Opinion ID: 3038487
Heading Depth: 3
Heading Rank: 2

Heading: reliance by the irs commissioner and change in

Text: REPRESENTATION BY THE TAXPAYER AFTER THE STATUTE OF LIMITATIONS HAS RUN [6] The second and third elements of the duty of consistency are also present here—reliance by the Commissioner and, after the limitations period, a change in position by the taxpayer that is harmful to the Commissioner. The IRS relied on Form 890, which contained Conrad’s agreement with the discounted valuation of the collection, and thereafter allowed the statute of limitations to run on further assessment of the 1991 estate tax return.4 Conrad changed his position only after 4 Petitioners argue that the Commissioner could not reasonably rely on Form 890 because under 26 U.S.C. § 7121, Petitioners may be able to seek a refund for tax returns where the limitations period has run on further assessment, citing Whitney v. United States, 826 F.2d 896 (9th Cir. 1987). Although it is true that in certain circumstances taxpayers may apply for a refund for time-barred returns, neither Whitney nor § 7121 address the duty of consistency. Equity would be remiss if this statutory benefit to the taxpayer were twisted to avoid the duty of consistency. 10024 JANIS v. CIR the limitations period ran. The Commissioner was surely prejudiced by this change in position because the Commissioner can no longer collect the tax deficiency occasioned by Petitioners’ turnabout. Such tax gamesmanship is exactly what the duty of consistency is designed to prevent. AFFIRMED.