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entitlement to capital gain treatment did not stem from any
conduct by respondent, equitable estoppel erects no barrier to
respondent’s recharacterization of the disputed payment as
ordinary income.
Additionally, it long has been established that the Internal
Revenue Service is not barred by mistakes of its agents from
correcting errors of law, “even where a taxpayer may have relied
to his detriment on that mistake.” Norfolk S. Corp. v.
Commissioner, supra at 60; see also Auto. Club of Mich. v.
Commissioner, 353 U.S. 180, 183 (1957); Hedrick v. Commissioner,
63 T.C. 395, 403 (1974). Given that this principle holds true
even in dealings with a single taxpayer, it clearly follows that
allowance of a treatment contrary to law to one taxpayer does not
preclude the Commissioner from correctly applying the law to
other taxpayers.3
In conclusion, we emphasize that the Tax Court, as a Federal
court, is a court of limited jurisdiction. Commissioner v.
McCoy, 484 U.S. 3, 7 (1987); Hays Corp. v. Commissioner, 40 T.C.
436, 442-443 (1963), affd. 331 F.2d 422 (7th Cir. 1964).
Consequently, our jurisdiction to grant equitable relief is
3 This is not a situation where two similarly situated
taxpayers simultaneously sought official written prefiling
rulings, i.e., private letter rulings, from the Internal Revenue
Service, and the Internal Revenue Service intentionally chose to
treat one differently from the other at the National Office
level. See Intl. Bus. Machs. Corp. v. United States, 170 Ct. Cl.
357, 343 F.2d 914 (1965).
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