Note:

We don't treat simple unintentional errors as fraud, malfeasance, or misrepresentation that allow reopening of an agreement. (Policy Statement P-4-3 (IRM 1.2.1.5.1) )

The burden of proof in establishing the disqualifying factor falls upon the party seeking to set the agreement aside. (Holmes & Janes, Inc. 30 B.T.A. 74 (1934))

Where EO Examinations believes there is fraud, malfeasance, or misrepresentation, we must conduct an audit of the taxpayer to prove a disqualifying factor.

The taxpayer must retain sufficient documentation to ensure compliance with the closing agreement requirements.

Existence of any disqualifying element is subject to review by a court.

We must base the term "fraud" , as applied under IRC 7121(b), upon evidence showing intent to evade the payment of tax, for which the taxpayer is believed to be liable, as distinguished from mistake, inadvertence, reliance on incorrect technical advice, honest difference of opinion, negligence, or carelessness. (IRM 25.1, Fraud Handbook.)