Whether or not there had been a meeting of the minds on the issue, the IRS went forward with finalizing the settlement, knowing precisely what Hunt's understanding of the agreement was. These facts cry out for equitable relief. At the least there was a mutual mistake of fact for which rescission would ordinarily be an appropriate remedy. However, rescission is wholly impractical here. The sheer passage of time, Hunt's changes of circumstance in the interim, and the independent interest of the Tax Court in not having stale litigation reactivated require an end to these proceedings, not a restoration of the status quo ante .
Equitable estoppel provides a just means to that end.
Hunt's reasonable reliance on the fact that he would be paid interest on the 1982 refund, the IRS's knowledge of that reliance, and its intentional finalization of the Tax Court case provide a classic case for the intervention of a court of equity. To the extent that what the government means is that Duvall, Bryant, and others who directly participated in the settlement of Hunt's case acted in subjective good faith, that is, believing that Hunt would be given interest on the 1982 refund, I fully agree with its assessment of the evidence. However, the IRS, like any other corporate body, must be deemed to have the knowledge of its constituent members. For these reasons, Hunt's motion for partial summary judgment will be granted and the government's motion for partial summary judgment will be denied. J. Frederick Motz United States District Judge 1.