-92-
credits under section 882(c)(2) will be allowed), the 18-month
filing deadline set forth in the regulation represents a
lengthening of the return filing deadline that would have
applied under Taylor Sec., Inc. v. Commissioner, 40 B.T.A. 696
(1939), and its progeny (under which respondent’s prior
notification would have established the deadline).
Where a category 1 corporation files its tax return for the
current year after the 18-month period, but before respondent
notifies the taxpayer, the fixed 18-month filing deadline of the
regulation would apply, and the regulation represents a
shortening of the filing deadline that would have applied under
Taylor Sec., Inc. and its progeny.
For purposes of allowing the deductions and credits under
section 882(c)(2) for the current year for a category 2
corporation (tax return for the prior year not filed), section
1.882-4(a)(3)(i), Income Tax Regs., provides that a foreign
corporation must file its tax return for the current year before
the earlier of either respondent’s notification to the
corporation (that no tax return has been filed for the current
year and that no deductions or credits under section 882(c)(2)
will be allowed) or 18 months after the due date for the current
year tax return. Where respondent so notifies a category 2
corporation within the specified 18-month period, this filing
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