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payments totaling $14,234,576 against this tax liability,
producing a deficiency of $9,965,542.
In 1979, there arose a foreign tax credit (FTC) in the
amount of $29,327,737 and an ITC in the amount of $17,238,117.
In that year, petitioner applied $27,020,189 of the FTC, as well
as some of the ITC, to its 1979 tax liability, and carried
$2,307,548 of the FTC and $7,947,605 of the ITC back to 1977.
For interest purposes, petitioner received the benefit of this
carryback as of December 31, 1979. Sec. 6601(d).3 Taking into
account a refund petitioner received in the amount of $4,067,608
for 1977, petitioner had, as of January 1, 1980, a 1977 tax
liability of $3,777,997.
In 1982, there arose an NOL, $59,552,102 of which was
carried back to petitioner's 1979 tax year, pursuant to section
172(b),4 eliminating petitioner's 1979 tax liability. The
elimination of the 1979 tax liability had the effect of releasing
the FTC and ITC which had arisen in 1979, to be used in other
3 Sec. 346 of the Tax Equity and Fiscal Responsibility Act
of 1982 (TEFRA), Pub. L. 97-248, 96 Stat. 324, amended sec.
6601(d), effective for interest accruing after October 3, 1982,
to change the date on which a taxpayer receives the benefit of a
carryback for interest purposes from the last day of the tax year
in which the carryback arose to the due date for the return for
that year.
4 Sec. 172(b)(1) provides that an NOL for any taxable year
shall be carried back to each of the 3 taxable years preceding
the loss year. Sec. 172(b)(2) provides that the entire amount of
the NOL shall be carried back first to the earliest year
possible.
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