Thomas E. Johnston, and Thomas E. Johnston, Successor in Interest to Shirley L. Johnston, Deceased v. Commissioner of Internal Revenue

BEA, Circuit Judge:

This case presents an attempt at “post-deal negotiation.” It doesn’t usually work in business. Why should we treat the tax collector differently?

Specifically, we address the following question: when a taxpayer offers to pay the Internal Revenue Service a sum certain to “fully resolve all adjustments at issue” for certain tax years, and the Commissioner accepts his offer, may the taxpayer then apply net operating losses (“NOLs”) to reduce his agreed payments under the settlement? Here, the answer is no. The taxpayer did not reserve the right to use NOLs in the settlement…