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Survey Article


While the legal holdings of the tax cases decided in the Eleventh Circuit in 2006 do not appear remarkable at first blush, the cases present somewhat conflicting considerations of equity that make them noteworthy. The Eleventh Circuit held in Ellinger v. United States that a taxpayer, who owned half of the stock in three S corporations, could not rely on language in a closing agreement between the Internal Revenue Service (the "Service") and one of the corporations to determine his tax liability with respect to transactions between the first corporation and the other two corporations. Reversing a district court decision, the Eleventh Circuit held in Wachovia Bank, N.A. v. United States that the three-year statute of limitations on filing a tax refund claim applied to a trustee corporation that filed a return when it was not required to do so. In McGowan v. Commissioner, the Eleventh Circuit affirmed a Tax Court decision providing that the Service cannot rely solely on an individual's criminal tax conviction for filing false returns to establish that he had the specific intent to evade taxes. In Steffen v. United States, the U.S. District Court for the Middle District of Florida affirmed a bankruptcy court decision denying an individual's refund request pursuant to § 13418 of the Internal Revenue Code of 1986, as amended (the "Code"), for a failure to establish a nexus between income included in a prior taxable year and the individual's later disgorgement of property as a result of Securities and Exchange Commission ("SEC") litigation against the taxpayer's spouse. Finally, in Planes v. United States, a magistrate judge in the U.S. District Court for the Middle District of Florida held that the Service did not abuse its discretion in finding that a CEO breached an offer in a compromise agreement with the Service when a corporation for which the CEO was a responsible person failed to pay its taxes, even though the notice of such breach never reached the CEO.