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or for the prior taxable year to which the NOL is carried. See
sec. 6411(c). Section 1.6411-4, Income Tax Regs.,
cross-references section 1.1502-78, Income Tax Regs., for rules
applicable to consolidated groups.
Section 1.1502-78, Income Tax Regs., provides, in part, as
follows:
(a) General Rule.--If a group has a consolidated
net operating loss, a consolidated net capital loss, or
a consolidated unused investment credit for any taxable
year, then any application under section 6411 for a
tentative carryback adjustment of the taxes for a
consolidated return year or years preceding such year
shall be made by the common parent corporation to the
extent such loss or unused investment credit is not
apportioned to a corporation for a separate return year
pursuant to �1.1502-79(a), (b), or (c). In the case of
the portion of a consolidated net operating loss or
consolidated net capital loss or consolidated unused
investment credit to which the preceding sentence does
not apply, and in the case of a net capital or net
operating loss or unused investment credit arising in a
separate return year which may be carried back to a
consolidated return year, the corporation or
corporations to which any such loss or credit is
attributable shall make any application under section
6411.
(b) Special Rules.--(1) Payment of refund. Any
refund allowable under an application referred to in
paragraph (a) of this section shall be made directly to
and in the name of the corporation filing the
application, except that in all cases where a loss is
deducted from the consolidated taxable income or a
credit is allowed in computing the consolidated tax
liability for a consolidated return year, any refund
shall be made directly to and in the name of the common
parent corporation. The payment of any such refund
shall discharge any liability of the Government with
respect to such refund. [Emphasis added.]
The dispute in the instant case centers around the
application of section 1.1502-78(b)(1), Income Tax Regs., with
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