The Independent Office of Appeals (hereinafter Appeals) is the only administrative function of the Internal Revenue Service (IRS) with authority to consider settlements of tax controversies and has the primary responsibility to resolve these disputes without litigation to the maximum extent possible. Appeals’ mission is to resolve Federal tax controversies without litigation on a basis which is fair and impartial to both the Government and the taxpayer, promotes a consistent application and interpretation of, and voluntary compliance with, the Federal tax laws, and enhances public confidence in the integrity and efficiency of the IRS. Appeals accomplishes this mission by considering protested and Tax Court cases, holding conferences, and negotiating settlements in a manner which ensures Appeals employees act in accord with the Taxpayer Bill of Rights (TBOR) in every interaction with taxpayers. See IRC 7803(a)(3) and Pub 5170, Taxpayer Bill of Rights.

The authority to settle protested and Tax Court cases is delegated to Appeals Team Managers (ATMs) and Appeals Team Case Leaders (ATCLs) as to their respective cases. This does not include the authority to set aside a closing agreement. For details, see Delegation Order 8-8 (Rev. 1) IRM 1.2.2.9.8, Authority of Appeals in Protested and Tax Court Cases, and IRM 1.2.2.9.1, Appeals Functions, Settlement of Cases Docketed in the United States Tax Court (Updated (10-02-2000) to reflect additional new organization titles required by IRS Modernization, for Delegation Order 8-1.

The Director of Case and Operations Support is the executive responsible for designing, developing, delivering, and monitoring short and long-range tax administration policies, programs, strategies, and objectives for the Appeals organization.

The Director, Policy, Planning, Quality and Analysis (PPQA) is responsible for providing technical and procedural guidance to Appeals employees, establishing and maintaining policies and standard procedures for Appeals work streams.

The Policy analyst shown on the Product Catalog Information page as the originator is the assigned author of this IRM.

The Director PPQA provides trends and data analyses and detailed summary reports for Appeals.

See IRM 8.1.1-1 Exhibit, Common Terms Used in Appeals, for common terms and definitions used in IRM Part 8.

This IRM is the primary source of guidance for Appeals settlement procedures and securing agreement forms.

Case dispositions involving concessions by both the Government and the taxpayer for the purpose of settlement where there is substantial uncertainty in the event of litigation as to how the courts would interpret and apply the law, or as to what facts the courts would find, are designated as mutual-concession settlements.

Appeals is expressly authorized by Policy Statement 8–47 to enter into such settlements. In such a case there is substantial strength to the position of both parties, so that neither party, with justification, is willing to concede in full the unresolved area of disagreement. See IRM 1.2.1.9.6.

Resolution of the dispute involves concessions for the purpose of settlement by both parties based on the relative strength of the opposing positions. A Form 870-AD, Offer to Waive Restrictions on Assessment and Collection of Tax Deficiency and to Accept Overassessment, type of agreement is generally used in mutual-concession settlements.

Do not use the term "overall settlement" in the discussion of an issue being settled unless there is a clear and precise discussion of the specific concessions being made by both parties.

Policy Statement 8–48 (Rev. 1) states Appeals may consider and accept proposals for "split issue" settlements. See IRM 1.2.1.9.7, Policy Statement 8-48 (Rev. 1), Split-Issue and Specific Dollar Settlements permitted Under Certain Circumstances.

A split-issue settlement is the settlement of an issue for a percentage or a stipulated amount of the tax in controversy that if litigated, would result in a decision completely for the Government or the taxpayer. The distinguishing feature of a split-issue settlement is that the agreed result would not be reached, if tried.

Split issue settlements are not appropriate in cases involving issues affecting prior or subsequent tax periods not included in the settlement, such as adjustments to depreciation/depletion, carryovers, carrybacks, or other reoccurring issues.

It is important the taxpayer has a clear understanding of the effect of the split-issue settlement in terms of tax liability and taxable income. Either a closing agreement or a collateral agreement is advisable.

Policy Statement 8-48 (Rev. 1) states that Appeals may consider and accept proposals for "specific dollar" settlements. See IRM 1.2.1.9.7.

A specific dollar settlement is the settlement of a case for a percentage or stipulated amount of the tax in controversy that approximates the amount that would have been reached by computing the tax.

Specific dollar settlements are appropriate when:

Specific dollar settlements are not appropriate in cases involving issues affecting prior or subsequent tax periods not included in the settlement, such as adjustments to depreciation/depletion, carryovers, carrybacks, or other reoccurring issues.

The following is a list of some of the issues where a specific dollar settlement would not be appropriate:

The Appeals Officer should explain to the taxpayer and in the Appeals Case Memorandum (ACM) his/her rationale for using a specific dollar settlement.

Prepare Form 5402, Appeals Transmittal and Case Memo, with special instructions:

If a Statement of Account and/or an IRC 6404(g) and/or May/Sequa worksheet(s) is needed, submit the case to Technical Support Tax Computation Specialist (TCS). Refer to IRM 8.2.1.8, Requesting Work from Tax Computation Specialist, for the procedures for requesting TCS assistance.

Do not provide Form 5403, Appeals Closing Record, instructions to Account & Processing Support (APS). APS will follow guidance in IRM 8.20.7, Closing Procedures.

Submit the case to the ATM for approval.

Policy Statement 8–47 states no settlement will be made if it is based on nuisance value to either party. Nuisance value is any concession made solely to eliminate the inconvenience or cost of further negotiations or litigation and is unrelated to the merits of the issues. Appeals neither exacts a concession nor grants a concession solely to relieve either party of such inconvenience or cost.

The judicial attitude is one which reasonably appraises the facts, law, and litigating prospects; uses sound judgment and ability to see both sides of a question; and is objective and impartial. Any approach which contemplates a maximum possible result in favor of the Government or a deficiency in every case is incompatible with a judicial attitude and the Appeals mission.

Do not take advantage of a taxpayer's lack of technical knowledge. Fully explain the settlement proposal and how the decision was reached. In the absence of an agreement, fully explain the taxpayer’s appeal rights.

The Internal Revenue Service Restructuring and Reform Act of 1998 ("RRA 98" ), which was signed into law on July 22, 1998, states under certain circumstances the Internal Revenue Service ("Service" ) has the burden of proof in any court proceeding with respect to a factual issue if the taxpayer introduces credible evidence to ascertain the taxpayer's income tax liability.

Congress believed that placing the burden of proof on taxpayers created a disadvantage for them when they litigated against the Service, and that it should be the Government's responsibility to show that a taxpayer's determination of liability is not correct. Congress also felt it was not appropriate in all cases to make the taxpayer disprove unreported income when the Service determined income solely based upon statistical information from unrelated taxpayers. Furthermore, Congress believed during court proceedings the Service cannot rest on the presumption of correctness if it does not provide any evidence relating to penalties.

The burden of proof provision, under IRC 7491, applies to income, estate, gift, and generation-skipping transfer taxes. (For purposes of this provision, self-employment taxes are treated as income taxes.)

The burden of proof provision applies to court proceedings arising in connection with examinations commencing after the date of enactment (July 22, 1998) of RRA 98. Where there is no examination, the burden of proof provision applies to court proceedings arising in connection with taxable periods or events beginning or occurring after the date of enactment of RRA 98.

An audit is not the only event considered an examination for purposes of the burden of proof provision. For example, matching an information return to an amount reported on an income tax return is an examination for purposes of this provision. Also, the review of a claim for refund prior to the issuance of the refund is an examination for purposes of this provision.

IRC 7491(a) places the burden of proof on the Service in any court proceeding where the taxpayer introduces credible evidence with respect to factual issues relevant to ascertaining the taxpayer's tax liability. To qualify, the taxpayer must:

IRC 7491(b) places the burden of proof on the Service in any court proceeding where the Service reconstructs a taxpayer's income solely through the use of statistical information of unrelated taxpayers. This rule only applies to individual taxpayers.

IRC 7491(c) states the Service has the burden of production in a court proceeding with respect to the liability of any individual for any penalties, additions to tax and additional amounts. This rule only applies to individual taxpayers.

The burden of proof encompasses both the burden of production (also known as the burden of going forward with the evidence) and the burden of persuasion.

The burden of production is met if the party who bears it comes forward with evidence supporting its position. The burden of production requires a party to demonstrate it has concrete and positive evidence, as opposed to a mere theoretical argument, that there is substance to their position. Once a party has established this threshold burden, the burden of production (going forward) shifts back to the other party.

In the past, the taxpayer bore the initial burden of production with respect to both the deficiencies and penalties. By requiring the taxpayer to produce credible evidence sufficient to base a decision if not rebutted, "RRA 98" leaves the burden of production on the taxpayer. However, under IRC 7491(c), the Service now bears the burden of production with respect to the determination that a penalty applies. The Service is required to come forward initially with evidence that it is appropriate to apply a particular penalty to an individual taxpayer. With respect to the liability of an individual for any penalty the burden of production includes proof of compliance with section 6751(b). Graev v. Comm., 149 T.C. 485 (2017) (“Graev III”). Once the Service meets the burden of production, the taxpayer retains the burden of persuading the court that the penalty is not appropriate, by raising defenses to the penalty, such as reasonable cause or substantial authority. Higbee v. Comm., 116 T.C. 438 (2001). Note that IRC 7491 does not apply to the fraud penalty where the IRC specifically places the burden of proof on the Commissioner.

To say that a party bears the burden of persuasion is to say the party must persuade the court that its position is correct. If the party fails to meet its burden, it loses the case. Stated another way, a party that meets the burden of persuasion persuades the Court that its evidence outweighs the evidence of the other party.

In the past, the taxpayer bore this burden and had to convince the court the Service was wrong. Based on the legislative history of "RRA 98" , the burden of persuasion shifts to the Government. Since the Government has the burden of persuasion, the Government only prevails if the preponderance of the evidence (more than 50%) favors the Government.

If the taxpayer complies with the statutory requirements, the Service must now assume the burden of showing to the satisfaction of the court the tax liability as determined is correct, and the taxpayer no longer bears the burden of proof.

It is critical that examiners now document their workpapers to reflect the degree of taxpayer cooperation. In addition, the examiners must fully describe documents used to support audit conclusions and proposed tax adjustments. Examiners must also prepare documents which fully describe the steps taken and the analysis which supports audit conclusions. Similarly, in unagreed cases, Appeals personnel must address the degree of taxpayer cooperation in their ACMs. This confirmation is needed by Counsel in addressing the burden of proof issues during preparation for trial.

Good auditing and good litigation practice, similar to most determinations in the past, ordinarily produce sufficient evidence to sustain the burden of proof. The Service and Chief Counsel have not, in the past, generally relied upon the taxpayer's failure of proof to sustain the asserted liability, but rather have affirmatively shown the proper liability. Continued adherence to these practices satisfies the new standard, but it is now extremely important that a thorough examination and documentation of the liability be performed prior to the initiation of litigation.

The Service cannot take the following actions:

The Service can take the following actions:

The settlement approach and elements of evaluation are not affected by the status of the case. An unacceptable settlement in non-docketed status does not become acceptable solely because it is reconsidered in docketed status; nor does it become more acceptable in a trial calendar period than it was in a prior period. This, of course, does not preclude recognition of changes in judicial interpretation of the law and changes in Service position. It is also recognized that in reconsideration of a case or trial preparation, additional facts may arise which could affect evaluation of the case.

If a trial cannot be recommended on an issue, concede the issue even though it may have some merit.

Do not make or accept minor concessions on the basis the outcome of litigation is never absolutely predictable.

Occasionally settlement is required for issues where the "Golsen Rule" is applicable. The "Golsen Rule" originated with the case of Jack E. Golsen, 54 T.C. 742 (1970). In this case, the Tax Court held it would follow the rule of law laid down by the Court of Appeals to which an appeal in the case before it would lie.

Problems arise when the rule of law laid down by the local circuit conflicts with a Revenue Ruling, Revenue Procedure, or other announcement of Service position in regard to the same issue(s). In cases where the "Golsen Rule" is applicable, consult with Counsel as promptly as possible to determine the amount of litigation activity in other circuits and other relevant information on the Service's posture on the issue(s) involved.

Exercise care in a case where a tentative agreement was reached with the taxpayer and a change in the position of an applicable authority occurs which affects the agreement in a substantive and material manner. If a tentative agreement was not finally reflected on Form 870-AD or Form 906, Closing Agreement on Final Determination Covering Specific Matters, and signed by a Service official authorized by the Commissioner to approve negotiated settlements, the tentative agreement is subject to modification if the law or legal precedent relied upon to formulate the tentative agreement changes. If the change is substantive and material, the agreement is renegotiated. For purposes of this section, the word "substantive" means the change in law or legal precedent results in a meaningful change to Appeals' assessment of the hazards of litigation.

Advise taxpayers that tentative agreements not finalized using Form 870–AD or Form 906, are subject to renegotiation in the circumstances described above.

When evaluating an issue which was the subject of litigation, it is imperative to check whether an "Action on Decision" ("AOD" ) was published when the court ruled adverse to the Service's position. "AODs" represent the Service's "litigating posture" on controversial issues in a specific case and provide the legal basis for the Service's position on those issues. "AODs" are valuable guides for evaluating similar issues, so apply them in resolving cases. However, exercise caution in extending the application of the decision to a similar case unless the facts and circumstances are substantially the same, and consideration is given to the effect of new legislation, regulations, and revenue rulings as well as subsequent court decisions and actions. "AODs" are prepared by the Office of Chief Counsel, and simultaneously made available to the public and Service personnel after litigation is completed.

Aim negotiations toward resolution of all issues in a case. If this cannot be done, attempt to reach agreement with the taxpayer on all issues capable of resolution.

Issues such as reasonableness of salaries, capital gain versus ordinary income on recurring sales of property, hobby losses, etc., are resolved on the basis of the facts and circumstances applicable to each year separately. In such cases, settlement has no effect on later years where a similar issue arises. Be sure the taxpayer understands this.

Where settlement involves issues such as basis of property, category of income, or amount of income from installment sales, it is desirable to incorporate the effect on later years into the settlement by use of a closing agreement or collateral agreement. See IRM 8.13.1, Processing Closing Agreements in Appeals.

This section provides formal procedures for Compliance to express disagreement with an Appeals case resolution. These procedures are not intended to replace any informal procedures currently in use at the local level. Local management in Compliance and Appeals continue to address and resolve disagreements over case resolutions at the lowest possible level. In circumstances where a settled issue is similarly present on multiple cases, concerns over those settlements should be raised through the advisory boards. Concerns may also be addressed through multi-functional meetings. Discussions must remain generic and non-case specific in accordance with Rev. Proc. 2012-18, Section 2.04, unless the issues before Appeals have been resolved with finality.

For LB&I cases worked in Appeals by a team leader (either an ATCL or an Appeals Officer assigned as a team leader), at the conclusion of a case and prior to submitting a formal dissent, the Compliance manager must contact the ATM to request a post settlement conference to allow Appeals the opportunity to communicate the resolution of the case. See IRM 8.7.11.13, Post Settlement Conference. If Appeals denies a post settlement conference or Compliance disagrees with the disposition following a post settlement conference, then a formal dissent may be appropriate.

The purpose of a formal dissent is to provide Compliance an opportunity to express in writing its specific disagreement with Appeals’ disposition of a case. Dissents serve an important purpose by providing Appeals with valuable feedback for internal quality review.

Dissents must be in writing and provide more than a mere continuation of advocacy from the Government to be considered. Disagreements may be based on:

Requests for Appeals to justify its decision or commit to a position regarding future treatment of a particular issue or taxpayer are not appropriate. The dissent must clearly state the reason(s) for the dissent, the rationale supporting the reason(s) for the dissent and whether Compliance requests a conference with the appropriate Appeals Area Director. The rationale for the dissent should include:

Dissents should be e-mailed to the appropriate Appeals Area Director via the “*AP Formal Dissents" centralized mailbox within the following timeframes:

The appropriate Appeals Area Director will send Compliance an acknowledgement of receipt within 10 days. Requests for extensions should be submitted to the appropriate Appeals Area Director.

Upon receipt of the dissent, the Appeals Area Director will determine whether Appeals will reply to the dissent. The Appeals Area Director will notify Compliance within 10 days, that no response will be provided. Appeals will provide a response to Compliance within 90 days of receipt of the dissent. If additional time is necessary, the Appeals Area Director will notify Compliance and provide an estimated response time frame.

Dissents, which occur only on closed cases, may also include a request to reopen a case. Such a reopening would only occur in extremely rare circumstances. The Appeals Area Director, guided by Policy Statement 8-3 (formerly P-8-50), and existing statutes and regulations will decide whether the case should be reopened. See IRM 1.2.1.9.3, Policy Statement 8-3 (Formerly P-8-50), Mutual concession cases closed by Appeals will not be reopened by Service except under certain circumstances.

If a Taxpayer Advocate Service (TAS) case is reopened and the determination changed as a result of this process, Appeals must notify TAS of the change.

A whipsaw situation develops when a settlement in one case can have a contrary tax effect in another case and one of the taxpayers may later, when the period of limitations applicable to the other case has expired or is about to expire, file a claim on a basis inconsistent with the prior closing.

Another whipsaw situation develops when a related party achieves a judicial determination inconsistent with a result already determined by the Service for another related party.

Additional action may be necessary in order to protect the Government's interest in a whipsaw situation.

See IRM 8.2.3.13, Whipsaw Cases, for additional information on whipsaw cases.

In certain instances, resolution of a tax dispute may require incorporating an adjustment into a tax year not currently before Appeals in which a Report of Income Tax Examination Changes (RAR) has not been issued. Examples of situations requiring such action include the disallowance or allowance of tax shelter losses and rollover adjustments resulting from a prior year. Once it is determined such an adjustment is appropriate, make an effort to determine whether any further action by Appeals is permissible.

In instances where an RAR was not issued with respect to a year affected by an Appeals settlement, determine if the tax return for the affected year is currently under examination.

The special agreement forms differ from the non-AD type agreements in several ways. The following table compares the two categories of forms:

Use the Form 870-type agreement (including Form 4549, Report of Income Tax Examination Changes) where a mutual concession settlement is not involved or in a situation where the amount of tax involved in a mutual concession settlement is not material enough to require the finality of the Form 870–AD.

In joint return cases, agreement forms require the signature of both spouses (or authorized representative, if applicable), unless the deficiency is paid in full. Full payment by the taxpayer is considered an agreement to the deficiency (see Rev. Proc. 2005-18, section 4.03 2005-13 IRB 798). Follow normal deficiency procedures for the non-signing spouse when full payment is not received.

Form 4549 can be used in income tax cases closed on an agreed basis. This form combines adjustments to income, computation of tax, and waiver of restrictions on assessment and collection of a deficiency or acceptance of an overassessment. It may be used by technical employees, as defined in IRM 8.1.3.3, Appeals Employees Involved in Settling and Processing Appeals Cases, with registered access to the Report Generation System (RGS) program. Forward the original and one copy of Form 4549 to the taxpayer or taxpayer's representative requesting the original be signed and returned. The copy is for the taxpayer's records. Do not use Form 4549 for the cases listed below:

Depending on the liability type and issues considered, non-AD type agreements include the following:

If the taxpayer requests greater finality, explain Service policy with regard to reopenings and make an attempt to persuade the taxpayer a Form 870-type agreement is adequate.

If the taxpayer is not satisfied, explain the provisions of Form 870–AD and attempt to persuade the taxpayer to use it. This is an exception to the general use of these forms, so include appropriate explanation in the ACM.

If the taxpayer still insists on greater finality and requests a closing agreement, it can be used if the Government sustains no disadvantage. See IRM 8.13.1, Processing Closing Agreements in Appeals.

Occasionally agreement is reached on some issues but not all. Under these circumstances, use a partial agreement. If there are material mutual concessions involved, a Form 870–AD agreement is required; however, make modifications limiting the pledges against reopening to the settled issues. Make a notation on the face of the form "For additional provisions see back of this form," and place detailed descriptions of the agreed matters on the reverse side.

If a Form 870–type agreement is used, identification of the settled issues is not required but may be added for clarity.

When overassessments are involved, obtain an agreement for the settled issues but for those issues not settled, advise the taxpayer to consider filing a claim in order to protect the balance of the overassessment against the expiration of the period of limitations. See IRM 8.7.7.3, Periods of Limitation in Claim and Overpayment Cases, for information about time limits for allowing a refund or credit of an overpayment.

The term "settlement - with reservations" applies to a non-docketed case where settlement is reached but the taxpayer or Government wishes to reserve one or more issues and no weight is given to the reserved issue in the settlement.

If a Form 870-type agreement is used, no modification is necessary. If a Form 870–AD type is used, the agreement must reflect the complete and exact understanding of the parties.

Add the notation "For additional provisions see back of this form" on the Form 870–AD at the end of the paragraph which begins with "If this offer is accepted * * *" .

Following are other situations where "settlements - with reservations" apply:

Where a carryback from a specific year has been taken into account, modify Form 870–AD to reflect any carrybacks given effect in the settlement.

In related cases the taxpayers may ask to have an overassessment offset a deficiency. To do this add a paragraph substantially as follows to the agreement form:

Also make appropriate notation in "Remarks" section of Form 5402, Appeals Transmittal and Case Memo.

If there is a prepayment credit adjustment required in an agreed case together with an overassessment or statutory deficiency, the total or the difference is shown as a deficiency or overassessment.

If considered necessary for an understanding of the agreement, add an explanation similar to the following on the agreement form:

When provisions of printed agreements are modified, change the printed footnotes to ensure consistency and clarity.

Instructions for modification of agreements in Joint Committee cases (other than potential Joint Committee Cases described below) are contained in IRM 8.7.9, Joint Committee (JC) Cases.

Form 2198, Determination of Liability for Personal Holding Company Tax, is used by the Service as an informal agreement as to liability for personal holding company tax under IRC 547(c)(3). For authority to enter into such agreements, see Delegation Order 4-1 (formerly DO-8, Rev. 11) in IRM 1.2.2.5, Delegations of Authority for the Examining Process. This agreement form is not accepted on behalf of the Service, unless the taxpayer has executed an appropriate agreement form, such as Form 870 or Form 870–AD, covering the proposed adjustments both to the income tax and to the personal holding company tax for the years involved. If Form 870 is used, it contains conditional paragraphs as shown in IRM Part 4. It will ordinarily be unnecessary to insert conditional paragraphs on Form 870–AD because the acceptance of Form 870–AD and Form 2198 are concurrent. See also Rev. Proc. 63-1, 1963–1 C.B. 471. For further information relative to the handling and disposition of Form 2198, see IRM Part 4.

For use of closing agreements as determinations under IRC 547(c)(2), see IRM 8.13, Closing Agreements, and Rev. Proc. 68-16, 1968–1 C.B. 770.

IRC 1313(a)(4) provides that a determination under IRC 1311 can be in the form of an agreement between the Secretary or his delegate and any person, relating to the liability of such person (or the person for whom he or she acts) in respect of a tax under Subtitle A of the 1986 Code for any taxable period. Form 2259, Agreement as Determination Pursuant to Section 1313(a)(4) of the Internal Revenue Code, has been prescribed for use by Appeals and Compliance employees in executing agreements to effect determinations under IRC 1311 and related regulations. The provisions of IRC 1311 through 1314 and applicable regulations are carefully complied with in the preparation of such agreements. For authority to enter into such agreements, see Delegation Order 4-5 (formerly DO-35, Rev. 15) in IRM 1.2.2.5.5, Delegation Order 4-5 (formerly DO-35, Rev. 15), Agreements Treated as Determinations (Updated 10-02-2000) to reflect additional new organizational titles required by IRS Modernization.

Inasmuch as Form 2259 does not contain sufficient space for the statements required by Treasury Regulation section 1.1313(a)-4(b)(2) and (3), such information is set forth on a separate sheet, or sheets, of paper which are securely fastened to the form. The attachment has a heading substantially similar to the following: "This statement is attached to, and made a part of, Form 2259 in the case of ____________ ." The original and/or executed copies of Form 2259 are associated with the appropriate tax return of each taxpayer involved. A copy of executed Form 2259 is also furnished to each taxpayer. Note the reverse side of Form 2259 for additional instructions.

For use of closing agreements as determinations under IRC 1313(a)(2), see IRM 8.13, Closing Agreements, and section 4.02 of Rev. Proc. 68-16, 1968–1 C.B. 770.

Occasionally settlements of non-docketed cases are made which are conditioned upon approval of a closing agreement: a case pending in another Appeals Office or before the Department of Justice; or the disposition of some other matter not under Appeals jurisdiction. All these cases, of course, require special handling, and generally the Form 5402 is not signed until the settlement has been approved in all respects. In some instances, however, as in the case of a closing agreement referred to Appeals National Office for final action, the Form 5402 may have been approved conditionally, and in a few instances the transmittal memorandum may possibly have been signed in anticipation of final action by another Bureau or Government agency, or other Appeals Office.

If Form 5402 is approved conditionally, and Form 870–AD type agreement is secured, acceptance of the agreement form may be deferred until the conditions have been met. It may be preferable in some cases to obtain an agreement form modified to become effective upon termination of the conditions. However, a modified agreement made effective upon acceptance of a closing agreement determining tax liability would be ineffective either as a waiver of restrictions on assessment or for the purpose of suspension of interest. See IRM 8.13, Closing Agreements.