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The following conditions must be satisfied before equitable
estoppel will be applied against the Government: (1) A false
representation or wrongful, misleading silence by the party
against whom the opposing party seeks to invoke the doctrine; (2)
an error in a statement of fact and not in an opinion or
statement of law; (3) ignorance of the true facts; (4) reasonable
reliance on the acts or statements of the one against whom
estoppel is claimed; and (5) adverse effects of the acts or
statements of the one against whom estoppel is claimed. Id.
Petitioners have not shown that they relied to their
detriment on the December 2003 letter or that they suffered
unconscionable injury. Accordingly, respondent is not estopped
from determining the accuracy-related penalty. Respondent’s
determination is sustained.
Reviewed and adopted as the report of the Small Tax Case
Division.
To reflect the foregoing,
Decision will be entered
for respondent.
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Last modified: May 25, 2011