Wilton Earl and Dorothy M. Keel - Page 5

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                  Petitioners' claim for refund as set forth in the amended                           
            return was allowed on March 22, 1994.  Petitioners subsequently                           
            received the refund.                                                                      
                  Petitioners were notified on or before November 15, 1994,                           
            that respondent had determined that the lump-sum payment was                              
            taxable income to them for the taxable year 1992.  Respondent                             
            issued the notice of deficiency for that year on July 21, 1995.                           
                  Initially, we deal with several arguments advanced by                               
            petitioners which are essentially directed to the proposition                             
            that respondent should be estopped from requiring them to pay                             
            tax on the lump-sum payment.  These arguments are as follows:                             
            (1) in addition to relying on the information contained in the                            
            newsletter article, prior to filing the amended return, Mrs. Keel                         
            was advised by IBM's Payroll Department and by an IRS                                     
            representative that the lump-sum payment was not taxable; (2) the                         
            refund was consistent with that advice; (3) petitioners have                              
            acted in good faith and respondent should do the same and not                             
            seek to negate the refund, which respondent should have reviewed                          
            more carefully and not made based on respondent's claim that the                          
            lump-sum payment is taxable; and (4) other similarly situated co-                         
            workers have not been contacted to return the refunds they                                
            obtained and respondent should not be allowed selectively to                              
            enforce the tax laws.                                                                     

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