DocketNumber： Docket No. 10037-78
Judges： Dawson,Featherston,Tannenwald,Simpson,Wilbur
Filed Date： 4/6/1983
Status： Precedential
Modified Date： 11/14/2024
*99 A capital loss carryback and an investment credit carryback, both from 1974, were properly allowed with respect to petitioner's taxable year 1971. Respondent subsequently determined a deficiency in petitioner's minimum tax for 1972 on the basis that a
*649 *105 OPINION
This case is before the Court on respondent's motion for partial summary judgment and petitioner's cross-motion for partial summary judgment. These motions are now assigned to Special Trial Judge Fred S. Gilbert, Jr., for consideration and ruling thereon. After reviewing the record, the Court agrees with and adopts his opinion, which is set forth below. Special Trial Judge: By notice of deficiency mailed June 2, 1978, respondent determined a deficiency in petitioner's Federal income tax for the taxable year 1972 in the amount of $ 298,861. The only issue for decision is whether the statute of limitations set forth in section 6501(a) *106 of the deficiency determined by respondent.
All of the facts have been stipulated and are found accordingly. The stipulation of facts and the exhibits attached thereto are incorporated herein by this reference.
The petitioner, a corporation organized under the laws of Delaware, maintained its principal office at One First National Plaza, Chicago, Ill., at the time the petition herein was filed. In accordance with extensions granted by the Internal Revenue Service, petitioner filed timely Federal income tax returns *650 for the taxable years 1972 and 1974 on May 17, 1973, and June 13, 1975, respectively.
Petitioner's 1974 return reflected a net capital loss in the amount of $ 981,428.28, and an unused investment credit in the amount of $ 7,698,175.14. As a result of these two items, petitioner filed an application for a tentative refund of tax (Form 1139) pursuant to*107 the "quick refund" provisions of section 6411. *108 Neither the amount of either of the carryback adjustments nor the propriety of allowing either carryback to 1971 has ever been questioned by respondent or petitioner; both parties agree that the carrybacks reduced the 1971 tax imposed on petitioner by an amount equal to the 1971 tax refunded to petitioner. The disputed issue in this case instead concerns respondent's determination as to the effect of the carryback adjustments on the tax imposed under
In addition to the other taxes imposed under chapter 1 (the income tax),
(1) the sum of the items of tax preference in excess of $ 30,000, is greater than (2) the sum*109 of -- (A) the taxes imposed by this chapter for the taxable year * * * and (B) the tax carry overs to the taxable year. * * * * (c) Tax Carry Overs. -- If for any taxable year -- (1) the taxes imposed by this chapter * * * exceed (2) the sum of the items of tax preference in excess of $ 30,000, then the excess of the taxes described in paragraph (1) over the sum described in paragraph (2) shall be a tax carryover to each of the 7 taxable years following such year. The entire amount of the excess for a taxable year shall be carried to the first of such 7 taxable years, and then to each of the other such taxable years to the extent that such excess is not used to reduce the amount subject to tax under subsection (a) for a prior taxable year to which [such] excess may be carried.
When initially computing its minimum tax liability for 1972, petitioner properly used a portion of its 1971 income tax as a "tax carryover" to 1972 pursuant to
Petitioner does not challenge the theory upon which respondent's determination is based; rather, petitioner contends that the statute of limitations for assessment of a deficiency for 1972 had expired at the time the statutory notice of deficiency for 1972 was issued. Petitioner relies on the general 3-year period of limitations prescribed in section 6501(a), which provides as follows:
SEC. 6501. LIMITATIONS ON ASSESSMENT AND COLLECTION.
(a) General Rule. -- Except as otherwise provided in this section, the amount of any tax imposed by this title shall be assessed within 3 years after the return was filed (whether or not such return was filed on or after the date prescribed) * * *, and no proceeding in court without assessment for the collection of such tax shall be begun after the expiration of such period.
*652 Respondent recognizes that the general 3-year assessment*111 period has expired. However, he argues that here the applicable period of limitations on assessment is prescribed in section 6501(h) and (j), rather than section 6501(a). Section 6501(h) and (j) provides, in relevant part:
(h) Net Operating Loss or Capital Loss Carrybacks. -- In the case of a deficiency attributable to the application to the taxpayer of a net operating loss carryback or a capital loss carryback (including deficiencies which may be assessed pursuant to the provisions of section 6213(b)(2) [now section 6213(b)(3)]), such deficiency may be assessed at any time before the expiration of the period within which a deficiency for the taxable year of the net operating loss or net capital loss which results in such carryback may be assessed. * * *
* * * *
(j) Investment Credit Carrybacks. -- In the case of a deficiency attributable to the application to the taxpayer of an investment credit carryback (including deficiencies which may be assessed pursuant to the provisions of section 6213(b)(2) [now section 6213(b)(3)], such deficiency may be assessed at any time before the expiration of the period within which a deficiency for the taxable year of the unused investment credit*112 which results in such carryback may be assessed, or, with respect to any portion of an investment credit carryback from a taxable year attributable to a net operating loss carryback or a capital loss carryback from a subsequent taxable year, at any time before the expiration of the period within which a deficiency for such subsequent taxable year may be assessed.
Under section 6501(h) and (j), the period for assessing a deficiency attributable to the application to the taxpayer of a net operating loss carryback, capital loss carryback, or investment credit carryback is the same as the period within which a deficiency may be assessed for the taxable year in which the net operating loss, capital loss, or investment credit arose. Since the deficiency determined in this case can be traced to the capital loss and investment credit which arose in 1974, respondent contends that these sections extend the period for assessing that deficiency to include the period for assessing a deficiency for 1974. The notice of deficiency in this case was mailed within 3 years after the return for 1974 was filed; therefore, relying upon section 6501(h) and (j), respondent argues that the period for assessing*113 a deficiency for 1972 has not yet expired. We disagree with respondent. In our opinion, section 6501(h) and (j) does not apply in this case.
*653 The quick refund provisions of section 6411 and the provisions of section 6501(h)
In recognition of the fact that, due to the short period of time allowed [generally 90 days], the Commissioner necessarily will act upon an application for a tentative carry-back adjustment only after a very limited examination, subsection (c) of
* * * *
It is to be noted that the method provided in subsection (c) of
With respect to the provisions for extending the period of limitations now prescribed in section 6501(h) and (j), the report states (
Subsection (e) of section 5 of the bill adds a new subsection (d) to
*116 As the committee report shows, the extended periods of limitation prescribed in section 6501(h) and (j) apply only where: (1) A carryback is erroneously applied to the taxpayer; (2) as a result of the carryback, a tax is improperly refunded on the ground that the tax thought to be imposed was less than the tax actually imposed; and (3) a deficiency
Here, the respondent seeks to have the Court open up a closed year for the purpose*118 of asserting a deficiency attributable *655 to the correction in the amount of the "tax carryover," provided by
In the instant case, as indicated, there were no carrybacks applied to 1972, the year of the deficiency. In addition, the carrybacks to 1971 in question were
In view of the foregoing, we conclude that the facts presented in this case are simply outside the scope of section 6501(h) and (j). Since respondent mailed the notice of deficiency after the expiration of the period of limitations set forth in section 6501(a), assessment of the deficiency in question is barred. Accordingly, respondent's motion for partial summary judgment will be denied and petitioner's cross-motion for partial summary judgment will be granted.
*656 Featherston,
As I read the legislative history, the purpose of section 6501(h) and (j) is, where an excessive refund has been made pursuant to a tentative carryback adjustment application, to restore the Commissioner and the taxpayer to the same positions that they occupied prior to the approval of the application; *122 tentative refund. In adopting this legislation, the Congress did not leave it to the courts, as Judge Whitaker suggests, to achieve what they conceive to be a "rational result," but rather the Congress spoke in precise terms as to the results it wanted achieved and later dealt with specific problems as they arose. The Congress has never, in my opinion, authorized the reopening of an otherwise barred year for which no adjustment was made.
*123
(b)
Thus, only the year to which the carryback has been applied is reopened for adjustment by section 6501(h). *125 Act of 1969 amended section 1212(a) to allow corporations to carry back capital losses *126 In addition to a capital loss carryback, this case also concerns an investment credit carryback. Credit carrybacks are the subject of section 6501(j), which was added to the Code *659 by the Revenue Act of 1962, Pub. L. 87-834, 87th Cong., 2d Sess. The accompanying S. Rept. 1881, 87th Cong., 2d Sess. (1962),
Subsection (e) of section 2 of the bill, which was added to the bill by your committee, amends certain provisions of the code relating to statutes of limitations and interest. These amendments were made necessary by the adoption of the provision allowing a 3-year carryback of any unused investment credit.
Paragraph (1) of section 2(e) of the bill amends section 6501, relating to limitations on assessment and collection, to provide that in the case of a deficiency attributable to the application of an investment credit carryback, the deficiency may be assessed at any time before the expiration of the period within which a deficiency may be assessed for the taxable year in which the unused investment credit arose (i.e., the unused credit year) which results in such carryback. This provision in effect suspends*127 the statute of limitations on the assessment of a deficiency
Again, this section, like section 6501(h), was intended to raise the limitations bar only with respect to "the assessment of a deficiency on account of the disallowance of an erroneous or improper investment credit carryback." It was not intended to raise the bar with respect to other closed years or even with respect to other adjustments in the same year where, as in the instant case, the refund was correct and proper.
In recognition of the precision with which the Congress has spoken in this area, this Court in applying section 6501(h) and its 1939 Code predecessor has held that the period of limitations for the assessment of a deficiency for a year to which a net operating loss has been carried was enlarged only to the extent that the deficiency was based on an error made in the computation or application of the net operating loss carryback. The Court *128 has rejected arguments that the period was enlarged for other adjustments even for the same year.
*129 Respondent here concedes that no error was made in the computation of the carryback from 1974 to 1971. He further concedes that the deficiency he here seeks is not for a year (1971) to which the carryback was applied, credited, or refunded. He seeks a deficiency for a year (1972), not otherwise affected by the carryback, on grounds other than a correction of the amount or application of the carryback adjustment. His position thus cannot be reconciled with the
The Congress relaxed the rule of these cases in 1966 to some extent by adopting section 6501(m). That section, which is specifically applicable to quick refunds under section 6411 such as the one concerned in the present case, authorizes the Commissioner to assess a deficiency for a year to which a capital loss or investment credit is carried at any time during the period of limitations for the year in which the loss or credit arose, just as he may do under subsections (h) and (j). Unlike assessments under subsections (h) and (j), however, which are limited to deficiencies attributable to the carryback, assessments under subsection (m) may be made for any reason. *130
*131
In the case of a deficiency [for 1963] * * * with respect to any portion of an investment credit carryback from a taxable year [1966] attributable to a net operating loss carryback or a capital loss carryback from a subsequent taxable year [1969], at any time before the expiration of the period within which a deficiency for such subsequent taxable*132 year [1969] may be assessed.
The portion of the statute quoted above was referred to in
Where Congress speaks in general terms, the courts may have some interpretative liberties to fill in the gaps left open to reach what they conceive to be equitable results in given cases. But where Congress speaks in definite and precise terms, the courts must*133 follow those terms. *134 As I read section 6501(h), (i), (j), (m), (o), and (p), relating to deficiencies, and the corresponding provisions of section 6511(d)(2)(A) and (B), (3) and (4), relating to refund claims, Congress has spoken definitely and precisely on the issue here presented. Almost every new carryback authorization (e.g., capital losses, investment credit, work incentive program credit, and new employee credit) has been accompanied by an amendment to these sections. *663 Congress did useless acts in adopting these amendments, because, under his view, the words "attributable to the carryback" are sufficient in substance to permit the Court to do what it conceives as equity regardless of the otherwise applicable statute of limitations. I agree with the majority that such is not the law. In order for the statute of limitations to be extended as respondent argues it should be in cases like this one, legislation, in my opinion, will be needed.
*135
Whitaker,
The majority and concurring opinions seem to emphasize that respondent is seeking to reopen a barred year unrelated to the carryback year; that the deficiency involves another tax in another year. I submit that this emphasis is misplaced. True it is that the deficiency is in minimum tax for the year 1972 whereas the carryback was to the year 1971. However, the 1972 adjustment is in fact an automatic mechanical adjustment due directly to the 1971 carryback. Since the 1971 income tax liability was reduced by the refund, the component of the minimum*137 tax liability calculation for 1972 consisting of the 1971 income tax paid obviously required adjustment to conform to the results of the 1971 refund. This is admitted. To avoid repaying to the United States an amount of tax conceded to be due, petitioner has sought an extremely narrow and restrictive interpretation of statutory language which is broadly worded. The majority, in my judgment, misconstrues section 6501(h) and (j).
This decision, if sustained, will force respondent to audit with extreme care future section 6411 refund claims with ensuing delay in order to avoid the possibility of an overpayment such as occurred here. Thus, the congressional intent clearly reflected in the Committee report accompanying the Tax Adjustment Act of 1945 will be defeated. Moreover, under the majority's rule, there are circumstances where a required automatic carryover reduction in the refund, as here called for, would be barred even though the gross refund must be allowed, an unconscionable result. *138 *665 It is my view that the statute of limitations changes which accompanied the "quickie refund" procedure, and those subsequently added, were intended by Congress to enable the Commissioner and the taxpayer, either or both, to recompute the tax liability of the taxpayer for every year affected by a net operating loss or a credit carryback, obviously the proper result. It is incumbent upon this Court to interpret procedural provisions of the Internal Revenue Code so as to achieve a rational result except where we are constrained by the statutory language itself, which is not the case here.
This case could in fact be disposed of very simply. Both sections 6501(h) and 6501(j) are involved. Both use identical language, insofar as here pertinent: "In the case of a deficiency attributable to the application to the taxpayer of a * * * carryback."
The Adjustment Act of 1945 added to the Code as parts of a single unified package a detailed mechanism for the filing and processing of "quickie" refunds, a procedure for summary reversal by the Commissioner of the allowance of such refunds, and various extensions of the*141 period of limitations both on taxpayer refund claims and IRS deficiencies. The many cross-references in the Committee report reflect the intended integration of the several parts. If we must look to the report for an indication of congressional intent, we are both entitled and required to construe it as a whole.
The refund claim procedure became new Code
Thus, if a taxpayer has a net operating loss or an unused excess profits credit in any taxable year ending on or after September 30, 1945, he may file an application for a tentative adjustment of the taxes for all prior taxable years affected by the net operating loss carry-back or the unused excess profits credit carry-back resulting from such loss or unused credit. A decrease in excess profits tax resulting from an unused excess profits credit carry-back which itself results from, or is increased in amount by, a net operating loss carry-back shall be considered to be attributable to such net operating loss carry-back. If a corporation has, e.g., a net operating loss*142 in the calendar year 1945 which when carried back to 1943 results in an unused excess profits credit, the decrease in excess profits tax for 1941 resulting from the unused excess profits credit carry-back from 1943 shall be considered to be attributable to the net operating loss carry-back from 1945. * * * [
While income and excess profits taxes were principally affected, *667 the report makes it clear that the statute embodies every tax affected by the carryback.
Within such period of 90 days the Commissioner is to make such limited examination of the application as he deems practicable for omissions and errors of computation therein. The Commissioner is then to determine the increase or decrease in
This language very plainly directs the Commissioner in checking the claim for refund based on the tentative carryback to recompute every tax affected by the carryback. The taxes to be recomputed are those*144 of any prior year affected by the carryback. The legislative history could hardly be made clearer. The fact that there was no minimum tax in the 1939 Code and no carryforward provision cannot prevent the 1954 Code equivalent from also reaching that adjustment.
In the instant case, the Commissioner should have recomputed petitioner's 1972 tax liability as well as his 1971 tax liability, for both were directly affected by the carryback, and he should have reduced the refund accordingly. The 1972 adjustment was inevitably mandated by the Code -- analogous to the classical mathematical error, which under section 6213(b) the Commissioner has long been authorized to correct by assessment without a statutory notice. *145 Petitioner clearly *668 recognized the propriety of this action since petitioner itself in its application for refund reduced the 1971 refund by the 1972 increase in tax.
In recognition of the fact that, due to the short period of time allowed, the Commissioner necessarily will act upon an application for a tentative carry-back adjustment only after a very limited examination, subsection (c) of
Application of this summary procedure is illustrated in the report by reference to two partially offsetting adjustments in a single year. However, the example in the Committee's discussion of
Finally, as again here pertinent the 1945 Act added to the 1939 Code as
(d) Net Operating Loss Carry-Backs and Unused Excess Profits Credit Carry-Backs. -- A deficiency attributable to the application to the taxpayer of a net operating loss carry-back or an unused excess profits credit carry-back, including deficiencies which may be assessed pursuant to the provisions of
*669 The express cross-reference to
Judge Featherston's concurring opinion seeks support for his and the majority's unduly narrow interpretation of section 6501(h) and (j) in the language of the 1958 Committee reports *148 in that these two reports do describe the 1939 Code provisions in terms of a deficiency of the year to which the loss was carried back, but I construe that language as simply a generalized and abbreviated description of the most obvious application of the 1945 Act provisions. It certainly cannot serve to limit the actual and intended scope of the 1945 Act. Neither does it limit the scope of the 1958 amendment Featherston points out, restored the 1939 Code rule.
The majority finds that three requirements must support a deficiency under section 6501(h) and (j): (i) The carryback must be erroneously applied, (ii) as a result, too much tax is refunded, and (iii) the deficiency must result from "an error in * * * the amount or existence of the loss or credit giving rise to the carryback." The authority cited for this interpretation is the legislative history, which offers no such support. Nor is this interpretation permissible under the decisions of this Court and other case law.
Under the majority's interpretation, the Commissioner would have no authority under section 6501(h) and (j) to determine a deficiency in the computation of the tax to be refunded, unless there is an error in the actual amount or existence of the loss or credit giving rise to the carryback or in the application of the carryback to the taxpayer. This result would be clearly erroneous as the majority would probably agree, for section 6501(h) and (j) authorizes the Commissioner, in determining the proper refund or credit, *149 to adjust each tax
*150 The majority insists that section 6501(h) and (j) does not include deficiencies attributable to carryovers but instead is restricted to deficiencies attributable to carrybacks. Thus, the majority concludes that the "attributable to" language of the two sections does not apply to an automatic adjustment in the minimum tax liability where the carryback causing that adjustment is applied in an earlier year. I suggest that such interpretation is neither required by the legislative history nor permissible under a decision of this Court, viz,
*152
Similarly in this case, I find the 1972 adjustment to be inseparably related to the 1971 adjustment, so much so that it should not be, in fact it cannot be, separated therefrom. And I "find no good reason for doing so." As we said in
The majority makes the point that section 6501(h) and (j) applies literally to "carrybacks" whereas the involvement of 1972 results from a "carryover." This is, however, a "red herring." It is immaterial how 1972 is involved or that it is a later year. These two sections refer to carrybacks as the original source of the adjustment only; the requirement is that the deficiency be "attributable to" a carryback. There is simply nothing in the statutory provisions which precludes respondent from predicating the deficiency on a carryforward adjustment so long as *153 it can be "traced directly to" a carryback.
Both the majority and Judge Featherston's concurring opinion accuse respondent of seeking to reopen a closed year *672 for an adjustment not related to the carryback, a proposition which would be foreclosed by decisions of this Court. For the foregoing reasons, I would allow respondent's motion for partial summary judgment and would deny petitioner's cross-motion for partial*154 summary judgment.
1. Since the motions herein are pre-trial motions, the Court concludes that the post-trial procedures set forth in
2. Unless otherwise indicated, all section and chapter references are to the Internal Revenue Code of 1954 as in effect for the period in issue.↩
3. Sec. 6411(a) provides that a "taxpayer may file an application for a tentative carryback adjustment of the tax for the prior taxable year affected by a net operating loss carryback * * *, by an investment credit carryback * * *, or by a capital loss carryback * * *, from any taxable year."
Sec. 6411(b) provides that, within "a period of 90 days from the date on which an application for a tentative carryback adjustment is filed under subsection (a), * * * the Secretary shall make, to the extent he deems practicable in such period, a limited examination of the application, to discover omissions and errors of computation therein, and shall determine the amount of the decrease in the tax attributable to such carryback upon the basis of the application and the examination."↩
4. Although added to the Internal Revenue Code of 1954 at a later time, the purpose and effect of sec. 6501(j) is essentially the same as that of sec. 6501(h). See Technical Explanation of the Revenue Act of 1962, to accompany H.R. 10650 (Pub. L. 87-834), 87th Cong., 2d Sess. (1962),
5. SEC. 6211 DEFINITION OF A DEFICIENCY.
(a) In General. -- For purposes of this title * * * the term "deficiency" means the amount by which the tax imposed * * * exceeds the excess of -- (1) the sum of (A) the amount shown as the tax by the taxpayer upon his return * * * plus (B) the amounts previously assessed (or collected without assessment) as a deficiency, over -- (2) the amount of rebates, as defined in subsection (b)(2), made.
(b) Rules for Application of Subsection (a). -- For purposes of this section -- * * * * (2) The term "rebate" means so much of an abatement, credit, refund, or other payment, as was made on the ground that the tax imposed * * * was less than the excess of the amount specified in subsection (a)(1) over the rebates previously made.↩
1. Judge Whitaker in his dissent characterizes the refund paid to petitioner as "admittedly erroneous." This characterization is, in my view, erroneous. The refund for 1971 was correct. As detailed in note 9
2. H. Rept. 849, to accompany the Tax Adjustment Bill of 1945, 79th Cong., 1st Sess. (1945),
"In recognition of the fact that, due to the short period of time allowed, the Commissioner necessarily will act upon an application for a tentative carryback adjustment only after a very limited examination, subsection (c) of
Judge Whitaker quotes other excerpts from H. Rept. 849,
3. The technical explanation of this provision makes the same point with equal clarity. IT states:
"Subsection (b) of this section amends section 6501 of the 1954 Code (relating to limitations on assessment and collection) to provide that a deficiency
4. Sec. 512(a), Pub. L. 91-172, 83 Stat. 487, 638.↩
5. S. Rept. 91-552 (1969),
6. Sec. 512(e)(1), Pub. L. 91-172, 83 Stat. 487, 639-640.↩
7. In
"Neither the language of the statute nor the legislative history supports respondent's position.
8. The report of the Committee on Ways and Means of the House of Representatives explains:
"Provision for quick refunds can, of course, result in the payment of larger refunds than would be paid if the Internal Revenue Service had more time to review the claim. Once refunded, in some instances, because of the 3-year limitation referred to above, these amounts cannot be recovered through deficiency procedures, except to the extent the deficiency is attributable to the carryback. Any amount erroneously refunded which is not attributable to the carryback may be recovered, however, by a suit to recover an erroneous refund.
"In light of the situation described above, your committee approved an amendment which extends the period for assessing a deficiency when a quick refund has been made because of a carryback of either a net operating loss or an unused investment credit, even though the deficiency is not attributable to the carryback. Under this provision,
H. Rept. 2161, 89th Cong., 2d Sess. (1966),
9. It should not be inferred that I think there is anything inequitable about the result reached in this case. Long before the May 17, 1976, expiration of the general 3-year statute of limitations for the taxable year 1972, petitioner, in its Form 1139 filed on July 30, 1975, notified both the Internal Revenue Service Center in Kansas City and the Chicago District Director that the allowance of the investment credit and capital loss carrybacks from 1974 to 1971, which it was claiming in the Form 1139, would have the correlative effect of increasing the 1972 minimum tax because of a reduction in the carryover of regular taxes to 1972 from 1971. Nevertheless, the Service chose to disregard that notice and made a
10. See, for example:
(1) The amendment of subsec. 6501(j) in 1967 by sec. 2(c) of Pub. L. 90-225 to add the second operative clause which allows the application of the extended period of limitations to deficiencies attributable to credit carrybacks which are in turn attributable to net operating loss, capital loss, or other credit carrybacks;
(2) Sec. 6511(d)(2)(B)(ii) of the Code, enacted by sec. 232(d) of the Revenue Act of 1964, Pub. L. 88-272, which provides for an extended period for asserting a refund for a year in which a taxpayer averaged his income under sec. 1302 of the Code where such refund is the result of a change in averageable income attributable to a change in the taxpayer's tax liability for a base period year, which in turn was attributable to a net operating loss or capital loss carryback to such base period year;
(3) The second clause of sec. 6501(o), enacted by sec. 601(d)(1) of Pub. L. 92-178 in 1971, creating an extended period of limitations for asserting a deficiency attributable to a work incentive program credit carryback which in turn was attributable to a net operating loss, investment credit, or capital loss carryback; and
(4) The second clause of sec. 6501(p) of the Code, enacted by sec. 202(d)(4)(A) of Pub. L. 95-30 in 1976, providing an extended period for assessing a deficiency attributable to a new employee credit carryback, which in turn was attributable to a net operating loss, capital loss, investment credit or work incentive program credit carryback.↩
1. As the concurring opinion recognizes, the currently applicable Code section was adopted by Congress in 1958 to reenact a 1939 Code provision omitted by oversight from the 1954 Code. S. Rept. 1983, 85th Cong., 2d Sess. (1958),
2. H. Rept. 849, 79th Cong., 1st Sess. (1945),
3. In this case, the 3-year statute of limitations with respect to the year 1972 expired on May 17, 1976, while the Form 1139 seeking the quickie refund was filed on July 30, 1975. Under these facts respondent, at least theoretically, had time within the regular limitation period in which to issue a statutory notice on 1972. However, the majority's decision is not rested on that fact. Suppose for example, that this taxpayer suffered product liability losses in 1981, which under sec. 172(i) would be carried back 10 years to the year 1971. Under the majority opinion, petitioner would be entitled to a further refund of 1971 taxes, but without any possibility of reduction due to the further automatic 1972 adjustment which the majority holds is outside the sec. 6501(h) and (j) provisions. I do not believe that we are required to interpret sec. 6501 so as to create such a gross legislative oversight when it is clearly not mandated by the actual statutory language.↩
4. Sec. 6501(h) applies to a net operating loss carryback and a capital loss carryback whereas sec. 6501(j) applies to an investment credit carryback.↩
5. "2. To ascribe (to) as belonging or pertaining; specif: a By way of cause; as, a disease
6.
7.
8.
9.
10. See, e.g.,
11. The year 1972 was open for audit by respondent at this time. Query, whether the majority opinion will create a disincentive to taxpayers to volunteer this adjustment. See note 3
12. S. Rept. 1983, 85th Cong., 2d Sess. (1958),
13. Technical Amendments Act of 1958, Pub. L. 85-866, 72 Stat. 1606.↩
14. The report is again instructive in its discussion of new
"In determining whether there is a deficiency attributable to a carry-back, proper adjustment shall be made in computing the net operating loss or unused excess profits credit, in computing the carry-backs, and in computing the amount of the net operating loss deduction or unused excess profits credit adjustment.
15. The "statutory machinery" language was first articulated in