- 36 -
(1981) (quoting Estate of Emerson v. Commissioner, 67 T.C. 612,
617-618 (1977)), affd. 810 F.2d 209 (D.C. Cir. 1987). A no-
change letter does not necessarily provide the necessary founda-
tion for applying that doctrine against respondent. See Opine
Timber Co. v. Commissioner, 64 T.C. 700, 712 (1975), affd.
without published opinion 552 F.2d 368 (5th Cir. 1977); Lawton v.
Commissioner, 16 T.C. 725, 726-727 (1951).
The following factors must be established in order to apply
the doctrine of equitable estoppel: (1) There must be a false
representation or wrongful misleading silence; (2) the error must
be in a statement of fact, and not in an opinion or a statement
of law; (3) the person claiming estoppel must be ignorant of the
true facts; and (4) that person must be adversely affected by the
acts or statements of the person against whom estoppel is claim-
ed. Estate of Emerson v. Commissioner, supra at 617-618.
Mr. Gordon has failed to show that the IRS revenue agent's
oral statement to him in October 1988 that his 1986 net trading
loss was properly reported in the 1986 return as an ordinary loss
and the IRS' issuance of the no-change letter in May 1989 were
misrepresentations of fact, and not mistakes of law resulting
from a failure to take into account the change in the law in 1984
that Congress believed it was making with respect to the charac-
terization of gains and losses from the option transactions of
options market makers when it enacted section 1256(f)(3)(A) into
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