Interlake Corporation - Page 12

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               Section 6211(b)(2) defines a "rebate" as an abatement,                  
          credit, refund, or other repayment made on the ground that the               
          tax imposed was less than the amount shown on the return and the             
          amounts previously assessed or collected without assessment.  See            
          also Groetzinger v. Commissioner, 69 T.C. 309, 314 (1977).                   
          Accordingly, not all refunds are rebates.  See O'Bryant v. United            
          States, 49 F.3d 340 (7th Cir. 1995); Groetzinger v. Commissioner,            
          supra at 312.  Generally, a rebate refund is issued on the basis             
          of a substantive recalculation of the tax owed.  See O'Bryant v.             
          United States, supra at 342.  A nonrebate refund, however, is                
          issued, not because of a determination by the Commissioner that              
          the tax paid is not owing, but for some other reason, such as a              
          mistake made by the Commissioner.  Id.  The rebate versus                    
          nonrebate distinction arises from the definition of the term                 
          "deficiency" contained in section 6211; rebate refunds can be                
          included in deficiency computations, while nonrebate refunds                 
          cannot.  Id.                                                                 
               Petitioner contends that, because the tentative refunds were            
          delivered to the wrong taxpayer, those tentative refund                      
          allowances constitute, for purposes of determining whether the               
          group has deficiencies for 1981 and 1984, nonrebate refunds with             
          respect to petitioner and the group.  Petitioner contends that               

          See Midland Mortgage Co. v. Commissioner, 73 T.C. 902, 907                   
          (1980); Kurtzon v. Commissioner, 17 T.C. 1542, 1548 (1952).                  

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