What is Closing Agreement
Closing agreements constitute an important part of tax representation and tax planning. A “closing agreement” is a final agreement between the IRS and the taxpayer on a specific issue or liability. Closing agreements are entered into pursuant to IRC Section 7121.
Usually, closing agreements may be entered into when it is beneficial to permanently and conclusively close a pending matter. However, a taxpayer may use other good reasons for this type of an agreement to convince the IRS. In both cases, however, it should be demonstrated that the agreement will not prejudice the government’s interests.
If a transaction is eligible for a letter ruling, the taxpayer may request a closing agreement with or in lieu of a letter ruling. Sometimes, it is the IRS that may impose closing agreement as a condition for the issuance of a letter ruling.
Sherayzen Law Office offers full IRS representation, including handling your case through a private letter ruling request and entering into a closing agreement, where appropriate.
If you have a case pending before the IRS or you are unsure about the tax consequences of a business transaction, call NOW to discuss your case with an experienced Minneapolis tax lawyer!