Guillermo Baez Espinosa - Page 18

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          Commissioner has prepared a substitute return and issued a notice           
          of deficiency.  Blenheim Co. v. Commissioner, supra; Taylor Sec.,           
          Inc. v. Commissioner, supra.                                                
               In this case we decide whether a nonresident alien                     
          individual may avoid the sanctions of section 874(a) by filing              
          returns after the Commissioner has prepared substitute returns              
          for him, but before the notice of deficiency is issued.                     
          Petitioner first argues that, since there is no explicit terminal           
          date in the statute, a taxpayer may file delinquent returns at              
          any time and avoid the proscription of section 874(a).  In the              
          alternative, petitioner contends that if there is a terminal date           
          that date should be the issuance of the notice of deficiency, and           
          not the filing of the return prepared by the Commissioner.                  
          Where, as here, the Commissioner has notified the taxpayer that             
          he has not filed a return and has given the taxpayer a reasonable           
          time within which to file a return, we disagree with both                   
               As we have already discussed, while sections 874(a) and                
          882(c)(2) contain no explicit time limit, the policy behind these           
          provisions, as applied by the case law, dictates that there is a            
          cut-off point or terminal date after which it is too late to                
          submit a tax return and claim the benefit of deductions.  If no             
          cut-off point existed, taxpayers would have an indefinite time to           
          file a return, and these provisions would be rendered                       

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