-30-
Congress ever intended to include the element of time
in the section dealing primarily with the manner of
filing. * * * [Id. at 715-716.]
C. Mills, Spence & Co.
In Mills, Spence & Co. v. Commissioner, a Memorandum Opinion
of the Board of Tax Appeals dated Oct. 5, 1938, the Board
followed its decision in Anglo-Am. Direct Tea Trading Co. v.
Commissioner, supra. In Mills, Spence & Co., the taxpayer was a
foreign corporation that had no offices in the United States but
derived income from sources within the United States, thus
requiring it to file Federal income tax returns. On July 19,
1934, the Commissioner informed the taxpayer that it had to file
tax returns for 1930 through 1933 because it had received during
those years gross income subject to Federal income tax. The
taxpayer filed those returns on February 21, 1936, reporting net
losses for each year. Subsequently, the Commissioner issued a
notice of deficiency to the taxpayer that disallowed all of the
deductions claimed on the returns. The Commissioner argued
before the Board that the taxpayer’s failure to file its tax
returns timely meant that it was precluded by section 233 of the
1928 and 1933 Revenue Acts from deducting its expenses. The
Board disagreed, stating:
That the petitioner received the gross incomes,
incurred the expenses, and sustained the net losses as
set out in the tabulation is not in dispute. The
contention of respondent is that such expenses are not
deductible, for the sole reason that the petitioner,
being a foreign corporation, is prohibited from
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