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respect to payment of the tentative refunds.7 The second clause
of section 1.1502-78(b)(1), Income Tax Regs., as emphasized
above, is applicable to the facts of the instant case because the
NOL in issue was carried back and deducted from the group's
consolidated taxable income for the consolidated return years
1981 and 1984. Petitioner contends that, pursuant to section
1.1502-78(b)(1), Income Tax Regs., the service center was
required to direct payment of the tentative refunds to
petitioner, the successor common parent of the group. Respondent
argues that the term "common parent corporation" in section
1.1502-78(b)(1), Income Tax Regs., refers to either the common
parent of the group for the consolidated taxable year for which
the tentative refund is made (i.e., Acme), at least where such
common parent remains in existence, or the group's successor
common parent (i.e., petitioner).
If the common parent is the same in the loss year and in the
carryback year, there is no question to which corporation section
1.1502-78(b)(1), Income Tax Regs., directs payment. Where,
however, the common parent for the group in the loss year is
different from the common parent for the group in the carryback
year, as in the instant case, the regulations are unclear as to
where payment of the tentative refund must, or may, be directed.
Section 1.1502-78(b)(1), Income Tax Regs., does not indicate
7 The parties agree that Acme properly relied on sec. 1.1502-
78(a), Income Tax Regs., in filing its applications for tentative
refund allowance of the tax paid by the group for the taxable
years 1981 and 1984.
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