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Additionally, neither petitioner nor Acme owns any shares of
stock in the other or any of the other's affiliates.
The parties do not stipulate as to the tax character of the
restructuring transaction or the spinoff.
The Tentative Refund Allowances
Petitioner
On their 1986 consolidated Federal income tax return, filed
on or about August 7, 1987, petitioner and the group reported a
consolidated net operating loss (CNOL) in the amount of
$8,461,369 and excess consolidated general business credits in
the amount of $1,496,693. The return was prepared on the basis
that petitioner is the successor common parent of the group, and
it included the taxable income or loss of petitioner and each
member of the group for either (1) the entire 52-53 week year
(beginning on December 30, 1985, and ending on December 28, 1986)
or (2) the portion of that taxable year during which each such
corporation was a member of the group.
On or about August 11, 1987, petitioner and the group filed,
with the Internal Revenue Service Center, Kansas City, Missouri
(service center), Form 1139, Corporation Application for
Tentative Refund. On the application, petitioner and the group
requested a tentative refund of income tax in the amount of
$5,346,097 attributable to the carryback of the 1986 CNOL and
excess consolidated business credits to the group's 1984 taxable
year. Petitioner attached to the application for tentative
refund allowance a statement detailing the restructuring
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