... Or bankrupt parent.

• Author: Meyerer, Thomas H.
• Position: Affiliated group

In some cases the common parent corporation has filed in bankruptcy but other members of the affiliated group have not. The problem faced by the nonsolvent (nondebtor) subsidiaries is that, under Regs. Sec. 1.1502-77(a), only the common parent of an affiliated group is permitted to file a Tax Court petition in order to obtain a preassessment adjudication of a disputed tax liability. (See J&S Carburetor Co., 93 TC 166 (1989).) The solvent subsidiaries may request under Regs. Sec. 1.1502-77(a) (last sentence) that the cognizant district director deal directly with any affiliated group member. However, acceptance of this request is at the district director's discretion.

The preferred...