Opinion
25984-22
09-18-2024
APACHE CORPORATION AND SUBSIDIARIES Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
James S. Halpern Judge
On June 28, 2024, the parties filed cross Motions for Partial Summary Judgment. By order served August 27, 2024, we ordered each party on or before September 27, 2024, to file a response to the other's Motion. On September 16, 2024, we held a telephone conference with the parties to address questions raised by the Motions that, we had provided to the parties. The question for respondent was as follows:
Respondent contends that "[n]o code provision, treasury regulation, or other authority allows a taxpayer to segregate its election under section 172(b)(3) to carry forward the portion of its NOLs that are not SLLs and simultaneously carry back the portion of its NOLs that are section 172(f)(1)(B) SLLs." In respondent's view, "[petitioner cannot pick and choose which portion of NOLs, such as SLLs, are subject to the election since section 172(b)(3) waives the entire NOL carryback period, applies to all section 172 carryback rules and applies to all portions of the NOL." Didn't the election by the Apache group manifestly reflect an intent to "pick and choose" in a way that respondent claims the law doesn't allow? As petitioner observes, "Apache's entire election statement essentially said we are waiving our two-year general carryback period for the Non-SLL Amounts, and we are not waiving our ten-year carryback period for the SLL Amounts." Petitioner says the Apache group was entitled to do that. Respondent says it wasn't. If respondent's view of the law is correct, why shouldn't the Apache group "be treated as having made no election"? Plumb v. Commissioner, 97 T.C. 632, 640 (1991). Put differently, why doesn't the "additional language" that respondent would dismiss as being "without effect" call into question the validity of the Apache group's election? If respondent's view of the law were correct, wouldn't the relevant issue be not whether the Apache group was required to carry its SLLs back ten years but instead whether it was required to carry the rest of its NOLs back two years?
In addition to a discussion during the conference, we invited the parties to address our informal questions in the responses to the other's motion. Because of some question whether the question to respondent reflected matters raised by petitioner in its brief, we directed that, in its response, respondent, and petitioner, if it chooses, address, in particular, that question.
In order to provide ample time to address the issues raised during our conference call, it is ORDERED that the date to respond to the Motions is extended to October 15, 2024.