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We have provided petitioners this specific relief in the
exercise of this Court’s inherent equitable powers. As the
United States Court of Appeals for the Ninth Circuit (to which
this case is appealable) has observed, the Tax Court possesses
“within its statutorily defined sphere * * * the authority to
apply the full range of equitable principles generally granted to
courts that possess judicial powers.” Estate of Branson v.
Commissioner, 264 F.3d 904, 908 (9th Cir. 2001), affg. 113 T.C. 6
(1999); see Estate of Ashman v. Commissioner, 231 F.3d 541, 545
(9th Cir. 2000) (“Even if the tax court does not have far-
reaching general equitable powers, it can apply * * * equitable
powers within its own jurisdictional competence.”), affg. T.C.
Memo. 1998-145; Buchine v. Commissioner, 20 F.3d 173, 178 (5th
Cir. 1994) (concluding that the Tax Court is empowered to apply
the equitable principle of reformation to a case over which it
already has jurisdiction), affg. T.C. Memo. 1992-36; Chocallo v.
Commissioner, supra (requiring the Commissioner to return to the
taxpayer, with interest, the amount collected by levy where the
levy had been made without following the hearing procedures
required under section 6330(b)).
Clearly, this case falls within this Court’s “statutorily
defined sphere”. Estate of Branson v. Commissioner, supra.
13(...continued)
stock and give petitioners appropriate credit. Either
contingency results in a credit to petitioners equal to the value
of the stock rather than an award for any suffered loss.
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