Hossam Helmy El-Bibany and Selma Hassan Kandil - Page 13

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          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.                                                               







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