That phrase is “Stipulate, Don’t Capitulate”‘s little brother.  It means whatever document is thus referred to is included in whatever document you’re reading. And if you never got the document thus incorporated, you’re still signing on to it.

For James H. Ballengee and A.C. Heyde, T. C. Memo. 2026-73, filed 8/19/26, it means they’re stuck with their concessions to the FPAA, which negated deductibility of  their partnership NOLs because the debt giving rise thereto was nonrecourse and hence giving them insufficient inside basis to permit passthrough of NOL carryforwards.

Now before you TEFRA-canny ultra-sophisticates yell as if with a single voice  “old Section 6235(a)(1) partner-level factual affected item!” and inquire why no SND, Judge Adam B. (“Sport”) Landy will tell you.

James and A. C. signed individually, and James signed as manager of their box-checked LLC, Forms 870-LT, agreeing to all IRS’ slices-and-dices for two (count ’em ,two) of the years at issue (IRS folded the third). “Form 870–LT contained only the names of the partnerships, the names of petitioners, the years at issue, and a statement in the remarks: ‘See attached 870–LT Continuation Page.’” T. C. Memo. 2026-73, at p. 4.

The 870-LT Continuation Page said: “The accompanying Form 886–A, Explanation of Partnership Items and Partnership-Level Adjustments, is hereby incorporated by references.” Idem.

James and A. C. claim they never got the Form 886-A, which set forth the aforementioned slices-and-dices, and would have consulted their trusty CPAs, who handled the audit from which arose said Form 886-A, if they had. So James and A. C. claimed IRS misrepresented a material fact.

“Regardless of whether petitioners’ assertion that Form 886–A was not attached to Form 870–LT when they received and signed it is true, they have not shown that this was a deliberate or intentional attempt by the Commissioner to misrepresent any terms of the closing agreement. In addition, petitioners’ contention that there was a mutual mistake is insufficient to set aside the closing agreement because mutual mistake is not an enumerated ground for invalidating a closing agreement under section 7121(b). We determine that there is no misrepresentation of material fact and that petitioners executed a valid Form 870–LT waiver.” T. C. Memo. 2026-73, at p.13.

Form 870-LT is a complete waiver and closing agreement.

Now lest anyone think James and A. C. were innocents caught in an IRS squeeze play, Judge Sport Landy has some background.

“Petitioner James H. Ballengee received a bachelor of science in accounting from Louisiana State University; and although he is not currently licensed, he practiced as a certified public accountant (CPA) for five years at KPMG. After leaving KPMG, Mr. Ballengee founded and sold multiple companies in the oil and gas industry. Because of the nature of his work, Mr. Ballengee reviewed legal documents and frequently consulted with professionals, such as lawyers or CPAs, before executing said documents, as needed.” T. C. Memo. 2026-73, at p. 2.