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to split the NOLs because they used the word “loss” instead of
“losses” which was inconsistent with the election of both types
of NOL. In reaching its holding, the Court of Appeals looked to
extrinsic evidence outside of the taxpayers’ statement on their
return. The Court of Appeals considered subsequent amended
returns, expert testimony on the meaning of the term “net
operating loss”, and the intent of the taxpayers’ return
preparer. Miller v. Commissioner, 99 F.3d 1042 (11th Cir. 1996),
revg. 104 T.C. 330 (1995).
With that backdrop, we hold that petitioners’ 1994 election
was valid and binding, and that it precludes their current
attempt to carry back the 1994 NOL deduction to 1991. There is
no ambiguity as to petitioners’ intentions or extrinsic evidence
showing that petitioners intended not to waive the carryback of
their 1994 NOL. To the contrary, at the time of filing their
1994 return, petitioners had applied their 1993 NOL to eliminate
their 1991 tax liability. We recognize petitioners’ dilemma
caused by the post-1994 disallowance of their 1993 NOL deduction,
which in turn led to respondent’s determination of a 1991 income
tax deficiency. However, the statute recites that such an
election, once made, is irrevocable. See sec. 172(b)(3).
To reflect the foregoing,
Decision will be entered
for respondent.
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