-5- it files a timely return. Under the relevant part of the disputed regulations, a return is timely if it is filed before an arbitrary 18-month deadline (18-month deadline) devised by the Secretary.4 The Secretary issued the disputed regulations stating that section 882(c)(2) contains a “clear” requirement that a foreign corporation file its return timely in order to deduct its expenses. The Secretary made no mention of the consistent interpretation of the relevant text by the Court of 4 The regulations explain the 18-month deadline as follows: For taxable years of a foreign corporation ending after July 31, 1990, whether a return for the current taxable year has been filed on a timely basis is dependent upon whether the foreign corporation filed a return for the taxable year immediately preceding the current taxable year. If a return was filed for that immediately preceding taxable year, or if the current taxable year is the first taxable year of the foreign corporation for which a return is required to be filed, the required return for the current taxable year must be filed within 18 months of the due date as set forth in section 6072 and the regulations under that section, for filing the return for the current taxable year. If no return for the taxable year immediately preceding the current taxable year has been filed, the required return for the current taxable year (other than the first taxable year of the foreign corporation for which a return is required to be filed) must have been filed no later than the earlier of the date which is 18 months after the due date, as set forth in section 6072, for filing the return for the current taxable year or the date the Internal Revenue Service mails a notice to the foreign corporation advising the corporation that the current year tax return has not been filed and that no deductions (other than that allowed under section 170) or credits (other than those allowed under sections 33, 34 and 852(b)(3)(D)(ii)) may be claimed by the taxpayer. [Sec. 1.882-4(a)(3)(i), Income Tax Regs.]Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011