                       120 T.C. No. 7



                UNITED STATES TAX COURT



    JAMES C. AND KATHERINE WILKINS, Petitioners v.
     COMMISSIONER OF INTERNAL REVENUE, Respondent



Docket No. 10704-00.           Filed February 26, 2003.


     Ps claimed a refund of $80,000 on their 1998
Federal income tax return attributable to “black taxes”
or so-called slavery reparations.

     Held: The Internal Revenue Code does not provide
a deduction, credit, or any other allowance for slavery
reparations.

     Held further: The doctrine of equitable estoppel
is not a bar to R’s determination in this matter.
Therefore, R’s Motion for Summary Judgment shall be
granted.


James C. and Katherine Wilkins, pro sese.

Monica J. Miller, for respondent.
                                 - 2 -

                                OPINION


     DAWSON, Judge:     This case was assigned to Chief Special

Trial Judge Peter J. Panuthos, pursuant to the provisions of

section 7443A(b)(5) and Rules 180, 181, and 183.1     The Court

agrees with and adopts the opinion of the Chief Special Trial

Judge, which is set forth below.

                 OPINION OF THE SPECIAL TRIAL JUDGE

     PANUTHOS, Chief Special Trial Judge:     This matter is before

the Court on respondent’s Motion for Summary Judgment, filed

pursuant to Rule 121.    As explained in detail below, we shall

grant respondent’s motion.

                              Background

     In February 1999, petitioners filed a Form 1040, U.S.

Individual Income Tax Return, for the taxable year 1998, on which

they reported wages of $22,379.85, total tax of $1,076, and tax

withholding of $2,388.    Petitioners’ tax return included two

Forms 2439, Notice to Shareholder of Undistributed Long-Term

Capital Gains.   The Forms 2439 stated that petitioners were

shareholders of a regulated investment company (RIC) or real

estate investment trust (REIT).2    The Forms 2439 identified the

     1
        Section references are to the Internal Revenue Code, as
amended. Rule references are to the Tax Court Rules of Practice
and Procedure.
     2
         Sec. 852(b)(1) and (3)(A) provides that tax will be
                                                    (continued...)
                               - 3 -

investment entity as “black investment taxes” and listed the

amount of tax paid by the entity on petitioners’ behalf as

$80,000.00.   Petitioners entered $80,000.00 on Form 1040, line 63

(Other payments), and claimed a refund on a total overpayment of

$81,312.   Respondent processed the tax return and promptly issued

to petitioners a refund check in the amount of $81,312.

     On August 9, 2000, respondent sent a notice of deficiency to

petitioners for the taxable year 1998 which stated in pertinent

part:

     It is determined that the amount reported as Other
     Payments on your tax return for the taxable year 1998
     is not allowable because there is no provision in the
     Internal Revenue Code for a refundable tax credit for
     the payment of reparation for slavery. Therefore, your
     allowable Other Payments is $0.00 rather than
     $80,000.00 as shown on your return. Accordingly, your
     tax liability is increased by $80,000.00 for the tax
     year 1998.

Petitioners filed a timely (imperfect) petition and an amended

petition challenging the notice of deficiency described above.3

The amended petition states in pertinent part:   “We request the

     2
      (...continued)
imposed on the taxable income and capital gains of a regulated
investment company (RIC). Sec. 852(b)(3)(D)(i) provides that the
RIC’s shareholders “shall include, in computing his long-term
capital gains in his return * * * such amount as the * * * [RIC]
shall designate”. Sec. 852(b)(3)(D)(ii) provides that such
shareholder “shall be deemed to have paid * * * the tax imposed”
under sec. 852(b)(3)(A) and the shareholder shall be allowed a
“credit or refund, as the case may be, for the tax so deemed to
have been paid by him.”
     3
        At the time the petition was filed, petitioners resided
in Satellite Beach, Florida.
                               - 4 -

total amounts plus any penalties be dropped, due to negligence of

the I.R.S.”4   Respondent filed an answer to the amended

petition.5

     As indicated, respondent moves for summary judgment.

Respondent avers that “Although there have been several

initiatives in Congress to study reparations proposals for

African-Americans, there is currently no provision in the tax law

that allows African-Americans to claim black investment taxes or

any type of tax credit or refund related to slavery reparations.”

Respondent also asserts that he has taken steps to combat the

“slavery reparation scam”.

     Petitioners filed an Objection to respondent’s motion.

Petitioners contend that respondent’s motion should be denied

because respondent was “negligent in informing the public

specifically African-Americans of * * * [the slavery reparations]


     4
        Respondent did not determine that petitioners are liable
for any addition to tax or penalty for the taxable year 1998.
     5
        Respondent initially filed a motion to dismiss for lack
of jurisdiction, asserting that the notice of deficiency was
invalid on the ground that respondent did not determine a
deficiency in tax because sec. 6201(a)(3) authorized the
immediate assessment of the $80,000 erroneously refunded to
petitioners. When petitioners failed to file an objection, the
Court granted respondent’s motion to dismiss. Respondent later
moved to vacate the Court’s order of dismissal for lack of
jurisdiction, asserting that the erroneous refund issued to
petitioners is subject to the normal deficiency procedures set
forth in secs. 6211-6216. The Court granted the motion to
vacate, concluding that respondent determined a deficiency in
petitioners’ Federal income tax.
                                - 5 -

scam.”   Petitioners assert that, when they first heard about

claims for slavery reparations, they researched the Internal

Revenue Service’s website and found no mention of a scam relating

to the matter.   They also contend that they first learned that

their slavery reparations claim was not legitimate when they were

interviewed by an IRS special agent in July 1999.   They maintain

that the special agent informed them that they did not need to

repay the $80,000 in question, but that he would appreciate their

assistance in prosecuting the promoter of the scam.

                            Discussion

     Summary judgment is intended to expedite litigation and

avoid unnecessary and expensive trials.   See Fla. Peach Corp. v.

Commissioner, 90 T.C. 678, 681 (1988).    Summary judgment may be

granted with respect to all or any part of the legal issues in

controversy “if the pleadings, answers to interrogatories,

depositions, admissions, and any other acceptable materials,

together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that a decision may be

rendered as a matter of law.”   Rule 121(b); Sundstrand Corp. v.

Commissioner, 98 T.C. 518, 520 (1992), affd. 17 F.3d 965 (7th

Cir. 1994); Zaentz v. Commissioner, 90 T.C. 753, 754 (1988);

Naftel v. Commissioner, 85 T.C. 527, 529 (1985).    The moving

party bears the burden of proving that there is no genuine issue

of material fact, and factual inferences will be read in a manner
                               - 6 -

most favorable to the party opposing summary judgment.   See

Dahlstrom v. Commissioner, 85 T.C. 812, 821 (1985); Jacklin v.

Commissioner, 79 T.C. 340, 344 (1982).

     Based on our review of the record, we are satisfied that

there is no genuine issue as to any material fact and that

summary judgment may be rendered in respondent’s favor as a

matter of law.

     We begin with the well-settled principle that tax deductions

are a matter of legislative grace, and taxpayers must show that

they come squarely within the terms of the law conferring the

benefit sought.   See Rule 142(a); INDOPCO, Inc. v. Commissioner,

503 U.S. 79, 84 (1992); New Colonial Ice Co. v. Helvering, 292

U.S. 435, 440 (1934); Welch v. Helvering, 290 U.S. 111, 115

(1933).   Petitioners concede that they did not make “other

payments” of $80,000 during 1998, and, therefore, they were not

entitled the refund claimed on their return.   The Internal

Revenue Code simply does not provide a tax deduction, credit, or

other allowance for slavery reparations.

     For purposes of the pending motion we assume that

petitioners’ assertions regarding the IRS website and their

interview with the special agent are true.   Petitioners’

contentions are tantamount to an assertion of equitable estoppel.

Equitable estoppel is a judicial doctrine that precludes a party

from denying its own representations which induced another to act
                                - 7 -

to his or her detriment.    Hofstetter v. Commissioner, 98 T.C.

695, 700 (1992).   The Court has recognized that estoppel is

applied against the Commissioner “with the utmost caution and

restraint.”   Id.; Kronish v. Commissioner, 90 T.C. 684, 695

(1988); Boulez v. Commissioner, 76 T.C. 209, 214-215 (1981),

affd. 810 F.2d 209 (D.C. Cir. 1987); Estate of Emerson v.

Commissioner, 67 T.C. 612, 617 (1977).      The taxpayer must

establish the following elements before equitable estoppel will

be applied against the Government:      (1) A false representation or

wrongful, misleading silence by the party against whom the

estoppel is claimed; (2) an error in a statement of fact and not

in an opinion or statement of law; (3) the taxpayer's ignorance

of the truth; (4) the taxpayer's reasonable reliance on the acts

or statements of the one against whom estoppel is claimed; and

(5) adverse effects suffered by the taxpayer from the acts or

statements of the one against whom estoppel is claimed.         Norfolk

S. Corp. v. Commissioner, 104 T.C. 13, 60 (1995), affd. 140 F.3d

240 (4th Cir. 1998).   Estoppel requires a finding that the

taxpayer relied on the Government's representations and suffered

a detriment because of that reliance.      Id.

     Petitioners’ allegations do not satisfy the traditional

requirements of estoppel.   Respondent’s alleged failure to

identify slavery reparations claims as a scam on its website does

not amount to a false representation or wrongful, misleading
                               - 8 -

silence.   Moreover, we conclude that it was unreasonable as a

matter of law for petitioners to base their $80,000 refund claim

on the lack of a warning on respondent’s website regarding

slavery reparations claims.   See, e.g., Johnson v. Commissioner,

T.C. Memo. 1993-272 (paying a refund to the taxpayers did not

estop the Commissioner from later determining a deficiency in the

same year on the ground that the transaction underlying the

taxpayers’ refund claim was a sham).

     We likewise conclude that the special agent’s remarks to

petitioners, that they would not be required to repay the refund,

do not warrant the application of equitable estoppel against

respondent.   The special agent’s statement was not a statement of

fact but rather was one of law.   Further, we are not convinced

that petitioners suffered a detriment as a result of the special

agent’s statement.   See, e.g., Nolte v. Commissioner, T.C. Memo.

1995-57 (holding taxpayers did not suffer any significant

detriment as the result of Commissioner’s earlier erroneous

statement that tax liability for years in question was “paid in

full” because   taxpayers would have been liable for deficiencies

whether or not Commissioner made the misstatement), affd. by

unpublished opinion 99 F.3d 1146 (9th Cir. 1996).
                                 - 9 -

     Consistent with the preceding discussion, we shall grant

respondent’s Motion for Summary Judgment.

     To reflect the foregoing,

                                         An Order and decision will

                                 be entered for respondent.
