45 T.C. 230">*230 OPINION

On August 11, 1965, respondent filed1965 U.S. Tax Ct. LEXIS 9">*11 his computation in this docket number under Rule 50, in accordance with 45 T.C. 230">*231 our Memorandum Findings of Fact and Opinion filed July 14, 1964, T.C. Memo. 1964-190. On September 9, 1965, petitioner filed an objection to respondent's computation insofar as it related to interest payable on 1952 and 1953 income tax deficiencies which were eliminated by net operating loss carrybacks from 1954 and 1955. Subsequently, a hearing was held and briefs were submitted by the parties in support of their respective positions. (We shall hereinafter use the term "petitioner" when referring either to petitioner or to the transferor.)

Under ordinary circumstances we would have no jurisdiction to determine a matter concerning interest. Commissioner v. Kilpatrick's Estate, 140 F.2d 887 (C.A. 6, 1944), affirming a Memorandum Opinion of this Court; Estate of Mary Redding Shedd, 37 T.C. 394">37 T.C. 394 (1961), affd. 320 F.2d 638 (C.A. 9, 1963). However, on September 14, 1960, subsequent to the filing of the petition herein, respondent, acting under section 6861 of the 1954 Code, relating1965 U.S. Tax Ct. LEXIS 9">*12 to jeopardy assessments, assessed the following amounts against petitioner:

Section 6861(c) of the 1954 Code provides in part that, under these circumstances, "the Tax Court shall have jurisdiction to redetermine the entire amount of the deficiency and of all amounts assessed at the same time in connection * * * [with the jeopardy assessment]." Section 273(c) of the 1939 Code contains identical language. Under this provision of the statute, we have jurisdiction to redetermine the correct amount of the interest assessed in connection with the jeopardy assessment of 1952 and 1953 income tax deficiencies. Ginsburg v. United States, 278 F.2d 470, 473 (C.A. 1, 1960). ¹ Under section 6861(a) of the 1954 Code, respondent was required, when he made the jeopardy assessment on September 14, 1960, to assess at the same time "all interest * * * provided for by law"; examination of the amounts of interest assessed discloses that this requirement was complied with. Since both parties agree that interest on the deficiencies which were eliminated by the carrybacks1965 U.S. Tax Ct. LEXIS 9">*13 stopped running no later than March 15, 45 T.C. 230">*232 1956, which was before the date of the jeopardy assessment, it is clear that we have jurisdiction over the entire amount of interest in dispute.

On the issue of the period for the running of interest, respondent argues that the 1939 Code applies, and that such Code provided for the running of interest until the due date of the return for the loss year. Petitioner makes two arguments: (1) Section 6601(e) 1965 U.S. Tax Ct. LEXIS 9">*14 (1) ² of the 1954 Code applies; and (2) even under the 1939 Code interest was terminated on the last day of the loss year.

Turning to petitioner's first argument, we see that section 7851(a) (6) of the 1954 Code provides that subtitle F ³ of such Code "shall apply with respect to any tax imposed by the Internal Revenue Code of 1939 only to the extent provided in subparagraphs (B) and (C) of this paragraph." Subparagraphs (B) and (C) specify that certain of the chapters of subtitle F, but not including chapter 67 and section 6601, shall apply to taxes1965 U.S. Tax Ct. LEXIS 9">*15 imposed by the 1939 Code. In view of the specificity of section 7851 (a) (6), we conclude that section 6601 (e) of the 1954 Code is not applicable here since the question involves interest "with respect to * * * [taxes] imposed by the Internal Revenue Code of 1939." Ingannamorte v. United States, 189 F. Supp. 341">189 F. Supp. 341 (D.N.J. 1960), cited by respondent, and dealing with section 6601(f) of the 1954 Code, is in accord.

We now consider petitioner's second argument. The 1939 Code contained no provision comparable to section 6601(e) of the 1954 Code, and the cases shed little direct light on the problem. Twaits v.United States, an unreported case ( S.D. Cal. 1953, 48 A.F.T.R. (RIA) 1544, 54-1U.S.T.C. par. 9203), reaches the result sought by respondent, but does not explain the reasons for the decision. Rev. Prov. 60-17, 1960-2 C.B. 942, 952, and Peck, Stow & Wilcox Co. v. United States, 168 F. Supp. 697">168 F. Supp. 697 (D. Conn. 1958),1965 U.S. Tax Ct. LEXIS 9">*16 also relied upon by respondent, similarly fail to rationalize the conclusions reached therein. On the other hand, petitioner's reliance on certain language of S. Rept. No. 1631, 77th Cong., 2d Sess., pp. 123-124 (1942), 1942-2 C.B. 504, 597, ⁴1965 U.S. Tax Ct. LEXIS 9">*17 part of the 45 T.C. 230">*233 legislative history of sections 122(b) (1) (A) ⁵ and 3771(e) ⁶1965 U.S. Tax Ct. LEXIS 9">*18 of the 1939 Code, which language was quoted by the Supreme Court in Manning v. Seeley Tube & Box Co. of New Jersey, 338 U.S. 561">338 U.S. 561 (1950), is misplaced. Petitioner ignores the language of section 3771(e), as well as the portion of the committee report immediately following the language relied upon. ⁷

In United States v. Hecla Mining Co., 302 F.2d 204 (C.A. 9, 1961), certiorari denied 370 U.S. 918">370 U.S. 918 (1962), the Court of Appeals for the Ninth Circuit had occasion to construe section 3771(e). After reviewing the statutory scheme with respect to interest on overpayments and deficiencies attributable to carrybacks, the court concluded that overpayments arising out of carrybacks are not available to offset deficiencies, for1965 U.S. Tax Ct. LEXIS 9">*19 the purpose of interest computations, prior to the time specified in section 3771(e). ⁸ Applying this rule to the type of situation at issue here, it would appear that interest on 1939 Code year deficiencies eliminated by net operating loss carrybacks should run until the occurrence of some event equivalent to the filing of a claim for refund or a petition with this Court. Cf. Landers, Frary & Clark v. United States, 137 Ct. Cl. 870">137 Ct. Cl. 870, 149 F. Supp. 202">149 F. Supp. 202 (1957). Compare Jernigin v. Phinney, an unreported case ( W.D. Tex. 1957, 52 A.F.T.R. (RIA) 1482, 57-2U.S.T.C. par. 9936), and Flex-O-Glass, Inc. v.United States, an unreported case ( N.D. Ill. 1959, 3 A.F.T.R.2d (RIA) 1034, 59-1U.S.T.C. par. 9328), in which cases no interest was allowed on refunds 45 T.C. 230">*234 that were granted by the Commissioner before the taxpayers had filed formal claims for refund.

Under1965 U.S. Tax Ct. LEXIS 9">*20 the rules of the cases heretofore cited, a taxpayer who paid the correct amount of tax in one year, then incurred a net operating loss which, when carried back to the prior year, resulted in an overpayment, is entitled to interest only from the date his claim for refund was filed. If, as was true in the Jernigin and Flex-O-Glass cases, no proper claim for refund was filed prior to the time respondent actually refunded the overpayments, the taxpayer would receive no interest at all; he would, of course, have the use of his money from the date of the refund.

In the instant case, petitioner underpaid its taxes for the prior years, 1952 and 1953. Certainly, petitioner should fare no better, as regards interest, than a similarly situated taxpayer who paid the correct amount of taxes for the prior years. It does not appear that petitioner, prior to the due dates of its returns for the loss years, 1954 and 1955, took any steps towards applying the losses to the taxes paid (or unpaid) for 1952 or 1953. Petitioner does not assert that the filing of a claim for refund, or any similar event, occurred prior to the respective due dates of the 1954 and 1955 returns. (The returns themselves1965 U.S. Tax Ct. LEXIS 9">*21 were filed shortly after such due dates.) Thus, by virtue of Rev. Proc. 60-17, supra, ⁹ which petitioner denounces so strongly, interest on the 1952 and 1953 deficiencies has been terminated on dates at least as early as, if not earlier than, those prescribed by law.

1965 U.S. Tax Ct. LEXIS 9">*22 Decision will be entered in accordance with the computations submitted by respondent.