State Farm Mutual Automobile Insurance Company and Subsidiaries - Page 13

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          threshold.  The taxpayer argued since there was no “overpayment”            
          on January 1, 1995, its overpayment was less than $10,000, and              
          the regular rate applied under section 6621(a)(1).  The Court of            
          Appeals for the Federal Circuit agreed with the Court of Federal            
          Claims that the term “overpayment” as used in section 6621(a)(1)            
          refers to a single, cumulative amount, not to whatever amount of            
          overpayment may be owed to the taxpayer at a particular point in            
          time.4  This point is important in the present case regarding the           
          second issue raised by petitioner’s motion, whether, despite the            
          prior refund, $10,000 of the overpayment due on the effective               
          date should receive the regular rate of interest rather than the            
          GATT rate.                                                                  
               We agree with the analysis of the Court of Appeals for the             
          Federal Circuit which requires that the threshold is met based on           
          the cumulative overpayment amount for the taxable year, not the             
          specific amount remaining at the effective date after credits had           
          been previously provided.  Gen. Elec. Co. v. United States, 384             
          f.3d at 1308-1309.5  Accordingly, we will deny both aspects of              

               4The Court of Appeals for the Federal Circuit stated that              
          “we agree with the trial court’s analysis” that the amount of a             
          tax overpayment once established is “fixed” and “does not vary as           
          the government makes refunds or credits.”  Gen. Elec. Co. v.                
          United States, 384 F.3d 1307, 1308-1309 (Fed. Cir. 2004), affg.             
          in part and remanding in part 56 Fed. Cl. 488 (2003).                       
               5Since there was never any accrued interest on the first               
          $10,000 of petitioner’s overpayment, we are not faced with the              
          allocation issue that required a remand by the Court of Appeals             
                                                             (continued...)           





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