Alan E. and Harriet R. Lewis - Page 4

                                        - 4 -                                         
               Subsequent to the remand of the instant case, both parties             
          filed separate motions.  Petitioners' motion seeks summary                  
          judgment.  Petitioners contend that we may not properly consider            
          the issue of quasi-estoppel because quasi-estoppel is an                    



               1(...continued)                                                        
               F.2d 622, 623 (5th Cir. 1972); Crosley Corp. v. United                 
               States, 229 F.2d 376, 380 (6th Cir. 1956); Ross v.                     
               Commissioner, 169 F.2d 483, 496 (1st Cir. 1948)(simple                 
               failure to report income “is not a representation that                 
               such income has in fact not been received” and does                    
               not, without more, furnish grounds for estoppel);                      
               Mertens, supra, sec. 60.05 ("Where there is a mistake                  
               of law and no factual misrepresentations, the doctrine                 
               of consistency does not apply.").  Moreover, the                       
               misstatement must be one on which the government                       
               reasonably relied, in the sense that it neither knew,                  
               nor ought to have known, the true nature of the                        
               transaction mischaracterized by the taxpayer.  See                     
               Herrington, 854 F.2d at 758; Mayfair Minerals, 456 F.2d                
               at 623; Ross, 169 F.2d at 495-96.                                      
                    In this case, it seems possible that * * *                        
               [petitioner] made representations of key facts                         
               regarding the genuine business activities of * * * [the                
               foreign controlled corporation] throughout the 1970's                  
               and the genuine intent on his and * * * [his partner’s]                
               part to repay the * * * [foreign controlled                            
               corporation] “loans.”  If such representations of fact                 
               were made, then holding * * * [petitioner] to them now                 
               might generate a 1984 tax liability.                                   
                    We stress, however, that we are uncertain about                   
               this matter.  Since it has not been argued here, and                   
               since factual history is at issue, both the Lewises and                
               the Commissioner should have a full opportunity to                     
               argue the issue before the Tax Court.  We therefore                    
               vacate the Tax Court's judgment insofar as it is                       
               inconsistent with this opinion.  And, we remand the                    
               case to the Tax Court for further proceedings. [Lewis                  
               v. Commissioner, 18 F.3d 20, 26 (1st Cir. 1994),                       
               vacating in part and remanding T.C. Memo. 1992-391.]                   




Page:  Previous  1  2  3  4  5  6  7  8  Next

Last modified: May 25, 2011