- 197 -
amounts, infra pp. 215-220.
We conclude that, because LTD filed no returns, it is not
entitled to any deductions for the direct costs in all of LTD's
income categories other than "Interest Income" or for
compensation expenses for the fees already paid by LTD to INC.
In Blenheim Co. v. Commissioner, supra, the taxpayer, a foreign
corporation, filed a personal holding company surtax return (Form
1120H) but not an income tax return (Form 1120). The
Commissioner's "Extended efforts * * * to get * * * [the
taxpayer] to file a Form 1120 return voluntarily were
unsuccessful", and the Commissioner was "forced by * * * [the
taxpayer's] inactivity and uncooperative attitude to prepare a
return for * * * [the taxpayer]". Id. at 909. In the return
that the Commissioner prepared for the taxpayer, the Commissioner
disallowed deductions and credits pursuant to section 233 of the
Revenue Act of 1934.28 The Commissioner then sent a notice of
deficiency to the taxpayer based on that return. Id.
The taxpayer then filed an income tax return (Form 1120)
that included "a breakdown of petitioner's income and claimed
deductions." Id. The Board of Tax Appeals held that the
circumstances of the case warranted the disallowance of the
deductions. The Court of Appeals for the Fourth Circuit
affirmed, stating that
28
Sec. 233 of the Revenue Act was the predecessor statute to
sec. 882(c)(2) of both 1954 I.R.C. and 1986 I.R.C.
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