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respondent has met his burden of proving that these actions
satisfy the first element of equitable estoppel.
2. Fact or Law
For equitable estoppel to apply, the misrepresentation or
wrongful misleading silence generally must originate in a
statement of fact and not in an opinion or a statement of law.
Graff v. Commissioner, 74 T.C. at 761.
While it could be argued that the effect of New Petroleum's
merger into Energy is a legal question, the misrepresentations or
silence relate to the facts herein; namely, that at the time the
last three Forms 872 were signed New Petroleum existed, and that
the individuals signing the consents were its properly authorized
officers. Given that Energy's misrepresentations or wrongful
misleading silences clearly originate in a statement of fact, we
find respondent has met his burden with respect to the second
element of equitable estoppel.
3. Detrimental Reliance
"It is fundamental to the doctrine of estoppel that the
party raising the issue must have been misled in reliance upon
the representations of his opponent." Century Data Sys., Inc. v.
Commissioner, 86 T.C. at 166; see also Atlas Oil & Ref. Corp. v.
Commissioner, 22 T.C. 552, 559 (1954) (taxpayer must be shown to
have taken some action which led Commissioner to postpone until
after the period of limitations expired the issuance of a notice
of deficiency that he was otherwise prepared to mail on a timely
basis).
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