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B. Deception and Fraud by Mr. Hoyt
Petitioners next argue that they should not be liable for
the negligence penalty because they were defrauded and otherwise
deceived by Mr. Hoyt with respect to their investment in the Hoyt
partnerships. In this regard, petitioners first argue that the
doctrine of judicial estoppel bars application of the negligence
penalty because the U.S. Government successfully prosecuted Mr.
Hoyt for, in general terms, defrauding petitioners.
Judicial estoppel is a doctrine that prevents parties in
subsequent judicial proceedings from asserting positions
contradictory to those they previously have affirmatively
persuaded a court to accept. United States ex rel. Am. Bank v.
C.I.T. Constr., Inc., 944 F.2d 253, 258-259 (5th Cir. 1991);
Edwards v. Aetna Life Ins. Co., 690 F.2d 595, 598-599 (6th Cir.
1982). While this Court has accepted the doctrine of judicial
estoppel, see Huddleston v. Commissioner, 100 T.C. 17, 28-29
(1993), the Court of Appeals for the Tenth Circuit, to which
appeal lies in this case, has expressly rejected the doctrine.
United States v. 162 MegaMania Gambling Devices, 231 F.3d 713,
726 (10th Cir. 2000). Consequently, the doctrine of judicial
estoppel is not applicable in this case. See Golsen v.
Commissioner, 54 T.C. 742, 757 (1970) (holding that this Court
must “follow a Court of Appeals decision which is squarely in
point where appeal from our decision lies to that Court of
Appeals and to that court alone”).
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