Charles C. Allen, III and Barbara N. Allen, et al. - Page 26




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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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