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provisions happens after the tentative refund has been paid, when
the Commissioner conducts a formal examination.
Section 1.1502-78(b)(1), Income Tax Regs., provides that if
a member of an affiliated group applies for a tentative refund,
the refund “shall be made directly to and in the name of the
common parent corporation”. If the identity of the common parent
had been settled at the time the tentative refunds were issued,
we might agree with petitioner that a mistaken payment of the
tentative refunds to any other taxpayer would be a nonrebate
refund, not recoverable through the deficiency procedures. See
Interlake Corp. v. Commissioner, 112 T.C. at 114-115. Those are
not the facts of this case.
When respondent paid petitioner the tentative refunds,
respondent was not sure which group was the continuation of the
prespinoff affiliated group. That affiliated group had been
restructured so that petitioner, the common parent, became a
subsidiary and was spun off less than one month thereafter.
After the spinoff, both petitioner and Interlake were parents of
two different affiliated groups that both originated from the
prespinoff group. Respondent received applications for tentative
carryback adjustments from both petitioner and Interlake relating
to the 1986 tax year. Respondent paid both petitioner and
Interlake tentative refunds on the basis of the applications they
each submitted. Respondent was not required, during the 90-day
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