Chugach Alaska Corporation Chugach Development Corp. Chugach Fisheries Inc. Chugach Forest Products Inc. Chugach Timber Corporation v. United States

I. INTRODUCTION

The Internal Revenue Service (“IRS”) appeals the district court’s decision on an appeal from a bankruptcy court decision involving the Chapter 11 proceedings of Chugach Alaska Corporation (“Chugach”). This appeal addresses two issues, each of which requires us to interpret section 60(b)(5) of the Deficit Reduction Act of 1984, Pub.L. No. 98-369, 98 Stat. 494, 579 (1984) (“DEFRA 1984”), as amended in 1986, which provided tax relief to Alaska Native Corporations (“Native Corporations”). The district court determined: (1) that Chugach, a Native Corporation, could carryback the net operating losses from its 1990 tax year to offset income assigned to it by another, profitable, corporation in Chugach’s 1987 tax year; and (2) that Chugach could retain a sufficient quantity of the income assigned to it by the profitable corporation in the 1987 tax year to avoid paying any Alternative Minimum Tax (“AMT”) for that year. We have jurisdiction under 28 U.S.C. §§ 158 (d) and 1291. We affirm as to both issues.

II. STATUTORY BACKGROUND

In 1971, Congress passed the Alaska Native Claims Settlement Act, 43 U.S.C. §§ 1601-1629 (“ANCSA”), to provide compensation to Native Alaskans…