the pe ti ti on to rai se th atcla im . On Ju ne 23 , 20 05 , th e cap it al ga in is su e was tri edbe fo re J ud ge Hol m es . On Oct ob er 5 , 20 09 , Ju dg e Hol m es is su edan op in io n fi nd in g tha t p et it io ne r an d M r. Ang le reco gn iz edga in fro m th ei r sa le of st oc k. Es ta te of An gl e v . Comm is si on er, T.C. Mem o. 2 00 9- 22 7. OnFeb ru ary 18 , 20 10 , th e Co urt en te reda de ci si on ag ai ns t p et it io ne r an d M r. Ang le fora de fic ie nc y

of $ 2,8 05 ,61 9 a nda pe na lty un de r se ct io n 6 66 2 o f $5 61 ,12 3.8 0. On Ju ly 8, 20 10 , res po nd en t as se ss edth e am ou nt s s etforthinth e d eci si on . II. In no cen t Sp ou se Cas e On J un e 1 8, 2 01 0, fo ll owi ng th e en try of d eci si oninth e d efi ci en cy cas e, pe ti ti on er fi le d F orm

88 57 , Reque stforInn oc en t Sp ou se Rel ie f, reque st in g re li ef- 4 -

[* 4] fro m he r 19 95 tax li ab il ity

pu rs ua ntto sec ti on 60 15 an d c la im in g tha t s he si gn edth e return und er dur es s. OnNov em be r 5, 2 01 0, the Int ern al Rev enue Serv ic e (IR S) Ci nc in na ti Cen tra li zedInn oc en t Sp ou se Oper at io ns (CCI SO) pr el im in ari ly den ie d p et it io ne r rel ie f de te rm in in g tha t s he ha d m at eri al ly pa rti ci pa te d i n the de fic ie nc y cas e an d c it in g re s ju di cat a. Pet it io ne r fi le d a st at em en t o f di sa gr eem en t o n Dec em be r 15 , 20 10 . On Ja nu ary 11 , 20 11 , pet it io ne r se ntth e IRS Offic e o f App eal s (Ap pe al s) a le tt er o ffer in g t o s et tl e th e in no cen t sp ou se cas e fo r $1 ,00 0. OnOcto be r 6, 2 01 1, Ap pe al s i ss ue d afin al de te rm in at io n su st ai ni ng CCIS O’ s p rel im in ary de te rm in at io n. On Dec em

be r 23 , 20 11 , pet it io ne r fi le d ape ti ti on inth is Co urt fo r rev ie w of App eal s’ fin al de te rm in at io n. Th e p et it io n was ass ig ne d d oc ke t No . 29 41 8- 11 (in no cen t s po us e cas e), wh ic h i s o ne of t he two cas es curren tl y be fo re the Co urt. Altho ug h re sp on de ntin it ia ll y ass ert edres jud ic at a as anaffi rm at iv e d efen se , res po nd en t l at er co nc ed editan d s en t the cas e b ackto CCIS O forco ns id erat io n o f th e m eri ts of p et it io ne r’s cl ai m . On Ju ly 31, 2 01 2, CC ISO d et erm in edth atth e 19 95 return was a va li d jo in t re tu rnan d tha t p et it io ne r was no t el ig ib le for in no cen t s po us e rel ie f be cau se sh e h adactua l kno wled ge of t he de fic ie nc y un de r se ct io n 6 01 5( c) an d b ecau se sh e d idno t s at is fy th e requi rem en ts un de r se ct io n- 5 -

[* 5] 60 15 (b ) or

(f). On Oct ob er 1 0, 2 01 2, re sp on de ntfil eda st atus rep ort wi th th e Co urt, i nf orm in g the Co urt o f CCI SO’s de te rm in at io n. III. Co ll ect io n Du e Pro ces s C as e Mea nwh il e, on Feb ru ary 10 , 20 11 , fol lo win g the en try of d eci si on inth e de fic ie nc y

cas e, res po nd en t i ss ue d afin al no ti ce o f in te ntto lev y to co ll ect pe ti ti on er’s 1 99 5 t ax li ab il ity . Peti ti on er t im el y reque st eda co ll ect io n due pro ces s (CDP) h eari ng inres po ns e to th e le vy no ti ce. On F eb ru ary 22 , 20 11 , pet it io ne r rece iv eda no ti ce o f Fed eral tax li enwith re sp ectto he r ta x l iabi li ty for 1 99 5. Pet it io ne r ti m el y

reque st eda CDP h eari ng inres po ns e to th e li enno ti ce. App eal s Offi cer Al anOwy an g c on du ct edpe ti ti on er’s CDP h eari ng by tele ph on e o n Nov em be r 30 , 20 11 . On Dece m be r 8, 2 01 1, re sp on de ntis su eda no ti ce o f de te rm in at io n s us ta in in g re sp on de nt ’s col le ct io n a ct io ns with re sp ectto bo th th e li enan d the lev y . On Ja nu ary 5, 2 01 2, p et it io ne r fi le d ape ti ti on inth is Co urt
se ek in g re vi ew of

res po nd en t’s n ot ic e o f de te rm in at io n. Th atcas e was ass ig ne d do ck etNo. 4 35 -1 2L (C DP cas e), wh ic h i s the sec on d c as e cu rren tl y be fo re the Co urt. OnApri l 1 8, 2 01 2, p et it io ne r fi le d am ot io n t o c on so li da te th e in no cen t sp ou se an d C DP cas es , whi chth e Co urt g ran te d o n M ay 21 , 20 12
.- 6 -

[* 6] IV. Res ol ut io n o f In no cen t Sp ou se an d C DP Cas es The in no cen t s po us e an d C DP cas es were s ch edul edfortri al on Octo be r 21 , 20 13 . Mean whi le , onJu ly 16, 2 01 3, re sp on de ntde po se d p et it io ne r reg ard in g h er kn owl ed ge of t he de fic ie nc y it em s an d h er dur es s cl ai m . After t he de po si ti on , res po nd en t re qu es te d a dd it io na l i nf orm at io n, wh ic h p et it io ne r pr ov id edon Aug us t 11 an d 2 0, 2 01 3. Onth e b as is of the de po si ti onan d the ne w in fo rm at io n, res po nd en t d et erm in edth atth e 1 99 5 re tu rnwas ava li d jo in t re tu rnbu t p et it io ne r was en ti tl edto rel ie f un de r se ct io n 6 01 5( c). On S ep te m be r 27 , 20 13 , res po nd en t in fo rm edpe ti ti on er o f th is de te rm in at io n a ndfax eddra ft d eci si on do cum en ts refl ect in g aset tl em en t. OnSep te m be r 28 , 20 13 , pet it io ne r ackno wled ge d re cei pt of th e d eci si on do cum en ts bu t re fu se d t o s ig n the m be cau se th ey

di d n otpro vi de fo r li ti ga ti on co st s. On Oct ob er 2 1, 2 01 3, wh enth es e cas es were ca ll edfortri al , th e p art ie s in fo rm edth e Co urt tha t al l u nd erl y in g i ss ue s h adbe enset tl edan d tha t o nl y th e is su e o f li ti ga ti on co st s re m ai ne d. The Co urt co nt in ue d the cas e unt il Nov em be r 3 18 , 20 13 , to gi ve th e p art ie s anop po rtu ni ty to re so lv e th e li ti ga ti onco stis su e. On Nov em be r 18 , 20 13 , th e p art ie s i nf orm edth e Co urt tha t a r es ol ut io n c ou ldno t b e
Res po nd en t co nc ed edat t ria l tha t the gra nt in g o f se c. 60 15 rel ie f ren de red 3 th e co ll ect io n a ct io n m oo t.- 7 -

[* 7] reac he d. Th atsame day , th e Co urt i ss ue d a n o rd er d ire ct in g p et it io ne r to fil e
a m ot io n fo r co st s u nd er s ect io n 7 43 0 b y Janua ry 17 , 20 14
. Dis cu ss io n Cu rren tl y be fo re the Co urt i s p et it io ne r’s m ot io n fo r li ti ga ti on co st s pu rs ua ntto sec ti on 74 30 . Und er s ect io n 7 43 0( a), a p rev ai li ng tax pa y er i n aco urt pr oc eed in g a ga in stth e Uni te d S ta te s m ay be award ed“ reas on ab le li ti ga ti on co st s in cu rredinco nn ect io n wi th su chco urt p ro ceed in g.” The d eci si on whet he r to awardatt orne y ’s fees un de r se ct io n 7 43 0 i s wi th in a tr ia l co urt’s s ou nddi sc ret io n. See P ac. Fi sh eri es , Inc . v. Un it edSta te s, 4 84 F.3d11 03 , 11 06 n.2 (9t h C ir. 2 00 7) ; Huf fm anv. Co m

m is si on er, 9 78 F.2d11 39 , 11 43 (9t h C ir. 1 99 2) , aff’g i n p art , rev ’g inpa rt T.C. M em o. 1 99 1- 14 4. I. Leg al Sta nd ard Inord er fo r th is Co urt t o a wardreas on ab le li ti ga ti on co st s u nd er s ect io n 74 30 , cert ai n re qu ire m en ts m us t b e m et . The rec or d m us t s ho w th e fo ll owi ng . (1 ) The m ov in g p arty

fil eda ti m el y

m ot io n fo r rea so nabl e li ti ga ti on co st s. Ru le 23 1( a). Inanord er d at edNov em be r 18 , 20 13 , th e Co urt o rd eredpe ti ti on er t o fil e a m ot io n fo r co st s b y Jan ua ry 17 , 20 14 . Whi le pe ti ti on er’s m ot io n was da te d Ja nu ary 17 , 20 14 , itwas n otfil edwith the Co urt u nt il Jan uary 21 , 20 14 , th e n ex t bu si ne ss da y . W e ex cu se pe ti ti on er’s d el ay , ho wev er, b ecau se itwas m in im al
.- 8 -

[* 8] (2 ) The m ov in g p arty di d n otun reas on ab ly pro tra ctth e co urt p ro ceed in gs . Sec. 7 43 0( b) (3 ). Res po nd en t co nc ed es th atpe ti ti on er d idno t u nr eas on ab ly pr ot ractth e p ro ceed in gs . (3 ) The m ov in g p arty

ex haus te d a ny adm in is tra ti ve rem ed ie s av ai labl e to hi m or h er wi th in th e IRS . Sec. 7 43 0( b) (1 ). Res po nd en t co nc ed es th atpe ti ti on er ha s ex haus te d the adm in is tra ti ve rem ed ie s av ai labl e to he r. (4 ) The m ov in g p arty

ha s a n etwort h tha t d idno t ex ceed$2 m il li on at t he ti m e th e p et it io n was fil edinth e cas e. Sec. 7 43 0( c)(4 )(A)(i i). Re sp on de nt
co nt en ds th atpe ti ti on er h as no t es tabl is he d tha t s he m eet s the ne t wo rth requi rem en t b ecau se th e o nl y pro of sh e subm itte d was “ he r own sel f-s erv in g st at em en ts ” in he r affi davi t. Onth e b as is of o urho ld in g b el ow tha t p et it io ne r is
no t a p rev ai li ng party, howe ve r, we ne edno t re so lv e th is fact -in te ns iv e is su e. (5 ) The m ov in g p arty

is a pr ev ai li ng pa rty in t he Co urt p ro ceed in g. Se c. 74 30 (a), (c )(4 )(A), (B) , (E). Res po nd en t d is pu te s tha t p et it io ne r is a “pr ev ai li ng pa rty”. For the reas on s s etforth be lo w, we agr ee wi th res po nd en t. (6 ) The a m ou ntof c os ts cla im edis reas on ab le . Sec. 7 43 0( a), (c) (1 ). Res po nd en t ch al le ng es th e rea so nabl en es s o f pe ti ti on er’s cl ai m edco st s. Onth e- 9 -

[* 9] ba si s o f ou r ho ld in g tha t p et it io ne r is no t a p rev ai li ng pa rty, howe ve r, we ne edno t d eci de th is is su e. The se si x re qu ire m en ts are i n the co nju nc ti ve ; ea chrequi rem en t m us t b e
m etbe fo re thi s C ou rt m ay ord er an awardof l it ig at io n c os ts to a ta xp ay er u nd er se ct io n 7 43 0. Se e Bee cro ft v . Comm is si on er, T.C. Mem o. 1 99 7- 23 (ci ti ng Mi na ha n v . Commis si on er, 8 8 T.C. 4 92 , 49 7 (1 98 7) ). Becaus e sh e is no t a pr ev ai li ng pa rty, we decl in e to awardpe ti ti on er l it ig at io n c os ts . II. Prev ai li ng Party

Und er the Qual ifi edOffer Ru le Pet it io ne r arg ue s tha t s he is en ti tl edto reco ve r li ti ga ti on co st s u nd er the qu al ifi edoff

er ru le , see sec . 74 30 (c)( 4) (E) an d (g ), be cau se he r Ja nu ary 11 , 20 11 , le tt er was a qu al ifi edoff

er. Pet it io ne r be ars th e b ur de n o f pr ov in g tha t s he m eet s 4 th e qua li fie d o fferrequi rem en ts . See Ru le 23 2( e). Sect io n 7 43 0( c)(4 )(E)(i ) pr ov id es : A party to a c ou rt p ro ceed in g * * * sh al l b e tr eat edas t he pre va il in g pa rty if th e li ab il ity

of t he tax pa y er p ur su an t t o the jud gm en t i n the pr oc eed in g (d et erm in edwitho utreg ardto in te res t) i s equa l t o o r le ss th anth e li ab il ity

of t he tax pa y er wh ic h wo ul d h av e b eenso de te rm in edif the Uni te d S ta te s h adacce pt eda qu al ifi edoff er o f th e pa rty [as d efi ne d] un de r subs ect io n (g ). Pet it io ne r do es no t ar gu e o n b rie f th atsh e is a pr ev ai li ng pa rty un de r se c. 4 74 30 (c)( 4) (A). W e th eref or e d eem an y su charg um en t t o b e co nc ed ed . See Men de s v . Commis si on er, 1 21 T.C. 30 8, 3 13 -3 14 (20 03 ) (h ol di ng th atarg um en ts no t ad dr es se d i n b rie f m ay be co ns id eredab an do ne d)
.- 10 -

[* 10 ] Und er the qu al ifi edoff er ru le of s ect io n 7 43 0( c)(4 )(E) an d (g ), a ta xp ay er
m ay be de em edto be a pr ev ai li ng pa rty rega rd le ss of wh ethe r th e ta xp ay er subs tant ia ll y

pre va il edinth e p ro ceed in g o r of whet he r th e Co m

m is si on er’s po si ti oninth e p ro ceed in g was subs tant ia ll y jus ti fie d. Haas & Ass oc s. Acco un tanc y

Co rp . v. Co m

mis si on er, 1 17 T.C. 48 , 59 (20 01 ), aff’d, 5 5 F ed . App x. 47 6 (9 thCir . 20 03 ). A. No Qu al ifi edOffer i n the CDP Cas e Sect io n 7 43 0( g) de fin es a “ qu al ifi edoff er” a s a wri tt enoff

er wh ic h: (1) is
m ad e b y th e ta xp ay er t o the Uni te d S ta te s dur in g the qu al ifi edoff er p eri od --i .e., th e p eri odbe twee n the da te th e fi rs t l et te r of pro po se d d efi ci en cy

is sen t an d 3 0 da y s b efo re the da te th e cas e is fir stsetfortri al ; (2 ) sp eci fie s the off eredam ou nt of th e ta xp ay er’s l iabi li ty (det erm in edwitho utreg ardto in te res t); (3) is de si gn at ed atth e ti m e itis m ad e as a qu al ifi edoff er fo r pu rp os es of thi s s ect io n; an d (4 )
rem ai ns op endu rin g the pe rio d b eg in ni ng on th e d at e itis m ad e an d e nd in g o n the earl ie stof t he date th e o ffer is reject ed , th e d at e th e tr ia l b eg in s, o r th e 9 0t h d ay aft er the da te th e o fferis m ad e. Res po nd en t co nc ed es th atpe ti ti on er’s J anua ry 11 , 20 11 , let te r was a qu al ifi edoff

er as de fin edby sect io n 7 43 0( g) with re sp ectto th e in no cen t s po us e cas e. Howev er, res po nd en t ar gu es th atpe ti ti on er’s J anua ry 11 , 20 11 , let te r was- 11 -

[* 11 ] no t a qua li fie d o fferwith re sp ectto th e CDP ca se fortwo reas on s. Fi rs t, the Ja nu ary 11 , 20 11 , let te r di d n otrefe r to an y CDP cas e o r co ll ect io n a ct io n. Seco nd , res po nd en t s en t the fir stco ll ect io n n ot ic e in co nn ect io n wi thth e CDP
cas e o n F eb ru ary 10 , 20 11 , app ro xi m at el y a m on th aft er p et it io ne r’s Ja nu ary 11 , 20 11 , let te r. W e fi ndth atpe ti ti on er’s o fferwas n otm ad e dur in g the qu al ifi ed of fer p eri odwith re sp ectto th e CDP ca se be cau se itwas m ad e b efo re the fir st le tt er tha t re sp on de ntsen t i n c on ne ct io n wi th th e CDP ca se . Accor di ng ly, we co nc lu de th atth e Ja nu ary 11 , 20 11 , let te r is no t a qua li fie d o fferwith re sp ectto th e CDP ca se . Si nc e p et it io ne r’s Ja nu ary 11 , 20 11 , let te r is a qu al ifi edoff er wi th res pe ctto th e in no cen t s po us e cas e, ho wev er, s he m ay be en ti tl edto reas on ab le li ti ga ti on co st s i nc urredinco nn ect io n wi th th e in no cen t s po us e cas e if all othe r qu al ifi ed of fer re qu ire m en ts are s at is fie d. B. Set tl em en t Ex cep ti on to th e Qua li fie d Off er Ru le Eve n wh ere t he tax pa y er m ak es a qu al ifi edoff er u nd er s ect io n 7 43 0( g) , th e qu al ifi edoff

er ru le do es no t ap pl y

to “ any jud gm en t i ss ue d p ur su an t t o a se tt le m en t” . Sec. 7 43 0( c)(4 )(E)(i i)( I); see als o s ec. 3 01 .74 30 -7 (a), Pr oc ed . & Adm in . Reg s. (“ An awa rdof r eas on ab le adm in is tra ti ve an d l it ig at io n c os ts un de r th e qua li fie d o fferrul e o nl y in cl ud es th os e co st s * * * att rib ut ab le to th e- 12 -

[* 12 ] ad jus tm en ts * * * tha t wer e in cl ud edinth e co urt’s jud gm en t o th er tha n b y reas onof s ettl em en t.”)
. InKnu ds env. Co m

m is si on er, T.C. Mem o. 2 01 3- 87 , at * 16 -* 17 , we ex pl ai ne d tha t re co ve ry

un de r th e qua li fie d o fferrul e is li mit edto is su es actua ll y de ci de d b y

th e co urt: The reg ul at io ns als o d efi ne th e wor d “ jud gm en t” for

pu rp os es of t he qu al ifi edoff

er ru le to m ean“ th e cu m

ul at iv e d et erm in at io ns of t he co urt co nc ern in g the ad

jus tm en ts at i ss ue an d l it ig at edto a de te rm in at io n i n the co urt p ro ceed in g” , sec . 30 1.7 43 0- 7( a), Pro ced . & Adm in . Reg s., an d s etforth by exam pl e th atanis su e th ata ta xp ay er di sp ut es inco urt b utul ti m at el y co nc ed es or s et tl es is ou ts id e th e m ean in g o f th e wor d “

jud gm en t” be cau se th e is su e “ was no t de te rm in edby the co urt, b utrathe r by con ces si on or s et tl em en t” , sec . 30 1.7 43 0- 7( e), Exa m

pl e (1 ), Pro ced . & Adm in . Reg s. See a ls o T.D. 91 06 , 20 04 -1 C.B. 3 84 , 38 5 (s ta ti ng th ata co m m en ta to r ha d
reco m m en de d tha t the fin al reg ul at io ns pe rm itth e rec ov ery of fees attrib ut ab le to ad jus tm en ts th atwere s et tl ed , bu t the fin al reg ul at io ns de cl in edto ad op t h is
co m m en t). M or eo ve r, a co nt rary rul e wou ldrun afo ul of t he sp iri t o f th e qua li fie d of fer ru le . “ The qu al ifi edoff er ru le was e na ct edto en co ur ag e se tt le m en ts . Requi rin g the go ve rn m en t t o p ay adm in is tra ti ve an d l it ig at io n c os ts with re sp ectto is su es res ol ve d e xc lu si ve ly pur su an t t o aset tl em en t wo ul d b e co nt rary to tha t go al .” Id
.- 13 -

[* 13 ] Dur in g the pe nd en cy of t he in no cen t s po us e an d C DP cas es , res po nd en t
co nc ed edbo th cas es . On Sep te m be r 27 , 20 13 , res po nd en t s en t p et it io ne r dr aft de ci si on do cu m en ts off

eri ng he r fu ll rel ie f fro m

he r 19 95 in co m e ta x l iabi li ty
un de r se ct io n 6 01 5( c). Mo reo ve r, on Octo be r 21 , 20 13 , pet it io ne r’s co un se l rep res en te d t o the Co urt tha t the so le is su e rem ai ni ng was the is su e o f at to rn ey ’s fees
. InKnu ds en , we hel d aco nc es si on to be a “ se tt le m en t” withi n the m ean in g of sec ti on 74 30 . Knu ds env. Co m m is si on er, at*1 2- *1 6 (“ The [qu al ifi edoff er] reg ul at io ns dra w no di st in ct io n b etweena se tt le m en t an d aco nc es si on [.]”). 5 Whe th er a co nc es si on co ns ti tu te s a s et tl em en t u nd er s ect io n 7 43 0( c)(4 )(E)(i i)( I) do es no t re sten ti rel y

on th e ti m in g o f th e Co m m is si on er’s co nc es si on bu t i ns te ad de pe nd s o n a ll th e fac ts an d c irc um st an ces . Knu ds env. Co m m is si on er, at*1 3. Mo reo ve r, “ th e p art ie s’ fai lu re t o c omm un ic at e th e co nc es si on ina fo rm al iz ed

InEst at e o f Lip pi tz v. Co m m is si on er, T.C. Mem o. 2 00 7- 29 3, we h el d tha t a 5 co nc es si on was n ota se tt le m en t wh ere t he Co m m is si on er co nt inue d t o o pp os e th e ta xp ay er wi fe’s cl ai m

forin no cen t s po us e rel ie f aft er re cei vi ng CCIS O’ s reco m m en da ti on infav orof r el ie f an d wh ere t he Co m m is si on er d idno t co nc ed e hi s p os it io n u nt il a di sp os it iv e m ot io n was pe nd in g. Bo th pa rti es arg ue th atEst at e of Lip pi tz is di st in gu is habl e fro m th e cu rren t ca se s, an d we a gr ee. Inth es e cas es , CCIS O reco m

m en de d d en y in g re li ef aft er co ns id eri ng th e m eri ts of p et it io ne r’s cl ai m . In ad di ti on , res po nd en t co nc ed edth es e cas es aft er re cei vi ng ad di ti on al in fo rm at io n tha t p et it io ne r ha d s ub m it te d a ndno t as a ta ct ic al li ti ga ti on pl oy. The refo re, Est at e o f Lip pi tz do es no t co nt ro l o uran al y si s.- 14 -

[* 14 ] st ip ul at io n o f se tt le d i ss ue s ca rri es li tt le weig htinou r an al y si s b ecau se th e fil in g o f a wri tt enag reem en t i s n otne ces sa ry to th e fi nd in g o f a s et tl em en t.” Id . at *1 5 (c it in g J oh ns to n v . Comm is si on er, 1 22 T.C. 12 4, 1 29 , aff’d, 4 61 F.3d11 62 (9 th Cir . 20 06 )). Und er the fact s an d c irc um st an ces , we fin d tha t re sp on de nt ’s con ces si on s i n th e in no cen t s po us e an d C DP cas es co ns ti tu te set tl em en ts un de r se ct io n 74 30 (c)( 4) (E)(i i)( I). The parti es di d n otsubm itan y is su e to th e Co urt fo r it s de te rm in at io n o n the m eri ts . Mor eo ve r, pe ti ti on er’s acc ep tanc e o f res po nd en t’s
co nc es si on is ev id en cedby her co un se l’s s tate m en t t o the Co urt tha t al l
ou ts tand in g i ss ue s h adbe enres ol ve d. Becaus e th es e cas es were s et tl ed , th e 6

InDorc he st er In du s. In c. v. Co m mis si on er, 1 08 T.C. 32 0, 3 30 (19 97 ), aff’d 6 witho utpubl is he d o pi ni on , 20 8 F .3d20 5 (3 d C ir. 2 00 0) , we hel d: “A set tl em en t i s a co nt ractan d, co ns eque nt ly, ge ne ral pri nc ip le s o f co nt ractlaw d et erm in e whe th er a se tt le m en t h as be enreac he d.” A con tra ctrequi res “ anob jecti ve m an ife st at io n o f m utua l as se ntto it s es se nt ia l t erm s” , andm utua l as se ntis typic al ly establ is he d th ro ug h a n o fferan d a n a ccep tanc e. Id . “ The pa rti es to a co nt ractne edno t m an ife stth ei r m

utua l as se ntex pl ic it ly butm ay do so im pl ic it ly thro ug h the ir act io ns or i na ct io ns as v ie wedinth e li gh t o f th e su rro un di ng fact s an d ci rcu m st an ces .” Knu ds env. Co m m is si on er, T.C. Mem o. 2 01 3- 87 , at * 14
. Mo reo ve r, “ ‘[a] ss en t t o the term s o f a s ettl em en t ag reem en t ca n b e im pl ie d fr om th e ci rcu m st an ces , andco nduc t i nc on si st en t wi th a refu sa l o f th e te rm s ra is es a pr es um pt io n o f as se ntup on whi chothe rs m ay rel y .’ ” Ahe rnv. Ce nt . Pac. Fre ig ht Lin es , 84 6 F .2d47 , 49 (9t h C ir. 1 98 8) (qu ot in g Won g v . Bai le y , 75 2 F .2d61 9, 62 1 (1 1th C ir. 1 98 5) ).- 15 -

[* 15 ] qu al ifi edoff

er ru le do es no t ap pl y , andpe ti ti on er i s n ota pr ev ai li ng pa rty. See s ec. 7 43 0( c)(4 )(E)(i i)( I). Inreac hi ng ou r ho ld in gs , we hav e co ns id eredall arg um en ts m ad e, an d t o th e ex te ntno t m en ti on edab ov e, we co nc lu de th ey are m oo t, i rrel ev an t, o r witho ut
m eri t. To re fle ctth e fo reg oi ng , An ap pr op ria te ord er an d de ci si on wil l b e en te redindo ck et No. 2 94 18 -1 1. An ap pr op ria te ord er an d
or de r of di sm is sa l wi ll be en te redin do ck etNo. 4 35 -1 2L.