Acme Steel Company (formerly known as Interlake, Inc., and now known as Acme Metals, Inc.) and Consolidated Subsidiaries - Page 3

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               to R, the tentative refunds were paid, after a limited                 
               examination pursuant to sec. 6411(b), I.R.C., to the                   
               correct taxpayer (P) because they were paid to P, the                  
               taxpayer who applied for the tentative carryback                       
               adjustments on the basis of the CNOL that P claimed it                 
               had incurred.                                                          
                    Held:  The tentative refunds in issue are rebate                  
               refunds as to P giving rise to deficiencies over which                 
               the Court has jurisdiction.  Sec. 6411(b), I.R.C.                      
               requires R to make only a “limited examination” of an                  
               application for tentative carryback adjustment and pay                 
               the tentative refund within 90 days.  When R paid the                  
               tentative refunds to P, R had not finally determined                   
               which affiliated group was the continuation of the                     
               prespinoff affiliated group, and R was not required to                 
               make that determination prior to paying the tentative                  
               refunds.  The tentative refunds were not paid because                  
               of any clerical or computer error requiring nonrebate                  
               characterization.  The tentative refunds paid to P are                 
               recoverable through the deficiency procedures.                         
               Accordingly, the Court has jurisdiction to enter                       
               decision on the stipulation of settled issues and will                 
               do so.                                                                 

               David J. Duez, Matthew P. Larvick, and Gregory G. Palmer,              
          for petitioners.                                                            
               Lawrence G. Letkewicz and Dana E. Hundrieser, for                      
          respondent.                                                                 


                                      CONTENTS                                        
          Background . . . . . . . . . . . . . . . . . . . . . . . . .   4            
               The Restructuring and Spinoff . . . . . . . . . . . . .   5            
               Tax Indemnification Agreement Between Petitioner and                   
               Interlake . . . . . . . . . . . . . . . . . . . . . .   6              
               Tax Filings by Interlake and Petitioner . . . . . . . .  10            
               Administrative Proceedings. . . . . . . . . . . . . . .  12            
               Notice of Deficiency and Stipulation of Settled                        
               Issues. . . . . . . . . . . . . . . . . . . . . . . .  14              






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