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December 20, 2018 The Tax Lawyer

More of the “Same”: Section 6621(d) in the Federal Circuit

Vol. 72, No. 1 - Fall 2018

By David Berke


     Section 6621(d), which allows “interest netting” for corporate taxpayers, has generated tax controversies involving many millions of dollars—all over just two words. Section 6621(d) only allows interest netting for outstanding tax over- and underpayments made by the “same taxpayer.” Amid constant mergers, acquisitions, and restructurings for large corporations, it is often not clear when an entity or entities should be considered the “same” under section 6621(d) and thus be permitted to net interest. The case law on this issue—all of which has arisen in the Federal Circuit—has not been subject to comprehensive study. This Article fills that gap in the literature. It argues that, while the key Federal Circuit cases interpreting “same taxpayer” under section 6621(d) reach supportable results, their reasoning is incomplete and, in some respects, flawed. This Article critiques these cases and, based on that critique, proposes a comprehensive definitional framework for “same taxpayer” under section 6621(d). This proposed definition is grounded in both the statutory text and certain principles from this case law.

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