In Barasch v. Pennsylvania Public Utility Commission, 120 Pa. Commw. 292, 548 A.2d 1310, 1312 (Pa. Cmwlth. 1988), the court explained: When consolidated tax returns are used, each subsidiary of a parent corporation calculates its separate income, deductions, tax liability and tax credits on a stand-alone basis. However, the subsidiary does not then file a separate federal income tax return or pay the calculated tax to the Internal Revenue Service (IRS). Rather, the subsidiary submits its calculations ... to the parent corporation. As is permitted by law, the parent corporation then offsets taxable income generated by some subsidiaries with tax losses and credits generated by other subsidiaries to arrive at a figure representing the taxable income of the consolidated group.