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3. Discussion
Initially, the dispute between the parties seems to involve two
countervailing principles of the law relating to consolidated
returns: (1) “`Each corporation is a separate taxpayer whether it
stands alone or is in an affiliated group and files a consolidated
return'”, Wegman's Properties, Inc. v. Commissioner, 78 T.C. 786,
789 (1982) (quoting Electronic Sensing Prods., Inc. v. Commissioner,
69 T.C. 276, 281 (1977)), and (2) “the purpose of the consolidated
return provisions * * * is `to require taxes to be levied according
to the true net income and invested capital resulting from and
employed in a single business enterprise, even though it was
conducted by means of more than one corporation'”, First Natl. Bank
in Little Rock v. Commissioner, 83 T.C. 202, 209 (1984) (quoting
Handy & Harman v. Burnet, 284 U.S. 136, 140 (1931)). The nature of
petitioner's refund claim with respect to the UBC affiliated group's
corporate minimum tax liabilities, however, allows us to restrict
our analysis to the centerpiece of the parties' dispute, i.e., the
amount of the deduction under section 56(c) for an affiliated group
of corporations. In other words, if we decide that the deduction
under section 56(c) for an affiliated group of corporations is
limited to its actually imposed chapter one tax, the parties will
have no material disagreement in their computations pursuant to Rule
155 regarding the UBC affiliated group's corporate minimum tax
liabilities for the years in issue. Therefore, we shall first
address that issue.
Section 1501 provides, in part, as follows:
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