Interlake Corporation - Page 13

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          section 1.1502-78(b)(1), Income Tax Regs., required delivery of              
          the tentative refunds to petitioner, as the successor common                 
          parent for the group.  Accordingly, petitioner argues, the                   
          tentative refunds are not rebate refunds with respect to                     
          petitioner and the group and cannot be included in the                       
          computation of the group's deficiencies for the years in issue.              
               Respondent concedes that a refund issued to the wrong                   
          taxpayer, or to an unauthorized representative of the taxpayer,              
          is a nonrebate refund which may not be taken into account in                 
          computing the taxpayer's deficiency.  Respondent, however, argues            
          that the tentative refunds were not issued to the wrong taxpayer.            
          Respondent contends that payment to Acme was proper because,                 
          pursuant to section 1.1502-78(b)(1), Income Tax Regs., and Union             
          Oil Co. v. Commissioner, 101 T.C. 130 (1993), both Acme and                  
          petitioner were authorized recipients of the tentative refunds.              
          Accordingly, respondent argues, because the tentative refunds                
          were paid to an authorized recipient, such refunds constitute                
          rebate refunds with respect to the group for purposes of                     
          computing its deficiencies for 1981 and 1984.                                
               Section 6411(a) authorizes a corporation that has sustained             
          a net operating loss (NOL) to apply for a tentative carryback                
          adjustment of the tax for the prior taxable year to which the NOL            
          is carried.  The application of section 6411, however, is subject            
          to such conditions, limitations, and exceptions as prescribed by             
          regulation when the applicant made or was required to make a                 
          consolidated return either for the year in which the NOL arose,              

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