Note:

When TEB completes a bond exam, it may enter into a closing agreement that resolves all identified specific matters relating to that issue and, when appropriate, any potential IRC 6700 promoter penalty liability of the issuer.

The examiner drafts the closing agreement covering specific matters, following the appropriate model closing agreement (https://www.irs.gov/tax-exempt-bonds/model-closing-agreements-for-vcap-and-examinations). The drafter must clearly state the violation that is being resolved with the closing agreement so the agreement, read on its own, has only one reasonable interpretation as to the specific matter being resolved.

Some of the model closing agreement terms apply only to specific situations so the examiner must consider whether the terms in IRM 4.70.14.2.1.5.9.3, TEB – Closing Agreement Terms, are appropriate for the agreement. The agreement may also cover related tax issues if the impacted taxpayer is a party to the agreement, such as:

Denial of interest deductions under IRC 150(b).

Depreciation adjustments under IRC 168.

Closing agreement terms generally follow the model closing agreements created for exam.

The GE Director executes exam closing agreements under the process in IRM 4.70.14.2.1.5.9.3, TEB – Closing Agreement Terms.