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574 of a 632-page consolidated Federal income tax return filed by
Holdings, New Petroleum's parent corporation. Moreover, in
Badger Materials, we attributed the merger information contained
in the taxpayer's Federal income tax return to the agent
conducting the income tax audit, not to an agent responsible for
an unrelated audit of a different kind of tax.
Finally, although neither party addresses this point, we
note that the returns under audit herein for the taxable periods
of 1985 were New Petroleum's Quarterly Federal Excise Tax Returns
(Form 720). On Form 720, there is a line which states that if
the taxpayer will not be liable for returns in succeeding
quarters, then the word "FINAL" should be entered. Had New
Petroleum entered the word "FINAL" on the appropriate line, that
might have been sufficient to put respondent on notice of New
Petroleum's merger into Energy. However, Energy's failure to
introduce into evidence New Petroleum's final 1991 Form 720 leads
us to infer that no such entry appears on the form. See Wichita
Terminal Elevator Co. v. Commissioner, 6 T.C. 1158, 1165 (1946),
affd. 162 F.2d 513 (10th Cir. 1947).
Thus, based on the record and the facts discussed herein, we
hold that Energy is equitably estopped to deny that the
limitations period for the taxable periods of 1985 was extended
properly under section 6501(c)(4).8
8 Even if we were to find that the error in the extension was
the result of mutual mistake, rather than any deliberate
deception on petitioner's part, the Court has the power to reform
(continued...)
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