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“limited examination” period, to try to determine which group
continued as the prespinoff affiliated group. That determination
required an application of the relevant regulations to the facts
of the restructuring and was appropriately left for the regular
examination. Respondent followed the requirements of the statute
and paid the tentative refunds to petitioner and Interlake well
within the 90-day period provided for in section 6411(b).
Respondent examined petitioner’s 1986 tax year after he paid
the tentative refunds and determined that petitioner did not
sustain the CNOL claimed on its 1986 return, and that petitioner
was the continuing common parent of the prespinoff affiliated
group. Respondent issued the notice of deficiency to petitioner
on the basis of the foregoing determinations. See sec. 1.1502-
77(a), Income Tax Regs. (providing that the notice of deficiency
shall be mailed only to the common parent).
We cannot identify any error, clerical or otherwise, made by
respondent in paying the tentative refunds to petitioner and then
attempting to recover them through a notice of deficiency when he
determined petitioner was not entitled to them. We have
consistently upheld the Commissioner’s right to proceed in this
manner.
In Pesch v. Commissioner, 78 T.C. 100 (1982), the taxpayers
contended that a tentative refund issued more than 90 days after
the application could not be recovered through the deficiency
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