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Amax, Inc. and subsidiaries, and by reference to pro
forma returns (Form 1120), prepared by you and submit-
ted to Amax, Inc., as if you were separate from Amax,
Inc., and still the common parent of your own consoli-
dated group.
* * * * * * * *
Because of the determination that Alumax, Inc. and
consolidated subsidiaries, are not included in the
consolidated returns of Amax, Inc. for the taxable
years ended December 31, 1984, December 31, 1985, and
November 24, 1986, there is sufficient tax available to
absorb * * * [the] credits. Therefore, the credits are
not allowed as carrybacks.
Petitioners bear the burden of establishing that respon-
dent's determinations in the notice are erroneous. Rule 142(a);
Welch v. Helvering, 290 U.S. 111, 115 (1933). That this case was
submitted fully stipulated does not change that burden or the
effect of a failure of proof. Rule 122(b); Borchers v. Commis-
sioner, 95 T.C. 82, 91 (1990), affd. 943 F.2d 22 (8th Cir. 1991).
Consolidation
Section 1501 grants an affiliated group of corporations the
privilege of filing a consolidated return. The dispute here
centers on whether for each of the years 1984, 1985, and 1986
petitioners were members of the affiliated group that had Amax as
its common parent, which filed a consolidated return for each of
those years that included petitioners. The term "affiliated
group" is defined in section 1504(a). The Deficit Reduction Act
of 1984 (1984 Act), Pub. L. 98-369, sec. 60(a), 98 Stat. 577-579,
amended the definition of an "affiliated group" in section
1504(a) (amended section 1504(a)). Amended section 1504(a) is
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