- 34 -
Income Tax Regs., provides that “the common parent * * * shall be
the sole agent for each subsidiary in the group, duly authorized
to act in its own name in all matters relating to the tax
liability for the consolidated return year.” In S. Pac. Co. v.
Commissioner, supra at 401, we held that the regulation
contemplates that the common parent’s authority to act as the
agent for an affiliated group arises on a year-by-year basis.
For any year for which a consolidated return is filed, the common
parent for that year is the exclusive agent with respect to any
procedural matters that may arise in connection with the group’s
tax liability for that year. Id.; see also Union Oil Co. v.
Commissioner, 101 T.C. 130 (1993).
Because of the importance of the identity of the common
parent, the continuation of the common parent is critical to the
continuation of the affiliated group. The rules for determining
when an affiliated group continues to exist are set forth in
section 1.1502-75(d), Income Tax Regs. Section 1.1502-75(d)(1),
Income Tax Regs., provides the general rule that a group shall
continue if the common parent remains as the common parent and at
least one subsidiary remains affiliated with it, whether or not
the subsidiary was a member of the group in a prior year, and
whether or not one or more corporations have ceased to be
subsidiaries at any time after the group was formed.
Sections 1.1502-75(d)(2) and (3), Income Tax Regs., provide
exceptions to the general rule. Under section 1.1502-
Page: Previous 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 NextLast modified: May 25, 2011