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application for tentative refund for 1984. The
Internal Revenue Service paid P and I the respective
tentative refunds for which they had applied.
Following an examination, R determined that P,
rather than I, was the continuing common parent of the
prespinoff affiliated group, revised P’s income on the
basis of a 52-week taxable year, and determined that P
did not sustain the CNOL claimed on its 1986 return. R
also revised I’s income on the basis of a 27-week short
1986 tax year. As a result of the foregoing
determinations, R determined that P was not entitled to
the tentative refunds paid to P for 1981 and 1984 and
issued a notice of deficiency to P to recover the
tentative refunds.
After P filed the petition in the case at hand, R
agreed to treat I as the successor common parent of the
prespinoff affiliated group and issued a duplicate
notice of deficiency to I, in exchange for P entering
into a stipulation of settled issues. The stipulation
of settled issues provides, in pertinent part, that P
will be liable to disgorge the tentative refunds it was
paid for 1981 and 1984 if those tentative refunds are
held not to be rebates as to I. In Interlake Corp. v.
Commissioner, 112 T.C. 103 (1999), the Court held the
tentative refunds paid to P were not rebates as to I.
P now contends the Court does not have
jurisdiction to enter decision on the stipulation of
settled issues because the tentative refunds P received
are nonrebate refunds not taken into account in
determining a taxpayer’s deficiency. According to P,
the tentative refunds are nonrebate refunds because P,
as the former common parent of the prespinoff group as
conceded by R, was not an “authorized recipient” of the
tentative refunds. P contends that when R paid the
tentative refunds to P, rather than I, R paid the wrong
taxpayer, giving rise to nonrebate refunds.
R contends that the tentative refunds are rebate
refunds over which the Court has jurisdiction and that
the Court may enter decision on the stipulation of
settled issues. According to R, nonrebate refunds are
issued because of clerical or computer errors and P has
not identified any clerical or computer error that
caused R to pay the tentative refunds to P. According
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