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to notify them of the impropriety of these prior returns should
prevent the disallowance of the deduction and credit, because it
denied them the opportunity to retrieve a copy of the 1995 Form
8332 and correct the discrepancy.
Once again, while we sympathize with petitioners’ position,
the law is clear. The Commissioner’s allowance of a deduction on
a Federal income tax return for 1 year does not preclude him from
challenging a similar item in a return for a later year. S.
Chester Tube Co. v. Commissioner, 14 T.C. 1229, 1235 (1950);
Lozoff v. United States, 266 F. Supp. 966, 971 (E.D. Wis. 1967),
affd. 392 F.2d 875 (7th Cir. 1968). This holds true even where
the Commissioner has accepted a taxpayer’s prior returns without
examining them. Rountree v. Commissioner, T.C. Memo. 1968-165.
Moreover, the Commissioner has no affirmative duty to notify
taxpayers of noncompliance with statutory requirements. Sommer
v. Commissioner, T.C. Memo. 1983-196.
Furthermore, application of the estoppel doctrine in tax
cases must be rare, as “the policy in favor of an efficient
collection of the public revenue outweighs the policy of the
estoppel doctrine in its usual and customary context.” Nadler v.
Commissioner, T.C. Memo. 1992-383, affd. without published
opinion 993 F.2d 1533 (2d Cir. 1993). Equitable estoppel is
available as a defense only where the taxpayer can show that the
Commissioner’s representatives have committed fraud or unfair
conduct that the taxpayer relied on to his or her detriment.
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Last modified: November 10, 2007