                             T.C. Memo. 1998-266



                        UNITED STATES TAX COURT



                 TOM AND BRENDA KELLY, Petitioners v.
             COMMISSIONER OF INTERNAL REVENUE, Respondent



        Docket No. 21641-96.                 Filed July 21, 1998.



        Tom Kelly, pro se.

        Thomas C. Pliske, for respondent.



                             MEMORANDUM OPINION


        DINAN, Special Trial Judge:      This case was heard pursuant

to the provisions of section 7443A(b)(3) and Rules 180, 181, and

182.1

        1
          Unless otherwise indicated, all section references are
to the Internal Revenue Code in effect for the taxable year in
issue. All Rule references are to the Tax Court Rules of
Practice and Procedure.
                                 - 2 -

     Respondent determined a deficiency in petitioners' Federal

income tax for 1993 in the amount of $2,954 and an accuracy-

related penalty pursuant to section 6662(a) in the amount of

$591.

     After concessions by the parties,2 the issue remaining for

decision is whether respondent's acceptance and cashing of

petitioners' check constitutes an accord and satisfaction of

their Federal income tax liability for 1993.

        Some of the facts have been stipulated and are so found.

The stipulations of fact and attached exhibits are incorporated

herein by this reference.     Petitioners resided in Catawissa,

Missouri, on the date the petition was filed in this case.       All

references to petitioner in the singular are to Tom Kelly.

        On March 29, 1996, petitioners received a letter from

respondent's Appeals Office which stated that the total amount

due for their 1993 taxable year was $2,907.05.     This amount

included tax in the amount of $2,044, a penalty in the amount of

$395, and interest through April 15, 1996, in the amount of

$468.05.

        On June 10, 1996, petitioners mailed a check in the amount

of $2,513 to the Internal Revenue Service.     Petitioner, who

formerly worked as an attorney, wrote "93 Full payment of tax

     2
          The parties agreed at trial that the amount of the
deficiency in petitioners' Federal income tax for 1993 is $2,044
and the amount of the sec. 6662(a) accuracy-related penalty is
$395.
                                 - 3 -

liability" in the notation area of the check.    On the back of the

check in the endorsement area, petitioner wrote "Full payment of

1993 Fed Tax, penalties & interest for Tom & Brenda Kelly".

Along with the check, petitioner sent a letter dated June 10,

1996, which stated:

     IRS

          Find enclosed check for $2513 for full payment on
     tax, penalty & interest for 1993 for Tom & Brenda
     Kelly.

           Thanks, please spend the money wisely.

     Petitioner also sent with the check and the letter a Form

1040-V (Payment Voucher) which he had found in the instructions

for his 1995 tax return.   He wrote on the voucher a note similar

to the above-quoted statement.    Respondent's service center in

St. Louis, Missouri, received the check and cashed it on or about

June 15, 1996.

     On July 5, 1996, respondent issued the statutory notice of

deficiency in this case.

     Petitioner argues that the respondent's act of cashing the

check with a restrictive endorsement constituted an accord and

satisfaction of petitioners' Federal income tax liability for

their 1993 taxable year.   We disagree.

     It is well established that as a general rule the

Commissioner is finally and conclusively bound by an agreement

with a taxpayer only if the parties enter into a closing
                              - 4 -

agreement under the provisions of section 7121.3   Holland v.

Commissioner, 70 T.C. 1046, 1048-1049 (1978), affd. 622 F.2d 95

(4th Cir. 1980); Hudock v. Commissioner, 65 T.C. 351, 362 (1975).

The statutory procedure is ordinarily the exclusive method by

which the Commissioner may be finally and conclusively bound.

Botany Worsted Mills v. United States, 278 U.S. 282, 288 (1929);

Estate of Meyer v. Commissioner, 58 T.C. 69, 70-71 (1972).      "The

very fact that Congress has provided a way in which the Internal

Revenue Department may bind itself, precludes the possibility of

its being bound by some other procedure."   Knapp-Monarch Co. v.

Commissioner, 139 F.2d 863, 864 (8th Cir. 1944), affg. 1 T.C. 59

(1942).

     In the instant case, petitioners did not enter into any

agreement with respondent with respect to their 1993 taxable

year, let alone a closing agreement pursuant to the provisions of

section 7121 and the regulations thereunder.   Further,

respondent's acceptance and cashing of the check tendered by

petitioner did not constitute an accord and satisfaction of

petitioners' tax liability for 1993.   Johnston v. Commissioner,

19 B.T.A. 630 (1930); Whitaker v. Commissioner, T.C. Memo. 1994-

109; Kehew v. Commissioner, T.C. Memo. 1983-354.




     3
          Sec. 7121(b) provides an exception to this rule upon a
showing of fraud, or malfeasance or misrepresentation of a
material fact.
                                 - 5 -

     Accordingly, we hold that the amounts of petitioners'

deficiency in Federal income tax for 1993 and liability for the

section 6662(a) accuracy-penalty are equal to the amounts agreed

to by the parties.   See supra note 2.

     To reflect the foregoing,

                                              Decision will be entered

                                         under Rule 155.
