Interlake Corporation - Page 17

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          Section 1.1502-77(a), Income Tax Regs., provides, in part, as                
               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