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period with respect to the net operating loss incurred in the
taxable year ending December 31, 1994.” The only questionable
aspect about petitioners’ statement is that they referred to
section 172(B)(3) instead of section 172(b)(3). The use of the
upper case “B”, however, does not create confusion as to their
intentions or as to other possible alternatives that may have
been available under section 172. In all other respects, the
statement made by petitioners, as part of their 1994 return,
meets the statutory and regulatory requirements.
Several cases have considered the effectiveness of
taxpayers’ elections to waive NOL carrybacks. It has been held
that the essence of section 172(b)(3)(C) is that a “taxpayer
unequivocally communicates his election and binds himself to his
decision concerning the best use of his net operating loss.”
Young v. Commissioner, 783 F.2d 1201, 1206 (5th Cir. 1986).
Elections made in compliance with the regulatory procedures or
requirements have been held to be binding. In Santi v.
Commissioner, T.C. Memo. 1990-137, it was held that the following
statement was sufficient to waive the carryback and permit the
carryover of the taxpayer’s NOL deduction: “Taxpayer elects to
carry net operating loss over under I.R.C. 172(b)(2)(C).” In
that case, even though the taxpayer’s statement identified the
wrong portion of section 172, the Court interpreted the statement
in the context of the entire return and held that the waiver was
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