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In the instant case, petitioner contends that the group
properly carried back, to 1984,5 the taxes and interest paid by
Lynchburg during 1992. Petitioner argues that the taxes and
interest in issue constitute SLL's within the meaning of section
172(f)(1)(B) because (1) the liabilities arose out of State and
Federal law, (2) the act (or failure to act) giving rise to the
liabilities occurred more than 3 years before 1992,6 and (3) all
members of the group used the accrual method of accounting
throughout the period during which the acts or failures to act
giving rise to the liabilities occurred. Additionally,
petitioner contends that, pursuant to section 172(f)(2), the
entire amount of the SLL's in issue may be carried back to 1984
because the amount claimed as SLL's for 1992 does not exceed the
amount of the CNOL reported by the group for 1992. Section
172(f)(2) does not state whether the limitation provided by that
section applies to each individual member of a consolidated group
or to the group as a whole.7 Petitioner contends, however, that
5 Notwithstanding the 10-year carryback period provided in
sec. 172(b)(1)(C), SLL's may not be carried back to any taxable
year beginning before Jan. 1, 1984. OBRA 1990, sec.
11811(b)(2)(B), 104 Stat. 1388-533.
6 Petitioner contends that the tax deficiencies and interest
liabilities in issue arose simultaneously from the group's
failure to file accurate State and Federal income tax returns.
7 If sec. 172(f)(2) is to be applied on a consolidated basis,
all of the deductions in issue (that otherwise qualify as SLL's
within the meaning of sec. 172(f)) would be eligible for the 10-
(continued...)
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