Guillermo Baez Espinosa - Page 19

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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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