- 12 -
expenses do not qualify as higher education expenses under
section 529(e)(3)(A).
Respondent’s change in position raises the issue of
equitable estoppel against respondent. “Equitable estoppel is a
judicial doctrine that ‘precludes a party from denying his own
acts or representations which induced another to act to his
detriment.’” Hofstetter v. Commissioner, 98 T.C. 695, 700 (1992)
(quoting Graff v. Commissioner, 74 T.C. 743, 761 (1980), affd.
673 F.2d 784 (5th Cir. 1982)). It is well settled, however, that
equitable estoppel does not bar or prevent respondent from
correcting a mistake of law, even where a taxpayer may have
relied to his detriment on that mistake. Dixon v. United States,
381 U.S. 68, 72-73 (1965); Auto. Club of Mich. v. Commissioner,
353 U.S. 180, 183 (1957); see also Schuster v. Commissioner, 312
F.2d 311, 317 (9th Cir. 1962), affg. in part and revg. in part 32
T.C. 998 (1959); Zuanich v. Commissioner, 77 T.C. 428, 432-433
(1981). An exception exists only in the rare case where a
taxpayer can prove he or she would suffer an unconscionable
injury because of that reliance. Manocchio v. Commissioner, 78
T.C. 989, 1001 (1982), affd. 710 F.2d 1400 (9th Cir. 1983).
Moreover, equitable estoppel is applied “against the Government
with utmost caution and restraint”. Schuster v. Commissioner,
supra at 317.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011