Note:

Evidence of fraud not related to the issues constituting the basis for the closing agreement will probably be insufficient to sustain setting aside a closing agreement, unless the fraud goes to the agreement itself as in Kehoe v. Commissioner, 34 B.T.A. 59 (1936)vacated, 105 F.2d 552, rev’d sub nom.Helvering v. Kehoe, 309 U.S. 277 (1940).

The term "malfeasance" imports violation of a public trust or guilt with respect to some form of official act.

The term "misrepresentation" when used as a basis for setting aside a closing agreement connotes intentional deceit. It doesn't refer to a mere mistake of fact or law, whether unilateral or mutual, no matter how material. In Ingram v. Commissioner, 32 B.T.A. 1063 (1935) the then Board of Tax Appeals stated: "Obviously the use of the word misrepresentation denotes something more deliberate or more conscious than a mere error or mistake. Otherwise, the entire rationale of a closing agreement would be lost. Congress intended that innocent mistakes be buried in a closing agreement. This still leaves an ample field for protection against an agreement founded in trickery or deception."

Setting aside of a closing agreement, even though deemed justified, is not mandatory. If it's in our best interests to refrain from setting aside the agreement, we may do so.

Any request to set aside a closing agreement must be submitted to the Commissioner. The request should include a recommendation and the reasons therefor.