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originally took FTC's in 1958 and 1959. In 1961, an NOL arose,
which was carried back and displaced the FTC's from 1958 and
1959. The taxpayer then decided to deduct the foreign taxes
(instead of taking them in the form of a credit) in 1958 and
1959. The court held that the taxpayer owed interest as if FTC's
had not been invoked in the first place, but rather as if the
taxes had been deducted initially, because the later decision to
change from a credit to a deduction related back to the time the
credits or deductions arose, at the beginning of the interest
period.
General Dynamics Corp. v. United States, supra, is clearly
distinguishable. In the instant case, petitioner has not
attempted to deduct items previously reflected in a credit, or to
change the nature of a previously claimed credit, nor has it
claimed any new deductions against its 1977 or 1978 income.
Here, a credit was replaced not with a deduction, but with
another credit. In Rev. Rul. 66-317, 1966-2 C.B. 510, the
replacement of a credit with a loss did not produce an interim
interest liability. We are unable to see how petitioner's
replacement of a credit with a credit (ITC for FTC) could produce
such a liability herein.
It is clear that the general use-of-money principle
enunciated in Manning v. Seeley Tube & Box Co., supra, reflected
in section 6601(d), and illustrated in respondent's rulings,
applies to the facts of this case. For the application of that
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