-48-
(2) Tax on gross income. If a return is not so
filed, the tax shall be collected on the basis of gross
income, determined in accordance with � 1.882-1 but
without regard to any deductions otherwise allowable.
C. 1990 Regulations
On December 10, 1990, the Secretary issued the 1990
regulations to amend section 1.882-4, Income Tax Regs., as
adopted in 1957. See sec. 1.882-4, Income Tax Regs., 55 Fed.
Reg. 50830 (Dec. 11, 1990), T.D. 8322, 1990-2 C.B. 172. The
amendments were first published as proposed regulations. See
sec. 1.882-4, Proposed Income Tax Regs., 54 Fed. Reg. 31547
(July 31, 1989). In the preamble to the proposed regulations,
the Secretary explained: “Since the filing of a timely return is
one of the requirements set forth in subtitle F, these
regulations provide that otherwise allowable deductions and
credits will be allowed only if a return is filed by the time
limits as set forth in these regulations.” Id. As finalized,
the 1990 regulations became effective July 31, 1990, for taxable
years ended after that date. See sec. 1.882-4, Income Tax Regs.,
supra, T.D. 8322, 1990-2 C.B. at 172.
The 1990 regulations added to the 1957 regulations a general
requirement that a foreign corporation file its Federal income
tax return timely; i.e., generally before the 18-month deadline,
in order to deduct its expenses for the year covered by the
return. As respondent asserts in brief, a timely filing
requirement was added because:
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