Garwood Irrigation Company - Page 6

                                        - 6 -                                         
               The phrase “large corporate overpayments” in the committee             
          report is significant since it echoes the definition of “large              
          corporate underpayment” in subsection (c)(3).  This parallel                
          language causes us to find that the reference to “(c)(3)” rather            
          than “(c)(3)(B)” was intentional and tilts the scales of the                
          statutory interpretation to petitioner’s broader reading.  It               
          follows that the overpayments subject to the lower rate of                  
          overpayment interest set forth in the flush language are those of           
          C corporations, and petitioner is not limited to the 0.5-percent            
          addition to the Federal short-term rate.                                    
               We have also considered that petitioner was at one time a C            
          corporation and is only now subject to a corporate-level tax                
          liability because of its prior status and the operation of                  
          section 1374.  However, this does not change our conclusion                 
          because in interpreting the application of section 6621(c)(3) to            
          underpayments, section 301.6621-3(b)(3), Proced. & Admin. Regs.,            
          provides that after the year of the S corporation election, the S           
          corporation is not to be treated as a C corporation in applying             
          the large corporate underpayment provision of section 6621(c)(3).           
          We find that the overpayment provisions of section 6621(a)(1)               
          should be applied in the same manner.                                       
               We are left with one final issue.  Petitioner seeks the                
          additional 3 percentage points provided for a noncorporate                  
          taxpayer in section 6621(a)(1)(B), but that section provides                






Page:  Previous  1  2  3  4  5  6  7  Next

Last modified: May 25, 2011