Finality through Closing Agreements

IRC §7121

Allows a taxpayer to enter into a written agreement with the IRS to permanently lock in a tax liability or treatment for a specific period, preventing future audits or changes on those matters.

Eligibility

Available to any person relating to their tax liability; requires IRS approval and a written agreement.

Frequently Asked Questions

Who is eligible for the Finality through Closing Agreements?

Available to any person relating to their tax liability; requires IRS approval and a written agreement.

How does the Finality through Closing Agreements work?

Allows a taxpayer to enter into a written agreement with the IRS to permanently lock in a tax liability or treatment for a specific period, preventing future audits or changes on those matters.

What law authorizes the Finality through Closing Agreements?

The Finality through Closing Agreements is authorized under IRC §7121 of the Internal Revenue Code (Title 26, United States Code).

Statutory Text — IRC §7121

Source: Internal Revenue Code, Title 26, United States Code

§ 7121. Closing agreements(a) AuthorizationThe Secretary is authorized to enter into an agreement in writing with any person relating to the liability of such person (or of the person or estate for whom he acts) in respect of any internal revenue tax for any taxable period. (b) FinalityIf such agreement is approved by the Secretary (within such time as may be stated in such agreement, or later agreed to) such agreement shall be final and conclusive, and, except upon a showing of fraud or malfeasance, or misrepresentation of a material fact—(1) the case shall not be reopened as to the matters agreed upon or the agreement modified by any officer, employee, or agent of the United States, and (2) in any suit, action, or proceeding, such agreement, or any determination, assessment, collection, payment, abatement, refund, or credit made in accordance therewith, shall not be annulled, modified, set aside, or disregarded. (Aug. 16, 1954, ch. 736, 68A Stat. 849; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.) Editorial Notes Amendments1976—Subsecs. (a), (b). Pub. L. 94–455 struck out “or his delegate” after “Secretary”.

Legal Sources

US Code (Official) — 26 USC §7121 → Cornell Law Institute — 26 USC §7121 → Search IRS.gov for IRC §7121 → Treasury Regulations (26 CFR) →

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