                        United States Court of Appeals,
                               Eleventh Circuit.


                                    No. 95-3040.

 Bradley C. MILLER and Dianne M. Miller, Petitioners-Appellants,

                                         v.

       COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellee.

                                Nov. 14, 1996.

Appeal from the Decision of the United States Tax Court. (Tac Court
No. 7263-93)

Before BARKETT, Circuit Judge, and DYER and HILL, Senior Circuit
Judges.

       HILL, Senior Circuit Judge:

       This appeal from the Tax Court involves the issue of whether

the taxpayers' election statement under Internal Revenue Code

Section 172(b)(3)(C)1 unequivocally communicated their intent to

relinquish the carryback period for both a net operating loss (NOL)

and an alternative minimum tax net operating loss (AMT NOL).

Finding that it did not, we reverse the decision of the Tax Court.

                                         I.

       Bradley C. and Dianne M. Miller filed their 1984 federal

income tax return.        They reported a tax liability of zero, and an

alternative minimum tax (AMT) liability of $46,000.            The Millers

paid       this   sum    to   the    Commissioner   of   Internal   Revenue


       1
      In general, an NOL is carried back to each of three
preceding years to offset taxable income (beginning with the
earliest year first). Then, to the extent that it has not been
absorbed, the NOL is carried forward to each of the next fifteen
years. I.R.C. § 172(b)(1), (2). A taxpayer may irrevocably
elect to relinquish his three-year carryback period. I.R.C. §
172(b)(3)(C). In that case he may use the NOL only by carrying
it forward to offset income in subsequent years. Id.
(Commissioner) in a timely manner.           The next year the Millers

sustained an NOL of $332,000 and an AMT NOL of $156,000.                   An

opportunity for personal income tax planning was presented as,

naturally, the Millers wanted to offset both types of 1985 losses

against income to the greatest lawful advantage under the tax code.

      Robert B. Krusoe was the Miller's certified public accountant.

In preparing their 1985 return, Krusoe determined that, if the

Millers carried back their 1985 AMT NOL to 1984, they would be

entitled to a refund of $41,000.           He found no such benefit in

carrying back their "regular" NOLs. Krusoe concluded that it would

be   financially   beneficial   to   the   Millers   if   they   elected   to

relinquish the carryback period for "regular" NOLs and carry them

over only into future years.     Krusoe then researched whether this

could be done legally under the tax code.2       At the time, there was

a dearth of information on the treatment of AMT NOLs for carryback
                                                                            3
purposes.   Relying on an article in a respected tax periodical,

      2
      Krusoe testified that, if his research had shown that the
carryback periods could not be split, he fully intended to carry
both losses back to assure the refund rightfully due the Millers.

      3
       The article stated:

            It is unclear whether both a regular NOL and AMT NOL
            from the same year must be given the same carryover
            treatment. For example, it may be possible to
            carryback a regular NOL and elect to carry forward an
            AMT NOL even though both NOLs originated in the same
            year. Independent treatment would seem appropriate in
            that for 1983, separate treatment was required due to
            the fact that an AMT NOL could not be carried back to a
            pre-1983 year, but no such limitation applied to a
            regular tax NOL.

      Gary R. Stout & Earl J. Weiss, "Analysis of the Alternative
      Minimum Tax Net Operating Loss: The Second NOL", 61 J.Tax.,
      418, 422 (December 1984).
substantiated by the written opinion of a former IRS employee and

colleague, and his own research, Krusoe filed an election on the

Millers' behalf to waive the NOL carryback period and, in so doing,

attempted to "split" their election:

     In accordance with the Internal Revenue Code Section 172, the
     Taxpayers hereby elect to forego the net operating loss carry
     back period and will carryforward the net operating loss.
     (Emphasis added.)

     Krusoe testified that it was his intent to waive only the

regular NOL carryback period and not the AMT NOL carryback period.

He claims that was why he chose the singular word "loss" and not

its plural, "losses."       Krusoe prepared the election statement by

tracking the exact statutory language of NOLs in the tax code.        By

so doing, he intended the term "net operating loss" to mean regular

NOLs.       He thought it unnecessary to refer to AMT NOLs at all.4

        Thereafter Krusoe filed an amended 1984 return for the Millers

and carried back their AMT NOL.       He did not carryback their NOL. 5

The return stated:

        The amended return is filed to carryback an alternative
        minimum taxable net operating loss in accordance with Internal
        Revenue Code § 55(d). AMT NOL computations are on page 5 and
        first carried back to 1983, on page 6, then to 1984 also on
        page 6.

Subsequently, the Millers received a refund of $41,000 from the

        4
      Expert witnesses testified at trial that, in the early
1980's, the term "net operating loss' was commonly understood by
members of the tax accounting industry to mean regular NOLs, not
AMT NOLs.
        5
      Krusoe's cover letter to the Millers, with their completed
1985 return, stated that, for 1985, they had sustained a "regular
net operating loss of [$332,000] which [had] been elected to be
carried forward ... [and] an alternative minimum tax net
operating loss of [$156,000], which ... [the Millers, with the
assistance of Krusoe, would] carryback after [the] return [was]
filed."
Commissioner.

                                 II.

       Hindsight and writing skills were not in Krusoe's favor.   In

1986, a House Conference Report was issued, making it clear that

"an election under section 172(b)(3)(C) to relinquish the carryback

period applies both for regular tax and for minimum tax purposes."

2 H.R.Conf.Rep. No. 99-841, 99th Cong., 2d Sess. II-262, 283

(1986), U.S.Code Cong. & Admin.News 1986, pp. 4075, 4350, 4371.

One year later, the Commissioner issued a revenue ruling stating

that the election was indivisible and could not be split. Rev.Rul.

87-44, 1987-1 C.B. 3.    In addition, in 1991, the Tax Court ruled

that NOLs and AMT NOLs could not be split and carried in different

directions.     Plumb v. Commissioner, 97 T.C. 632, 636, 1991 WL

260735 (1991).

       Subsequently, in 1993, the Commissioner issued a notice of

deficiency to the Millers, disallowing the carryback of the AMT

NOL, and, seeking the return of the refunded AMT.        The Millers

filed a petition in the Tax Court contesting the Commissioner's

determination.    They argued that, after Plumb, 97 T.C. at 632, if

they were not permitted to split their carryback periods, then

their election was invalid as ambiguous on its face, and they

should be allowed to carryback both their AMT NOL and their regular

NOL.

       The Tax Court rejected this contention stating:

       ... objectively and on its face, when considered in the
       context of the election, [the election] does not create
       ambiguity or show that [the taxpayers] attempted to carry
       forward only NOL's computed by the regular method.       The
       operative language in [the taxpayers'] election included the
       phrase "to forego the net operating loss carry back period."
     Under the statute, that necessarily would include NOLs and AMT
     NOLs.

      The Tax Court found that the Millers' election statement

unequivocally and unambiguously communicated an intent to waive the

carryback period for both their NOL and their AMT NOL.     It held, as

a matter of law, that the Millers had made an effective election

under Code Section 172(b)(3)(C) and were bound by that election.

We review the Tax Court's holding de novo. Powers v. Commissioner,

43 F.3d 172, 175 (5th Cir.1995);    Branum v. Commissioner, 17 F.3d

805, 808 (5th Cir.1994).

                                 III.

      While this issue is one of first impression in this circuit,

the Fifth Circuit has considered it twice recently.         Powers v.

Commissioner, 43 F.3d 172 (5th Cir.1995);     Branum v. Commissioner,

17 F.3d 805 (5th Cir.1994).      In both     Branum and Powers, the

taxpayers attempted a split election that was later found to be

unavailable   to   them.   The   Fifth   Circuit   determined   that   a

taxpayer's election to waive the carryback period under Code

Section 172(b)(3)(C) must be unequivocal and unambiguous to be

effective.    Powers, 43 F.3d at 176;    Branum, 17 F.3d at 811;   see

also Young v. Commissioner, 783 F.2d 1201, 1206 (5th Cir.1986).

     In Branum, the taxpayer attempted to file a "split" election

notice, sending NOLs and AMT NOLs in different directions for

offset purposes.    Unlike the Millers, however, the Branum taxpayer

used the plural word, "losses," and the phrase, "all losses," in

his election statement.      17 F.3d at 806.       When it was later

determined that a split election was impermissible, the Branum

taxpayer sought to repudiate his election, as he, like the Millers,
benefited from waiving the carryback only as to his NOLs and not

his AMT NOLs.   The Fifth Circuit found that he had waived the

carryback periods for both.    Id.    The Branum taxpayer's use of the

plural in his election statement "unequivocally communicated his

intent" to waive both types of losses, id. at 808, and left no room

for even a "shadow of ambiguity." 6      Id. at 809 n. 11.     This was

fatal to his claim.     Id. at 809.

     In Powers, the taxpayer, in his attempt to file a "split"

election notice, used the right subsection of the tax code but the

wrong section number.    The Fifth Circuit held the taxpayer's error

caused his election to be ambiguous on its face and fatal to the

validity of his election.    Powers, 43 F.3d at 177.   The court found

that an invalid election is no election at all and that the Powers

taxpayer had not relinquished the right to carryback his NOLs.7

Id. at 179.

     Under a de novo review, the same result is in order here.       As

the taxpayers in Branum and Powers, the Millers attempted a split

election under Code Section 172(b)(3)(C) that was later determined

to be unavailable to them.      Plumb, 97 T.C. at 641.       Unlike the

Branum election notice, however, the Miller's notice did not refer

to "losses" but to "loss.8 "    Using the Fifth Circuit precedent of

     6
      In this case, the Tax Court found that the Millers should
not be permitted to repudiate their own language by showing, what
it termed "a mere shadow of ambiguity."
     7
      Here the Tax Court distinguished Powers on the basis that
the Millers had used language that had correctly cited the proper
code section.
     8
      The Tax Court here found itself "compelled to hold that the
[singular] term "net operating loss" objectively and on its face,
when considered in the context of the election, does not create
Branum and Powers as guidance, we find the Miller's election to be

ambiguous and equivocal on its face, and hence, invalid.   Branum,

17 F.3d at 805;    Powers, 43 F.3d at 175.   For purposes of Code

Section 172(b)(3)(C), their invalid election is no election at all.

Id.   Therefore, the Millers have not relinquished their right to

carryback both their regular NOLs and their AMT NOLs.   Id.

                                IV.

      The decision of the Tax Court is REVERSED.

      REVERSED.




ambiguity or show that [the Millers] attempted to carry forward
only NOL's computed by the regular method."
