Ford Motor Company v. United States, 908 F.3d 805

Ford created a wholly owned foreign subsidiary, Ford Export Services B.V. (Export), as an FSC in 1984; Export satisfied FSC statutory prerequisites and contracted to perform export functions for Ford.
Export had no employees; Ford directed operations, prepared Export’s returns, funded Export’s foreign accounts, and paid Export’s U.S. tax liabilities.
Ford made a large tax overpayment in 1992; Export made underpayments in multiple years (1990–93, 1995–98). The IRS did not apply interest netting under I.R.C. § 6621(d) for overlapping periods.
Ford sought refund/abatement in 2008 arguing Ford and Export were the “same taxpayer” under § 6621(d) so interest netting should apply; IRS denied and Ford sued in the Court of Federal Claims.
The Court of Federal Claims granted summary judgment for the government; on appeal the Federal Circuit considered whether background legal principles support treating a parent and an FSC subsidiary as the “same taxpayer.”

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Ford and Export were the “same taxpayer” under I.R.C. § 6621(d) for interest netting	Ford: FSC structure and regulatory authorization for parent control show Congress intended parent and FSC to be treated as one taxpayer for § 6621(d) purposes	Government: Background tax law treats separate corporations (including FSCs and parents) as distinct taxpayers; no background principle indicates shared identity	Held: Not the same taxpayer; Moline Properties principle controls—separate corporate form yields separate tax status absent background law (e.g., merger) showing identity continuity

Wells Fargo & Co. v. United States, 827 F.3d 1026 (Fed. Cir. 2016) (framework: determine “same taxpayer” by reference to background legal principles such as merger law)
Moline Properties v. Commissioner, 319 U.S. 436 (U.S. 1943) (tax law treats corporations with business purpose as separate taxable entities)
National Carbide Corp. v. Commissioner, 336 U.S. 422 (U.S. 1949) (ownership and control alone do not defeat separate corporate tax status)
Ocean Drilling & Expl. Co. v. United States, 988 F.2d 1135 (Fed. Cir. 1993) (parent and subsidiary generally accorded separate taxable-entity treatment)
Boeing Co. v. United States, 537 U.S. 437 (U.S. 2003) (background on DISCs/FSCs and statutory differences in taxation)
Abbott Laboratories v. United States, 573 F.3d 1327 (Fed. Cir. 2009) (administrative issue about retroactive allocation changes between parent and FSC)
Munson S.S. Line v. Commissioner, 77 F.2d 849 (2d Cir. 1935) (example where statutory purpose justified ignoring separate entity)
Morton v. Mancari, 417 U.S. 535 (U.S. 1974) (canon: avoid interpreting statutes to render other statutes inoperative when coexistence is possible)