City Metals & Salvage, Inc., Petitioner-appellant, v. Commissioner of Internal Revenue, Respondent-appellee, 125 F.3d 857 (9th Cir. 1997)

MEMORANDUM^* 

City Metals claims it entered into the settlement agreement believing that the accumulated earnings tax issue would not be relitigated. Because the IRS never believed that the settlement agreement would reach into future years, this mistake was, at most, a unilateral mistake of fact.

Only a unilateral mistake which leads to an unconscionable or oppressive result might warrant rescission of the settlement agreement. See Korangy v. Commissioner, 893 F.2d 69, 72 (4th Cir. 1990). City Metals was holding earnings subject to the accumulated earnings tax, and it settled with the IRS for tax years 1989-91. The obligation to pay a properly assessed accumulated earnings tax is ongoing, not a one-time event, and the IRS properly sought to enforce the tax again in subsequent years. The IRS's actions did not render the settlement oppressive, and enforcement is, therefore, appropriate. Absent a more compelling proffer, the Tax Court was correct to dispose of the motion to rescind the settlement without an evidentiary hearing. Korangy, 893 F.2d at 72.

AFFIRMED.