-2-
Commissioner, 125 F.2d 906 (4th Cir. 1942), affg.
42 B.T.A. 1248 (1940); Ardbern Co. v. Commissioner,
120 F.2d 424 (4th Cir. 1941), modifying and remanding
on other grounds 41 B.T.A. 910 (1940). R continues to
adhere to his rejected interpretation and now attempts
to support that interpretation by citing Treasury
regulations issued in 1990. Those regulations
interpret sec. 882(c)(2), I.R.C., to provide that a
foreign corporation generally is entitled to deduct its
expenses only if it files a timely return.
Held: A timely filing requirement is not found in
a plain reading of sec. 882(c)(2), I.R.C.
Held, further, the timely filing requirement in
the regulations is invalid in that it is unreasonable
under a plain reading of sec. 882(c)(2), I.R.C., and an
application of the considerations set forth in Natl.
Muffler Dealers Association v. United States, 440 U.S.
472 (1979).
Phillip L. Jelsma, for petitioner.
Thomas A. Dombrowski and Nina E. Chowdhry, for respondent.
LARO, Judge: Petitioner petitioned the Court to redetermine
respondent’s determination of deficiencies in its Federal income
taxes for its taxable years ended May 31, 1994, 1995, and 1996
(1994, 1995, and 1996 taxable years, respectively; collectively,
subject years), and additions thereto under section 6651(a)(1).1
The deficiencies and additions to tax are as follows:
1 Unless otherwise noted, section references are to the
applicable versions of the Internal Revenue Code of 1986. Rule
references are to the Tax Court Rules of Practice and Procedure.
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