- 23 -
For example, in Rev. Rul. 66-317, 1966-2 C.B. 510, the
taxpayer claimed an ITC in year 1. In year 4, an NOL arose which
was carried back to year 1, eliminating taxable income and tax
liability for year 1, and thereby displacing the ITC originally
claimed. The ruling holds that the taxpayer was not required to
pay interest from year 1 to year 4 on that portion of the tax
that had been originally offset by the ITC that was displaced by
the NOL.
In Rev. Rul. 71-534, 1971-2 C.B. 414, the taxpayer incurred
an NOL for year 6, which was carried back to year 3, eliminating
taxable income against which an FTC had been claimed in year 3.
As a result, the FTC was carried back to year 1, for which year a
refund was claimed. The ruling holds that interest was due to
the taxpayer on the refund from the first day after the close of
year 6, because the significant event that gave rise to the year
1 overpayment was the year 6 NOL.16
In Rev. Rul. 82-172, 1982-2 C.B. 397, the taxpayer had an
unused ITC in year 3 that it carried back to year 1. In year 4,
the taxpayer incurred an NOL which it carried back to year 1,
eliminating all income and resultant tax liability against which
the ITC could be applied, and resulting in a refund for year 1.
The displaced ITC was carried to year 2, resulting in an
overpayment of tax for year 2. The ruling holds that the
16 See infra note 18.
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