Valero Energy Corporation and Subsidiaries v. Commissioner of Internal Revenue

Valero Energy Corporation (“Valero”) realized every taxpayer’s dream — it took an improper deduction, and the Commissioner of Internal Revenue (the “Commissioner”) decided not to challenge it. Rather than acknowledge that she has forfeited her right both to challenge the 1979 deduction and to invoke the “duty of consistency,”1 the Commissioner wants to exact a pound of flesh by challenging the 1984 deduction. I am puzzled by the Commissioner’s position, because in arguing that the 1979 deduction was proper, she undermines her position in countless cases for the sake of a victory in the…