Limited Gaming of America, Inc. - Page 11




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                  & Power Co. v. Commissioner, 40 T.C. 597, 654-655                                    
                  (1963), vacated and remanded pursuant to stipulation                                 
                  (2d Cir., Feb. 15, 1965) (holding that the decision in                               
                  Lewis v. Reynolds, supra, was controlling and allowing                               
                  a reduction in an overpayment claimed by the taxpayer);                              
                  Estate of Carruth v. Commissioner, 28 T.C. 871, 880                                  
                  (1957).  Applying the doctrine of Lewis v. Reynolds,                                 
                  supra, to this case, we find that even though                                        
                  assessment and collection of petitioner’s tax liability                              
                  is now barred by the statute of limitations, respondent                              
                  has the right to retain prior timely payments to the                                 
                  extent they do not exceed the amount of petitioner’s                                 
                  actual tax liability. [Footnotes omitted.]                                           
                  Our above-mentioned holding in Bachner is equally applicable                         
            to the facts in this case.  The Bankruptcy Court did not                                   
            determine LGA’s tax liability for the taxable years 1993 and                               
            1994.  That is abundantly clear from a review of the record in                             
            this case.  We hold that respondent is not collaterally estopped                           
            from determining petitioner’s correct tax liabilities for taxable                          
            years 1993 and 1994 in order to determine if there are tax                                 
            overpayments in those years because of a net operating loss                                
            carryback from the taxable year 1995.                                                      
                  From our review of the record, we also find that the                                 
            question of whether or not LGA and Sunrise were separate entities                          
            for tax purposes was not litigated by the Bankruptcy Court.  The                           
            bankruptcy order confirming petitioner’s third amended plan and                            
            consolidating the bankruptcy estates of petitioner and Sunrise                             
            makes no reference to the determination of Federal taxes.                                  
            Petitioner’s third amended plan did not specifically state that                            
            the substantive consolidation of the estates of petitioner and                             






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Last modified: May 25, 2011