Exxon Mobil Corporation and Affilliated Companies, f.k.a. Exxon Corporation and Affiliated Companies - Page 16

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          regular interest rate left in section 6621(a)(1)(B) would apply             
          to any December 31, 1994, overpayment interest balance, even                
          though a corporation had a tax overpayment in excess of $10,000.            
               As explained, however, on the basis of the language of                 
          section 6621(a)(1), as enacted, we conclude that the GATT rate              
          applies to a corporation’s December 31, 1994, overpayment                   
          interest balance for further accrual of interest thereon after              
          December 31, 1994.                                                          
               On brief, petitioners set forth an example involving a                 
          corporation’s $100,000 tax overpayment for a year, as of                    
          March 15, 1990.  In petitioners’ example, on January 1, 1992,               
          respondent refunds to the corporation $50,000 in principal, and             
          on January 1, 1996, respondent refunds the remaining $50,000                
          principal balance.  Petitioners then state:                                 

               For the 1992-1995 period, the applicable interest rate is              
               applied to $50,000 in remaining principal, plus previously             
               accrued interest.  It is irrelevant to that latter                     
               computation that the “original” overpayment was $100,000.              

               But if, under the governing statutory language in                      
          petitioners’ example, a corporation’s overpayment of tax for a              
          year in excess of $10,000 triggered a reduction in the                      
          overpayment interest rate, then the fact that the corporation’s             
          original overpayment was more than $100,000 would be highly                 
          relevant.  That is the situation presented to us herein.                    

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