Farrell v. Commissioner

T.C. Memo. 1996-295

UNITED STATES TAX COURT

VINCENT AND CLOTILDE FARRELL, JR., Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 28082-89. Filed June 25, 1996.

Hugh Janow, for petitioners.

Barry J. Laterman, for respondent.

MEMORANDUM OPINION

WOLFE, Special Trial Judge: This matter is before the Court

on petitioners' Motion For Leave to File Motion for Decision

Ordering Relief From the Negligence Penalty and the Penalty Rate

of Interest and to File Supporting Memorandum of Law under Rule

50.1 Petitioners' motion for leave was filed with attached

1
All section references are to the Internal Revenue Code in
effect for the year at issue, unless otherwise indicated. All
Rule references are to the Tax Court Rules of Practice and
Procedure.
 - 2 -

exhibits on November 9, 1995. On the same date, petitioners'

motion for decision ordering relief from the negligence penalty

and the penalty rate of interest, with attachments, and

petitioners' memorandum in support of such motion were lodged

with the Court. Subsequently, respondent's objections, with

attachments, and memorandum in support thereof, were filed.

1. Background and Procedural Matters

This case is part of the Plastics Recycling group of cases.

The opinion in the lead case in that group, Provizer v.

Commissioner, T.C. Memo. 1992-177, affd. without published

opinion 996 F.2d 1216 (6th Cir. 1993), concerning the substance

of the transaction and the additions to tax, was filed on March

25, 1992. To date, we have decided more than 25 cases involving

various aspects of the Plastics Recycling transactions. Most

such cases primarily concern additions to tax for negligence and

valuation overstatement. When the present case was tried, on

March 31 and April 1, 1994, the opinion in Provizer v.

Commissioner, supra, had been issued. Before petitioners filed

their motion for leave, more than 12 additional opinions had been

filed concerning negligence and valuation overstatement in

Plastics Recycling cases.

Petitioners base their motion for leave largely upon

petitioners' alleged discovery, after the record was closed, of a

Stipulation of Settlement between the taxpayers in this case and

respondent in a different case for another year. Petitioners
 - 3 -

claim such stipulation of settlement entitles them to the same

settlement as the taxpayer and the IRS reached in docket Nos.

10382-86 and 10383-86, each of which was styled Miller v.

Commissioner. Petitioners' present counsel argues that he was

not even aware of the settlement of the Miller cases until

September 1994. We note, however, that prior to the entry of

appearance of petitioners' present counsel in June 1992,

petitioners were represented by the same attorneys who tried the

Provizer case, represented the taxpayers in Miller v.

Commissioner, supra, and, for use in various other cases,

negotiated the terms of the stipulation of settlement on which

petitioners now seek to rely. Those attorneys, at least, should

have been well aware of the matters that petitioners' present

counsel considers newly discovered. Consequently, there is ample

reason for us to conclude that in the past, petitioners, acting

through well-informed counsel, rejected the idea of seeking the

same treatment accorded the taxpayer in the Miller case and

instead chose to proceed with litigation.

Moreover, even if we express no view as to petitioners'

present counsel's knowledge of the background facts or as to the

extent to which petitioners are charged with whatever knowledge

petitioners' prior counsel may have had concerning these matters,

at the very least, petitioners' present counsel seeks to raise a

new issue long after trial. Resolution of such issue plainly

would require a new trial. Such further trial "would be contrary
 - 4 -

to the established policy of this Court to try all issues raised

in a case in one proceeding and to avoid piecemeal and protracted

litigation." Markwardt v. Commissioner, 64 T.C. 989, 998 (1975);

see also Robin Haft Trust v. Commissioner, 62 T.C. 145, 147

(1974). Consequently, under the circumstances here, at this late

date in the litigation proceedings, long after trial and

briefing, and after the issuance of numerous opinions on issues

and facts closely analogous to those in this case, we consider

that the practice of this Court would support, if not absolutely

require, denial of petitioners' motion for leave.

However, we do not rely solely on such procedural matters

for denying petitioners' motion for leave. Instead, we also have

considered the consequences of granting such motion. We conclude

that even if petitioners' motion for leave were granted, the

arguments set forth in petitioners' motion for decision and

attached memorandum, lodged with this Court, are without merit

and such motion would be denied.

Therefore, and for reasons set forth in more detail below,

petitioners' motion for leave will be denied.

2. Facts and Circumstances Relevant to Petitioners' Proposed
Motion for Decision

In a notice of deficiency dated August 25, 1989, respondent

determined a deficiency in petitioners' Federal income tax for
 - 5 -

1982, plus increased interest under section 6621(c).2 In an

amendment to answer, respondent asserted a lesser deficiency for

1982 in the amount of $51,043, plus additions to tax in the

amount of $12,127 under section 6659 for valuation overstatement,

in the amount of $2,552 under section 6653(a)(1) for negligence,

and under section 6653(a)(2) in an amount equal to 50 percent of

the interest due on $50,278. Respondent also asserted that

$50,278 of the deficiency was subject to the increased rate of

interest under section 6621(c).

Petitioners contend that they should be relieved of any

liability for the negligence additions to tax and increased

interest based upon: (1) Respondent's treatment of a purportedly

similarly situated taxpayer in two other cases; (2) a Stipulation

of Settlement agreement executed by petitioners and respondent in

a separate Plastics Recycling case, docket No. 1173-88, which

concerned taxable years 1981 and 1978; and (3) equitable

estoppel.

Some of the facts have been stipulated and are so found.

The stipulated facts and attached exhibits are incorporated by

this reference. Vincent and Clotilde Farrell resided in Katonah,

New York, when their petition was filed.

2
Respondent also determined a deficiency in petitioners'
Federal income tax for 1980, and subsequently asserted a lesser
amount in an amendment to answer. On Apr. 22, 1992, respondent
and petitioners filed a Stipulation of Settled Issues resolving
all of the issues relating to taxable year 1980.
 - 6 -

In 1980 Vincent Farrell (Farrell) acquired a limited

partnership interest in SAB Associates and in 1982 he acquired a

limited partnership interest in SAB Resource Reclamation

Associates (SAB Reclamation).3 SAB Reclamation purported to

lease four Sentinel EPE recyclers in a series of transactions

substantially identical to those in the Clearwater Group limited

partnership (Clearwater), the partnership considered in Provizer

v. Commissioner, T.C. Memo. 1992-177. SAB Associates invested in

plastics recycling partnerships like SAB Reclamation and

Clearwater.4 On their 1981 and 1982 joint Federal income tax

returns, petitioners claimed their pro rata share of SAB

Associates' and SAB Reclamation's partnership losses and tax

credits.

In a notice of deficiency dated November 30, 1987,

respondent determined deficiencies in petitioners' 1981 Federal

income tax. Respondent disallowed petitioners' claimed losses

and tax credits related to SAB Associates and determined

additions to tax under section 6659 for valuation overstatement

and under section 6653(a)(1) and (2) for negligence. Respondent

also determined that interest on the deficiency accruing after

3
Petitioners own a 4.5-percent limited partnership interest
in SAB Reclamation. The record does not disclose the amount of
petitioners' percentage interest in SAB Associates.
4
SAB Associates was formed to engage in tax straddle
investments. During 1981, it ceased engaging in tax straddle
investments and changed its function to leasing Sentinel EPE
recyclers.
 - 7 -

December 31, 1984, would be calculated at 120 percent of the

statutory rate under section 6621(c). In a second notice of

deficiency issued that same date, respondent determined a

deficiency in petitioners' 1978 Federal income tax due solely to

the disallowance of a credit carryback that arose in 1981. A

timely petition to this Court was filed by petitioners on January

19, 1988 (docket No. 1173-88).5 Petitioners' counsel at the time

was Jerome R. Rosenberg (Rosenberg).

Several months earlier, on June 12, 1987, this Court had

ordered that respondent and the lead counsel for the taxpayers in

Plastics Recycling cases designate lead cases that would present

all issues involved in the Plastics Recycling cases. The

following cases were selected: (1) Fine v. Commissioner, docket

No. 35437-85; (2) Miller v. Commissioner, docket No. 10382-86

(concerning taxable years 1982 and 1983); and (3) Miller v.

Commissioner, docket No. 10383-86 (concerning taxable years 1979

and 1980). In early 1988, the Fine case was concluded without

trial. In place of the Fine case, the parties thereafter

selected, and the Court designated, the case of Provizer v.

Commissioner, docket No. 27141-86, as a lead case along with the

5
Certain background facts and circumstances relating to
docket No. 1173-88 apparently are not disputed by the parties,
and we have discussed these matters for the sake of completeness.
As we have noted, granting petitioners' motion for leave would
require further proceedings.
 - 8 -

two Miller cases. Estate of Satin v. Commissioner, T.C. Memo.

1994-435; Fisher v. Commissioner, T.C. Memo. 1994-434.6

After the lead counsel for the taxpayers and respondent

agreed upon the test cases, respondent prepared Stipulation of

Settlement agreements (piggyback agreements) with respect to the

Plastics Recycling project so that taxpayers who did not wish to

litigate their cases individually could agree to be bound by the

results of the test cases. Respondent's counsel offered the

piggyback agreements to taxpayers involved in the Plastics

Recycling project, including petitioners in docket No. 1173-88.

Respondent and petitioners executed the piggyback agreement for

docket No. 1173-88 and filed it with the Court on September 12,

1988. Rosenberg signed the piggyback agreement on behalf of

petitioners.

In the piggyback agreement, petitioners agreed to be bound

by the results of the three test cases. The agreement is

6
The summary of the background of the plastics recycling
litigation, the selection of Provizer v. Commissioner, T.C. Memo.
1992-177, as a test case, and of the preparation of the piggyback
agreement is taken from our opinions in Estate of Satin v.
Commissioner, T.C. Memo. 1994-435, and Fisher v. Commissioner,
T.C. Memo. 1994-434. Petitioners have attached to their motion
copies of these cases and of the piggyback agreement executed by
Jerome R. Rosenberg and rely upon such materials in their
memorandum. Respondent has not specifically objected to the
accuracy of the documentation. However, again we refer to such
materials only to explain petitioners' argument for completeness.
As noted above, the underlying documents are not part of the
record as stipulated exhibits or otherwise, and we would be
required to conduct further proceedings if we were to grant
petitioners' motion for leave.
 - 9 -

virtually identical to the piggyback agreements set forth in

Estate of Satin v. Commissioner, supra, and Fisher v.

Commissioner, supra. The piggyback agreement executed by

petitioners, as attached to petitioners' motion for leave and

undisputed by respondent, provides:
STIPULATION OF SETTLEMENT FOR TAX SHELTER ADJUSTMENTS

With respect to all adjustment(s) in respondent's notice of
deficiency relating to the Plastics Recycling tax shelter, the parties
stipulate to the following terms of settlement:

1. THE ABOVE ADJUSTMENT IS ONE OF SEVERAL ISSUES IN DISPUTE
BETWEEN THE PARTIES. ALL OTHER ADJUSTMENTS WILL EITHER BE RESOLVED BY
THE PARTIES OR WILL BE SUBMITTED TO THE COURT FOR RESOLUTION;

2. The above adjustment(s), as specified in the preamble, shall
be determined by application of the same formula as that which resolved
the same tax shelter adjustment(s) with respect to the following
taxpayer(s):

Names(s): Harold M. Provizer and Joan Provizer v. Commissioner
of Internal Revenue

Tax Court Docket No.: 27141-86

Names(s): Elliot I. Miller v. Commissioner of Internal Revenue

Tax Court Docket No.: 10382-86

Names(s): Elliot I. Miller and Myra K. Miller v. Commissioner of
Internal Revenue

Tax Court Docket No.: 10383-86

(hereinafter the CONTROLLING CASE);

3. All issues involving the above adjustment(s) shall be
resolved as if the petitioner(s) in this case was/were the same as the
taxpayer(s) in the CONTROLLING CASE;

a. If the Court finds that any additions to tax or the
section 6621(c) interest are applicable to the underpayment
attributable to the above-designated tax shelter adjustment(s), the
resolution of the tax shelter issue and the applicability of such
addition to tax or interest to that tax shelter issue in the
CONTROLLING CASE, whether by litigation or settlement, shall apply to
petitioner(s) as if the petitioner(s) in this case was/were the same as
the taxpayer(s) in the CONTROLLING CASE;

4. If the adjustment is resolved in the CONTROLLING CASE in a
manner which affects the same issue in other years (e.g., * losses in
later years or affects depreciation schedules), the resolution will
apply to petitioner(s)' later years as if the petitioner(s) in this
case was/were the same as the taxpayer(s) in the CONTROLLING CASE;
 - 10 -
5. A decision shall be submitted in this case when the decision
in the CONTROLLING CASE (whether litigated or settled) becomes final
under I.R.C. sec. 7481;

6. If the CONTROLLING CASE is appealed, the petitioner(s)
consent(s) to the assessment and collection of the deficiency(ies),
attributable to the adjustment(s) formulated by reference to the Tax
Court's opinion, notwithstanding the restrictions under I.R.C. sec.
6213(a);

7. The petitioner(s) in this case will testify or provide
information in any case involving the same tax shelter adjustment, if
requested; and

8. The petitioner(s) in this case consent(s) to the disclosure
of all tax returns and tax return information for the purpose of
respondent's discovering or submitting evidence in any case involving
the same shelter adjustment(s).

On or about February of 1988, a settlement offer (the

Plastics Recycling project settlement offer or the offer) was

made available by respondent to all docketed Plastics Recycling

cases, and subsequently to all nondocketed cases. Baratelli v.

Commissioner, T.C. Memo. 1994-484.7 Pursuant to the offer,

taxpayers had 30 days to accept the following terms:

(1) Allowance of a deduction for 50 percent of the amount of the

cash investment in the venture in the year(s) of investment to

the extent of loss claimed; (2) Government concession of the

substantial understatement of tax penalties under section 6661

and the negligence additions to tax under section 6653(a)(1) and

(2); (3) taxpayer concession of the section 6659 addition to tax

for valuation overstatement and the increased rate of interest

7
The record does not include a settlement offer to
petitioners. Petitioners have attached to their motion for
decision a copy of a settlement offer to another taxpayer with
respect to a plastics recycling case. Respondent has not
disputed the accuracy of the statement of the plastics recycling
settlement offer.
 - 11 -

under section 6621; and (4) execution of a closing agreement

(Form 906) stating the settlement and resolving the entire matter

for all years. Petitioners assert that the Plastics Recycling

project settlement offer was extended to them, but they do not

claim to have accepted the offer timely, so they effectively

rejected it.

In December 1988, the Miller cases were disposed of by

settlement agreement between the taxpayers and respondent, and

attorney Richard S. Kestenbaum executed the settlement on behalf

of the Millers. This Court entered decision documents based upon

those settlements on December 22, 1988. The settlement provided

that the taxpayers in the Miller cases were liable for the

addition to tax under the provisions of section 6659 for

valuation overstatement, but not for the additions to tax under

the provisions of sections 6661 and 6653(a). The increased

interest under section 6621(c), premised solely upon Miller's

interest in the recyclers for the taxable years at issue, was not

applicable because Miller made payments prior to December 31,

1984, so no interest accrued after that time. Respondent did not

notify petitioners or any other taxpayers of the disposition of

the Miller cases. Estate of Satin v. Commissioner, T.C. Memo.

1994-435; Fisher v. Commissioner, T.C. Memo. 1994-434.8

8
Respondent attached copies of the Miller closing agreement
and disclosure waiver to her objection to petitioners' motion for
leave. Petitioners do not dispute the accuracy of the document
(continued...)
 - 12 -

In a notice of deficiency dated August 25, 1989, respondent

determined a deficiency in petitioners' Federal income tax for

1982, plus increased interest under section 6621(c). Petitioners

timely filed a petition with this Court. Their attorneys at the

time were Richard S. Kestenbaum and Bernard S. Mark (Kestenbaum

and Mark). On March 25, 1992, this Court filed its opinion in

Provizer v. Commissioner, T.C. Memo. 1992-177, in which

Kestenbaum and Mark represented taxpayers. In our Provizer

opinion, all of the Plastics Recycling issues were decided for

respondent, including the additions to tax under section 6653(a)

and increased interest under section 6621(c). On February 1,

1994, respondent filed a motion for leave to file a first

amendment to answer in order to assert reduced deficiencies and

the applicability of sections 6659 and 6653(a)(1) and (2) for

1982. The motion was subsequently granted.

On January 24, 1994, Hugh Janow, petitioners' present

counsel, filed an entry of appearance for petitioners in this

case. Kestenbaum and Mark promptly filed a motion to withdraw as

counsel, and it was granted. On March 31, 1994, petitioners and

respondent filed a Stipulation of Settled Issues concerning

petitioners' participation in the Plastics Recycling project.

Petitioners conceded the losses and tax credits claimed on their

1982 return resulting from their participation in the Plastics

8
(...continued)
although it is not otherwise a part of the record in this case.
 - 13 -

Recycling project as well as the increased rate of interest under

section 6621(c). Issues concerning the additions to tax under

sections 6659 and 6653(a)(1) and (2) were not resolved.

On August 25, 1994, this Court filed opinions in two

Plastics Recycling cases: Estate of Satin v. Commissioner, supra

and Fisher v. Commissioner, supra. At issue in the Estate of

Satin and Fisher cases were two piggyback agreements virtually

identical to the one executed by petitioners and respondent for

docket No. 1173-88. Noting that the cases involved "peculiar, if

not unique circumstances", this Court held that the piggyback

agreements entitled the taxpayers to the same settlement as had

been reached in the Miller cases. Docket No. 1173-88 has

subsequently been settled pursuant to the piggyback agreement.

Respondent represents that administrative settlements have been

made with taxpayers in each of the relatively few cases, like

docket No. 1173-88, in which the taxpayer executed a piggyback

agreement like those discussed in Estate of Satin v.

Commissioner, supra, and Fisher v. Commissioner, supra.

3. Discussion

The motion for entry of decision here under consideration

raises the principle of equal treatment of similarly situated

taxpayers, the interpretation of a Stipulation of Settlement

entered into by petitioners and respondent in a separate case

(docket No. 1173-88), and equitable estoppel. In effect,

petitioners seek to resurrect the settlement offer they rejected.
 - 14 -

Petitioners first argue that they are similarly situated to

Elliot Miller (Miller), the taxpayer in the Miller cases, and

that therefore they are entitled to the same settlement agreement

executed by respondent and Miller in those cases.

Under the principle of "equality," the Commissioner has a

duty of consistency toward similarly situated taxpayers and

cannot tax one and not tax another without some rational basis

for the difference. United States v. Kaiser, 363 U.S. 299, 308

(1960) (concurring opinion); see Baker v. United States, 748 F.2d

1465 (11th Cir. 1984); Farmers' and Merchants' Bank v. United

States, 476 F.2d 406 (4th Cir. 1973). Essentially, the principle

of equality precludes the Commissioner from making arbitrary

distinctions between like cases. See Baker v. Commissioner, 787

F.2d 637, 643 (D.C. Cir. 1986), vacating 83 T.C. 822 (1984).

The different tax treatment accorded petitioners and Miller

was not arbitrary or irrational. While petitioners and Miller

both invested in the Plastics Recycling project,9 their actions

with respect to such investments provide a rational basis for

treating them differently. Miller foreclosed any potential

liability for increased interest in his cases by making payments

prior to December 31, 1984; no interest accrued after that date.

9
The Millers were Schedule C owners of Sentinel EPE
recyclers, while petitioners owned interests in limited
partnerships that owned Sentinel EPE recyclers. We consider this
difference to be negligible and of no consequence. See Estate of
Satin v. Commissioner, supra; Fisher v. Commissioner, supra.
 - 15 -

In contrast, petitioners concede that the increased rate of

interest under section 6621(c) applies in this case. Liability

for the increased rate of interest is one of the principal

differences between the settlement in the Miller cases and the

settlement offer rejected by petitioners. Accordingly, with

respect to the section 6621(c) issue, petitioners and Miller were

treated equally to the extent they were similarly situated, and

differently to the extent they were not. With respect to the

other differences, i.e., the section 6653(a) addition to tax and

the 50-percent loss deductions, petitioners rejected a settlement

offer made to them prior to trial of a test case. Miller

negotiated for himself and accepted an offer that was essentially

the same prior to trial. In their motion, petitioners seek the

benefits of the settlement after trial of the test case. Miller

obtained no such benefit. Petitioners' motion is not supported

by the principle of equality. Cf. Baratelli v. Commissioner,

T.C. Memo. 1994-484.

Next, petitioners argue that the piggyback agreement they

executed for docket No. 1173-88 entitles them to the Miller

settlement in docket No. 28082-89. Petitioners maintain that the

scope of the piggyback agreement includes cases that concern

1982, such as docket No. 28082-89.

A settlement stipulation is a contract. Smith v.

Commissioner, T.C. Memo. 1991-412. General principles of

contract law are applied in construing a settlement agreement.
 - 16 -

Goldman v. Commissioner, 39 F.3d 402 (2d Cir. 1994), affg. T.C.

Memo. 1993-480. Absent wrongful, misleading conduct or mutual

mistake, we enforce a stipulation of settlement in accordance

with our interpretation of its written terms. Stamm Intl. Corp.

v. Commissioner, 90 T.C. 315 (1988); Scherr v. Commissioner, T.C.

Memo. 1990-225. Where the language of an agreement is

unambiguous, we look within the "four corners" of the instrument

to ascertain the intent of the parties. Goldman v. Commissioner,

supra; see Estate of Satin v. Commissioner, T.C. Memo. 1994-435,

and Fisher v. Commissioner, T.C. Memo. 1994-434, and cases cited

therein.

Petitioners first assert that the piggyback agreement

designates both of the Miller cases as test cases, instead of

just one, so as to extend the scope of the agreement to the years

at issue in those cases, such as 1982. In the Estate of Satin

and Fisher cases, we found that the piggyback agreement entitled

participant taxpayers to elect to accept the results of the

Miller cases or the Provizer case. There is no language in the

agreement extending the result of the controlling cases to any or

all cases of the participant taxpayers, not referenced in the

agreement, simply because they concern the same years addressed

in the controlling cases. Petitioners' theory as to why both

Miller cases were designated controlling cases is speculation

unsupported by the terms of the piggyback agreement.
 - 17 -

Petitioners also argue that paragraph 4 of the piggyback

agreement extends the controlling case to all cases not expressly

a part of or referenced in the agreement, such as docket No.

28082-89. Paragraph 4 provides:

If the adjustment is resolved in the CONTROLLING CASE
in a manner which affects the same issue in other years
(e.g., * losses in later years or affects depreciation
schedules), the resolution will apply to petitioner(s)'
later years as if the petitioner(s) in this case
was/were the same as the taxpayer(s) in the CONTROLLING
CASE; [Emphasis added.]

We disagree with petitioners' interpretation of paragraph 4.

Paragraph 4 merely provides that if the result in the controlling

case affects a continuing item in other or later years in the

controlling case, then the resolution will apply in the same

manner to other or later years of the same continuing item in

petitioners' case; it does not extend the result to other cases

not a part of the agreement. See Conway v. Commissioner, T.C.

Memo. 1994-413 (interpreting a similar stipulation); sec.

301.7121-1(b)(3) and (4), Proced. & Admin. Regs. The piggyback

agreement is exclusively for docket No. 1173-88; no other case is

explicitly or implicitly referenced or incorporated therein.

Petitioners' motion is not supported by the piggyback agreement

for docket No. 1173-88.

Finally, petitioners contend that the doctrine of equitable

estoppel should apply to bar respondent from assessing penalties

other than those assessed in the Miller cases. We note that this

Court is a court of limited jurisdiction and lacks general
 - 18 -

equitable powers. Commissioner v. McCoy, 484 U.S. 3, 7 (1987).

However, while we cannot expand our jurisdiction through

equitable principles, we can apply them in the disposition of

cases that are within our jurisdiction. See Woods v.

Commissioner, 92 T.C. 776, 784-787 (1989), and cases cited

therein. The redetermination of a deficiency, addition to tax,

or penalty determined by respondent is within our jurisdiction.

Secs. 6213(a), 6665, 6671. Accordingly, in deciding this issue,

we are not expanding on our statutory jurisdiction.

"[T]he doctrine of equitable estoppel is applied against the

Government `with the utmost caution and restraint.'" Kronish v.

Commissioner, 90 T.C. 684, 695 (1988) (quoting Boulez v.

Commissioner, 76 T.C. 209, 214-215 (1981), affd. 810 F.2d 209

(D.C. Cir. 1987)). There are several conditions that must be

satisfied before the doctrine is applied: (1) A false

representation or wrongful, misleading silence by the party

against whom the opposing party seeks to invoke the doctrine; (2)

error in a statement of fact and not in an opinion or statement

of law; (3) ignorance of the 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. See Kronish v.

Commissioner, supra at 695, and cases cited therein.

Petitioners assert that they were adversely affected in this

case by respondent's failure promptly to notify them of the
 - 19 -

disposition of the Miller cases. Specifically, petitioners

maintain that respondent's failure to notify them of the Miller

settlement prior to issuing the notice of deficiency for this

case "effectively took from them the opportunity to have the

Miller settlement applied to * * * 1982."

However, there is no showing in the record that petitioners

ever had the opportunity to have the Miller settlement applied to

1982. Petitioners were not similarly situated to the Millers and

have conceded that section 6621(c) applies to this case. No

piggyback agreement was offered or executed in this case.

Instead, as petitioners themselves have argued, respondent

extended the Plastics Recycling project settlement offer to

petitioners. That offer mirrored the Miller settlement or was

more advantageous for taxpayers in all major respects except the

increased interest. Petitioners have not shown that knowledge of

the Miller settlement would have entitled them to escape

liability for the increased interest. We find that petitioners

were not adversely affected by respondent's actions, and

therefore that their motion is not supported on equitable

grounds.

In order to reflect the foregoing,

An appropriate order will be

issued denying petitioners' motion.