-41-
filing his own return, the taxpayer may still enjoy the
privilege of all deductions and credits, there is then
no inducement to foreign corporations voluntarily to
file timely returns. In the absence of demonstrable
fraud, they will, by self-serving uncooperative
conduct, suffer no loss other than the general late
filing penalty which is applicable to domestic as well
as foreign corporations. Such a construction of the
statute would put a premium on tax evasion and would
reduce the administration of the tax laws to mere idle
activity. [Id. at 909-910.]
G. Georday Enters.
In Georday Enters. v. Commissioner, 126 F.2d 384 (4th Cir.
1942), affg. a Memorandum Opinion of the Board of Tax Appeals, a
companion case to Blenheim Co. v. Commissioner, 125 F.2d 906 (4th
Cir. 1942), the Court of Appeals for the Fourth Circuit affirmed
the Board’s denial of deductions under section 233 of the 1928
and 1932 Revenue Acts. The court noted that the case for the
disallowance was even stronger than in Blenheim because the
taxpayer did not attempt to file a return voluntarily until after
a petition had been filed with the Board. The court stated:
On the issues of the timeliness of Georday’s federal
income tax return and the imposition of a 25% penalty,
our decision in the Blenheim case is determinative.
The case for disallowance of Georday’s deductions is
even stronger here because Georday failed to file a
return voluntarily not only after a return had been
filed for it by the Commissioner and after a deficiency
letter had been sent to it, but even after a petition
to the Board had been filed. In point of time, Georday
filed its return more than five years after the date on
which it was due.
Georday, therefore, clearly failed to file its
return within the reasonable terminal period prescribed
in the Blenheim case and is now precluded from
obtaining the benefits of any deductions it might have
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