Interlake Corporation - Page 15




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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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