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the party against whom the estoppel is claimed, and as a
consequence of that reliance must be adversely affected by the
acts or statements of the one against whom an estoppel is
claimed; and (4) the party claiming the benefits of estoppel must
not know the true facts. Century Data Sys., Inc. v.
Commissioner, 86 T.C. 157, 165 (1986); Graff v. Commissioner,
supra at 761; Steiner v. Commissioner, T.C. Memo. 1995-122. The
party affirmatively asserting an estoppel has the burden of
proving all the essential elements constituting the estoppel.
Steiner v. Commissioner, supra. Accordingly, respondent bears
the burden of proving each of the above elements. Rules 39,
142(a).
1. Misrepresentation or Misleading Silence
To sustain equitable estoppel, respondent must show that
Energy took "some action" which misled respondent. Century Data
Sys. Inc. v. Commissioner, supra at 166. Respondent contends
that Energy made false representations or wrongful misleading
silences, when it did not tell respondent that New Petroleum had
merged out of existence, and that its officers had no power to
act. Respondent further contends that the representations were
part of a pattern of false representations and misleading
silences that caused respondent to believe mistakenly that the
period of limitations had been extended. Respondent argues that
these material misrepresentations were bolstered by Energy's
continuing relations with respondent's Appeals officers, where 25
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