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affd. 737 F.2d 1440 (5th Cir. 1984); sec. 1.11-1(b), Income Tax
Regs. Section 172(a) allows as a deduction for the taxable year
an NOL carryback. NOLs in tax years beginning before August 6,
1997, may generally be carried back to the 3 years preceding the
loss year and then forward to 15 years following the loss year.
Sec. 172(b)(1)(A); Taxpayer Relief Act of 1997, Pub. L. 105-34,
sec. 1082(a), 111 Stat. 950; see also Intermet Corp. & Subs. v.
Commissioner, 117 T.C. 133, 136 n.1 (2001).
At the time petitioner filed its Federal income tax return
for the tax year ended January 31, 1994, it understated its
income tax by $225,753. The tax shown as due on petitioner’s
return for the year was zero. The parties agree that for the tax
year ended January 31, 1995, petitioner incurred an NOL which it
was entitled to carry back to the year in issue. Section 172(a)
treats the NOL carryback as a deduction from petitioner’s income.
This deduction reduced petitioner’s taxable income, and
correspondingly reduced its tax, as imposed by the Code, for the
tax year ended January 31, 1994, to $63,573. Therefore, under a
straightforward application of the statute and the Commissioner’s
own regulations, the excess of the tax imposed by the Code for
the tax year at issue over the amount of tax paid on or before
the return due date was $63,573.
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