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Furthermore, since 1977 the Courts of Appeals have begun
increasingly to acknowledge the difference between exercising
equitable powers to take jurisdiction and applying equitable
principles to decide matters within the Court’s jurisdiction.
For instance, a series of recent decisions has consistently
affirmed on such basis Tax Court authority to reform written
agreements and to apply equitable estoppel. See Flight
Attendants Against UAL Offset v. Commissioner, 165 F.3d 572, 578
(7th Cir. 1999); Kelley v. Commissioner, 45 F.3d 348, 351-352
(9th Cir. 1995), affg. T.C. Memo. 1990-158; Bokum v.
Commissioner, supra at 1140-1141. Given that the Court of
Appeals for the Eleventh Circuit is among this group, we question
the determinative value in that forum of the broad and summary
language in Continental Equities, Inc. v. Commissioner, supra.
In particular, it is on the grounds of Bokum v.
Commissioner, supra, that we cannot with confidence say that the
Court of Appeals for the Eleventh Circuit would reject use of
equitable recoupment in the case at bar. In considering whether
the Tax Court possessed authority to apply equitable estoppel,
the Court of Appeals recognized the limited nature of this
Court’s jurisdiction but went on to find such authority for many
of the same reasons cited in Estate of Branson v. Commissioner,
supra, as supporting our use of equitable recoupment:
The Commissioner correctly notes that the Supreme
Court has held that “[t]he Tax Court is a court of
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