-24-
Section 217 of the Revenue Act of 1918 was reenacted in
subsequent revenue acts, see, e.g., Revenue Act of 1924, ch. 234,
sec. 217(g), 43 Stat. 275; Revenue Act of 1926, ch. 27, sec.
217(g), 44 Stat. 32; Revenue Act of 1928, ch. 852, sec. 215(a),
45 Stat. 848; Revenue Act of 1932, ch. 208, sec. 215(a), 47 Stat.
229, and was codified in the 1939 Code as section 215(a), ch. 2,
53 Stat. 77. It was recodified in the 1954 Code as section
874(a), 68A Stat. 281. Section 874 of the 1954 Code was
identical in substance with sections 215 and 216 of the 1939
Code, H. Rept. 1337, 83d Cong., 2d Sess., supra at A245, and is
virtually identical to section 882(c)(2) except that the latter
section uses the words “foreign corporation” instead of the words
“nonresident alien individual”.
From the outset, the Secretary interpreted section 217 of
the Revenue Act of 1918 as providing that a nonresident alien was
allowed deductions upon the alien’s filing of a true and accurate
Federal income tax return and that the alien’s tax liability
would be assessed without the benefit of deductions if the
Commissioner had to prepare a substitute return for the alien.
That interpretation was set forth in Article 311 of Regulations
45 as follows:
Art. 311. Allowance of deductions and credits to
nonresident alien individual.--Unless a nonresident
alien individual shall render a return of income as
required in article 404 [i.e., “a full and accurate
return on form 1040 (revised) or form 1040 A (revised)
of his income received from sources within the United
Page: Previous 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 NextLast modified: May 25, 2011