FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

METRO ONE TELECOMMUNICATIONS,

INC.,

Petitioner-Appellant,

v.

COMMISSIONER OF INTERNAL

REVENUE,

Respondent-Appellee.

No. 11-70819

Tax Ct. No.

12651-07

OPINION

Appeal from a Decision of the

United States Tax Court

Argued and Submitted

October 12, 2012—Portland, Oregon

Filed December 19, 2012

Before: Barry G. Silverman, Richard R. Clifton,

and N. Randy Smith, Circuit Judges.

Opinion by Judge N.R. Smith
2 METRO ONE V. CIR

 This summary constitutes no part of the opinion of the court. It has

*

been prepared by court staff for the convenience of the reader.

SUMMARY

*

Tax

The panel affirmed the Tax Court’s judgment that Metro

One Communications was not entitled to tax relief under § 56

of the Internal Revenue Code (“the Relief Rule”), which

permitted taxpayers subject to the Alternative Minimum Tax

to offset up to 100% of their taxable income with net

operating losses. 

The panel held that the term “carryovers” as used in the

Relief Rule means net operating losses that are carried

forward from a tax year to a later tax year. Therefore, Metro

One Communications cannot use net operating losses that are

carried back to 2001 or 2002 from a later tax year to take

advantage of the Relief Rule. 

COUNSEL

Neil D. Kimmelfield, Lane Powell PC, Portland, Oregon, for

Petitioner-Appellant.

Gilbert S. Rothenberg, Acting Deputy Assistant Attorney

General; BethanyB. Hauser(briefed and argued) and Richard

Farber (briefed), Tax Division, United States Department of

Justice, Washington, D.C., for Respondent-Appellee.
METRO ONE V. CIR 3

 We refer to the Internal Revenue Code as “I.R.C.” or “the Code.” 1

Further, all citations to “I.R.C.” or “§” are to the Code, codified at Title

26, United States Code.

 Typically, the amount of the deduction for NOLs that a taxpayer 2

subject to the AMT is able to claim is limited to 90% of the taxpayer’s

taxable income. See § 56(d)(1)(A)(i)(II).

OPINION

N.R. SMITH, Circuit Judge:

Between 2002 and 2009, § 56 of the Internal Revenue

Code provided tax relief by permitting taxpayers subject to 1

the Alternative Minimum Tax (AMT) to offset up to 100% of

their taxable income with net operating losses (NOLs). To 2

qualify for this relief, NOLs had to be (1) “carryovers to” the

2001 or 2002 tax years, or (2) “carried back from” the 2001

or 2002 years to a prior tax year. The plain meaning of the

term “carryovers” prevents taxpayers from using NOLs that

are carried back to 2001 or to 2002 from a later tax year to

take advantage of the Relief Rule. Therefore, we affirm the

Tax Court’s assessment of a deficiency, because Metro One

Telecommunications may not take advantage of the Relief

Rule with NOLs it carried back from the 2003 and 2004 tax

years to 2002.

I. Facts

Metro One Telecommunications was a company based in

Beaverton, Oregon that operated call centers throughout the

United States. In this case, Metro disputes the determination

of a deficiency by the Commissioner of the Internal Revenue
4 METRO ONE V. CIR

 The AMT is imposed to the extent that the amount determined to be 3

the “tentative minimum tax” exceeds the amount of the “regular tax.”

§ 55(a).

 The Tax Court reached its decision without a trial, based on stipulated 4

facts and exhibits. See Tax Ct. R. 122.

Service based on Metro’s use of NOLs accumulated in 2003

and 2004 to completely offset its 2002 taxable income. 

For the 2002 tax year, Metro was subject to the AMT. In 3

2004, Metro claimed a refund for 2002 by offsetting 100% of

its 2002 taxable income with NOLs that it had accumulated

in 2003 and 2004. In response, the Commissioner sent Metro

a Notice of Deficiency in the amount of $630,159. Metro

then filed a petition with the United States Tax Court.

Agreeing with the Commissioner, the court imposed the

amount of the deficiency. Metro then appealed. 4

II. Standard of Review

We review “the Tax Court’s interpretation of the Internal

Revenue Code . . . de novo.” Adkison v. Comm’r, 592 F.3d

1050, 1052 (9th Cir. 2010).

III. Analysis

A. Background

We determine here whether a taxpayer, subject to the

AMT in 2002 may (under the applicable version of the Code)

reduce its income tax liability by claiming a deduction for

NOLs that arose in later years. Section 172 of the Code

permits taxpayers to deduct NOLs from taxable income as a
METRO ONE V. CIR 5

net operating loss deduction (NOLD). I.R.C. § 172(a). A

“net operating loss” arises in a given tax year, if the sum of

the taxpayer’s deductions in that year exceeds the amount of

the taxpayer’s taxable income. § 172(c). Further, § 172

permits taxpayers to apply NOLs that arise in a given tax year

as deductions in other tax years. See § 172(b)(1)(A).

Relevant here, § 172(b)(1)(A) specifies that:

a net operating loss for any taxable year–

(i) shall be a net operating loss carryback to each

of the 2 taxable years preceding the taxable year of

such loss, and

(ii) shall be a net operating loss carryover to each

of the 20 taxable years following the taxable year of

the loss.

According to this paragraph, a “carryback” is any NOL that

is “carried” to one of the 2 years preceding the tax year in

which the loss arises. Conversely, a “carryover” (sometimes

called a “carryforward”) is any NOL that is “carried” to one

of the 20 years following the taxable year in which the loss

arises. For a given tax year, the amount of the NOLD is the

sum of the amount of NOL carrybacks plus the amount of

NOL carryovers that are carried to that year. § 172(a).

If a taxpayer is subject to the AMT, the taxpayer must

claim an alternative tax net operating loss deduction

(ATNOLD) instead of the NOLD permitted by § 172.
6 METRO ONE V. CIR

 The version of § 56(d) that applies to Metro in this case is the version 5

of § 56 as enacted by the Job Creation and Worker Assistance Act of

2002, Pub. L. 107-147, § 102(c) (2002) and amended by the Working

Families Tax Relief Act of 2004, Pub. L. 108-311, § 403(b) (2004).

Unless otherwise indicated, all citations to I.R.C. § 56 refer to that version,

which we refer to (for the sake of convenience) as the “Relief Rule,”

because it provided tax relief by permitting AMT taxpayers to use NOLs

to reduce their tax liability. References to the “original” Relief Rule refer

to the version of the Rule enacted by the Job Creation and Worker

Assistance Act of 2002, unamended by the Working Families Tax Relief

Act of 2004. Congress eliminated the Relief Rule in 2009. See infra

note 13.

§ 56(a)(4). Under the Tax Relief Act of 2004, § 56(d)(1) 5

defined ATNOLD as:

the net operating loss deduction allowable for

the taxable year under section 172, except

that–

(A) the amount of such deduction shall

not exceed the sum of–

(i) the lesser of–

(I) the amount of such deduction

attributable to net operating losses (other than

the deduction described in clause (ii)(I)), or

(II) 90 percent of alternative

minimum taxable income determined without

regard to such deduction, plus

(ii) the lesser of–
METRO ONE V. CIR 7

(I) the amount of such deduction

attributable to the sum of carrybacks of net

operating losses from taxable years ending

during 2001 or 2002 and carryovers of net

operating losses to taxable years ending

during 2001 and 2002 . . . .

Job Creation and Worker Assistance Act of 2002, Pub. L.

107-147, § 102(c) (2002) [hereinafter Jobs Act of 2002], as

amended by Working Families Tax Relief Act of 2004, Pub.

L. 108-311, § 403(b) (2004) [hereinafter Tax Relief Act of

2004] (emphasis added). This section limits the amount of

the ATNOLD that can be claimed by a taxpayer who is

subject to the AMT. In general, this limit is 90% of the

taxpayer’s alternative minimum taxable income (AMTI), or

the amount of NOLs, whichever is lesser. Id.

§ 56(d)(1)(A)(i). On the other hand, under the Relief Rule,

there is no limit (up to the amount of taxable income) on the

amount of the ATNOLD that a taxpayer can claim in a given

taxable year, if those NOLs are carried from 2001 or 2002 to

an earlier tax year (“carrybacks”), or to 2001 or 2002 from an

earlier tax year (“carryovers”). Id. § 56(d)(1)(A)(ii).

Ultimately, we address here whether the term “carryovers

of net operating losses” in the Relief Rule includes (1) both

NOLs that are carried to a later tax year (“carryforwards”)

and NOLs that are carried to a preceding tax year

(“carrybacks”), or (2) only carryforwards. Metro argues that

“carryovers” means both carryforwards and carrybacks, and

therefore it was entitled to use NOLs from 2003 and 2004 as

“carrybacks” to offset 100% of its taxable income in 2002.

The Commissioner disagrees, arguing that, as used in the

Relief Rule, “carryovers” is a synonym for carryforwards, so

the amount of the 2002 ATNOLD attributable to NOLs that
8 METRO ONE V. CIR

Metro carried back from 2003 and 2004 was, like any other

NOL carried under § 172, limited to 90% of Metro’s 2002

AMTI.

Thus, under the Commissioner’s interpretation, Metro

would be able to carry back only $11,182,013.00 of its 2004

NOLs to 2002. That amount would increase to

$14,332,806.00 under Metro’s interpretation of the Relief

Rule, because the ATNOLD would not be limited to 90% of

Metro’s 2002 AMTI. Therefore, if Metro is correct, it would

be able to claim an additional $3,150,793.00 ATNOLD

against its 2002 AMTI, reducing its taxable income for that

year to $0.00. However, the plain meaning of “carryovers”

indicates that the Relief Rule does not apply to NOLs that are

carried back under these circumstances. We therefore affirm

the Tax Court.

B. The plain meaning of carryovers refers only to

items that are carried from an earlier period to a

later one.

When interpreting a statute, we must start with the

language of the statute. Williams v. Taylor, 529 U.S. 420,

431 (2000). Moreover, “[i]n the absence of an indication to

the contrary, words in a statute are assumed to bear their

ordinary, contemporary, common meaning.” Walters v.

Metro. Educ. Enters., Inc., 519 U.S. 202, 207 (1997) (internal

quotation marks omitted).

The term “carryovers” ordinarily and commonly refers

only to something that is carried from an earlier period to a

later one—only to carryforwards. To ascertain the plain

meaning of terms, we may consult the definitions of those

terms in popular dictionaries. Af-Cap, Inc. v. Chevron
METRO ONE V. CIR 9

Overseas (Congo) Ltd., 475 F.3d 1080, 1088 (“When

determining the plain meaning of language, we may consult

dictionary definitions.”). Black’s Law Dictionary defines a

“carryover” as “[a]n income-tax deduction (esp. for a net

operating loss) that . . . may be taken in a later period . . . .”

Black’s Law Dictionary 242 (9th ed. 2009); Electrolux

Holding, Inc. v. United States, 491 F.3d 1327, 1328 n.2 (Fed.

Cir. 2007) (defining “carryovers” in § 1212 by reference to

Black’s). Likewise, Webster’s Third New International

Dictionary contains multiple definitions of “carry over,” all

of which suggest movement from one period of time to a later

period of time. Webster’s Third New International

Dictionary 344 (1993) (e.g., “to hold over . . . for another

season”). Courts also commonly employ “carryovers” for

this meaning. E.g., Kansas v. Colorado, 543 U.S. 86, 102

(2004); In re Grand Jury Subpoenas Duces Tecum, 78 F.3d

1307, 1312 n.11 (8th Cir. 1996); United States v. Gregory,

871 F.2d 1239, 1243 (4th Cir. 1989) (“Of these, 19 were new

hires and the remaining 11 were carryovers from the previous

administration.”); Hoots v. Pennsylvania, 672 F.2d 1124,

1129 (3d Cir. 1982). None of these definitions or usages

suggest that the ordinary meaning of “carryover”

encompasses movement from a point in time backward to an

earlier point in time. Therefore, according to the plain

meaning of “carryovers,” the Relief Rule does not apply to

carrybacks of NOLs.

It becomes even more clear that Congress used

“carryovers” in the Relief Rule as a synonym for

“carryforwards” after considering the relationship between

§ 56 and § 172. See Samantar v. Yousuf, 130 S. Ct. 2278,

2289 (2010) (“[W]e do not . . . construe statutory phrases in

isolation; we read statutes as a whole.”) (quoting United

States v. Morton, 467 U.S. 822, 828 (1984)). Section 56 is
10 METRO ONE V. CIR

closely related to § 172, because § 56 “define[s] ATNOL by

expressly incorporating the definition of regular NOL in

§ 172 and then enumerating specific exceptions . . . .”

Kadillak v. Comm’r, 534 F.3d 1197, 1203 (9th Cir. 2008).

Accordingly, § 172 defines NOL as the sum of two parts: (1)

the carrybacks to that year of NOLs and (2) the carryovers to

that year of NOLs. § 172(a). Paralleling § 172, the Relief

Rule addresses each component of the NOLD: The amount of

the NOLD “attributable to the sum of carrybacks of net

operating losses from taxable years ending during 2001 or

2002” is not subject to the 90% limit typically imposed on

NOL carrybacks. § 56(d)(1)(A)(ii)(I) (emphasis added).

Likewise, the amount of the NOLD attributable to

“carryovers of net operating losses to taxable years ending

during 2001 and 2002” is also not subject to that limit. Id.

(emphasis added). Because Congress used “carryovers” in

the Relief Rule to refer to the part of the NOLD computed

under § 172 with the same label, it intended the words to have

the same meaning.

Additionally, we note that Congress could have easily and

clearly extended the benefit of the Relief Rule to taxpayers

like Metro who carried back NOLs from tax years after 2002,

without using “carryovers” contrary to its plain meaning.

Inserting the words “to or” into the phrase “carrybacks of net

operating losses from taxable years ending during 2001 or

2002” would have this effect. The resulting phrase would

read: “carrybacks of net operating losses to or from taxable

years ending during 2001 or 2002.” However, Congress

elected not to insert those words into the text of the statute.

If Congress did intend to extend the Relief Rule to NOLs that

a taxpayer carried back from tax years later than 2002, it

would be odd to do it by using the word “carryovers”
METRO ONE V. CIR 11

 As examples of these statutes, Metro cites I.R.C. §§ 1362(e)(6)(A), 6

1371(b), 535(b)(7).

 In fact, Congress also uses the term “carryovers” in sections other than 7

56 and 172 according to its plain meaning. E.g., §§ 45A(d)(2), 50(a)(3),

50(c)(2).

contrary to its plain meaning, when simply adding two words

would have produced the same effect with more clarity.

We understand that Congress has used the term

“carryovers” in other parts of the tax code to refer to both

“carryforwards” and “carrybacks.” However, that fact does 6

not suggest that “carryovers” must have a non-ordinary

meaning in the Relief Rule. Such uses only indicate that

Congress sometimes uses “carryovers” in an out-of-theordinary way. The varied uses of the term “carryovers” in 7

the Code also explain why we cannot, here, assume “that

identical words used in different parts of the same act are

intended to have the same meaning.” Sorenson v. Sec’y of

Treasury of United States, 475 U.S. 851, 860 (1986) (internal

quotation marks omitted). Clearly, Congress intended to use

“carryovers” in some provisions of the Code to mean both

“carryforwards” and “carrybacks,” and in other provisions, to

mean only “carryforwards.” Therefore, we cannot adopt a

uniform definition of the term “carryovers” applicable to

every usage of the term in the Code. Rather, we only confirm

that, in the Relief Rule, “carryovers” means “carryforwards.”

Metro argues that we should reject the plain meaning of

“carryovers” and instead follow the canon that “where

Congress includes particular language in one section of a

statute but omits it in another section of the same Act, it is

generally presumed that Congress acts intentionally and
12 METRO ONE V. CIR

purposely in the disparate inclusion or exclusion.” United

States v. Wahid, 614 F.3d 1009, 1014 (9th Cir. 2010).

However, where the plain meaning rule has provided a clear

answer, we do not need to look to other canons of statutory

construction. See United States v. Harrell, 637 F.3d 1008,

1010 (9th Cir. 2011) (quoting Hughes Aircraft Co. v.

Jacobsen, 525 U.S. 432, 438 (1999)). Nevertheless, Metro

also argues that our exclusive reliance on the plain meaning

of the statute’s text, rather than other canons of construction,

“may unnecessarily establish precedent regarding the relative

weight given to competing canons.” This concern is moot.

It is already well-settled that, in the realm of the canons of

statutory construction, the plain meaning rule is

“preeminent.” See McDonald v. Sun Oil Co., 548 F.3d 774,

780 (9th Cir. 2008). Therefore, regardless of what other

canons of statutory construction might suggest, under the

plain meaning of the text, “carryovers” in the Relief Rule

means “carryforwards.”

Relying on Benton v. Commissioner, 122 T.C. 353, 370

(2004), Metro also argues that we should abandon the plain

meaning of “carryovers,” and instead define the term

according to its purpose. However, the Benton court’s

implicit construction of the term “carryovers” in § 1398 to

include carrybacks does not change our conclusion. Section

1398 imposes conditions on the use of NOLs in and after a

chapter 7 or chapter 11 bankruptcy case. I.R.C. § 1398(a);

Benton, 122 T.C. at 370. Under § 1398(g)(1), the bankruptcy

estate succeeds to the debtor’s “net operating loss carryovers

determined under section 172” upon the commencement of a

bankruptcy case. After the case terminates, the debtor then

succeeds to the tax aspects of the estate (including NOLs

specified in § 1398(g)(1)), “but taking into account that the
METRO ONE V. CIR 13

 See supra notes 6–7 and accompanying text. 8

transfer is from the estate to the debtor instead of from the

debtor to the estate.” § 1398(i).

Based on these provisions, the Tax Court in Benton

concluded that “the losses succeeded to [by the debtor] from

the estate may be used, to the extent permitted in section 172

. . . .” Benton, 122 T.C. at 376. Because § 172 provides for

NOLs to be carried back, the court’s conclusion implies that

the debtor could carry back NOLs that he inherited under

§ 1398(i). Necessarily, this means that the Tax Court read the

term “carryovers” in § 1398(g)(1)—which defines the tax

attributes that the debtor succeeds to—as including NOL

carrybacks.

The Tax Court’s implicit interpretation of § 1398(g)(1) in

Benton does not undermine our conclusion that Congress

used “carryovers” according to its ordinary meaning in the

Relief Rule. Assuming that the Tax Court’s analysis is

correct, we can accept that § 1398 is another instance in the

Code where Congress used “carryovers” to refer to both

carryforwards and carrybacks. At the same time, we 8

recognize that the plain meaning of “carryovers” could not be

applied to § 1398(g)(1) for reasons that do not prevent its

application in the Relief Rule. If “carryovers” in

§ 1398(g)(1) meant only “carryforwards,” then

§ 1398(j)(2)(B), which prohibits a debtor from offsetting prepetition income by carrying back NOLs it inherits from the

bankruptcy estate, would serve no purpose. Section

1398(g)(1) would already effectively bar any NOLs from

being carried back, because the debtor would not inherit them

from the bankruptcy estate. Thus, the plain meaning of the

term “carryovers” could not apply in § 1398(g)(1) without
14 METRO ONE V. CIR

 The parties make a distinction between “functional” and “non- 9

functional” uses of the term “carryover” in the Code. “Carryovers” in

§ 1398(g)(1) would be a functional use of the term, according to Metro,

because its meaning cannot be determined by looking to the surrounding

text. Thus, Metro argues that, “Benton shows that it is appropriate for a

court to determine the meaning of the word” that is used “functionally” by

what the “operative text” of the section it appears in is “intended to

accomplish.” However, unlike in this case, the Tax Court in Benton

derived the “purpose” of § 1398 by analyzing general principles of tax and

bankruptcy law, and the operation of § 1398 in light of those principles.

122 T.C. at 373–74. Here, Metro asks us to derive a “purpose” from the

Relief Rule’s thin legislative history. As described below, infra Part III.C,

we are not persuaded that the legislative history supports Metro’s

interpretation, certainly not enough to overcome the plain meaning of the

language used in the statute.

rendering § 1398(j)(2)(B) “meaningless or superfluous.”

United States v. Cabaccang, 332 F.3d 622, 627 (9th Cir.

2003). The Relief Rule does not present the same structural

problem. Therefore, at most, Benton confirms that the term

“carryovers” is not always used according to its ordinary

meaning. The case does not suggest, however, that Congress 9

used “carryovers” in the Relief Rule to mean something other

than its plain meaning.

C. Legislative history confirms that Congress

intended “carryovers” in § 56 to have its plain

meaning.

The plain meaning also does not “produce a result

demonstrably at odds with the intentions of [the Rule’s]

drafters.” United States v. Ron Pair Enters., Inc., 489 U.S.

235, 242 (1989); see also Albertson’s, Inc. v. Comm’r,

42 F.3d 537, 545 (9th Cir. 1994). Although legislative

history can be read as an expression of the intention of the

legislature, it is certainly not the best expression. See Lyons
METRO ONE V. CIR 15

 This fact distinguishes this case from Albertson’s. Had the court in 10

that case followed the plain meaning, it would have created a loophole,

permitting businesses to avoid a disincentive that Congress implemented

to “encourage employers to create qualified [deferred compensation] plans

for their employees.” Albertson’s, 42 F.3d at 543–44. Unlike that case,

adopting the plain meaning of “carryovers” here will not compromise a

statutory mechanism that Congress implemented to further its purpose.

v. Mendez, 303 F.3d 285, 293 (3d Cir. 2002) (“[T]he text of

the statute is the best expression of the intent of Congress.”).

Rather, it is “often murky, ambiguous, and contradictory.”

Gonzalez v. Arizona, 677 F.3d 383, 450 n.1 (9th Cir. 2012)

(Rawlinson, J., concurring in part and dissenting in part)

(quoting Exxon Mobil Corp. v. Allapattah Servs., Inc.,

545 U.S. 546, 568 (2005)), cert. granted sub nom. Arizona v.

Inter Tribal Council of Arizona, Inc., 133 S. Ct. 476 (2012).

Here, Congress has given us very little legislative history

to go on:10

the September 11, 2001 attacks have caused

adverse effects to the U.S. economy.

Thousands of Americans have lost jobs.

Consumer confidence and investor confidence

are low. The Committee believes that it is

necessary to spur economic growth and job

creation and help struggling businesses and

unemployed workers. The provisions

approved by the Committee will stimulate and

strengthen the economy.

H.R. Rep. No. 107-251, at 18 (2001). Parsing the general

language in this passage, Congress apparently enacted the

Relief Rule (among other legislation) to “stimulate and

strengthen the economy” in response to the economic
16 METRO ONE V. CIR

 “Carryforwards” was replaced by the term “carryovers” when the 11

Relief Rule was amended by Tax Relief Act of 2004 § 403(b).

downturn that followed the terrorist attacks of September 11,

2001. Specifically, Congress sought to strengthen the

economy by “spur[ring] economic growth and job creation

and help[ing] struggling businesses and unemployed

workers.” Temporally, Congress was apparently targeting an

immediate problem, because it employed the past tense to

describe the source of economic downturn: “The terrorist

attacks . . . have affected the United States in numerous ways.

In addition to the [lives lost], the September 11, 2001 attacks

have caused adverse effects to the U.S. economy.” H.R. Rep.

No. 107-251, at 18 (emphasis added). Thus, Congress

enacted the Relief Rule to address an economic slowdown

that existed at the time of its enactment. 

Consistent with this understanding of Congress’s intent,

the original Relief Rule would have had its primary economic

effect in 2002 and 2003 by providing businesses with extra

cash as a result of refunds and deductions generated during

the 2001 and 2002 tax years. Originally, the Relief Rule only

applied to “carrybacks of net operating losses for taxable

years ending during 2001 or 2002 and carryforwards of net

operating losses to taxable years ending during 2001 and

2002.” Jobs Act of 2002 § 102(c) (emphasis added).

Obviously, the term carryforwards does not include 11

carrybacks. Thus, after 2002, taxpayers would have been

unable to take advantage of the Relief Rule by carrying back

NOLs generated in those years to offset 2001 or 2002

income. Therefore, the original Relief Rule permitted an

AMT taxpayer to free up cash that would otherwise be

subject to taxation in only two ways. First, if the taxpayer

sustained losses in 2001 or 2002 sufficient to give rise to
METRO ONE V. CIR 17

 Contrary to Metro’s argument, Congress did not intend to change the 12

economic effect of the original Relief Rule when it changed

“carryforwards” to “carryovers” in 2004. Both the Joint Committee on

Taxation and the 2004 Conference Committee described the change as

merely “clerical.” See H.R. Rep. No. 108-696, at 90 (Sept. 30, 2004);

Joint Committee on Taxation, Description of the “Tax Technical

Corrections Act of 2003,” JCX-104-03, at 4 (Dec. 3, 2003). Such a

change was necessary, because the Rule used “carryovers” to mean both

“carryforwards” and “carrybacks,” but § 172, which the Rule discussed,

used “carryovers” to mean only “carryforwards.” Thus, the clerical

change of wording sensibly eliminated an inconsistent usage of the same

word in closely related sections of the Code.

NOLs, it could carry back those NOLs to prior tax years. The

Relief Rule would permit such a business to offset an

additional 10% of the income in those prior tax years with its

2001–02 NOLs that it could not have offset under the preRelief Rule version of § 56(d)(1)(A). This would give rise to

a refund, providing the business with additional cash in 2002

or 2003—the years in which refunds from 2001 and 2002

would have been received. 

Second, a business could also free up cash by carrying

forward unused NOLs from previous tax years to 2001 or

2002, potentially offsetting all of its taxable income in those

years. Obviously, the direct economic effect of this part of

the Rule would not persist past 2003, because 2002 would be

the last tax year that the Rule would have permitted an AMT

taxpayer to completely offset its taxable income with NOLs.

Therefore, judging by the economic effects of the original

Relief Rule, Congress enacted the Rule to stimulate the

economy by providing businesses with additional cash,

primarily in 2002 and 2003. Because applying the plain 12

meaning of “carryovers” to the Relief Rule would have the
18 METRO ONE V. CIR

 Indeed, Congress eliminated the Relief Rule in 2009. See Worker, 13

Homeownership, and Business Assistance Act of 2009, Pub. L. 111-92,

§ 13(b), 123 Stat. 2984, 2993–94 (2009).

same economic effect, it is not demonstrably at odds with

Congress’s intent for us to adhere to that meaning.

Metro argues that the plain meaning is demonstrably at

odds with Congress’s intent, because the Relief Rule “would

not provide any benefit to taxpayers that generated positive

AMTI through 2002 but struggled (and generated ATNOLs)

thereafter” if “carryovers” means only “carryforwards.”

Metro argues this result opposes Congress’s intent to “help

struggling businesses,” particularly those that struggled after

September 11, 2001. By focusing on this short phrase from

the Rule’s limited legislative history, Metro has “look[ed]

over a crowd and pick[ed] out [a] friend[].” Exxon Mobil,

545 U.S. at 568. However, there is no evidence that Congress

intended to suspend the 90% limit in perpetuity following

September 11. Moreover, taking the legislative history and 13

the original Relief Rule together, we are confident that

Congress was focused on providing the greatest economic

stimulus during 2002 and 2003; determining what effect

Congress intended the Rule to have beyond that would

require speculation that we will not indulge.

Citing Albertson’s, Inc v. Comm’r, 42 F.3d 537, 545 (9th

Cir. 1994), Metro also argues that we should not adopt the

plain meaning of “carryovers,” because doing so will produce

absurd results. The absurd result Metro foresees is that the

plain meaning “capriciously allowsthe Relief Rule to benefit

ATNOLs carried back to 2001 and 2002 depending on

whether and to what extent other ATNOLs are carried

forward to the Carryover Year in question.” We disagree.
METRO ONE V. CIR 19

 As the Commissioner points out, a taxpayer whose 2001 tax year 14

ended prior to September 11, 2001 could have accrued NOLs in 2001 that

could be carried back under the Relief Rule, even though it would be

impossible for the losses that gave rise to the NOLs to have been caused

by the September 11 terrorist attacks. Thus, regardless of whether

“carryovers” means “carryforwards” or both “carryforwards” and

“carrybacks,” the extent to which a given taxpayer could benefit from the

Rule could vary with the amount of pre-9/11 NOLs that the taxpayer had

accrued. The fact that following the plain meaning of the term

“carryovers” will have the same economic affect only confirms our

reliance on it.

Based on the little legislative history available, it is

unclear that Congress was concerned about the ability of

taxpayers in years after 2002 to take full advantage of the

Relief Rule. The primary economic effect of the Relief Rule

would have occurred in 2002 and 2003, based on the

deductions and refunds it would generate. That economic

effect depended, in large part, on a taxpayer having

accumulated NOLs in prior years that it could carry forward

to 2001 or 2002 to offset income in those years, or having

excess income in prior years that could be offset by carrying

back NOLs from 2001 or 2002. Therefore, to the extent that

the Relief Rule has any economic effect after 2003, it would

not be anomalous or “absurd” for the economic benefit to

depend on the taxpayer having accumulated NOLs prior to

2001 that could be carried forward. Even in 2001 or 2002,

much of the benefit of the Rule would only be available to

taxpayers that had accumulated NOLs before 2001 or 2002.14

Therefore, the plain meaning of the term “carryovers” is

consistent with its purpose as expressed in the limited

legislative history and what we can infer from the economic

effect of the original version of the Rule. Because the plain

meaning of the term “carryovers” does not produce a result
20 METRO ONE V. CIR

that is unreasonable and plainly at odds with the policy of this

legislation, the term “carryovers” in § 56(d)(1)(A)(ii)(I)

means NOLs that are carried forward from a tax year to a

subsequent tax year.

IV. Conclusion

The Tax Court interpreted the term “carryovers” in the

Relief Rule (§ 56(d)(1)(A)(ii)(I)) correctly, because it

interpreted the term according to its plain meaning. The plain

meaning is confirmed by the context of the Relief Rule and

the sparse legislative history available for the statute.

AFFIRMED.