Frank R. v. United States

OPINION ON DEPENDANT’S MOTION FOR SUMMARY JUDGMENT

In this tax refund action, plaintiffs, Frank R. and Bertha M. Kretchmar, jointly seek a refund of federal income taxes, interest, and penalties in the amounts of $19,-006.05, $27,404.64, and $24,250.02 for the taxable years 1976, 1977, and 1978, respectively. Plaintiffs claim that they were unlawfully assessed the foregoing additional amounts based upon an erroneous calculation of gross income for each of the years in question. Further, plaintiffs claim that the penalties assessed are without foundation in fact or in law.1

Without addressing the merits of these claims as to any of the foregoing years, defendant, in moving for summary judgment, avers that (1) plaintiffs’ previous execution of IRS Form 870-AD,2 Offer of Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and of Acceptance of Overassessment, now estops plaintiffs from seeking a refund for each of said taxable years; (2) for the taxable year 1978, plaintiffs have failed to pay in full the totally assessed amount for such year thereby depriving this court of subject matter jurisdiction to award a refund for that year; and (3) plaintiffs’ failure, in this action, to reply to defendant’s answer aver*193ring fraud regarding the filing of plaintiffs’ returns for the years in question was an admission entitling defendant to judgment on the fraud issue as a matter of law. Because we find that plaintiffs failed to pay the amount (tax and penalty) fully assessed for the taxable year 1978, this court is without jurisdiction to entertain a claim for such year. As for the taxable years 1976 and 1977, we find that the plaintiffs are also barred from litigating the merits of their refund suit on the grounds that the doctrine of equitable estoppel, stemming from their previous execution of IRS Form 870-AD, is a complete impediment.3

FACTS

Plaintiffs, husband and wife residing in West Brookfield, Massachusetts, filed timely federal income tax returns for the taxable years in question, 1976, 1977, and 1978. Schedule C of each of said returns described plaintiffs’ business, euphemistically, as “novelty sales,” and reported gross receipts and net income in the identical amounts of $11,700, $19,140, and $30,000, for the taxable years 1976, 1977, and 1978, respectively.4 No deductible expenses were claimed as having been incurred in connection with earning these amounts of income.

During the calendar year 1980, Internal Revenue Agent (IRA) Robert B. Puzzo conducted an audit of the plaintiffs’ 1976, 1977, and 1978 returns. That audit report (December 12, 1980) resulted in plaintiffs being assessed income tax deficiencies of $12,156.76, $13,867.49, and $24,180.99, for the taxable years 1976, 1977, and 1978, respectively. In addition, plaintiffs were also assessed civil fraud penalties at the rate of 50% of the assessed tax deficiency plus deficiency interest ($6,078.39, $6,933.75, and $12,090.49 as to each respective tax year, pursuant to 26 U.S.C. § 6653(b)). In the aggregate, said audit generated a proposed assessment against plaintiffs in the amount of $75,307.89 in additional taxes and penalties. Said amounts were assessed within the periods prescribed by I.R.C. §§ 6501(a) and (c)(4), i.e., within three years from the date the returns were filed or within the period agreed to by voluntary extensions. Following the audit, a deficiency notice and offer of settlement, Form 870, was forwarded to the plaintiffs.

Plaintiffs rejected, i.e., refused to execute, the Form 870 settlement offer and appealed the foregoing proposed deficiencies to the Appeals Office of the Internal Revenue Service (IRS). Upon further settlement negotiation, the IRS agreed in 1982 to decrease plaintiffs’ assessed gross income by the amount of $6,000 for 1976, and $20,000 for 1978. No adjustment, however, was made for 1977 given the agreed diminution in 1976 and 1978. As a result of said readjustments by the Appeals Office, plaintiffs’ reassessed taxes and penalties were reduced to $14,063.52, $20,801.24, and $20,104.15, for the three taxable years in question or an aggregate amount of $54,-968.91. As evidence of the results of the compromise/settlement negotiations, and in order to preclude future assessments against such taxable years, plaintiffs executed Form 870-AD on January 29, 1982, which was accepted for the Commissioner *194of Internal Revenue on February 9, 1982. See Exhibits B and C, Appendix B, Memorandum for the United States dated January 22, 1985.

Shortly thereafter, i.e., on or about March 15, 1982, plaintiffs received the IRS notice that the agreed to deficiency had been accepted by the defendant. That notice also contained an assessment issued in the total amounts of $18,163.20, $25,922.91, and $24,250.02 for the taxable years 1976, 1977, and 1978, respectively, which included taxes, penalties, and deficiency interest. Plaintiffs’ complaint alleges that the total foregoing assessment was in fact paid in full for all of the foregoing years in question over the period June, 1982 through February, 1983. The facts, however, belie this averment and show that the total assessment for the taxable year 1978 was not paid in full as of February 3, 1984, i.e., the date plaintiffs’ petition was filed in this court. Plaintiffs have since conceded the fact that payment in full has not been made for the taxable year 1978.5 As for the taxable years 1976 and 1977, the Service’s records confirm the jurisdictional fact that plaintiffs have paid in full the agreed to amounts assessed on Form 870-AD for such years.

In spite of plaintiffs’ promise in the Form 870-AD that “no [future] claim for refund or credit shall be filed ... other than for amounts attributed to carrybacks” for the years in issue after the execution of the Form 870-AD, they nevertheless filed a timely claim for refund (Form 1040X), for each of the years in question, “other than for amounts attributed to carrybacks” with the Boston Appeals Office of the IRS on or about May 23, 1983. At that date, despite plaintiffs’ previous execution of several forms extending the general three-year limitations period for deficiency assessment for 1976 and 1977 to December 31, 1982, defendant’s right to assess any further deficiency as to all years under the general three-year period of limitations (§§ 6501(a) and (c)(4)) had then expired. On each such Forms 1040X, plaintiffs claimed, inter alia, that the originally reported income amounts on their returns for each year were correct; that the Form 870-AD was executed by a representative of plaintiffs who was acting outside the scope of his authority; that the Form 870-AD was itself illegal as it was executed beyond the three year statute of limitations contained in 26 U.S.C. § 6501; and that no grounds existed to assess civil fraud penalties pursuant to 26 U.S.C. § 6653(b). The IRS rejected plaintiffs’ contentions and disallowed all of plaintiffs’ refund claims on December 12, 1983.

Plaintiffs, thereafter, commenced a refund action in this court on February 3, 1984. The petition here did not seek refunds “for amounts attributed to carry-backs,” but rather requested refunds of the same amounts for each year which were sought in plaintiffs’ earlier appeal to the Appeals Office dated May 23, 1983. In opposition, on January 22, 1985, defendant moved for summary judgment in which it invoked the doctrine of equitable estoppel for all years as a result of plaintiffs’ execution of Form 870-AD, and also averred that this court lacks jurisdiction with regard to the claim respecting the taxable year 1978.

For reasons hereinafter delineated, we find that judgment should be granted in favor of defendant on its motion for summary judgment as to all taxable years in issue.

DISCUSSION

In passing on the operative issues for each taxable year, the court will address the claim regarding the taxable year 1978 first inasmuch as a jurisdictional bar is raised to the prosecution of that refund claim. Thereafter, we will discuss the impediment to the prosecution of the 1976 and 1977 refund claims because of the applicability of the doctrine of equitable estoppel.

*195A. Jurisdiction Re 1978 Claim for Refund

As a jurisdictional prerequisite, it has long been settled law that federal courts may not adjudicate tax refund suits for a given year until and after the deficiency assessed for that year has been paid in full. Flora v. United States, 357 U.S. 63, 78 S.Ct. 1079, 2 L.Ed.2d 1165 (1958), aff'd on rehearing, 362 U.S. 145, 80 S.Ct. 630, 4 L.Ed.2d 623 (1960). That holding has consistently obtained in both the Claims Court, and in the predecessor Court of Claims. Tonasket v. United States, 218 Ct.Cl. 709, 711-12, 590 F.2d 343 (1978); Frise v. United States, 5 Cl.Ct. 488, 490 (1984); see also 28 U.S.C. § 1491 (1982).

For the taxable years 1976 and 1977, defendant has made no challenge to this court’s subject matter jurisdiction over plaintiffs’ refund action. IRS records submitted by the defendant confirm that all taxes, interest, and penalties agreed to through the execution of settlement Form 870-AD have been paid in full for the taxable years 1976 and 1977.6 Premised on the standards articulated in Flora and Tonasket, supra, since plaintiffs have paid in full all deficiencies assessed for the taxable years 1976 and 1977, tax refund jurisdiction in this court, as to those two years, is proper.

On the other hand, for the taxable year 1978, defendant has challenged this court’s subject matter jurisdiction over plaintiffs’ refund claim. Defendant alleges that for that taxable year, plaintiffs have made only two payments, aggregating $3,500, toward the total $24,250.02 deficiency agreed to on Form 870-AD.7 Consequently, even after applying the modest overpayments from the 1976 and 1977 assessments to the outstanding 1978 balance, plaintiffs are left with a current unpaid balance of $18,425.44 in taxes, penalties, and interest for the taxable year 1978.8 There is no question as to the fact of failure to pay in full, as contended by defendant, inasmuch as plaintiffs in their opposition to defendant’s motion for summary judgment candidly concede as follows: “Plaintiffs reluctantly agree that the [defendant is correct on this issue.” 9

In addressing this identical issue, the predecessor Court of Claims stated in Tonasket v. United States that:

... the jurisdictional basis for refund suits provides a second, independent ground for concluding that this court lacks jurisdiction. Section 1346(a)(1) gives the district courts concurrent jurisdiction with this court over actions to recover any internal-revenue tax, any penalty, or any sum erroneously or unlawfully collected. In Flora v. United States, 362 U.S. 145 [80 S.Ct. 630, 4 L.Ed.2d 623] (1960), the Supreme Court, after full consideration on reargument, affirmed its earlier construction of section 1346(a)(1) as requiring full payment of all taxes or penalties before jurisdiction vested in the district courts. 362 U.S. 146-47, 177 [80 S.Ct. 630, 631, 647, 4 L.Ed.2d 623]. Plaintiffs seek to avoid the full payment requirement by arguing that Flora does not apply to refund suits in the Court of Claims [now the U.S. Claims Court], or that Flora should be reconsidered on the basis of subsequent Supreme Court equal protection cases which plaintiffs interpret as making the Flora rule an unconstitutional discrimination against indigents. We cannot construe Flora to preclude part-payment tax suits in district courts, but allowing such part-payment actions here. Although the precise holding of Flora requires full payment before tax suits in district courts, the ratio decidendi of that rul*196ing—that full payment before suit is necessary to preserve the harmony of a carefully structured tax litigation system, id at 176-77—[80 S.Ct. at 646-47] must extend to require full payment before suit in the Court of Claims.

Tonasket, 218 Ct.Cl. at 711-12 (emphasis added). Given the foregoing, this court is constrained to conclude, and must hold, that it lacks subject matter jurisdiction over plaintiffs’ 1978 refund claim.

B. Equitable Estoppel

1. Background

Defendant has next moved for summary judgment on plaintiffs’ refund claims (the taxable years 1976-1977) on the ground that their previous execution of IRS Form 870-AD equitably estops plaintiffs from litigating these now compromised and settled claims. In short, defendant avers that it would be most inequitable and unjust, in the face of the bargained-for-concessions implicit in Form 870-AD signed by plaintiffs on January 29, 1982, and approved by defendant on February 9, 1982, to permit plaintiffs to file an efficacious claim for refund (May 23, 1983) long after the running of the general three-year statute of limitations (26 U.S.C. § 6501(a)) on additional assessments. Conversely, and in opposition, plaintiffs argue that (1) any estoppel of their claims would be “inequitable” given the fact that no compromise of their claims was made through the execution of Form 870-AD; (2) no prejudice would be visited on defendant should the agreement be revoked inasmuch as the statute had not run on additional assessments at the time plaintiffs filed their claims to the extent the defendant can prove either fraud or an omission in excess of 25 percent of the amount of gross income originally reported; (3) in fact the Form 870-AD was executed by an unauthorized person; and (4) the Form 870-AD is not valid because the statute of limitations (§ 6501(a)) expired prior to January 29, 1982.

Research discloses that the application of the doctrine of equitable estoppel, to bar the prosecution of tax refund claims settled and concluded by the execution of a Form 870-AD, has provoked not only controversy but outright inconsistency among various federal circuits. On the one hand, there are those courts which strictly hold, according to the Supreme Court in Botany Worsted Mills v. United States, 278 U.S. 282, 49 S.Ct. 129, 73 L.Ed. 379 (1929), that the only binding form of tax settlement is one which conforms to the finality prescribed through a settlement agreement pursuant to 26 U.S.C. § 7121 (1982).10 The justification for this conclusion is apparently premised on the fact that Form 870-AD specifically states that it is not such an agreement.11 Absent strict adherence to the formality envisioned in § 7121, these courts, therefore, reject the application of the doctrine of equitable estoppel relying instead on the Supreme Court’s admonishment that “[w]hen a statute limits a thing to be done in a particular mode, it includes the negative of any other mode.” Botany, 278 U.S. at 289, 49 S.Ct. at 132. Cf. Uinta Livestock Corp. v. United States, 355 F.2d 761 (10th Cir.1966); Associated Mutuals, Inc. v. Delaney, 176 F.2d 179, 181 n. 1 (1st *197Cir.1949); and Bank of New York v. United States, 170 F.2d 20 (3d Cir.1948).

On the other hand, there are also those courts which have a tradition of affirmatively applying the doctrine of equitable estoppel to bar the litigation of claims previously concluded through the taxpayer’s execution of a settlement Form 870-AD. These courts, infra, in essence, acknowledge the continued vitality of Botany, but they persuasively distinguish its holding by arguing that that case did not present the estoppel issue squarely to the Court. In support of this position, they refer to the following often cited dicta in Botany, to wit:

It is plain that no compromise is authorized by this statute which is not assented to by the Secretary of the Treasury. For this reason, if for no other, the informal agreement made in this case did not constitute a settlement which in itself was binding upon the Government or the Mills. And, without determining whether such an agreement, though not binding in itself, may when executed become, under some circumstances, binding on the parties by estoppel, it suffices to say that here the findings disclose no adequate ground for any claim of estoppel by the United States.

Botany, 278 U.S. at 289, 49 S.Ct. at 132 (emphasis added, citations omitted). Since the Supreme Court has expressly reserved the issue of what circumstances might ultimately raise the execution of a Form 870-AD to a binding settlement, certain courts have consequently held that Botany does not estop the courts from developing their own law on the subject. Thus, it is on the foregoing premises that a properly executed Form 870-AD has become a recognized impediment, in certain circuits, to es-top taxpayers from litigating the merits of tax refund claims settled therein. Cf. Stair v. United States, 516 F.2d 560 (2d Cir.1975); General Split Corp. v. United States, 500 F.2d 998 (7th Cir.1974); Quigley v. Internal Revenue Service, 289 F.2d 878 (D.C.Cir.1960); Cain v. United States, 255 F.2d 193 (8th Cir.1958); Daugette v. Patterson, 250 F.2d 753 (5th Cir.1957), cert. denied, 356 U.S. 902, 78 S.Ct. 561, 2 L.Ed.2d 580 (1958); Monge v. Smyth, 229 F.2d 361 (9th Cir.1956), appeal dismissed per curiam, 351 U.S. 976, 76 S.Ct. 1055, 100 L.Ed. 1493 (1956); Elbo Coals, Inc. v. United States, 763 F.2d 818 (6th Cir.1985).

2. Equitable Estoppel in the Predecessor Court of Claims

Research further discloses that the predecessor Court of Claims saw fit on a number of occasions to apply the doctrine of equitable estoppel on facts arising out of a taxpayer’s previous execution of a Form 870-AD. See Guggenheim v. United States, 111 Ct.U. 165, 77 F.Supp. 186 (1948); H.W. Nelson Co., Inc. v. United States, 158 Ct.Cl. 629, 308 F.2d 950 (1962); D.D.I., Inc. v. United States, 199 Ct.Cl. 380, 467 F.2d 497 (1972); McGraw-Hill, Inc. v. United States, 224 Ct.Cl. 354, 623 F.2d 700 (1980) (doctrine affirmed but not applied on the specific facts of the case). In so doing, said Court of Claims made particular mention of the language cited from Botany, supra. For example, in the seminal case adopting the doctrine in the predecessor Court of Claims, Guggenheim v. United States, all of the formalities required for executing an efficacious Form 870-AD12 were present. Guggenheim, 77 F.Supp. at 196. Both parties had signed, and the form was properly accepted by the Commissioner on the same day. Id. at 194. There, the court noted in contradistinction to Botany that:

Many of the elements in the formal agreement involved in this case [Guggenheim] were lacking in that case [Botany]. Moreover, we do not understand that case to hold, as plaintiff contends, that under no circumstances will a closing agreement be held binding unless executed in accordance with Section [7121]....

*198Guggenheim, 77 F.Supp. at 196. Having effectively distinguished Botany, the Court of Claims in Guggenheim went on to dismiss the tax refund action therein holding that cause of action to be equitably barred due solely to the plaintiff’s previous execution of Form 870. Id. at 197.

Against the foregoing background, it is underscored that our research has uncovered no cases in the Claims Court or the Court of Appeals for the Federal Circuit (CAFC) since their inception in 1982, which have applied the doctrine of equitable estoppel premised on a taxpayer’s prior execution of a Form 870-AD. That doctrine, however, has nevertheless been affirmed in other fact situations evidencing a similar detrimental reliance by defendant arising out of a previous agreement resolving an area of contention between the parties. Thus, although there is a factual dichotomy between the case at bar and the cases cited, infra, we view such fact variances to reflect a distinction without a significant difference. See e.g., Alpena Savings Bank v. United States, 8 Cl.Ct. 249 (1985) (bank loan guarantee); Estate of Piper v. United States, 8 Cl.Ct. 243 (1985) (estate and gift tax refund); Estate of German v. United States, 7 Cl.Ct. 641 (1985) (estate tax refund); Pacific Gas & Electric Co. v. United States, 3 Cl.Ct. 329 (1983) (implied-in-fact contract). While research has failed to unearth relevant Claims Court and CAFC precedent in which a Form 870-AD was involved, those decisions in the predecessor Court of Claims applying the doctrine of equitable estoppel are sufficient authority for this court to invoke this equitable defense in an appropriate case such as here. This is so because the Claims Court is compelled to follow, as binding precedent, applicable rulings in the predecessor Court of Claims. See RUSCC, General Order No. 1, October 7, 1982.13

3. Application of the Doctrine—Equitable Estoppel

As outlined above, we apply the doctrine of equitable estoppel to preclude the litigation of plaintiffs’ claims as to the taxable years 1976 and 1977. (While we may refer to the taxable year 1978, we deem it to be unnecessary to discuss the applicability of said doctrine to the taxable year 1978, inasmuch as plaintiffs concede that this court is without subject matter jurisdiction with respect to said year.) The discussion which follows demonstrates that in accordance with Court of Claims precedent, plaintiffs did, by executing the Form 870-AD, waive their right to further litigate the 1976 and 1977 claims, so that to reopen them at this juncture would significantly prejudice the defendant. On such facts, we find that equity favors the enforcement of plaintiffs’ agreement.

In general terms, binding precedent teaches that the doctrine of equitable estoppel, arising out of the execution of a Form 870-AD, may be applied to hold a taxpayer to his bargain if the following three criteria are established: (1) the execution of the Form 870-AD was the result of mutual concession or compromise; (2) there was a meeting of the minds that the claims be extinguished; and (3) that to allow the plaintiff to reopen the case would be prejudicial given the defendant’s reliance on the extinguishment thereof. Guggenheim, 77 F.Supp. at 196; H.W. Nelson Co., 308 F.2d at 956-59; D.D.I., Inc., 467 F.2d at 500-01; McGraw-Hill, Inc., 623 F.2d at 706. As the pleading of the doctrine raises an affirmative defense, the bur *199den is on the defendant to establish these criteria by the requisite quantum of proof.

a. Mutual Concession and Compromise

With respect to the first criterion, mutual concession or compromise, the defendant’s documentary evidence clearly establishes this fact for all taxable years with striking similarity to the facts in Guggenheim. In Guggenheim, the court stated in that connection that:

Plaintiff protested the proposed disallowance and thereafter conferences were held with plaintiff’s representatives. A further investigation was made by a revenue agent. As a result of these discussions, the representatives of the Commissioner agreed to recommend for allowance a deduction ... claimed by plaintiff. Plaintiff abandoned his contention that the other deductions claimed were allowable. The Commissioner’s representative also agreed to make an adjustment in plaintiff’s favor on account of certain dividends.

Guggenheim, 77 F.Supp. at 194. In the case at bar, plaintiffs similarly protested the audit report which initially assessed them some $75,307 in deficiencies (taxes and penalties) in December 1980 for all of the years in issue. Likewise, as in Guggenheim, a further investigation was held in which an IRS report was issued containing the following revelations:

Taxpayers, in an effort to close this case, propose that the Government accept in the year 1976 a reduction of $6,000 as representing a repayment of the loan to Ray Heck as outlined above. Taxpayers concede all adjustments in 1977. In 1978, it is proposed that the Government concede the inclusion of $13,661 deemed to have been for the purchase of JTC stock. In the year 1978, taxpayers also propose that an amount of $6,339 be considered as cash on hand. It is recommended that this proposal of settlement be accepted as a reasonable conclusion to this case.

Appeals Transmittal Memorandum and Supporting Statement, Feb. 12, 1982 (emphasis added).14 This paraphrase of the ongoing dialogue between plaintiffs and defendant as contained in the referenced IRS report, evidencing the negotiations leading to the final adjustments which were then recorded on Form 870-AD, persuasively belies plaintiffs’ assertion that “[t]he numbers placed on the Form 870-AD were not a compromise at all.” 15 Indeed, as in Guggenheim, it is clear beyond cavil, and we so find, that plaintiffs’ settlement, manifested by the execution of Form 870-AD in this case, was a bilateral process driven by mutual concession and compromise.

In support of our holding as to mutual concession and compromise, we also stress that plaintiffs’ proof regarding their contrary assertion was thoroughly insufficient to raise, even by their contentions, a genuine issue of material fact. While we acknowledge plaintiffs’ attempt to raise such genuine issues of material fact based on the holding in Lignos v. United States, 439 F.2d 1365 (2d Cir.1971), we find that case to be clearly distinguishable from the case at bar. In Lignos, the Second Circuit refused to affirm the district court’s grant of summary judgment on the grounds of equitable estoppel because there plaintiffs had adduced sufficient proof to raise a factual issue regarding whether defendant had in truth “conceded” its position in arriving at the settlement recorded on the Form 870-AD. Id. The appellate court in Lignos reached this conclusion based upon plaintiff’s clear evidentiary showing in the district court which included specific facts alleged through sworn affidavits. Id. In the case at bar, however, plaintiffs have neither apprised this court of any specific *200facts illustrating that there exists genuine issues for trial, nor have they proffered an affidavit averring such. Because of the foregoing, plaintiffs are entitled to no comfort from Lignos particularly whereas here they have failed to comply with RUSCC 56(e). Rule 56(e) states that:

When a motion for summary judgment is made ..., an adverse party may not rest upon the mere allegations or denials of his pleading, but ... must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him.

RUSCC 56(e) (emphasis added). In essence, plaintiffs in the case at bar have done nothing more than rely on repeated, conclusory allegations that there was no compromise. Without more, such bland assertion(s) may not generate genuine issues of material fact, nor may they overcome the persuasive proof proffered by defendant.

b. Meeting of the Minds

The second criterion cited above requires that, concomitantly, there must also be a meeting of the minds to the effect that the right to raise any prospective claims or to otherwise reopen the case, for such years, be extinguished (save exceptions not here relevant). In Guggenheim, the court added substance to the evaluation of this concept by examining two additional factors: (1) the parties’ course of conduct; and (2) the express language adopted by the parties on the Form 870-AD. Guggenheim, 77 F.Supp. at 195. As to course of conduct, the court stated:

The conclusion is inescapable from the evidence that there was a meeting of minds as to the final disposition of the case. When that occurred, the Commissioner recomputed plaintiff’s tax liability and transmitted to plaintiff the settlement document wherein was set out a deficiency for each of the years. In transmitting that document to plaintiff at that time, the Commissioner stated that he was accepting plaintiff’s “proposal for settlement,” and also referred to the document as an “agreement” when executed by plaintiff and approved on his behalf. In returning the document after execution, plaintiff likewise referred to it as an “agreement.”

Id. at 195. In Guggenheim, at no time did either party objectively manifest a belief that what was being negotiated was anything less than a complete settlement for the taxable years in issue. While no correspondence similar to that in Guggenheim has been presented to the court in the case at bar, neither has any demonstrative evidence been submitted supporting plaintiffs’ contention that a definitive settlement was not intended for all taxable years. In fact, on this issue the documentary evidence is thoroughly supportive of defendant’s position, particularly when we examine defendant’s Form 5278, Statement-Income Tax Changes, prepared by the Appeals Office of the IRS which contains a box plainly checked “settlement computation.”16 Similarly, in the Appeals Transmittal Memorandum and Supporting Statement, supra, the words “Proposal of Settlement” are used consistently throughout to characterize the nature of the procedural posture of plaintiffs’ appeal.17 While plaintiffs may, as an afterthought, now contend otherwise, the evidence is wanting and it strains credulity to contend that the lengthy and detailed negotiations, which led to the preparation and execution of Form 870-AD, were conducted with any purpose other than that they were aimed at a definitive settlement.

Moreover, in reviewing the undeniable language contained in the Form 870-AD together with other referenced evidence, supra, the ultimate intentions of the parties leave no room for doubt. This conclusion is compelled when one carefully reviews the Form 870-AD, wherein the following unambiguous statement appears directly above the plaintiffs’ signatures:

*201If this offer is accepted for the Commissioner, the case shall not be reopened in the absence of fraud, malfeasance, concealment or misrepresentation of material fact, an important mistake in mathematical calculation, or excessive tentative allowances of carrybacks provided by law; and no claim for refund or credit shall be filed or prosecuted for the year(s) stated above other than for amounts attributed to carrybacks provided by law.

Appendix B to the Memorandum for the United States in Support of Its Motion for Summary Judgment, January 22, 1985, Exhibit C (emphasis added). Thus, by signing the Form 870-AD containing the referenced language, plaintiffs, in essence, waived all further rights to contest the assessment for the stated taxable years, save for the specific exception not present in this case.18 While the Form 870-AD was drafted by the defendant, no ambiguity exists as to the clear import of the intendment of the parties, i.e., each side expressly waived its right (with exceptions not pertinent here) to subsequently litigate the settlement contained therein. For this court to find otherwise, at this posture, would contravene and directly ignore the clearly exhibited objective manifestations of the signatories.

Confronted with practically identical language on the Form 87019 in Guggenheim, the Court of Claims there equally underscored its opinion regarding the degree of mutuality between the parties by stating:

In language which we think is too clear to be misunderstood and which would be rendered meaningless if plaintiff’s interpretation were to prevail, the agreement states: “If this proposal is accepted by or on behalf of the Commissioner, the case shall not be reopened nor shall any claim for refund be filed or prosecuted respecting the taxes for the years above stated, in the absence of fraud, malfeasance, concealment or misrepresentation of material fact, or of an important mistake in mathematical calculations.” There is no contention that there was any fraud, malfeasance, concealment, misrepresentation, or mistake in calculation. How this could be interpreted other than to preclude plaintiff from filing a claim for refund or prosecuting this suit is difficult to understand.

Guggenheim, 77 F.Supp. at 195 (emphasis added). Thus, on substantially identical facts as obtained in