Court Opinion

ID: 4338502
Source: CourtListenerOpinion
Date Created: 2018-11-14 03:55:38.56231+00
Date Added: 2024-06-11T07:49:37.948342
License: Public Domain

EXXON MOBIL CORPORATION AND AFFILIATED COMPANIES,
                                           F.K.A. EXXON CORPORATION AND AFFILIATED COMPANIES,
                                                  PETITIONERS v. COMMISSIONER OF INTERNAL
                                                           REVENUE, RESPONDENT
                                               Docket Nos. 18618–89, 18432–90.                        Filed February 3, 2011.

                                                  The Tax Reform Act of 1986, Pub. L. 99–514, sec. 1511(a),
                                               100 Stat. 2744, modified sec. 6621, I.R.C., to increase the
                                               interest required to be paid by taxpayers to the Government
                                               on underpayments to a higher rate than the Government was
                                               required to pay taxpayers on overpayments. This resulted in
                                               taxpayers’ having to pay interest to the Government even
                                               when underpayments were offset by overpayments; i.e., when
                                               no tax was due. In 1998 Congress enacted sec. 6621(d), I.R.C.,
                                               and an uncodified special rule set forth in the Internal Rev-
                                               enue Service Restructuring and Reform Act of 1998, Pub. L.
                                               105–206, sec. 3301(c)(2), 112 Stat. 741, as amended by the
                                               Omnibus Consolidated and Emergency Supplemental Appro-
                                               priations Act, 1999, Pub. L. 105–277, div. J, sec. 4002(d), 112
                                               Stat. 2681–906 (1998), to eliminate the interest rate differen-
                                               tial on overlapping periods of interest on overpayments and
                                               underpayments. Ps seek relief from interest rate differentials
                                               due on underpayments for 1975 through 1978 and equivalent
                                               overpayments for 1979 and 1980. Respondent disputes the
                                               jurisdiction of the Court to make the determination and the
                                               applicability of interest netting to the facts of these cases.
                                               Held: Pursuant to sec. 7481(c), I.R.C., this Court has jurisdic-
                                               tion to determine interest netting pursuant to sec. 6621(d),
                                               I.R.C., and the uncodified special rule. Held, further, sec.
                                               6621(d), I.R.C., and the uncodified special rule apply to 1979
                                               and 1980, and petitioners are entitled to eliminate the
                                               interest rate differentials for the overlap periods in the
                                               amounts stipulated by the parties.

                                           Kevin L. Kenworthy and Alan I. Horowitz, for petitioners.
                                           R. Scott Shieldes, for respondent.

                                                                                  OPINION

                                         HAINES, Judge: These consolidated cases are before the
                                      Court on respondent’s motion to dismiss for lack of jurisdic-
                                      tion, petitioners’ motion for partial summary judgment under
                                      sections 7481(c) and 6621(d) seeking a net interest rate of
                                      zero on equivalent underpayments and overpayments in Fed-
                                      eral income taxes for overlapping periods preceding July 22,

                                                                                                                                     99

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                                      100                136 UNITED STATES TAX COURT REPORTS                                        (99)

                                      1998, and respondent’s cross-motion for partial summary
                                      judgment in opposition to petitioners’ motion. 1
                                        The issues presented are: (1) Whether this Court has juris-
                                      diction under section 7481(c) to resolve petitioners’ section
                                      6621(d) interest-netting claim; and (2) whether, pursuant to
                                      section 6621(d) and an uncodified special rule set forth in the
                                      Internal Revenue Service Restructuring and Reform Act of
                                      1998 (RRA 1998), Pub. L. 105–206, sec. 3301(c)(2), 112 Stat.
                                      741, as amended by the Omnibus Consolidated and Emer-
                                      gency Supplemental Appropriations Act, 1999 (1998 Act),
                                      Pub. L. 105–277, div. J, sec. 4002(d), 112 Stat. 2681–906
                                      (1998), petitioners are entitled to a net interest rate of zero
                                      on equivalent underpayments and overpayments in Federal
                                      income taxes for overlapping periods preceding July 22, 1998.
                                        The parties have stipulated the facts relevant to the
                                      instant motions.

                                                                               Background
                                        Petitioners in these cases, Exxon Mobil Corp. & Affiliated
                                      Cos., are corporations organized and existing under the laws
                                      of the United States. Petitioners are successors in interest to
                                      Exxon Corp. & Affiliated Cos. All references to petitioners
                                      are either to Exxon Mobil Corp. & Affiliated Cos. or to Exxon
                                      Corp. & Affiliated Cos., where the context so requires. The
                                      parties have stipulated that an appeal would lie with the
                                      U.S. Court of Appeals for the Second Circuit.
                                      I. Prior Determinations
                                         Petitioners filed timely consolidated Federal income tax
                                      returns for 1975 through 1980 that were audited by the
                                      Internal Revenue Service (IRS) over a period ending in 1990.
                                      Adjustments that petitioners agreed to were assessed and
                                      the assessments, together with ‘‘underpayment interest’’,
                                      were paid. Unless otherwise specified or the context other-
                                      wise requires, the term ‘‘underpayment interest’’ refers to
                                      interest provided for generally by section 6601(a), the term
                                      ‘‘overpayment interest’’ refers to interest provided for gen-
                                        1 Unless otherwise indicated, all section references are to the Internal Revenue Code (Code),

                                      as amended and in effect at relevant times. All Rule references are to the Tax Court Rules of
                                      Practice and Procedure. Amounts are rounded to the nearest dollar.

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                                      (99)                 EXXON MOBIL CORP. v. COMMISSIONER                                        101

                                      erally by section 6611(a), and the term ‘‘interest’’ refers to
                                      either or both.
                                           A. The 1979/1980 Litigation
                                         On June 29, 1989, respondent issued a notice of deficiency
                                      to petitioners, determining income tax deficiencies for 1977,
                                      1978, and 1979. 2 Petitioners did not petition the Court in
                                      response to the notice of deficiency for 1977 and 1978, and,
                                      as a consequence, those deficiencies were assessed and paid.
                                      Petitioners did, however, file a timely petition in response to
                                      the notice of deficiency for 1979 which was assigned docket
                                      No. 18618–89 (1979 litigation).
                                         On July 16, 1990, respondent issued a notice of deficiency
                                      to petitioners for 1980 as well as 1981 and 1982. 3 Petitioners
                                      timely filed a petition for redetermination in this Court for
                                      those years which was assigned docket No. 18432–90 (1980
                                      litigation). During the course of respondent’s audits, peti-
                                      tioners’ administrative appeals, and the litigation of these
                                      cases, petitioners made a number of substantial advance pay-
                                      ments to respondent of taxes and interest with respect to
                                      each of the tax deficiencies determined by respondent against
                                      petitioners for 1979 and 1980.
                                         This Court has issued a number of opinions addressing the
                                      issues raised in these cases. 4 The parties ultimately resolved
                                      the remaining issues by agreement, and decisions were
                                      entered in accordance with the parties’ agreed computations.
                                         On February 27, 2004, this Court entered a revised stipu-
                                      lated decision in the 1979 litigation, determining that peti-
                                      tioners were entitled to credit or refund of an income tax
                                      overpayment for 1979. The revised stipulated decision
                                      became final within the meaning of section 7481(a) on May
                                        2 Before expiration of the periods of limitations on assessment for 1977, 1978, and 1979, the

                                      parties extended the time to assess for these years to June 30, 1989.
                                        3 Before expiration of the period of limitations on assessment for 1980, petitioners and re-

                                      spondent extended the time to assess tax for 1980 to July 18, 1990.
                                        4 See, e.g., Exxon Mobil Corp. v. Commissioner, 126 T.C. 36 (2006) (involving determination

                                      of proper rate of interest to be applied to overpayment interest after Jan. 1, 1995), affd. 484
                                      F.3d 731 (5th Cir. 2007); Exxon Mobil Corp. v. Commissioner, 114 T.C. 293 (2000) (involving
                                      the deductibility of estimated dismantlement, removal, and restoration costs relating to the
                                      Prudhoe Bay, Alaska, oil field); Exxon Corp. v. Commissioner, T.C. Memo. 1999–247 (involving
                                      the deductibility of interest relating to contested tax deficiencies); Exxon Corp. v. Commissioner,
                                      102 T.C. 721 (1994) (involving the computation of percentage depletion relating to the sale of
                                      natural gas); Exxon Corp. v. Commissioner, T.C. Memo 1993–616 (involving the allocation of
                                      profits from sales of Saudi Arabian crude oil), affd. sub nom. Texaco, Inc. v. Commissioner, 98
                                      F.3d 825 (5th Cir. 1996); Exxon Corp. v. Commissioner, T.C. Memo. 1992–92.

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                                      102                136 UNITED STATES TAX COURT REPORTS                                        (99)

                                      27, 2004. Respondent promptly credited the overpayment
                                      determined in the 1979 litigation to petitioners’ accounts for
                                      1989, 1997, 1998, 1999, and 2000 and paid to petitioners
                                      overpayment interest. On June 14, 2004, respondent abated
                                      income tax and underpayment interest for 1979 in accord-
                                      ance with the decision entered in the 1979 litigation.
                                        On July 28, 2004, this Court entered a stipulated decision
                                      in the 1980 litigation, determining in part that petitioners
                                      were entitled to credit or refund of an income tax overpay-
                                      ment for 1980. The stipulated decision became final within
                                      the meaning of section 7481(a) on October 26, 2004. On the
                                      same day, in accordance with the decision entered in the
                                      1980 litigation, respondent refunded to petitioners the over-
                                      payment so determined and paid them overpayment interest.
                                      On November 15, 2004, respondent abated income tax and
                                      underpayment interest for 1980 in accordance with the deci-
                                      sion in the 1980 litigation.
                                           B. The 1975 Litigation
                                         Petitioners also litigated their Federal income tax liabil-
                                      ities for 1975 through 1978 in other forums. They consented
                                      to the assessment of adjustments to which they did not
                                      agree, paid the tax and interest assessed, and filed claims for
                                      refund. Petitioners’ refund claims for 1975 through 1978
                                      were not attributable to either interest or interest netting
                                      but established the predicate for the subsequent refund
                                      litigation described below. In 1995 respondent allowed some
                                      of petitioners’ refund claims and abated income tax and
                                      underpayment interest that reduced but did not eliminate
                                      the underpayments previously assessed and paid for 1975
                                      through 1978.
                                         On October 30, 1996, petitioners timely filed a complaint
                                      in the U.S. Court of Federal Claims seeking a refund of
                                      income tax for 1975 (1975 litigation). Following a trial on the
                                      merits of the substantive issues in the 1975 litigation, the
                                      Court of Federal Claims issued findings of fact and conclu-
                                      sions of law. Exxon Corp. v. United States, 45 Fed. Cl. 581
                                      (1999). Both parties appealed, and the Court of Appeals for
                                      the Federal Circuit affirmed in part and reversed in part,
                                      directing the Court of Federal Claims to calculate the
                                      resulting refund due petitioners. Exxon Mobil Corp. v. United

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                                      (99)                 EXXON MOBIL CORP. v. COMMISSIONER                                        103

                                      States, 244 F.3d 1341 (Fed. Cir. 2001). On November 6, 2001,
                                      judgment was entered in the 1975 litigation pursuant to
                                      stipulation of the parties (1975 judgment).
                                        On March 18, 2002, respondent satisfied the 1975 judg-
                                      ment. On April 8, 2002, respondent abated income tax and
                                      related underpayment interest in compliance with the 1975
                                      judgment that reduced but did not eliminate the underpay-
                                      ments previously assessed and paid for 1975.
                                           C. The 1976 Litigation
                                         On April 18, 2000, petitioners filed a complaint in the U.S.
                                      District Court for the Northern District of Texas seeking an
                                      income tax refund for 1976 (1976 litigation). On March 10,
                                      2003, following a trial on the merits of the substantive
                                      issues, the District Court issued findings of fact and conclu-
                                      sions of law. Exxon Mobil Corp. v. United States, 253 F.
                                      Supp. 2d 915 (N.D. Tex. 2003). Petitioners appealed to the
                                      U.S. Court of Appeals for the Fifth Circuit.
                                         While the 1976 litigation was docketed on appeal, the par-
                                      ties reached a settlement that required a refund to be paid.
                                      Respondent paid the refund, and, pursuant to the settlement,
                                      abated income tax and related underpayment interest for
                                      1976 that reduced but did not eliminate the underpayments
                                      previously assessed and paid for 1976.
                                           D. The 1977/1978 Litigation
                                         On September 17, 2002, petitioners filed a complaint in the
                                      U.S. District Court for the Northern District of Texas,
                                      seeking income tax refunds for 1977 and 1978 (1977/1978
                                      litigation). The parties resolved the 1977/1978 litigation by
                                      agreement in 2003. Respondent refunded moneys to peti-
                                      tioners for both years in accordance with the resolution of
                                      the 1977/1978 litigation. Respondent abated income tax and
                                      related underpayment interest in accordance with the resolu-
                                      tion for 1977 and 1978 that reduced but did not eliminate the
                                      underpayments previously assessed and paid for 1977 and
                                      1978.
                                      II. Interest Netting
                                        Before 1987, section 6621 applied the same annual interest
                                      rate to overpayments and underpayments. Therefore, if a

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                                      104                136 UNITED STATES TAX COURT REPORTS                                        (99)

                                      taxpayer owed the Government an underpayment and the
                                      Government, in turn, owed the taxpayer an overpayment in
                                      an equivalent amount, the amounts could be offset pursuant
                                      to section 6402 and no interest would be paid by either party.
                                         However, beginning January 1, 1987, Congress amended
                                      section 6621 to increase the rate of interest a taxpayer paid
                                      on underpayments to a higher rate than a taxpayer received
                                      on overpayments. See Tax Reform Act of 1986 (TRA 1986),
                                      Pub. L. 99–514, sec. 1511(a), (b), (d), 100 Stat. 2744. Thus,
                                      a taxpayer could end up paying interest to the Government
                                      even in situations when no tax was due; i.e., when an under-
                                      payment and an overpayment offset each other.
                                         Congress recognized that taxpayers should not be paying
                                      interest to the Government if no net tax was due. However,
                                      it took 10 years before the problem was addressed. In 1998
                                      Congress again amended section 6621 by adding section
                                      6621(d) to authorize interest netting for periods when over-
                                      payments and underpayments offset each other. See RRA
                                      1998 sec. 3301, 112 Stat. 741. Section 6621(d) applied
                                      prospectively to periods of overlap after July 22, 1998. How-
                                      ever, an uncodified special rule in RRA 1998 sec. 3301(c)(2)
                                      applied interest netting retroactively. Congress subsequently
                                      added to the rule the phrase ‘‘Subject to any applicable
                                      statute of limitation not having expired with regard to either
                                      a tax underpayment or a tax overpayment’’ in a technical
                                      corrections amendment later the same year. See 1998 Act
                                      sec. 4002(d). The parties are now disputing the scope of
                                      interest-netting relief granted by section 6621(d) and the
                                      uncodified special rule.
                                         Petitioners sought both administratively and in this Court
                                      to preserve their right to interest netting. During the ongoing
                                      litigation in the Court of Federal Claims and the District
                                      Court for the Northern District of Texas, on December 17,
                                      1999, petitioners requested administrative interest-netting
                                      relief under newly enacted section 6621(d) and the uncodified
                                      special rule by filing a timely claim with respondent.
                                         On February 28, 2005, petitioners timely filed a motion
                                      with this Court to redetermine postdecision interest for 1979
                                      and 1980 pursuant to section 7481(c) and Rule 261, both of
                                      which provisions will be discussed shortly. But for the motion
                                      presently before this Court, petitioners have not asserted a
                                      claim attributable to interest netting in prior litigation.

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                                      (99)                  EXXON MOBIL CORP. v. COMMISSIONER                                              105

                                        After reflecting all of the underpayments and overpay-
                                      ments, together with interest, paid or credited by the parties
                                      for 1975 through 1980, the parties have stipulated the fol-
                                      lowing summary of petitioners’ income tax underpayment
                                      and overpayment balances that have not been previously
                                      netted for interest-netting purposes pursuant to section
                                      6621(d). They have also stipulated the starting and ending
                                      dates of the periods of overlap:

                                                                 (Over)-/under-
                                                Year            payment balance                      Start date               End date

                                                1975                 $45,327,497                         1/1/87                12/22/87
                                                1975                   3,164,434                       12/22/87                12/28/88
                                                1976                   6,218,939                         1/1/87                12/22/87
                                                1977                 135,679,108                         1/1/87                12/22/87
                                                1977                 119,043,520                       12/22/87                 7/18/88
                                                1978                 103,645,011                         1/1/87                10/27/89
                                                1979                (137,750,546)                        1/1/87                10/27/89
                                                1980                (208,122,341)                        1/1/87                10/27/89

                                      Should the Court grant petitioners’ motion as it pertains to
                                      interest netting, the parties have also stipulated that peti-
                                      tioners would be entitled to additional interest in the fol-
                                      lowing amounts:

                                              Additional                                                                      Statutory
                                               interest                                                                        interest
                                              to be paid                                                                         date

                                              $565,612 ...................................................................    12/28/88
                                                 66,033 ...................................................................   12/22/87
                                              4,434,833 ..................................................................    10/27/89
                                              3,864,292 ..................................................................    10/27/89

                                                                                    Discussion
                                      I. Interest Provisions
                                        Section 6601 requires a taxpayer to pay interest on any
                                      income taxes remaining unpaid. Section 6601 provides:
                                      SEC. 6601. INTEREST ON UNDERPAYMENT, NONPAYMENT, OR
                                                 EXTENSIONS OF TIME FOR PAYMENT, OF TAX.
                                        (a) GENERAL RULE.—If any amount of tax imposed by this title * * * is
                                      not paid on or before the last date prescribed for payment, interest on such
                                      amount at the underpayment rate established under section 6621 shall be
                                      paid for the period from such last date to the date paid.

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                                      106                136 UNITED STATES TAX COURT REPORTS                                        (99)

                                      Conversely, section 6611 requires the Government to pay
                                      interest on any overpaid income taxes. Section 6611 provides:
                                      SEC. 6611. INTEREST ON OVERPAYMENTS.
                                        (a) RATE.—Interest shall be allowed and paid upon any overpayment in
                                      respect of any internal revenue tax at the overpayment rate established
                                      under section 6621.

                                         Before 1987 interest netting was accomplished through sec-
                                      tion 6402, which authorizes the IRS to credit an overpayment
                                      owed to a taxpayer from one year against an underpayment
                                      owed by the same taxpayer to the Government from a dif-
                                      ferent year. After the two amounts were offset, the interest
                                      rate was applied to the net underpayment or net overpay-
                                      ment, automatically resulting in less interest being paid or
                                      received by the taxpayer. An offset pursuant to section 6402
                                      was used only if the underpayment and overpayment were
                                      both outstanding.
                                         Effective January 1, 1987, TRA 1986 sec. 1511(a), (b), and
                                      (d) increased the rate of interest a taxpayer pays on under-
                                      payments to a higher rate than a taxpayer receives on over-
                                      payments. The interest rate differential under section 6621
                                      applied to underpayments that were still outstanding at the
                                      end of 1986 as well as to new tax liabilities that arose after
                                      1986. After the enactment of TRA 1986, the IRS no longer
                                      offset an outstanding overpayment and underpayment and
                                      applied an interest rate to the net amount pursuant to sec-
                                      tion 6402. Rather, underpayment interest was calculated at
                                      the higher underpayment rate while overpayment interest
                                      was calculated at the lower overpayment rate. If the tax-
                                      payer had equivalent overlapping overpayments and under-
                                      payments for a period, the Government collected net interest
                                      even though no tax was due to the extent of the overlap.
                                         When TRA 1986 was enacted, Congress recognized the need
                                      for a global interest-netting procedure that would prevent
                                      taxpayers from having to pay net interest to the extent
                                      underpayments and overpayments were equivalent. Congress
                                      also recognized, however, that ‘‘The IRS requires substantial
                                      lead time to develop the data processing capability to net
                                      such underpayments and overpayments in applying differen-
                                      tial interest rates.’’ S. Rept. 99–313, at 185 (1986), 1986–3
                                      C.B. (Vol. 3) 1, 185. Accordingly, Congress provided for a 3-
                                      year ‘‘transition period’’ during which interest netting would

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                                      (99)                 EXXON MOBIL CORP. v. COMMISSIONER                                        107

                                      be governed by IRS regulations. H. Conf. Rept. 99–841 (Vol.
                                      II), at II–785 (1986), 1986–3 C.B. (Vol. 4) 1, 785. By the close
                                      of that period, Congress stated that ‘‘the IRS should have
                                      implemented the most comprehensive netting procedures
                                      that are consistent with sound administrative practice.’’ Id.
                                         By 1996 the Department of the Treasury (Treasury) and
                                      the IRS had initiated a study but had not begun to implement
                                      regulations or comprehensive interest-netting procedures.
                                      See Announcement 96–5, 1996–4 I.R.B. 99; Notice 96–18,
                                      1996–1 C.B. 370. In July 1996 Congress became impatient
                                      and statutorily commissioned the Secretary of the Treasury
                                      or his delegate to ‘‘conduct a study of the manner in which
                                      the Internal Revenue Service has implemented the netting of
                                      interest on overpayments and underpayments and of the
                                      policy and administrative implications of global netting’’ and
                                      to submit that study to Congress within 6 months. See Tax-
                                      payer Bill of Rights 2, Pub. L. 104–168, sec. 1208, 110 Stat.
                                      1473 (1996).
                                         In response, Treasury submitted a report to Congress in
                                      April 1997 which acknowledged that ‘‘Congress has pre-
                                      viously concluded that comprehensive interest netting is
                                      desirable to the maximum extent feasible.’’ See Department
                                      of the Treasury, Office of Tax Policy, Report to the Congress
                                      on Netting of Interest on Tax Overpayments and Under-
                                      payments 2 (1997) (Treasury report) (available at
                                      http: / / treasury.gov / resource - center / tax - policy / Documents /
                                      t0neting.pdf). But the Treasury report stated that the
                                      Treasury lacked statutory authority to implement global
                                      interest netting and recommended that Congress grant such
                                      authority with the following limitations: (1) Adopt the
                                      interest equalization approach rather than an extension of
                                      the credit/offsetting approach and require at least one over-
                                      lapping period to have an outstanding balance in order for
                                      the interest equalization approach to apply; (2) limit interest
                                      netting to income taxes; (3) apply interest netting ‘‘only to
                                      tax years that are not barred by statute’’, citing principles of
                                      finality; (4) require the taxpayer to initiate interest netting
                                      and bear the burden of establishing entitlement; and (5)
                                      allow a phase-in period of 2 years. See id. at 41–42.
                                         Congress rejected most of the recommendations, either in
                                      whole or in part, when it enacted section 6621(d). See RRA
                                      1998 sec. 3301. Section 6621(d) provides:

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                                      108                136 UNITED STATES TAX COURT REPORTS                                        (99)

                                        SEC. 6621(d). ELIMINATION OF INTEREST ON OVERLAPPING PERIODS OF
                                      TAX OVERPAYMENTS AND UNDERPAYMENTS.—To the extent that, for any
                                      period, interest is payable under subchapter A and allowable under sub-
                                      chapter B on equivalent underpayments and overpayments by the same
                                      taxpayer of tax imposed by this title, the net rate of interest under this
                                      section on such amounts shall be zero for such period.

                                      Section 6621(d) adopted the interest equalization approach
                                      but rejected the requirement that there be a balance out-
                                      standing for one overlap period. See H. Conf. Rept. 105–599,
                                      at 257 (1998), 1998–3 C.B. 747, 1011 (stating that interest
                                      netting under section 6621(d) is applied without regard to
                                      whether an overpayment or an underpayment is currently
                                      outstanding). Further, the net interest rate of zero applied
                                      even when special rules increased the rate of interest for
                                      large corporate underpayments under section 6621(c) or
                                      decreased the rate of interest for large corporate overpay-
                                      ments under section 6621(a). Id. Interest netting was not
                                      limited to income taxes and was made available ‘‘for any
                                      period’’ and for any ‘‘tax imposed by this title’’. The burden
                                      was not placed on the taxpayer to initiate interest netting or
                                      to establish entitlement. Rather, section 6621(d) required the
                                      IRS to automatically apply the net rate of zero on equivalent
                                      overpayments and underpayments for the overlapping period.
                                      Section 6621(d) significantly broadened the availability of
                                      interest netting beyond what was recommended by the
                                      Treasury report.
                                        Section 6621(d) was effective for periods of overlap begin-
                                      ning after July 22, 1998. The enactment of section 6621(d)
                                      was accompanied by an uncodified special rule (special rule)
                                      that permitted taxpayers to seek application of the interest-
                                      netting relief of section 6621(d) for periods of overlap pre-
                                      ceding July 22, 1998, so long as certain administrative filing
                                      requirements were met. See RRA 1998 sec. 3301(c)(2). The
                                      special rule initially enacted did not refer to a statute of
                                      limitation. A technical correction provision, 1998 Act sec.
                                      4002(d), amended RRA 1998 sec. 3301(c)(2) by adding: ‘‘Sub-
                                      ject to any applicable statute of limitation not having expired
                                      with regard to either a tax underpayment or a tax overpay-
                                      ment’’. The special rule, as amended, provides:
                                        (2) Special rule.—Subject to any applicable statute of limitation not
                                      having expired with regard to either a tax underpayment or a tax overpay-
                                      ment, the amendments made by this section shall apply to interest for

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                                      (99)                 EXXON MOBIL CORP. v. COMMISSIONER                                        109

                                      periods beginning before the [July 22, 1998] date of the enactment of this
                                      Act if the taxpayer—
                                        (A) reasonably identifies and establishes periods of such tax overpay-
                                      ments and underpayments for which the zero rate applies; and
                                        (B) not later than December 31, 1999, requests the Secretary of the
                                      Treasury to apply section 6621(d) of the Internal Revenue Code of 1986,
                                      as added by subsection (a), to such periods.

                                      The IRS promulgated Rev. Proc. 99–43, 1999–2 C.B. 579, to
                                      implement procedures for a taxpayer to request interest net-
                                      ting under section 6621(d) and the special rule. On December
                                      17, 1999, petitioners requested administrative interest-net-
                                      ting relief by filing a timely claim with respondent on Form
                                      843, Claim for Refund and Request for Abatement, in accord-
                                      ance with the revenue procedure.
                                        RRA 1998 sec. 3301(b) also added section 6601(f) to clarify
                                      the offset provision of section 6402. Section 6601(f) provides:
                                         SEC. 6601(f). SATISFACTION BY CREDITS.—If any portion of a tax is satis-
                                      fied by credit of an overpayment, then no interest shall be imposed under
                                      this section on the portion of the tax so satisfied for any period during
                                      which, if the credit had not been made, interest would have been allowable
                                      with respect to such overpayment. The preceding sentence shall not apply
                                      to the extent that section 6621(d) applies.

                                      If an outstanding overpayment is used to offset an out-
                                      standing underpayment under section 6402, a zero interest
                                      rate applies to the underpayment so offset. However, section
                                      6402 applies only when the underpayment and the overpay-
                                      ment are both outstanding. Therefore, as section 6601(f) pro-
                                      vides, it does not apply to situations covered by section
                                      6621(d) where there may be no outstanding balances at the
                                      time the interest-netting determination is made.
                                      II. Tax Court Jurisdiction
                                        The Tax Court is a court of limited jurisdiction, and we
                                      may exercise our jurisdiction only to the extent authorized by
                                      Congress. See sec. 7442. Before 1988 it was well settled that
                                      this Court’s jurisdiction to redetermine a deficiency in tax
                                      generally did not extend to statutory interest imposed under
                                      section 6601. See Bax v. Commissioner, 13 F.3d 54, 56–57 (2d
                                      Cir. 1993); Asciutto v. Commissioner, T.C. Memo. 1992–564,
                                      affd. per order 26 F.3d 108 (9th Cir. 1994). The only recourse
                                      for a taxpayer who disputed the amount of underpayment
                                      interest was to pay the disputed interest, file a claim for

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                                      refund, and then file a separate action either with a Federal
                                      District Court, 28 U.S.C. sec. 1346(a)(2) (2006), or with the
                                      Court of Federal Claims, 28 U.S.C. sec. 1491(a)(1) (2006). In
                                      contrast, consistent with section 6601(e), the Tax Court did
                                      have jurisdiction to redetermine statutory interest if a tax-
                                      payer had properly invoked the Court’s overpayment jurisdic-
                                      tion pursuant to section 6512(b)(2). See Barton v. Commis-
                                      sioner, 97 T.C. 548, 554–555 (1991).
                                         In 1988 the enactment of section 7481(c) in the Technical
                                      and Miscellaneous Revenue Act of 1988, Pub. L. 100–647,
                                      sec. 6246(a), 102 Stat. 3751, gave the Tax Court jurisdiction
                                      to decide underpayment interest disputes after a decision for
                                      a deficiency became final, see H. Conf. Rept. 100–1104 (Vol.
                                      II), at 232 (1988), 1988–3 C.B. 473, 722 (providing that the
                                      new section allowed a motion to redetermine interest ‘‘If a
                                      dispute arises over the IRS’ computation of the interest due
                                      on a deficiency’’). There was some confusion, however,
                                      because section 7481(c) did not refer to overpayment interest.
                                         In 1997 Congress amended section 7481(c) in the Taxpayer
                                      Relief Act of 1997, Pub. L. 105–34, sec. 1452(a), 111 Stat.
                                      1054, to clarify that ‘‘the Tax Court’s jurisdiction to redeter-
                                      mine the amount of interest under section 7481(c) does not
                                      depend on whether the interest is underpayment or overpay-
                                      ment interest.’’ See H. Conf. Rept. 105–220, at 732–733
                                      (1997), 1997–4 C.B. (Vol. 2) 1457, 2202–2203. Section 7481(c)
                                      provides:
                                           SEC. 7481(c). JURISDICTION OVER INTEREST DETERMINATIONS.—
                                             (1) IN GENERAL.—Notwithstanding subsection (a), if, within 1 year
                                           after the date the decision of the Tax Court becomes final under sub-
                                           section (a) in a case to which this subsection applies, the taxpayer files
                                           a motion in the Tax Court for a redetermination of the amount of
                                           interest involved, then the Tax Court may reopen the case solely to
                                           determine whether the taxpayer has made an overpayment of such
                                           interest or the Secretary has made an underpayment of such interest
                                           and the amount thereof.

                                      Thus, section 7481(c) grants the Tax Court nonexclusive
                                      jurisdiction, along with Federal District Courts and the
                                      Court of Federal Claims, to determine disputes with respect
                                      to the determination of underpayment and overpayment
                                      interest. H. Conf. Rept. 105–220, supra at 733, 1997–4 C.B.
                                      (Vol. 2) at 2203 (explaining that the clarification of this juris-
                                      diction was not meant to ‘‘limit any other remedies that tax-

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                                      payers may currently have with respect to such determina-
                                      tions, including in particular refund proceedings relating
                                      solely to the amount of interest due’’).
                                         In order for section 7481(c) to apply, this Court must have
                                      determined that there is an underpayment pursuant to sec-
                                      tion 6214(a) or an overpayment pursuant to section 6512(b),
                                      and the decision with respect to the overpayment or under-
                                      payment must be final. Section 7481(a) defines the cir-
                                      cumstances when a decision of the Tax Court becomes final.
                                      As a general rule, this Court lacks jurisdiction once a deci-
                                      sion becomes final. 5 Taub v. Commissioner, 64 T.C. 741, 750
                                      (1975), affd. without published opinion 538 F.2d 314 (2d Cir.
                                      1976). However, section 7481(c) provides a limited statutory
                                      exception to finality by authorizing the Court to reopen a
                                      case in which a final decision has been entered only for the
                                      purpose of determining postdecision interest disputes if the
                                      taxpayer files a motion for redetermination of interest within
                                      1 year from the date the decision became final.
                                         The revised stipulated decision of this Court in the 1979
                                      litigation, docket No. 18618–89, establishing an overpayment
                                      for 1979 became final within the meaning of section 7481(a)
                                      on May 27, 2004. The stipulated decision of this Court in the
                                      1980 litigation, docket No. 18432–90, establishing an over-
                                      payment for 1980 became final within the meaning of section
                                      7481(a) on October 26, 2004. On February 28, 2005, peti-
                                      tioners timely filed a motion with this Court to redetermine
                                      interest for 1979 and 1980 pursuant to section 7481(c) and
                                      Rule 261. 6
                                         Although respondent concedes that petitioners have com-
                                      plied with the procedural requirements set forth in section
                                      7481(c) and Rule 261, respondent contends that sec-
                                        5 There are limited exceptions to this rule. The Court may grant a motion for leave to consider:

                                      (1) Whether the Court had jurisdiction to enter the decision in the first instance, Billingsley v.
                                      Commissioner, 868 F.2d 1081, 1084–1085 (9th Cir. 1989), or (2) whether the decision entered
                                      was the result of fraud on the Court, Abatti v. Commissioner, 859 F.2d 115, 118 (9th Cir. 1988),
                                      affg. 86 T.C. 1319 (1986).
                                        6 RULE 261. PROCEEDING TO REDETERMINE INTEREST

                                         (a) Commencement of Proceeding: (1) How Proceeding Is Commenced: A proceeding to redeter-
                                      mine interest on a deficiency assessed under Code section 6215 or to redetermine interest on
                                      an overpayment determined under Code section 6512(b) shall be commenced by filing a motion
                                      with the Court. The petitioner shall place on the motion the same docket number as that of
                                      the action in which the Court redetermined the deficiency or determined the overpayment.
                                         (2) When Proceeding May Be Commenced: Any proceeding under this Rule must be com-
                                      menced within 1 year after the date that the Court’s decision becomes final within the meaning
                                      of Code section 7481(a).

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                                      tion 7481(c) does not grant this Court jurisdiction to deter-
                                      mine interest netting pursuant to section 6621(d). Citing
                                      Lincir v. Commissioner, T.C. Memo. 2009–153, respondent
                                      argues that section 6621(d) is not an interest rate provision
                                      but a computation of a separate interest-netting amount for
                                      respondent to administratively apply. If there are no out-
                                      standing balances to offset under section 6402(a), respondent
                                      argues that the determination of a net rate of interest of zero
                                      will result in the payment of money to the taxpayer. Thus,
                                      respondent posits, a claim under section 6621(d) constitutes
                                      a general claim for money against the Government which
                                      must be brought in a separate proceeding. We disagree.
                                         Section 6621(d) is, at its core, an interest rate provision.
                                      Section 6601 requires a taxpayer to pay interest on any
                                      income taxes remaining unpaid. Section 6611 requires the
                                      Government to pay interest on any overpaid income taxes.
                                      Both provisions refer to section 6621 to determine the rate
                                      of interest. Section 6621(a) initially sets the general overpay-
                                      ment and underpayment rates, subject to adjustments
                                      required by section 6621(b) and (c). Section 6621(d) reduces
                                      the interest rate set pursuant to section 6621(a) to the net
                                      rate of zero during overlap periods when underpayments and
                                      overpayments are equivalent. The fact that interest netting
                                      may result in the Government’s owing money to a taxpayer
                                      does not morph section 6621(d) into a general claim for
                                      money. Section 6621(d) does not refer to an amount, only to
                                      a rate.
                                         In Lincir v. Commissioner, supra, we recognized that sec-
                                      tion 6621(d) is an interest rate provision. Lincir dealt with
                                      the interaction of section 6621(d) and the interest component
                                      of the addition to tax for negligence under repealed section
                                      6653(a). The taxpayer argued that interest netting should
                                      apply to the interest calculated on the underpayment attrib-
                                      utable to negligence. The Court held against the taxpayer,
                                      finding that interest netting under section 6621(d) applies
                                      only to interest on underpayments and overpayments, not to
                                      interest on penalties or additions to tax. Lincir does not
                                      stand for the proposition that section 6621(d) requires an
                                      amount to be determined. Lincir was a collection due process
                                      case in which the abuse of discretion standard was applied
                                      in deciding whether to sustain the Commissioner’s deter-
                                      mination.

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                                         Congress directed the IRS to implement ‘‘the most com-
                                      prehensive netting procedures that are consistent with sound
                                      administrative practice.’’ H. Conf. Rept. 99–841 (Vol. II),
                                      supra at II–785, 1986–3 C.B. (Vol. 4) at 785. Such a state-
                                      ment is not limited to section 6402. It also applies to section
                                      6621(d). In response, the IRS promulgated Rev. Proc. 99–43,
                                      supra, which sets forth interest-netting procedures for sec-
                                      tion 6621(d). Interest-netting claims should, for the most
                                      part, be resolved in administrative proceedings. Section
                                      6621(d) does not require an interest-netting claim to be initi-
                                      ated in a separate action within the IRS or in a particular
                                      forum, respondent’s assertions to the contrary notwith-
                                      standing.
                                         If, however, the interest-netting claim under section
                                      6621(d) cannot be settled administratively, various courts
                                      have been given concurrent jurisdiction to resolve the dis-
                                      pute. A taxpayer may file a suit for refund or for payment
                                      of additional overpayment interest in a Federal District
                                      Court, 28 U.S.C. secs. 1346(a)(1), 2401(a), or in the Court of
                                      Federal Claims, 28 U.S.C. secs. 1491(a)(1), 2501. In addition
                                      the taxpayer may, pursuant to section 7481(c), file a motion
                                      to redetermine interest when postdecision interest is dis-
                                      puted after a decision has become final. Petitioners have
                                      timely filed a motion with this Court to redetermine interest
                                      for 1979 and 1980 pursuant to section 7481(c).
                                         We therefore hold that we have jurisdiction pursuant to
                                      section 7481(c) to determine interest netting under section
                                      6621(d).
                                      III. The Scope of Jurisdiction
                                        Respondent makes several arguments seeking to limit the
                                      scope of this Court’s jurisdiction.
                                           A. Determination of Interest Rates
                                        Respondent contends that because the Court is a court of
                                      limited jurisdiction, our jurisdiction under section 7481(c)
                                      must be limited to the determination of interest rates.
                                        The title of section 7481(c) is ‘‘Jurisdiction Over Interest
                                      Determinations.’’ However, the text clearly provides that ‘‘the
                                      Tax Court may reopen the case solely to determine whether
                                      the taxpayer has made an overpayment of such interest or

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                                      the Secretary has made an underpayment of such interest
                                      and the amount thereof.’’ (Emphasis added.)
                                        Rule 261(b)(3)(B) identifies the elements required to
                                      redetermine the amount of interest involved in an overpay-
                                      ment as ‘‘the amount and date of each payment in respect of
                                      which the overpayment was determined’’ and ‘‘the amount
                                      and date of each credit, offset, or refund received from the
                                      Commissioner in respect of the overpayment and interest
                                      claimed by the petitioner.’’ Determining the amount of
                                      interest under section 7481(c) requires the Court to analyze
                                      the applicable rate, the principal amount, and the length of
                                      time the overpayment or underpayment is outstanding. Con-
                                      sequently, our jurisdiction under section 7481(c) necessarily
                                      covers the factors required to determine the proper amount
                                      of overpayment interest with respect to the years before the
                                      Court and is not limited to determination of interest rates.
                                      Within this framework overpayment interest can be deter-
                                      mined without the necessity of multiple proceedings.
                                           B. Original Jurisdiction
                                        Respondent contends that our interest determinations
                                      under section 7481(c) must be limited to 1979 and 1980,
                                      years over which we have original jurisdiction, and not to
                                      prior years over which we have no jurisdiction.
                                        In order to put this argument into perspective, we turn to
                                      section 6214, entitled ‘‘Determinations by Tax Court.’’ Section
                                      6214(b) provides:
                                        SEC. 6214(b). JURISDICTION OVER OTHER YEARS AND QUARTERS.—The
                                      Tax Court in redetermining a deficiency of income tax for any taxable year
                                      * * * shall consider such facts with relation to the taxes for other years
                                      * * * as may be necessary correctly to redetermine the amount of such
                                      deficiency, but in so doing shall have no jurisdiction to determine whether
                                      or not the tax for any other year * * * has been overpaid or underpaid.
                                      * * *

                                      The word ‘‘determine’’ as it is used in section 6214(b) has a
                                      specific and narrow meaning that is not implicated in this
                                      case. In Hill v. Commissioner, 95 T.C. 437, 439 (1990), the
                                      Court stated that it has ‘‘distinguished our authority under
                                      section 6214(b) to compute a tax for a year not before the
                                      Court from our lack of authority under that same section to
                                      ‘determine’ a tax for such year.’’ See also Lone Manor Farms,

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                                      Inc. v. Commissioner, 61 T.C. 436, 440 (1974) (holding that
                                      section 6214(b) ‘‘does not prevent us from computing, as
                                      distinguished from ‘determining,’ the correct tax liability for
                                      a year not in issue when such a computation is necessary to
                                      a determination * * * for a year that has been placed in
                                      issue’’), affd. without published opinion 510 F.2d 970 (3d Cir.
                                      1975).
                                         Petitioners argue, and we agree, that it is unnecessary for
                                      this Court to make any determinations for 1975–78, the
                                      underpayment years over which we have no jurisdiction. The
                                      underpayment for 1975 was determined after a trial on the
                                      merits of the substantive issues and appeal to the Court of
                                      Appeals for the Federal Circuit. Exxon Mobil Corp. v. United
                                      States, 244 F.3d 1341 (Fed. Cir. 2001). Judgment was
                                      entered on November 6, 2001, pursuant to stipulation of the
                                      parties. The underpayments for 1976, 1977, and 1978 were
                                      determined by settlement after petitioners had filed com-
                                      plaints in the District Court for the Northern District of
                                      Texas. The settlement for 1976 was reached while the case
                                      was on appeal to the Court of Appeals for the Fifth Circuit
                                      after a trial on the merits of the substantive issues. Exxon
                                      Mobil Corp. v. United States, 253 F. Supp. 2d 915 (N.D. Tex.
                                      2003).
                                         These determinations by courts of competent jurisdiction
                                      do not require further determinations by this Court. The par-
                                      ties have stipulated the balances of underpayments and over-
                                      payments for 1975 through 1980, the applicable overlap
                                      periods, and the applicable amounts of interest. We may con-
                                      sider these facts related to the 1975–78 underpayment years
                                      to determine interest netting for the 1979 and 1980 overpay-
                                      ment years, years over which we do have jurisdiction. See
                                      sec. 6214(b).
                                      IV. The Impact of the Special Rule
                                           A. Introduction
                                        For convenience, we again quote pertinent portions of the
                                      special rule:
                                        (2) Special rule.—Subject to any applicable statute of limitation not
                                      having expired with regard to either a tax underpayment or a tax overpay-
                                      ment, the amendments made by this section shall apply to interest for

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                                      periods beginning before the [July 22, 1998] date of the enactment of this
                                      Act * * *

                                      When the special rule was originally enacted, it extended
                                      interest-netting relief retroactively and did not contain the
                                      introductory ‘‘subject to’’ language. See RRA 1998 sec.
                                      3301(c)(2). The ‘‘subject to’’ language was added a few
                                      months later and was explicitly designated a technical
                                      correction. See 1998 Act sec. 4002(d).
                                        The parties have stipulated that the period for filing suit
                                      for payment of additional overpayment interest for 1979 and
                                      1980, the overpayment years before us, as generally provided
                                      under 28 U.S.C. secs. 2401 and 2501 (2006), had not expired
                                      as of July 22, 1998. However, the parties do not ask us to
                                      decide in this proceeding the status of 1975–78 with respect
                                      to the ‘‘subject to’’ language of the special rule.
                                        Petitioners argue that retroactive application of section
                                      6621(d) via the special rule is available where the limitations
                                      period for either the overpayment period or the under-
                                      payment period had not expired as of July 22, 1998.
                                      Respondent argues that the special rule, as amended,
                                      restricts retroactive interest netting to cases where both the
                                      overpayment and underpayment years are open as of July
                                      22, 1998, the effective date of section 6621(d).
                                        The same arguments were made in FNMA v. United
                                      States, 379 F.3d 1303, 1307 (Fed. Cir. 2004) (FNMA I), where
                                      the Court of Appeals for the Federal Circuit, when inter-
                                      preting the special rule, stated: ‘‘we agree that the language
                                      at issue—‘[s]ubject to any applicable statute of limitation not
                                      having expired with regard to either a tax underpayment or
                                      a tax overpayment’—is equally subject to both proffered
                                      interpretations, the parties’ efforts to persuade us to the con-
                                      trary notwithstanding.’’ We also find the ‘‘subject to’’ lan-
                                      guage susceptible to either interpretation and cannot deter-
                                      mine, from the language itself, which interpretation Con-
                                      gress intended.
                                        Respondent bases his position on Rev. Proc. 99–43, supra,
                                      which pronounced that both periods had to be open, and the
                                      Court of Appeals’ decision in FNMA I, which came to the ulti-
                                      mate conclusion that the special rule was a waiver of sov-
                                      ereign immunity that required strict construction of the
                                      statute in favor of the Government.

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                                           B. Rev. Proc. 99–43
                                         Respondent argues that we should give Skidmore deference
                                      to Rev. Proc. 99–43, supra. See Skidmore v. Swift & Co., 323
                                      U.S. 134 (1944). The revenue procedure was promulgated 16
                                      months after the special rule’s enactment and states that the
                                      special rule requires that ‘‘both periods of limitation
                                      applicable to the tax underpayment and to the tax overpay-
                                      ment * * * must have been open on July 22, 1998’’. Rev.
                                      Proc. 99–43, sec. 4.01, 1999–2 C.B. at 580. The pronounce-
                                      ment in the revenue procedure is not supported by any anal-
                                      ysis of text or legislative history or any other relevant guid-
                                      ance. It is not an interpretation but a litigation position. The
                                      extent to which deference is accorded a given agency
                                      pronouncement ‘‘[depends] upon the thoroughness evident in
                                      its consideration, the validity of its reasoning, its consistency
                                      with earlier and later pronouncements, and all those factors
                                      which give it power to persuade’’. Skidmore v. Swift & Co.,
                                      supra at 140. Because the pronouncement in Rev. Proc. 99–
                                      43, supra, that both periods of limitation must be open is
                                      unaccompanied by any supporting rationale, it is not entitled
                                      to deference and does not provide a basis for resolving the
                                      issues before us. Accord FNMA I, 379 F.3d at 1307–1309.
                                           C. FNMA I
                                         In FNMA I a three-judge panel of the Court of Appeals for
                                      the Federal Circuit held that although Rev. Proc. 99–43,
                                      supra, does not provide a basis to decide the case, the special
                                      rule constitutes a waiver of sovereign immunity because it
                                      ‘‘discriminates between those claims for overpaid interest
                                      Congress has authorized and those it has not.’’ Id. at 1310.
                                      Neither party in the case had raised sovereign immunity as
                                      an issue. The Court of Appeals went on to hold that the
                                      waiver was expressly conditioned by the introductory lan-
                                      guage ‘‘Subject to any applicable statute of limitation not
                                      having expired’’. Thus, the Court concluded that the term of
                                      consent in the special rule limited a court’s jurisdiction to
                                      entertain a suit, that the principle of strict construction had
                                      to be applied, and that the principle assumed ‘‘primacy over
                                      any other tools or principles of statutory construction’’. Id. at
                                      1311 n.8. Therefore, the principle of strict construction
                                      required an interpretation of the special rule in favor of the

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                                      Government. The Court of Appeals remanded the case to the
                                      Court of Federal Claims to determine whether the limita-
                                      tions period for the underpayment year was closed on July
                                      22, 1998. On remand, the Court of Federal Claims granted
                                      summary judgment to the Government. See FNMA v. United
                                      States, 69 Fed. Cl. 89 (2005), affd. 469 F.3d 968 (Fed. Cir.
                                      2006). In affirming the Court of Federal Claims, the Court of
                                      Appeals reaffirmed its position in FNMA I.
                                         With all due respect to the Court of Appeals for the Fed-
                                      eral Circuit, section 6621(d), as modified by the special rule,
                                      is a remedial statute that must be interpreted to achieve the
                                      remedial purpose Congress intended; i.e., taxpayer relief
                                      from disparate interest rates. And such an interpretation is
                                      appropriate regardless of whether the special rule constitutes
                                      a waiver of sovereign immunity. See Sullivan v. Town &
                                      Country Home Nursing Servs., Inc., 963 F.2d 1146, 1151–
                                      1152 (9th Cir. 1992) (‘‘when the federal government waives
                                      its immunity, the scope of the waiver is construed to achieve
                                      its remedial purpose’’).
                                         The Supreme Court has cautioned against overbroad use of
                                      the strict construction principle if a waiver of sovereign
                                      immunity is involved. See United States v. White Mountain
                                      Apache Tribe, 537 U.S. 465, 472–473 (2003); United States v.
                                      Mitchell, 463 U.S. 206, 216–219 (1983). The strict construc-
                                      tion principle is actually ‘‘no more than an aid in the task of
                                      determining congressional intent.’’ Block v. North Dakota ex
                                      rel. Bd. of Univ. & Sch. Lands, 461 U.S. 273, 293 (1983)
                                      (O’Connor, J., dissenting). ‘‘The mere observation that a
                                      statute waives sovereign immunity * * * cannot resolve
                                      questions of construction. The Court still must consider all
                                      indicia of congressional intent.’’ Id. at 294; see also Franchise
                                      Tax Bd. v. USPS, 467 U.S. 512, 521 (1984) (scope of waiver
                                      of sovereign immunity ‘‘can only be ascertained by reference
                                      to underlying congressional policy’’).
                                         Section 6611(a) provides that ‘‘Interest shall be allowed
                                      and paid upon any overpayment in respect of any internal
                                      revenue tax’’. Section 6611(a) waives sovereign immunity.
                                      See E.W. Scripps Co. & Subs. v. United States, 420 F.3d 589,
                                      597 (6th Cir. 2005); Gen. Elec. Co. & Subs. v. United States,
                                      56 Fed. Cl. 488, 497 (2003) (such a waiver exists in section
                                      6611), affd. in part and remanded in part 384 F.3d 1307
                                      (Fed. Cir. 2004). While we find that the special rule is not

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                                      a waiver of sovereign immunity but an interest rate provi-
                                      sion, the fact that the special rule is based on an existing
                                      waiver in section 6611 does not mean that the special rule
                                      itself is governed by the strict construction principle. See
                                      Gomez-Perez v. Potter, 553 U.S. 474 (2008) (concluding that
                                      a substantive provision in a section did not have the same
                                      high hurdle of being narrowly construed in favor of the
                                      Government as the waiver sovereign immunity provision,
                                      even though they were in the same section); see also Dolan
                                      v. USPS, 546 U.S. 481, 491–492 (2006); Kosak v. United
                                      States, 465 U.S. 848, 853 n.9 (1984).
                                         The ‘‘subject to’’ language was added by a technical correc-
                                      tion. Unlike a typical statutory amendment that operates
                                      prospectively and is designed to change prior law, a technical
                                      correction relates back to the original date of enactment.
                                      Congress turns to technical corrections when it wishes to
                                      clarify existing law or repair a scrivener’s error, rather than
                                      to change the substantive meaning of the statute. Wilhelm
                                      Pudenz, GmbH v. Littlefuse, Inc., 177 F.3d 1204, 1210–1211
                                      (11th Cir. 1999); Aetna Cas. & Sur. Co. v. Clerk, U.S. Bankr.
                                      Court (In re Chateaugay Corp.), 89 F.3d 942, 954 (2d Cir.
                                      1996). As a technical correction there is no doubt that the
                                      special rule was not intended to restrict interest netting but
                                      to extend interest-netting relief to periods of overlap pre-
                                      ceding July 22, 1998, that were open on that date.
                                         After considering the statutory text, legislative history and
                                      relevant policies surrounding section 6621(d), and the special
                                      rule, we hold that interest netting should be available even
                                      if only one applicable limitations period was open on July 22,
                                      1998. Otherwise, any closed period would trump an open one.
                                      Moreover, two different limitation periods may apply to the
                                      same tax year. By way of example, if a taxpayer can file a
                                      timely suit for additional overpayment interest for a given
                                      tax year, such a year should be considered ‘‘open’’ even if a
                                      suit to redetermine the underlying tax liability is time
                                      barred.
                                         For the foregoing reasons, we hold that: (1) We have juris-
                                      diction pursuant to section 7481(c) to determine interest net-
                                      ting under section 6621(d) and the special rule; (2) the scope
                                      of our jurisdiction is limited to a determination of interest
                                      netting for 1979 and 1980, years for which the applicable
                                      limitations periods were open as of July 22, 1998; (3) section

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                                      120                136 UNITED STATES TAX COURT REPORTS                                        (99)

                                      6621(d) and the special rule require only one leg of the
                                      limitations period to be open as of July 22, 1998; and (4) peti-
                                      tioners are entitled to additional interest pursuant to section
                                      6621(d) and the uncodified special rule in accordance with
                                      the stipulations and agreements of the parties.
                                         In reaching our holdings, we have considered all argu-
                                      ments made, and, to the extent not mentioned, we conclude
                                      that they are moot, irrelevant, or without merit.
                                         To reflect the foregoing,
                                                                      An order will be issued granting peti-
                                                                   tioners’ motion for partial summary judg-
                                                                   ment and denying respondent’s motion to dis-
                                                                   miss for lack of jurisdiction and cross-motion
                                                                   for partial summary judgment.

                                                                               f

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