126 T.C. No. 6
UNITED STATES TAX COURT
SWALLOWS HOLDING, LTD., Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 8045-02. Filed January 26, 2006.
P is a foreign corporation whose only substantial
asset is unimproved land in the United States. On its
1994, 1995, and 1996 Federal income tax returns, P
recognized rent and option income and claimed
deductions for taxes and licenses, the result of which
was a reported loss for each year. P filed each return
after its due date, but before any contact from R. R
determined that sec. 882(c)(2), I.R.C., precluded P
from deducting its expenses because it filed its
returns untimely. In Anglo-Am. Direct Tea Trading Co.
v. Commissioner, 38 B.T.A. 711 (1938), a setting
similar to that here, the Board held that sec. 233 of
the Revenue Act of 1928, ch. 852, 45 Stat. 849, and the
Revenue Act of 1932, ch. 209, 47 Stat. 230, an almost
verbatim predecessor to sec. 882(c)(2), I.R.C., did not
include a timely filing requirement and rejected R’s
contrary interpretation. Subsequently, the Court of
Appeals for the Fourth Circuit construed like
predecessor text similarly, also in rejection of R’s
contrary interpretation. See Blenheim Co. v.
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