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Section 1.1502-77(a), Income Tax Regs., provides, in part, as
follows:
The common parent, for all purposes (other than the
making of the consent required by paragraph (a)(1) of
�1.1502-75, the making of an election under section
936(e), the making of an election to be treated as a
DISC under �1.992-2, and a change of the annual
accounting period pursuant to paragraph (b)(3)(ii) of
�1.991-1) shall be the sole agent for each subsidiary
of the group, duly authorized to act in its own name in
all matters relating to the tax liability for the
consolidated return year.
By its terms, the above-quoted regulation contemplates that
the common parent's authority to act as agent for the
consolidated group arises on a year-by-year basis with respect to
the group's consolidated income tax liability. Southern Pac. Co.
v. Commissioner, supra at 401. Accordingly, for any given year
in which a consolidated return is filed, the entity that is the
common parent for that particular year continues as the sole
agent with respect to any procedural matters that may arise in
connection with the group's tax liability for that year. Id. Of
course, if the common parent ceases to exist, its authority to
act for the group terminates. Id. In Southern Pac. Co., we held
that if the old common parent in a reverse acquisition, as
specified in section 1.1502-75(d)(3)(i), Income Tax Regs., does
not continue to exist after the reorganization, the new common
parent succeeds the old common parent as the agent of the group
for purposes of the issuance of notices of deficiency for years
both before and after the reorganization. Southern Pac. Co. v.
Commissioner, supra at 404.
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Last modified: May 25, 2011