the next case on the calendar is trusted media brands the united states and the law an unbroken stream of case law and the dictionary tells us how to apply it here i intend the government has made two arguments about why the statute of limitations applies i have three points i'd like to make for each if the court allows it in our opening brief we actually responded to the district court somewhat different theories and as the court may have noticed the agency's internal theories were different still but i'm going to focus on the government's cover current arguments treasury regulation one nine zero one one d directs you to the regulation as i read the code and then further reading the code when you talking about credits it's two years and once you go to the regulations if you look  three years and as i read the regulation dealing with credits it's ten years scratching my head over the last several days as well as right so i don't know what i don't know how to interpret their well i could help the court interpret it because the agency is bound by its regulation that's been the l before i went to law school if even if there is a conflict between the regulation and the statute and we don't quite agree that the statute should be read as the court suggested the statute can be read the way we  because you must still deal with the issue of deduction and the choice between the deduction and the credit so we think the statute can fairly be read in the manner we suggested but it matters not because the agency has by regulation created a direction and that their action tells us to which statute of limitations applies and the government does not quibble with the a cardi principle which has been the law for a good long time that the agencies and that principle is an agency is bound by its own regulation taxpayer isn't the agency is and that's true even as this court has said in in the saying a case but it's the law all over even if there's a conflict with the statute because the regulation is the law now the government makes an argument and that's my first point the government's argument is all oh here's how you should reconcile it the regulation only goes to the issue of the sure between a deduction and a credit it doesn't tell you what the refund period is and there are different there's a difference between the choice  the refund and that's not a possible argument first of all it's in a logical argument see a logical because you don't say i'm going to give you ten years to change into a deduction and then say  you waited your ten years you're seven years too late that makes no sense logically the refund and the choice period should be the same but you don't have to rely on logic because the statute tells us the answer to the question nine sentence i think or maybe the third says such choice for any taxable year may be made or changed that any time before the expiration of the period prescribe for making the claim for refund and it of course does that it says that you can snake the change in the period for the refund and not alone not only is the plain words the direction but we litigated it jimmy taxpayers and the i litigated this issue for fifteen years and the premise of those litigations in each of those cases was that the refund period passed the match the period for the choice that's the government's only argument and it is dead wrong because the refund period and the choice period have to be the same by statute and that was true in each of those cases heart and bank and the government lost another words if the government wanted the three years that you let's assume you are correct there's plenty of ambiguity in the statutory language the government would have said for the credit you get to choose the ten year period but for the deduction your choice has to be within the three year refund period of the three it could have you have some good points but the government is also making  some significant credible arguments about the statutory language shouldn't count against your interpretation is the government argues that it would be very difficult to administer the tax laws if you were into if your approach to sixty five eleven  no because it's difficult to be a tax payer but we're happy to do that by the way this works both ways the attributable language works both ways but no it is not a question of administrative convenience the government announced the law i it quite consciously which is my second point after the heart do you agree with the government it ministry of inconvenience here no i i don't we have to show that it is attributable to the foreign tax credit which is the third point for example the thing the government picks out is the second part it's sixty five eleven d three b and you have to be pretty meanspirited to say oh ok we  did put you within a ten year period we gave you ten years to make the choice but we're going to read d three b to be restrictive what d three b does is simply say you only get the benefit of the change that is the foreign tax credit and they again use the attributable to language says you have to trace that back to the original to show that that's the source of the overpayment only to the extent it's not a general reopen or which would might be difficult to administer no we have to trace back that foreign tax taxpayer always has the right to challenge a regulation as unauthorized by a statute within a chevron principle or not the government does not have a right to renounce its own its own  it is yes but i would say it's beyond case law because it is it is so fundamental the rule of card is not unlike a simple case a card is a principle of law and i don't notice that the government has a that they want to distinguish the reg can you going back to the attributable to problem for just a moment your argument is that we should interpret that to require just simple but for cause ation centrist onto the tax payments it's ten years so in your case like yours where you're using both to go back you have to choose between which statute nations should apply so there's three answers to that the first is they've chosen for us by the regulation where the regulation tells you what the answer is that's the one that applies second when there are two statute of limitations that are potentially applicable and this is true many times in the law the taxpayer gets to choose the one that's most favorable to them but the third point that i would make here is you could even use the morse code why they chose this statute of limitations like i said they might have chosen something else in their regulation but they didn't the reason they chose it is because it is more specific the there are thousands and thousands of net operating losses that exist in the world that have carried backs that are nothing have nothing at all to do with foreign taxes that's a general rule this is about foreign taxes d three and again what you are tracing back the specific is the effect of the foreign tax on the initial overpayment so it really doesn't arise the attributable problem you don't rises out of their argument about the choice again i haven't covered the attributable issue i would ask to do that either now or in my rebuttal but i know the rule about if they don't please the court my name is tell you kramer i'm an assistant u s attorney on behalf of the united states the section of the code that governs taxpayer refund claims section sixty five eleven both the specific provision with the ten year limitations period section sixty five eleven d three a that provision read as a whole d three and d three b together and sixty five eleven d thirty when read in the context of sixty five eleven as a whole including next to sixty five eleven d two which deals specifically with refunds that result from net operating loss carry backs shows that sixty five eleven d three the ten year period for claiming a refund in that provision is limited to foreign tax credits section nine zero one and the regulation that interprets section one zero one deal with something separate they deal with the period within which a tax payer can whether or not it wants to claim the benefits of the foreign tax credit regime for a given year and section nine zero or a deduction under the i r s as regulation i walk through each of those sections i know when the statute deals only with credits it says that the taxpayers choice section nine zero nine zero one correct the statute dealing with the election period for deciding whether to claim a credit t taxpayers the time within which you can choose whether to claim credit is the period prescribed by law for claiming a refund of the tax imposed for such taxable year and that's important it doesn't say it's the same as the period you have to claim a refund based on that foreign tax it borrows from the limitations periods for tax payer refund claims it says you have to to a net operating loss our position is that there is not a special limitations period for deductions alone or deductions of foreign tax credits alone and the reason for that as we explain in our brief is that deductions and credits function differently in terms of when the tax payer can claim them and as a result of that tax payers don't need as long as the limitations period to benefit from their foreign tax deductions the way they do from borrowing from the statutes of limitations for refund claims it says such choice whether to elect the credit may be made or changed any time within the period prescribed for claiming a refund of the tax imposed for such taxable year the taxpayer leaves those words out in their brief but they're important because there is no single period for claiming a refund of tax for a single taxable year you have to look to section sixty five eleven to decide which refunds limitations period did section nine zero one borrow and nots with the bank of america and heart cases don't with they looked at the language of section nine zero one and they said ok this tells us to borrow from the limitations necessarily be clear what it's referring to and so that was the interpretive question that the bank of america cases were answering they decided that the best way to read that was that it was borrowing the ten year period in sixty five eleven d three and that that becomes your period to elect the foreign tax credit and then to turn back to the regulation when the i r s acquiesced in those cases it in acted the regulation one point nine zero one dash one and it made clear that the election period that's being borrowed a sixty five eleven d three it also was a generous regulation to taxpayers in that even though the statute and the bank of america america cases excuse me all  exclusively with credits the i r s made clear in this regulation and we don't dispute this that the taxpayer has ten years in which to elect i did the credit or if it doesn't want the credit because the taxpayers other option is to deduct its foreign taxes then the taxpayer can instead claim a deduction but what the regulation does not say is that the taxpayer has ten years to claim a refund based on a foreign tax deduction it also does not say the taxpayer may behind the lengthy period the lengthy limitations period for foreign tax credits is in case a foreign jurisdiction jacks your foreign tax liability right so if a tax payer elects the deduction within ten years after its foreign tax liability has been adjusted it can go ahead and claim that deduction right away in the year where the foreign tax liability is determined and then it has the normal three year period to claim a refund based on that deduction so if the deduction is a foreign taxes that is a new assessment of foreign tax liability within ten years from the original tax year it can elect the deduction and deduct the taxes in the current year it doesn't have to go back like it does with credits and so because of that it can still claim that deduction in the current year having elected it within the ten year period and then you can go ahead and claim a refund within three years of filing that current tax return under sixty five eleven a so they work differently i'll also note that this wouldn't be the only case by far in which different parts of the tax code work in a way where the tax payer might be eligible for a benefit but another provision of the code another limitations period interact with it in a way that doesn't give the taxpayer all the benefits they want to stay within the election example in the credits example generally taxpayers can carry back excess foreign tax credits from one year to another so if in this case the taxpayer had originally claimed deductions of its foreign taxes in say in one thousand nine hundred seven in  hundred seventy year but if it had excess foreign tax credits it couldn't carry them back to one thousand nine hundred five because the time period to change their election for ninety five would have been closed and you can only carry credits back if you've elected credits in both years so the limitations periods are strict they won't always unable to x paris to claim all the benefits that they want to claim but in this case there is a logic behind the reason that it works differently for deductions and credits and the treasury regulation that does address the limitations period for refund claims those are the treasury regulations and sixty five eleven thirty three or excuse me of three zero one point sixty five eleven d three that regulation unambiguously is written to apply  only to credit it says that the ten year period to claim a refund claim applies when the overpayment results from a credit and that is the relevant regulation in determining the rule for refund claims and it is entitle to deference and has not been challenged by the taxpayer in this case to the extent there is any ambiguity in the statutory scheme or in the word allowed with that which the taxpayer has focused on in interpret the statute treasury regulation three zero one point sixty five alemany three should and the matter turning to the attributable to question for one moment i'll know that it is enough for the taxpayers claim to be  timely if this court agrees that sixty five eleven d three only applies to credits but it is also appropriate in the context of sixty five eleven d three to interpret attributable to narrowly because it is the sixty five eleven  a waiver of the government's sovereign immunity and therefore should be strictly construed we are not asking that attributable to be read so as to always bar the tax payers refund claim but simply to limit the universe of possible causes to which the refund attributable to which would be consistent with that principle i see you have to reach the issue if we agree with you as to the effect or not effect of the regulation that's correct if you agree that the ten year period is only available for credits you don't have to reach that question thank you thank you to question one and if you listened closely you heard from my colleagues many good arguments why they think they should have chosen a different statute of limitation but there is no way around the fact that they existed before the series of cases it doesn't prohibit anything else it is what i call a repeater regulation which you see in the code where they simply mimic there's a provision of the help my colleague here might  prohibit the language of the regulation is it refers to an overpayment result resulting from a credit why is that not it is determined because it has nothing to do with the deduction it doesn't cover deductions it doesn't say only it doesn't so exclusively it doesn't say prohibit resulting from a credit duction it says resulting from credit course because it's covering credits in other words when it covers one half of the universe that's not a pro a big issue in or a restriction and how did anything else half of the universe into the ten year suit through the through the consciously created regulation that we have been relying on and we discussed earlier with judge parker which is and you can't get around the language they have chosen the statute of limitations for the election they can see the point and the statute tells you that that regulation must be the one that covers the refund it's the only thing they can choose and it's the only sensible choice because how would you respond or government's logic argument that the you know the purpose of the statu yes as in the first chicago i'm standing sense to me well this is actually works both ways as the first chicago case points out there are many purposes for this that year the government went in all these cases and made these arguments about the purpose of the statute a great budget and it got legislative history to support it and the court said no no the purpose of the statute is multifold so for example we don't know and i would say the purpose of the statute is to allow you to take the deduction because you don't know how your credit is going to work out for many years because to your credit your foreign tax credit depends on how much foreign taxes you pay there's a maximum turned out to be the right one we rely on that's the regulation as a taxpayer is allowed to do in order to see what happened over time so your honor it is correct it does take time but that's for both sides of the equation to work out and let me just say something about the the second argument the basic proposition here is everybody agrees that it means generated by direct  attributable to news generated by our traceable to the cases have rejected the government's position consistently but i just want to point out that there's a reason why the cases reject that position and we've cited three cases squarely rejecting through each since the two fall first of all if you're timely you get the benefits of a timely filing the second is these statutes are looked back statutes there carry back what the reason you have carried back provisions is congress has the sided it is very important that when you assess what your economic circumstances for one year you could take into account what happens in the subsequent years and then adjust what happened earlier and congress is very careful so what happened in two thousand and two affects what happens in two thousand and seven close congress wants you to be able to even out your wins your gains in your losses for a true picture of your economic circumstance so the economic circumstance in one nine hundred ninety seven is what forces us this is all mandatory and that the code to change the credit the way credits are handled in the prior  advantageous to take a deduction over the credit in two thousand and two that's absolutely correct but the carry back principles when you do that you have an excess and and an excess in two thousand and two and the law tells you that if you have this excess you must carry it back first when you have carried it back first the lot tells you that the credit that was taken in nine hundred ninety seven was excessive and you can take it you must take it back and it also creates limitations so we followed all those requirements which is why i say i've heard of causation being interrupted by subsequent events in my world that i've always lived  the act that causes it is the taking of the auction and the foreign credit but when it operates through the code the law i don't say you add one position or two co provisions the law is a seamless thing it is not a separate intervening a vent the code directs what the result was here in the overpayment and as i suggested earlier i think this was conscious choices in fact in two thousand and two congress amended the statute to allow the carry back to be five years rather than three years why to put money in as it says in the legislative history where in the time of her session we need money in the