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the assessment of tax due from petitioners' group need not,
however, be based upon section 1.1502-77(c)(2), Income Tax Regs.,
and respondent so argues. Specifically, respondent contends
that, without regard to section 1.1502-77(c)(2), Income Tax
Regs., Amax and its successor Cyprus Amax had the authority under
Delaware law to act as the agent of petitioners' group when each
executed the Forms 872 in question extending the period of
limitations for "Amax and Consolidated Subsidiaries" for each of
the years 1984, 1985, and 1986. Furthermore, according to
respondent, not only did petitioners' group expressly consent to
the authority of Amax and its successor Cyprus Amax to act as its
agent in extending the periods of limitations in question, Amax
and Cyprus Amax also had apparent authority to execute the Forms
872 in question. Petitioners counter that Amax and Cyprus Amax
had neither express nor apparent authority to act as the agent of
petitioners' group in extending the periods of limitations in
question.
Actual agency or actual authority is defined as the author-
ity which a principal expressly or implicitly grants to an agent.
Billops v. Magness Constr. Co., 391 A.2d 196, 197 (Del. 1978).39
39 Although the pledge and indemnity agreement, the tax-sharing
agreement, and other pertinent agreements entered into by, inter
alia, Amax and Alumax provide that they are to be construed in
accordance with and governed by the law of New York, where Amax
was incorporated, respondent contends, and petitioners do not
dispute, that the law of Delaware, where Alumax was incorporated,
is the controlling law with respect to both the question of
actual agency and apparent agency. In any event, the law on
(continued...)
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