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misrepresentation in pursuing the partnership-level proceeding
and forgoing an individual proceeding against Mr. Blonien within
the period of limitations on assessment under section 6501(a).
Petitioners first notified respondent of their position that Mr.
Blonien was not a partner after the period of limitations had
expired for the assessment of a deficiency on the full amount of
wage income that would have been taxable to petitioners if Mr.
Blonien had been an employee of Finley Kumble rather than a
partner. These are the elements for equitable estoppel under the
duty of consistency.9 Under the duty of consistency, petitioners
are bound by the facts asserted in their returns--that Mr.
Blonien was a partner in Finley Kumble for Federal income tax
purposes.
Second, petitioners have no standing to raise a due process
challenge because they received a partnership Schedule K-1 from
Finley Kumble for 1992 and failed to file a Form 8082 or
otherwise notify respondent that they were taking a position
9We have previously adopted the elements for the duty of
consistency from the decision in Beltzer v. United States, 495
F.2d 211, 212 (8th Cir. 1974): “(1) the taxpayer has made a
representation or reported an item for tax purposes in one year,
(2) the Commissioner has acquiesced in or relied on that fact for
that year, and (3) the taxpayer desires to change the
representation, previously made, in a later year after the
statute of limitations on assessments bars adjustments for the
initial tax year.” See, e.g., Estate of Letts v. Commissioner,
109 T.C. 290, 297 (1997), affd. without published opinion 212
F.3d 600 (11th Cir. 2000); Hollen v. Commissioner, T.C. Memo.
2000-99, affd. 25 Fed. Appx. 484 (8th Cir. 2002).
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