BankAmerica Corporation, as successor in interest to Continental Bank Corporation, as successor in interest to Continental Illinois Corporation - Page 22

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          determining interest liability during the period January 1, 1980,           
          to March 14, 1983.  We disagree.                                            
               In Manning v. Seeley Tube & Box Co., 338 U.S. 561 (1950),              
          the Supreme Court held that the carryback of an NOL to abate a              
          deficiency does not abate the interest accrued on that deficiency           
          up until the date the NOL arises.  Absent a clear legislative               
          expression to the contrary, the "use of money" principle will               
          apply to the accrual of interest on a deficiency.  Id. at 566.              
               The "use of money" principle is reflected in section 6601.             
          Section 6601(a) provides for interest to be charged on a                    
          deficiency.  Section 6601(d) provides that interest is not                  
          affected by a carryback before the filing date of the year in               
          which the loss or credit arises.15  That is, the party who has              
          the use of the money pays interest up until the event which                 
          causes the party no longer to have use of that money.  In                   
          general, interest liability is determined under section 6601                
          synchronically, looking at the period during which interest                 
          accrues, without reference to future events, such as loss or                
          credit carrybacks.  This general principle, evident from the                
          statute itself, is also clearly set forth in respondent's own               
          rulings.                                                                    




          15  Sec. 6601(d) mentions specifically net capital losses,                  
          NOL's and ITC's, but is silent as to FTC's.  See infra note 18.             




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