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equitable estoppel against the Government: (1) A false
representation or wrongful, misleading silence by the party
against whom the estoppel is claimed; (2) an error in a statement
of fact and not in an opinion or statement of law; (3) the
taxpayer's ignorance of the true facts; (4) the taxpayer's
reasonable reliance on the acts or statements of the one against
whom estoppel is claimed; and (5) adverse effects suffered by the
taxpayer from the acts or statements of the one against whom
estoppel is being claimed. See Norfolk S. Corp. v. Commissioner,
104 T.C. 13, 60 (1995), supplemented by 104 T.C. 417 (1995).
Petitioners have failed to establish that all of the
elements for equitable estoppel have been satisfied. The
correspondence which petitioner relies on to support his
contention simply described how the allowed refund for 1994 would
be applied to petitioners' tax account. The correspondence did
not make any representation that petitioners owed no additional
1995 tax. Therefore, petitioners have failed to establish that
there has been a false representation by respondent.
Moreover, it was not reasonable for petitioners to rely on
the letter from respondent's caseworker for the proposition that
petitioners owed no additional income tax for 1995. The letter
was written in response to petitioners' request for refund on an
amended income tax return filed for 1994. The letter does not
purport to be a determination regarding petitioners' 1995 return
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Last modified: May 25, 2011