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argue that the words “overpayment of tax” do not include
overpayment interest, particularly the overpayment interest
balance that was outstanding on December 31, 1994.
Beginning January 1, 1995, petitioners effectively would
place interest accrual on their overpayments of interest relating
to 1979 through 1985 into three baskets:
First Basket: Interest accruing after December 31,
1994, relating to overpayments of tax
of $10,000 or less and statutory interest thereon;
Second Basket: Interest accruing after December 31, 1994,
relating to overpayments of tax in excess
of $10,000 and statutory interest thereon;
Third Basket: Interest accruing after December 31, 1994,
relating to overpayment interest balance outstanding
as of December 31, 1994.
Petitioners would apply the GATT rate only to the contents
of the second basket. To the contents of the first and third
baskets, petitioners would apply the regular interest rate, not
the GATT rate.
The third basket, however, suggested by petitioners is not
supported by the statutory language. The second basket already
includes post-December 31, 1994, interest accrual and compound
interest thereon relating to corporate tax overpayments in excess
of $10,000; namely, the subject matter to which the flush
language of section 6621(a)(1) applies the reduced GATT interest
rate.
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