The court also noted that the government's "constructive return" theory was a flawed interpretation ofRevenue Procedure 84-58, but that the theory made some sense in connection with section 6603, which allows interest on returned deposits at a reduced rate (section 6603 interest). Ford made an argument that because section 6603 allows a taxpayer who requests the return of a deposit to obtain section 6603 interest computed from the date of remittance date, it didn't make sense to interpret section 6611 to allow a taxpayer who converts a deposit to recover interest only from the conversion date. The government responded that the conversion of a deposit involves two separate transactions. First, the deposit is constructively returned, and then it is immediately re-submitted as a payment. The court noted that under this reasoning, section 6603 would allow interest to be paid at two different rates—the lower section 6603 rate from the date of deposit to the date of conversion and at the normal interest rate from the date of conversion to the date of refund.
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