- 101 -
such a return does not alter the agency relationship established
under section 1.1502-77(c), Income Tax Regs. See Intervest
Enterprises, Inc. v. Commissioner, 59 T.C. 91, 96-97 (1972).
We reject petitioners' argument that section 1.1502-
77(c)(2), Income Tax Regs., is invalid. We do not find that
regulation to be arbitrary, capricious, or manifestly contrary to
the broad grant of authority to the Secretary under section 1502.
Consequently, we find that, pursuant to that regulation, the
Forms 872 executed by Amax and Cyprus Amax, respectively, ex-
tended the respective periods of limitations for 1984, 1985, and
1986 for the assessment of tax due from petitioners' group.38
Accordingly, we find that those respective periods of limitations
have not expired.
Our finding that the Forms 872 in question extended the
respective periods of limitations for 1984, 1985, and 1986 for
38 Petitioners also claim that "each Form [872] was invalid on
its face, because the Service did not attach a rider, as required
by Rev. Proc. 72-38, 1972-2 C.B. 813, 814, as modified by Rev.
Proc. 82-6, 1982-1 C.B. 409, listing the name, address, and
taxpayer identification number of each member of Petitioner's
Group." We disagree. The revenue procedures on which petition-
ers rely are applicable to a situation where a parent corporation
and its subsidiary corporations file separate returns, and not to
a situation such as that presented here where a parent corpora-
tion and its subsidiary corporations join in the filing of a
consolidated return. In any event, even if those revenue proce-
dures were applicable in the present case, they are directory,
and not mandatory. Accordingly, any failure by the IRS to follow
the procedures set forth therein by attaching a "rider" to the
Forms 872 in question would not affect the validity of those
forms. See Cleveland Trust Co. v. United States, 421 F.2d 475,
481-482 (6th Cir. 1970); Luhring v. Glotzbach, 304 F.2d 560, 563
(4th Cir. 1962).
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