Diesel Performance, Inc. v. Commissioner

MEMORANDUM *

Diesel Performance, Inc. (“Diesel”) appeals the Tax Court’s decision upholding the Commissioner’s deficiency determination against Diesel for the tax year ending June 30, 1994. Diesel also appeals the Tax Court’s denial of Diesel’s motion for reconsideration. We affirm. Because the facts are familiar to the parties, we recount them only as necessary to explain our decision.

1. The Tax Court correctly held that Diesel did not timely waive the carryback period for the tax year ending June 30, 1992. The statute clearly required that the taxpayer “shall” elect to waive the carryback period “by the due date (including extensions of time) for filing the taxpayer’s return for the taxable year of the net operating loss.” I.R.C. § 172(b)(3) (1986). The regulation reiterated the deadline set by the statute. See *719 § 7.0(b)(1), Temporary Income Tax Regs., 42 FedReg. 1469-1470 (Jan. 7,1977).

2. The Tax Court correctly held the doctrine of equitable estoppel inapplicable because Diesel did not show that the Commissioner engaged in “affirmative misconduct,” as required to invoke the doctrine against the government. See United States v. Hemmen, 51 F.3d 883, 892 (9th…