Exxon Mobil Corporation and Affiliated Companies, f.k.a. Exxon Corporation and Affiliated Companies v. Commissioner, 136 T.C. 99

Exxon Mobil Corp. and affiliated, successors to Exxon Corp. & Affiliated Cos., filed consolidated 1975–1980 federal income tax cases against the IRS.
The primary issue involves interest netting under §6621(d) and an uncodified special rule enacted in the 1998 RRA, affecting overlapping underpayments and overpayments.
The Tax Court has previously determined 1979 and 1980 overpayments and abated related interest; those determinations became final in 2004.
Petitioners sought a net zero interest rate for overlapping periods before July 22, 1998, under §6621(d) and the special rule, while the IRS challenged jurisdiction and scope.
The Court consolidated motions: petitioners’ motion under §7481(c) and §6621(d) for a zero net rate, respondent’s motion to dismiss for lack of jurisdiction, and respondent’s cross-motion for partial summary judgment.
The issues include whether the Court has jurisdiction under §7481(c) and whether §6621(d) and the special rule apply to 1979–1980 overlaps.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Jurisdiction under §7481(c) to determine interest netting	Petitioners contend §7481(c) provides jurisdiction to resolve §6621(d) netting	Respondent argues §7481(c) does not extend to §6621(d) netting	The Tax Court has jurisdiction under §7481(c) to determine interest netting under §6621(d) and the special rule
Scope of jurisdiction—years covered	Netting should cover 1979–1980 where overlaps existed as of July 22, 1998	Scope limited to years open as of July 22, 1998	Jurisdiction limited to 1979 and 1980, years with open limitation periods as of July 22, 1998; open-one-leg suffices
Retroactive application via the special rule	Special rule allows retroactive relief for overlaps pre-July 22, 1998 if conditions met	Special rule is limited by its language and Rev. Proc. 99-43 which require both periods open	Special rule applies even if only one limitation period was open on July 22, 1998; retroactive relief available per the special rule
Interpretation of the special rule’s text and deference to Rev. Proc. 99-43	Special rule should be interpreted broadly to grant relief	Rev. Proc. 99-43 should govern and is not entitled to deference; FNMA I constrains retroactivity	The court rejects the Rev. Proc. 99-43 interpretation as controlling; adopts broader remedial interpretation of the special rule

FNMA v. United States, 379 F.3d 1303 (Fed. Cir. 2004) (special rule constitutes a waiver of sovereign immunity and retroactivity dispute)
FNMA v. United States, 469 F.3d 968 (Fed. Cir. 2006) (affirmation of remedial, broad interpretation of §6621(d) with special rule)
Bax v. Commissioner, 13 F.3d 54 (2d Cir. 1993) (pre-§7481(c) limits on jurisdiction over interest)