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of cash employed to open the E Trade account or of the trades
conducted therein. Given this convoluted trail, the Court agrees
with respondent that the substance of what petitioners had
claimed at various junctures and were now claiming concerning the
E Trade account only became clear enough adequately to disclose a
change in position and support a duty of consistency argument
through testimony elicited at trial. On these facts, the Court
concludes that all three elements for application of the duty of
consistency are met.
Where the three prongs of the test are met, the consequence
is that the Commissioner may act as if the previous
representation remains true, even if it is not, and the taxpayer
is barred from asserting to the contrary. E.g., Herrington v.
Commissioner, 854 F.2d at 758; Estate of Letts v. Commissioner,
109 T.C. at 297; Janis v. Commissioner, T.C. Memo. 2004-117.
Hence, petitioners here are properly estopped from claiming that
ownership of or proceeds from transactions in the E Trade account
are attributable to other than Ms. Quinn. As a result,
petitioners’ various arguments regarding attribution to
Mr. Arberg, even if otherwise legally meritorious, cannot be
sustained. The Court therefore need not further consider
petitioners’ contentions with respect to an alleged power of
attorney, to trust law in the State of Georgia, or to their so-
called legal preclusion doctrine.
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Last modified: November 10, 2007