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meaningless. "To hold otherwise would render the entire
provisions of the statute a nullity." Gladstone Co. v.
Commissioner, 35 B.T.A. 764, 768 (1937). The prior case law
established the terminal date as a mechanism designed to ensure
that sections 874(a) and 882(c)(2) would have the in terrorem
effect that Congress intended. The Court of Appeals for the
Fourth Circuit explained:
This terminal date, which the Board of Tax Appeals
first adopted in Taylor Securities v. Commissioner, 1939, 40
B.T.A. 696, is directed against those foreign corporations
which instead of being induced voluntarily to advise the
Commissioner of their domestic operations, might find their
interests best served by filing no return whatever, and then
waiting until such time, if any, as the Commissioner
discovers their existence and acquires sufficient
information about their income on which to base a return.
Unless they are precluded from then obtaining the deductions
and credits under such circumstances, such foreign
corporation can, if detected, come in for the first time
after the Commissioner has made a return and suffer no
economic loss other than the general 25% late filing penalty
which applies to domestic as well as foreign corporations.
[Blenheim Co. v. Commissioner, 125 F.2d at 910.]
The second aspect of petitioner's argument is that a
taxpayer may avoid section 874(a) by submitting returns prior to
the issuance of the notice of deficiency. We do not believe,
however, that the Congressional intent in enacting section 874(a)
would be furthered by a rule that always lets a taxpayer wait and
see what information the Commissioner puts on a substitute return
before the taxpayer has to file a return of his own.
The facts in this case point out our concerns. When
respondent first contacted petitioner concerning his failure to
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