Energy East Corp. v. United States

In 2000 the plaintiff acquired CMP and its subsidiary; in 2002 it acquired RGS and its subsidiary. Plaintiff acquired all liabilities; the companies and subsidiaries became part of a group of affiliated companies filing consolidated income tax returns pursuant to I.R.C. sect. 1501. Prior to the acquisition, the subsidiaries had overpaid taxes in some years. The plaintiff had underpaid and, after paying the deficiency and interest, requested a refund of interest, claiming entitlement to a net interest rate of zero on its deficiency because sect. 6621(d) allowed it to offset its underpayment with the overpayments by the subsidiaries. The IRS ignored the request. The Court of Federal Claims rejected the claim, finding that the plaintiff was not the "same" taxpayer as had overpaid. The Federal Circuit affirmed, reasoning that the taxpayer must be the same at the time of the overpayments and underpayments.