Rev. Rul. 55-474

In determining the amount of a tax credit under section 3806(b) of the Internal Revenue Code of 1939, since assessed taxes are in most cases paid prior to the allowance by the renegotiating agency of the tax credit, although the tax payment may be made subsequent to the computation of such credit by the Internal Revenue Service, it is the policy to use the assessed tax in the computation of the credit, in order to avoid the delay in the settlement of the net repayment due the renegotiating agency, which would result if such computation were not made until the assessed taxes were paid in full. Where, however, the Service has knowledge of an outstanding assessment the payment of which is in doubt, the computation of the credit by the Internal Revenue Service is made on the basis of taxes paid and the amount of the credit, furnished to the renegotiating agency which allows the tax credit, is limited to the extent of the overpayment of tax. In any event, if outstanding taxes are not later paid and the tax credit based on assessment (rather than payment ) has already been finally allowed by the renegotiating agency, the tax credit allowed, to the extent it exceeds the allowable credit based upon taxes paid , will be reassessed as a deficiency. See Baltimore Foundry and Machine Corporation v. Commissioner , 7 T.C. 998