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procedures and that the Commissioner’s exclusive remedy was an
erroneous refund action under section 7405, for which the period
of limitation had expired. We held that a tentative refund paid
pursuant to section 6411 is a “rebate” because it is made on the
ground that the tax imposed is less than the amount of tax shown
on the taxpayer’s return. Pesch v. Commissioner, supra at 111.
We rejected the taxpayer’s contention that the Commissioner’s
remedies to recover tentative refunds issued after the 90-day
period provided in section 6411 are somehow limited. We noted
that section 6411 does not penalize the Commissioner for failure
to act on an application within 90 days and held that we would
not supply a penalty in the form of a bar against the
Commissioner determining a deficiency. Pesch v. Commissioner,
supra at 115. In so holding, we stressed the tentative nature of
refunds paid pursuant to section 6411 and concluded that any
action the Commissioner may take is not final. Accordingly, we
concluded that when the Commissioner allows and pays a tentative
carryback adjustment that he later determines was made in error,
the selection of the remedy to correct the error is within the
Commissioner’s discretion. Id. at 118.
In Baldwin v. Commissioner, 97 T.C. 704 (1991), the
taxpayers claimed an NOL for 1987 that they carried back to 1985
on an application for tentative carryback adjustment. The
taxpayers had not paid any tax in 1985 and requested that the
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