59 STAT.] 79TH CONG., IsT SESS.-CH. 340 -JULY 31, 1945 or refunded, he may assess the amount of the excess as a deficiency as if it were due to a mathematical error appearing on the face of the return, as provided in section 272 (f). Upon making such assessment, the Commissioner shall schedule as an overassessment the decrease in any other tax resulting from the adjustments reflected in the compu- tation of the deficiency. "SEC. 3781. EXTENSION OF TIME AND TENTATIVE CARRY-BACK AND AMORTIZATION ADJUSTMENTS IN THE CASE OF CON- SOLIDATED RETURNS. "If the corporation seeking an extension of time under section 3779, a tentative carry-back adjustment under section 3780, or a tentative adjustment with respect to an amortization deduction under section 124 (j) and (k), made or was required to make a consolidated return, either for the taxable year within which the net operating loss or the unused excess profits credit arises or within which the election is made to terminate the amortization period, or for a preceding taxable year affected by such loss, credit, or election, the provisions of such sections shall apply only to such extent and subject to such conditions, limita- tions, and exceptions as the Commissioner, with the approval of the Secretary, may by regulations prescribe." (b) Section 294 of the Internal Revenue Code is amended by adding at the end thereof the following new subsection: "(e) SUBSTANTIAL OVERSTATEMENT OF EXPECTED CARRY-BACKS. - If the time for payment of any tax or taxes for any taxable year is extended under section 3779, there shall be added to such tax or taxes an amount equal to 5 per centum of the penalty portion, if any, of the amount to which such extension relates, unless the taxpayer establishes to the satisfaction of the Commissioner that, as of the end of the tax- able year in which such extension was made, there was reasonable cause to expect there would be no such penalty portion. The penalty portion shall be the excess of the amount to which such extension relates which is not paid by the end of the taxable year in which such extension is made over 125 per centum of the amount to which such extension relates which is satisfied by applying thereto a decrease in tax in respect of an application under section 3780 (a) less any amounts assessed in respect of such application which are not so satisfied." (c) Section 3777 of the Internal Revenue Code is amended by adding at the end thereof the following new subsection: "(c) TENTATIVE CARRY-BACK ADJUSTMENTS.- Any credit or refund allowed or made under section 3780 (b) shall be made without regard to the provisions of subsection (a). In any such case, if the credit or refund, reduced by any deficiency in such tax thereafter assessed and by deficiencies in any other tax resulting from adjustments reflected in the determination of the credit or refund, is in excess of $75,000, there shall be submitted to such committee a report containing the matter specified in subsection (a) at such time after the making of the credit or refund as the Commissioner shall determine the correct amount of the tax." SEC. 5. PERIOD OF LIMITATION IN CASE OF CARRY-BACKS (a) Section 322 (b) (5) of the Internal Revenue Code is amended by striking the words "or of a carry-back" where they appear in sub- paragraph (B) thereof, and by striking the last sentence and inserting in lieu thereof the following: "If the claim for credit or refund relates to an overpayment on account of the effect that the deductibility of such a debt or loss has on the application to the taxpayer of a carry- back, the period shall be either seven years from the date prescribed by law for filing the return for the year of the net operating loss or 523 53 Stat. 83. 26U. S.C. 272 (). Ante, pp. 519, 21. Poet, pp .525, 526. 53 Stat. 88. 26 U. S.C.. 294; Supp. IV, i 294. Ante, p. 519. Ante, p. 521. 58 Stat. 466. 26U. 8. C. 18777. Pbt,p . 574. Ante, p. 622 56 Stat. 877. 26 U. S. C., Supp. IV, 322(b) (5).
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