NALBANDIAN, Circuit Judge. Taxes may well be “what we pay for civilized society,” Compania Gen. de Tabacos de Filipinas v. Collector of Internal Revenue, 275 U.S. 87, 100 (1927) (Holmes, J., dissenting), but that doesn’t mean the tax collector is above the law. This case arises from the IRS’s efforts to circumvent basic contract law.

Eaton Corporation and the IRS entered into two contracts: a pair of advance pricing agreements (“APAs”) meant to govern Eaton’s tax calculations from 2001 through 2010. A few years after entering in to the APAs, Eaton reviewed its records and caught some inadvertent calculation errors. After letting the IRS know, Eaton corrected the mistakes. But the IRS thought that Eaton’s mistakes were serious enough to warrant its unilateral cancellation of the APAs for tax years 2005 and 2006. And after cancelling the APAs, the IRS handed Eaton a notice claiming a deficiency of tens of millions of dollars. Eaton filed a petition in the Tax Court, challenging the deficiency notice and the IRS’s cancellation of the APAs.

The Tax Court sided with Eaton on the major issues, concluding that the IRS had wrongfully cancelled the APAs. The parties raise a much-narrowed subset of arguments in their dueling appeals. For the reasons below, we affirm in part and reverse in part, siding with Eaton on all issues presented.

JOHN P. GUSTAFSON, Bankruptcy Appellate Panel Judge. This appeal concerns the “uses as a residence” requirement in 11 U.S.C. § 522(d)(1).¹ Kathy Ellen Richards (“Debtor”) appeals from the bankruptcy court’s order sustaining an objection to a claimed exemption in $23,298.78 that was held in escrow when Debtor filed her bankruptcy petition. Debtor claimed the funds as exempt pursuant to § 522(d)(1). The Trustee, Mark Little (“Trustee”), objected because although the funds are directly traceable proceeds of Debtor’s prepetition sale of her residence, the proceeds were not being “used as a residence” at the time the petition was filed.² The bankruptcy court sustained Trustee’s objection, holding that the plain language of § 522(d)(1) does not apply to proceeds from a prepetition sale of a residence. The Panel AFFIRMS.