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had already received the notice when she accepted custody of her
nephew, petitioner’s claim of reliance on the no change letter is
not credible. See Levin v. Commissioner, T.C. Memo. 1990-226
(taxpayer who executed two extensions of the period of
limitations did not establish reliance on a closing document).
Third, any reliance on the no change letter was not
reasonable. A no change letter, as distinguished from a closing
agreement under section 7121, does not resolve a tax controversy
with finality. See Opine Timber Co. v. Commissioner, 64 T.C.
700, 712-713 (1975), affd. without published opinion 552 F.2d 368
(5th Cir, 1977); Kiourtsis v. Commissioner, T.C. Memo. 1996-534;
Fitzpatrick v. Commissioner, T.C. Memo. 1995-548. Even after she
received the no change letter, petitioner was aware that the 1992
tax year remained open. Petitioner signed three consents to
extend the time to assess tax (Form 872). The period of
limitations on assessment for the 1992 tax year had not expired
at the time respondent issued the notice of deficiency in this
case. Accordingly, even if petitioner did rely on the no change
letter, her reliance was not reasonable.
We deny petitioner’s claim for the application of equitable
estoppel against respondent to invalidate the statutory notice.
Issue 2: Amount and Character of Allowable Deductions
The validity of respondent’s statutory notice having been
upheld, the conclusion follows, as petitioner concedes, that the
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