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Heckler v. Community Health Servs., 467 U.S. 51, 60 (1984)). The
doctrine of equitable estoppel is applied against respondent
“with utmost caution and restraint.” Schuster v. Commissioner,
312 F.2d 311, 317 (9th Cir. 1962), affg. 32 T.C. 998 (1959),
affg. in part and revg. in part First W. Bank & Trust Co. v.
Commissioner, 32 T.C. 1017 (1959). Estoppel may be successfully
invoked against the Commissioner only where a taxpayer would
otherwise sustain such a “profound and unconscionable injury in
reliance on the Commissioner’s action as to require, in
accordance with any sense of justice and fair play, that the
Commissioner not be allowed to inflict the injury.” Id. This
rarely happens; the policy in favor of the efficient collection
of public revenue usually outweighs the customary policy
considerations that justify invocation of equitable estoppel as
between private litigants. See id.
In addition to the traditional elements of equitable
estoppel, the Court of Appeals for the Ninth Circuit requires the
party seeking to apply the doctrine against the Government to
prove affirmative misconduct. See Purcell v. United States, 1
F.3d 932, 939 (9th Cir. 1993), and cases cited. The aggrieved
party must prove “‘affirmative misconduct going beyond mere
negligence’” and, even then, “‘estoppel will only apply where the
government’s wrongful act will cause a serious injustice, and the
public’s interest will not suffer undue damage by imposition of
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