- 18 -
the estate tax return as having a fair market value of $59,713 on
the date of his father's death, September 22, 1959. The time for
adjustments and assessments against the estate expired on
December 23, 1963. On May 6, 1966, the taxpayer sold the shares
for $140,000. For purposes of determining his gain on the sale
of the stock, the taxpayer asserted that the stock actually had a
fair market value of $118,020 on the date of his father's death,
despite the fact that he had signed the estate tax return at the
lesser figure and had received the benefit of the lower estate
tax. The taxpayer argued that he should not be bound by the
estate's representation of value, because he relied on his
coexecutor to handle the estate tax return. Rejecting the
taxpayer's nonparticipation argument, the Court of Appeals held
that the taxpayer was bound by the lower stock value reported by
the estate under the duty of consistency. Id. at 212.
The teaching from Hess, Beltzer, and the other cases which
have found that a taxpayer may be estopped by a prior
representation made by or on behalf of another taxpayer is that
there must be a sufficiently close relationship between the party
making the prior representation and the party to be estopped.
Hess v. United States, supra at 464; Beltzer v. United States,
supra at 212. Whether there is sufficient identity between the
parties will be dependent upon the facts and circumstances of the
Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 NextLast modified: May 25, 2011