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regarding the refunds could be handled through regular audit
procedures. Petitioner refused to repay the refunds but recited
its understanding that collection activities would be stayed
pending the resolution of a technical advice request by
respondent’s revenue agent to the IRS National Office.
On July 31, 1989, respondent issued technical advice
memoranda in the form of private letter rulings (PLR), PLR
8946007 to petitioner and PLR 8946006 to Interlake. Both PLR’s
recite the steps taken in the restructuring of the affiliated
group and the spinoff, and state “both [petitioner] and
[Interlake] claim to be the continuation of the original group.”
The PLR’s conclude that the affiliated group of which petitioner
had been the common parent continued, with petitioner remaining
the common parent. The PLR’s relied on the general rule of
section 1.1502-75(d)(1), Income Tax Regs., which provides that an
affiliated group shall be considered as remaining in existence if
the common parent remains the common parent of at least one
subsidiary, whether or not the subsidiary was a member of the
affiliated group in the prior year. Since petitioner was the
common parent of an affiliated group that consisted of petitioner
and AMC, PLR 8946007 concluded that petitioner and AMC
represented the continuation of the affiliated group. PLR
8946006 concluded that Interlake and its subsidiaries composed a
new affiliated group. The immediate significance of respondent’s
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