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in paragraph 1 is made in paragraph 2 of the settlement
agreement, and it is undisputed that paragraph 2 was intended to
compensate for nontort type injuries. Petitioners suggest that
the parenthetical reference in paragraph 1 to adjustments
required by paragraph 2.e. demonstrates that the adjustments
required by paragraph 2.e. were also intended to compensate for
tort type claims. We do not interpret the settlement agreement
that way. All the 1996 payments in excess of $25,130 were
apparently paid pursuant to the specific provisions of paragraph
2.e. The settlement agreement and other evidence petitioners
submitted would not be sufficient for us to decide that any
amount of the DHS payments in excess of $25,130 was paid on
account of a tort or tort type personal injury. Thus, the burden
of proof remains on petitioners as to the payments in excess of
$25,130, and petitioners have failed to meet their burden of
proof.
VI. Equitable Estoppel
Petitioners argue that irrespective of the burden of proof,
respondent should be equitably estopped from arguing that any of
the payments at issue are not excludable from gross income under
section 104(a)(2).
“[T]he doctrine of equitable estoppel is applied against the
Government ‘with the utmost caution and restraint’”, Boulez v.
Commissioner, 76 T.C. 209, 214-215 (1981) (citing Estate of
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