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nonrefundable credits to completely eliminate regular tax
liability on $1 million of gross income, under petitioners'
theory, none of the $1 million of preferences would be added back
to taxable income in computing AMTI. Thus, the taxpayer would
completely avoid Federal income tax liability, despite having an
economic income of $1 million.
That petitioners seek to avoid less tax than is
hypothetically possible under their theory as shown by the
preceding scenario does not bolster their tenuous position. See
United States v. Deckelbaum, 784 F. Supp. at 1207.
2. Section 53 Permits an Indefinite Carryover of Disallowed
Section 29 Credits to Future Taxable Years
The putative use of the section 59(g) tax benefit rule is
also inappropriate due to the availability of the section 53
minimum tax credit. Congress recognized that taxpayers may not
be able to use currently all of their section 29 credits because
of the section 29(b)(5) limitation and therefore allowed the
indefinite carryover of these credits under section 53. Sec.
53(a).
Section 59(g) was added to the Code to give the Secretary
the flexibility to provide relief in the event a taxpayer would
not get a reduction in regular tax liability from an item that
was includable in the AMT base. Section 59(g) explicitly
authorizes relief only where an item "will not result in the
reduction of the taxpayer's regular tax for the taxable year for
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