- 2 -
amount of its deficiencies. In year 6, a net operating
loss arose which was carried back to year 3. The
carryback of the year 6 loss displaced a year 3 foreign
tax credit, which was then carried back to years 1 and
2, displacing the investment tax credit originally
taken in those years. R computed interest under sec.
6601, I.R.C., from the end of year 3 to the due date of
the return for year 6 on deficiency amounts for years 1
and 2, calculated after the effect of the year 6 loss,
without reducing the deficiencies by the amounts of ITC
taken from year 3 to year 6. P filed a timely motion
under sec. 7481(c), I.R.C., to redetermine interest.
Held, P has made overpayments of interest for years 1
and 2 because R should have taken the investment tax
credit amounts into account in calculating interest
accruing from the end of year 3 until the due date of
the return for year 6 on deficiency amounts reduced by
the investment tax credit carried back.
Roger J. Jones and Jeffrey B. Frishman, for petitioner.
Pamela V. Gibson and Richard G. Goldman, for respondent.
SUPPLEMENTAL OPINION
TANNENWALD, Judge: A decision was entered in this case on
November 17, 1994, pursuant to a stipulated computation, in
accordance with the opinion of the Court of Appeals for the
Seventh Circuit in Continental Illinois Corp. v. Commissioner,
998 F.2d 513 (7th Cir. 1993), cert. denied 510 U.S. 1041 (1994).
On December 20, 1995, petitioner filed a timely motion under
section 7481(c)1 and Rule 261 to redetermine interest for the
1 Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the taxable years in
issue, and all Rule references are to the Tax Court Rules of
Practice and Procedure.
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