-40-
It will thus be noted that Section 233 relating to
foreign corporations, which made its first appearance
in the Revenue Act of 1928, 26 U.S.C.A. Int. Rev. Acts,
page 419, is almost verbally identical with this
section governing nonresident aliens which has been a
part of the revenue laws since 1918. The application
of Section 217 of the 1918 Act is clear. From the
outset the Treasury Regulations have expressly provided
that no deductions were allowable to nonresident aliens
unless an accurate and complete return was filed, and
the filing of the return by the Commissioner fixed the
tax liability. * * *
* * * * * * *
The foregoing regulation [Article 311 of Treasury
Regulations 45] states specifically that deductions are
allowable to a nonresident alien only if a return is
filed, and, if no return has been filed at the time the
Commissioner prepares a return for the taxpayer, the
tax shall be assessed with no allowance for deductions.
Congress may be presumed to have adopted this
longstanding administrative construction when it
enacted and reenacted Section 233. Brewster v. Gage,
1930, 280 U.S. 327, 50 S. Ct. 115, 74 L.Ed. 457, Morgan
v. Commissioner, 1940, 309 U.S. 78, 626, 60 S. Ct. 424,
84 L.Ed. 585, 1035. [Id. at 910.]
The Court of Appeals for the Fourth Circuit distinguished its
holding in Ardbern Co. v. Commissioner, 120 F.2d 424 (4th Cir.
1941), stating:
A substantially different factual situation is
presented in the case before us. Here the Commissioner
prepared a return only after he had unsuccessfully made
repeated requests to the taxpayer to do so, and only
after the taxpayer had flouted all of these requests.
Then, after the Commissioner had assessed a deficiency
on the basis of his return, but only then, the
petitioner filed its petition for review by the Board
and also a return.
Unless the deductions are here denied, Section 233
will become a meaningless provision, for if, after the
Commissioner has earnestly attempted to obtain a return
by the taxpayer and has waited a reasonable time before
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