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Second, in its discussion of “other rules”, the General
Explanation of the 1986 Act states:
Under the Act, the application of the tax benefit
rule to the minimum tax is within the discretion of the
Secretary of the Treasury. Relief from either the
regular or the minimum tax, when the source of the
taxpayer’s tax liability changes, between taxable
years, from one system to the other, is not appropriate
solely by reason of the fact that a taxpayer has
received no benefit under one of the systems with
respect to a particular item. Congress both intended
that the regular and minimum taxes constitute separate
and parallel tax systems, and anticipated that the
source of some taxpayers’ liability would change from
year to year. Relief from the possible adverse impact
of switching from one system to the other (e.g., the
denial of deductions with respect to which there are
timing differences as between the two systems) was
intended to be provided by means of the minimum tax
credit, along with the use of adjustments that give
rise, in effect, to “negative preferences” with respect
to items such as depreciation. Thus, application of
the tax benefit rule in this context is not necessary,
although the Treasury may, at its discretion, identify
particular circumstances where such exercise is
appropriate. [Id. at 472.]
Given the clarity of the statute in the direct reference to
and the definition of the term “taxable income”, we consider none
of the uses of the word “parallel” by Congress or the Joint
Committee to be a clear directive from Congress that it intended
that the computation of AMTI would, as the parties suggest,
“start from scratch”. Moreover, in the case of AMT NOLs, the
rules for those NOLs did and still do run parallel.11 Thus, the
mere fact that the prior and current systems of AMT NOLs are
11 The same is true as to AMT FTCs.
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