me please the court deborah snyder on behalf of the united states of america in this case the f b i inc and city areas filed administrative refund claims with the i r s seeking tax benefits from a contingent liability as an l l c ever in the first instance serve as a commentary corp under the old regulations that are governing under the old regulations that were broke that are governing the l l  would not have been qualified initio services common parent but that's a different issue from the issue here which is once the common parent is qualified to serve as the common parent and  the the court of federal claims below held that basically there was a team liquidation of p f i ink and as a result it no longer existed the pinatas of correct one in europe court right with the court of federal claims analysis is that even if you look to those energy classification regulations including the deemed liquidation regulation that the core aligned on the court did not address at all anybody and never classified as an association it never made an election under sea want want right then how does it fall into little three right i guess our position is that you don't have  saying that dissolution in the secession of existence are state law concepts and the regulations and the statute do not otherwise to find those terms and in the absence of a contrary definition in the really it's eligibility to service the common parent corporation is and then the question over whether the question of whether an entity is eligible to serve as the common parent is a different question from when it's agency authorit common parent corporation but it doesn't speak to whether the common parent teacher already ans with respect to prior year see here is part of my problem part of my problem is that an l l c couldn't in the first all we're talking about is whether or not a could version that occurred as of the end of two thousand when work eliminated the common parent's agency authority with respect to ninety seven to nine but under the new reg you've taken care of this problem for the most part this can come for example an l l c or another otherwise disregarded entity can only continue to serve as the common parrot so what they do year in which they were at least the common parent a portion of that year even under the new regs the common parent who turns into an l l c can't keep functioning indefinitely and then well actually the new regs say that the common parent remains the agent for the consolidated return year or else it remains in existence only it doesn't indicate or give authority to the l l c to continue to function as the common pattern no but that's exactly what we're talking about in this case that we're talking about prior consolidated right on about your interpretation of  d seventy seven a d insist that when the common parent corporation became an l l c it did not cease to exist under that interpretation a common parent the l l c could continue serving if the common parent indefinitely there's nothing the bar them from doing that clearly the regulations never contemplated that past present or the ones that apply to occasions post two thousand two and that's my concern my concern is that the interpretation you want me to adopt allows  continue to serve absent an election as the common indefinitely because in your mind it's never terminate it being the common parent corporation i do we deal with that on around her perch ation that would allow the i'll see the servant definitely from the prior consolidated return no no no no no this provision talks about when someone sees things to be a problem and herrick it doesn't say anything about limited for the particular years your interpretation would say they never cease to be the common that continue to exist in fact we're saying it's agency authority wasn't terminated because it's under seven and seven kept a regulation it would lose its agency authority only if it dissolved or cease to exist we're not saying that it w exist as an entity and as a result it retained its agency authority for the prior years you know we don't have before us here the issue of who would come here and is going forward because as i mentioned we're only talking about the ninety seven ninety eight tax years so i think you know the question of but wonder your interpretation of the common parent corporation has not been dissolved or extinguished in any way by their version so it can keep serving as the common parent that's the that's really the crux of what bothers me about the interpretation the governments are feeling here but we're not arguing that this regulation necessarily overrides the rules about who can be a common carrier to start with you know the problem is the taxpayers interpretation basically nobody is authorized to act at all in the situation that we have here so you have a situation where you member is free to add on to the taxpayer's interpretation that's not true under their interpretation well but it was authorized to take actions they in fact took so in a way they're seeking to get a benefit from the fact they didn't comply with the regulation by doing designation they can look back later and say oh well we didn't just there was a lapse of time lapsed time that is always going to be an interesting time after version and before the election when it's when you're in no man's land well here it was so they just it just took a little longer because someone course our position is that i mean even if you look at that regulation the court of federal claims ignored the regulation that explicitly carves out this precise situation from that seen liquidation construct and that's the seventy seven zero one dash two regulation mourning your honour's my name is philip carter may please the court i represent the appellee and given the nature of the dispute today i would rather limited to that as opposed to identifying the specific appellee in this case because the which hurting that's exactly right the issue that was brought up is whether the b f i think can do anything here and the important point to remember is typing the timing of the f i think and the terminations of b s fighting for federal tax purposes occurs on december thirty first two thousand and four when it converts to an l l c it is no more for purposes of federal tax it is treated as it is not as so it no longer he but when ink terminated prior to the time that the refund claim was filed it became a disregarded entity it would when it did what when it went it converted to an l l c it won because under the writ bunder the regulation it becomes disregard but an eligible entity is an entity in the case of a corporation converting to an l l c that must be elect to be treated as a corporation otherwise it is the facto disregarded under the federal tax law so it has to take an axe regulation said th have it backwards the election is to be treated as a taxable corporate entity in other words an l l c is treated in this regard and lacks to be the election next to be just regarded as an entity separate from its owner that's what the election so as i understand  vanities are treated as a terminations and there's no dispute in this case that if i want it converted became a disregarded entity suppose that we don't agree and you can see that you've got some trouble here on the three little lies so how else do you win states that you lose on that point and you win otherwise well if your best case first of all under fifty go to seventy seven the requirement is that agency status and the right to serve as the common parent it can only exist for a corporation whatever this was and we assert that it was an entity that was disregard for federal tax purposes and argument i don't even think that the government has disputed noted they're not named they they  change there's not two entities here there's an enemy that converted one from one form to another first it was an incorporated entity serving as the common parent once again or a bit under the federal tax law which refers to dissolution or other termination regulations interpret the previous regulated it's not necessary to do so because one can glean the same meaning from the original regulation because it refers to dissolution or other terminations and the use of the disjunctive as the supreme court has the case we cited in our brief is intended to be two different things so the question is is there a way other than state law in which this corporation's status as an agent for the consolidated group can terminate and the answer is if somebody wanted to say that in this very very precise set of regulations i mean my god there for science then i would have written right well i guess and when you believe the way i do you know i didn't learn and said you know if the if the little box of the tax law catchin the profit are there but if you're not in the box you're not but put your honour's premises that way and then when a corporation converts to an l l c unless it takes some affirmative action to elect to be treated as something other than a corporation it continues to exist as a corporation therefore either even under the credits is a refund for only years what's what's the problem as a policy matter to me mike my own my problem sure is that you don't and my judgment  possibly find gail and you have not told me how you can get in and you haven't told me how you can prevail otherwise as it is true your term it is true that under the federal law and anybody that becomes disregarded what boiling this down to the question what it converts to an l l c is no longer classified as a corporation under sub two it is an eligible entity to the extent intercept two hundred seventy one seventy seven zero one dash two a business entity that is not one dish two corporations were tax purposes a corporation means right can be a corporation or an association simply saying that the language of fifteen zero to their seventy seven limits the loss of agency status to the circumstance under which there's a dissolution under state law so the  premise for them to prevail is that federal ephedra law doesn't apply if federal law does apply and this court has focused on a very simple question which is whether when there is a conversion of a corporation to a limited liability company entitle than to file an amended return but we know that's not true under the consolidated return regulations because under subsection d there's a specific process by which a substitute agent is a point where you're saying the government gave this argument away during oral argument qualification for refund or credit and what what's the difference really qualification to the qualification means you have to do everything that's necessary to qualify for the refund credit which includes the filing of a valid refund claim and the on three dollars a right and the regulation only says with risp it can treat a disregarded entity as separate from its owner with respect to refunds or credits right and the government has said that means anything to do with refunds or credits and our interpretation has been no it means with respect to refunds or credit once a determination is it has been made that a refund or credit is due which was your near your argument is a regulation of certain the regulation is the regulation to read it as the government would suggest would be plainly inconsistent with the process with the procedure outlined in seventy seven fifty no today seventy seven day and the procedure outlined for the appointment of agent a bit of a substitute agent and to the extent there is a conflict seventy seven fifteen zero today or seventy seven they must be pretty predominant it must control but there's no reason to read the regulation in conflict in fact the preamble to the new regulations make clear that that interpretation is incorrect they say the proposed regulation and this is this is the regulation we're talking about to see two three little lot do not address the question of whether the disregarded entity is in fact either liable for federal taxes or entitled to a refund or credit a federal tax when i find interesting is that if you made a hypothetical situation where yes statute of limitations is about to run and and in anchorage in and in file you know somebody forgot about the conversion l l c and filed a request for a refund and the government threw it out so you know you don't qualify you know why it would have been an incumbent upon us to file a refund claim no matter what that what the circumstances because that's exactly what could have happened the statute of limitations could run we could have tried the case in the lower court we could have won the case in the lower court and we could be standing here right now arguing that on the government standpoint that there was a lack of jurisdiction because the party that filed the refund claim had terminated and wasn't authorized as an agent of the consolidated group the refund claim was invalid and therefore we have no time to file a correct to designate a new agent a designation application was made it was approved by the i r s and a corrected refund was filed before the statute of limitations expired well the subsequent amendments that were filed were if i wish party to file the claims was the one that was duly designated under the procedures and that seventy seven days and designation application was made it was approved and they became the agents for purposes of performing administrative actions and for really could make the check to be f b i and it would be cast by the successor to be f i a that the parent company but the point of that is that that's that that's why the regulation exists it's for the benefit of this of the service to not have to figure out who they have to deal with when they talk about refunds or credits the government is entitle to pay that refund or credit to that this regarded entity for that limited purpose it is entitle regarded entity as if it is entitle the i r s to issue the refund to be a fighting even though b if i think no longer exists that's the limited scope of that regulation subsection three a little like that and of course dealing with b f i think in the context of right it lists liabilities and it lists refunds so in both instances that provision as the preamble makes clear to the new regulations to the regulations is that that is intended for the administrative convenience of the can collect liabilities by serving notices by issuing intends to levy it can do all that it doesn't have to seek out who the due entity is but it says nothing about the activities that the entity itself can do and undertake and that's consistent with fifteen zero two deaf seventy seventy which limits conduct to what the i r s can do not what the taxpayer can do it says nothing about what the taxpayer can do in terms of taking affirmative actions and that speaks to the question of whether the individual members of the group can take their own essentially assert their own claims or ratify their own claims or the specific entity can file a claim on behalf of itself or that regulation speaks to is whether the i r s can deal before i do that i just i want to make it clear that the government would not want to be arguing the other side of this case and wouldn't you know i think if all be a fine were concerned about were making sure they had a clear jurisdiction brings out how remarkable the court of federal claims ruling is in the extraordinary level of technical accuracy that it requires a refund claims and i think if this were a situation where the parties roles were reversed and the government say the special imitations ran as your honor meant then the government filed a motion to dismiss and if we said well you know even though the refund claims were filed under the same name and tax id number as the original tax returns and even though we knew who the tax payer was and even though we knew what the transaction was in the exact amount of the adjustments and who all the players were and even though we consider the claims on the merits the court has  to avoid being forced by their own tard if they win on this argument so i mean i think this is sort of beyond hypertechnical but just to move on to some of the technical points the government is in no way giving up its argument that the s is empowered to deal with members individually all i was saying was that under the tax payers position there is no one who could act but we are certainly in the way conceding that point and i apologize if something came across if we were doing that  necessarily i mean i guess the only thing that that's relevant here is that that's what happens when we think you don't even look to the preamble of the regulation because the regulation is not ambiguous but even if you do that preamble doesn't talk about the issue that we have in this case which is whether or not the entity has the capacity to file refund questions we're not talking about whether it was entitle to only reconsideration  but the informant claims doctrine is relevant to the extent that it casts light upon how extraordinarily high the standard has been or the the approach of the court of federal claims was in this case and that it's a exist and disregarded doesn't mean for all federal income tax purposes you can be disregarded for some things and not for others and that's when it will not time we're talking dean liquidate what happens if you are in liquidation is by virtue of the disregard and what our regulations the current regulation does is it says well but you are not disregarded for prior years and you are not disregarded for refunds so in this solution is a belt because all or if for any other reason it's existence about to terminate what would be another reason a coke company's existence could terminate other than dissolution that's a good point because the taxpayer reads that to apply to federal law but that's not correct i mean there are other state law ways that an entity created under state law could terminate and one of them is by merger for example state law could provide the corporation tarkas out of existence in a merger so that language in no way requires you to look to federal law to see if the existence of a state law created and why one merger qualify for ceasing to exist when the changing the very nature of your structure doesn't qualify as ceasing to exist because when you change the nature of your structured you're still there is an entity and if you're an entity when you merged aren't you still there are you know albeit a new merged entity with some extra parts added on by well