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States, 384 F.3d 1307 (Fed Cir. 2004), affg. on this issue and
remanding in part 56 Fed. Cl. 488 (2003).
As explained in State Farm Mut. Auto. Ins. Co. v.
Commissioner, supra (slip op. at 9), with regard to the language
of section 6621(a)(1):
The role of the phrase “overpayment of tax” is central
to this dispute. We find the phrase in question is a device
to describe the occasion when the GATT rate is triggered for
all interest computational purposes including compounding
under section 6622. We do not read the phrase “overpayment
of tax” as a limitation on the scope of the applicability of
the changed rate once triggered. * * *
The legislative history of the GATT rate change and the
effective date language, set forth above, discuss only a change
in the rate of interest “without distinguishing between the rate
paid on an overpayment and the rate compounded.” State Farm Mut.
Auto. Ins. Co. v. Commissioner, supra (slip op. at 10). A
bifurcation in the interest to be paid on the tax overpayment
itself, and the interest to be paid on interest is not found in
the statute.
In Gen. Elec. Co. v. United States, 384 F.3d at 1311, the
Court of Appeals for the Federal Circuit explained its holding,
in part, as follows:
We think it highly unlikely that Congress intended the
exception to the GATT rate for small overpayments to have
such dramatic potential consequences for overpayments vastly
larger than the modest overpayments of $10,000 or less that
are eligible for the regular rate. * * * While the statutory
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