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return immediately after liquidation, but if for the purposes of a consolidated return the holding company desired to withhold the return until the end of its fiscal year, it could do so. The regulation is permissive not mandatory.

Extensions of time for filing returns. In the case of both individuals and corporations :

Law. Section 227. (a) .... The Commissioner may grant a reasonable extension of time for filing returns whenever in his judg. ment good cause exists and shall keep a record of every such extension and the reason therefor. Except in the case of taxpayers who are abroad, no such extension shall be for more than six months.12 . ...

This authorization is, of course, broad enough to permit general extensions as well as extensions in the cases of particular taxpayers. Authority has been delegated to the local collectors of internal revenue to make an extension of thirty days only in case of sickness or absence. Power to grant other extensions rests with the Commissioner.13

APPLICATION TO THE COLLECTOR FOR THIRTY-DAY EXTENSION IN CASE OF ABSENCE OR SICKNESS.—In case an extension of not more than thirty days is desired because of absence or sickness, application should be made by letter to the local collector with whom the return is to be filed.

Law. Section 1317. [Section 3176, Rev. Stat.] .... If the failure to file a return or list is due to sickness or absence, the collector may allow such further time, not exceeding thirty days, for making and filing the return or list as he deems proper.

From the above section of the law, it clearly appears that application may be made after the expiration of the period

2[Former Procedure] Under the 1913 law (section 3176) the Com. missioner was authorized to grant extensions only in case of sickness or absence and even then was limited to thirty days. The 1916 law (section 14 (c)] introduced this provision: “That the Commissioner of Internal Revenue shall have authority, in the case of either corporations or individuals, to grant a reasonable extension of time, in meritorious cases as he may deem proper.” The six months' limitation introduced above is new.

**See page 66.

in which the return is normally required to be filedi; but the application for such extension must not be delayed beyond the period (thirty days) for which the extension is desired. The conditions governing extensions of time in cases of individuals and corporations are fully set forth in a recent Treasury decision as follows:

REGULATION. It is important that the taxpayer render before the return due date a return as complete and final as it is possible for him to prepare. However, in cases of sickness or absence collectors are authorized to grant an extension of not exceeding thirty days, where in their judgment such further time is actually required for the making of an accurate return..... The application for such extension must be made prior to the expiration of the period for which the extension is desired. The absence or sickness of one or more officers of a corporation at the time the return is required to be filed will not be accepted as a reasonable cause for failure to file the return within the prescribed time, unless it is satisfactorily shown that there were no other principal officers available and sufficiently informed as to the affairs of the corporation to make and verify the return. As a condition of granting an extension of time for filing a return the collector may require the submission of a tentative return and estimate of the tax on form 1040T in the case of individuals, or on form 1031T in the case of corporations, and the payment of onefourth of the estimated amount of tax. Where a taxpayer has filed a tentative return and has failed to file a complete return within the period of the extension requested by him the complete return when filed is subject to penalties prescribed for delinquency. Where a tentative return has been filed and no time has been fixed within which a complete return must be filed, the collector may at any time send notice to the taxpayer to file a complete return within a period of time therein specified by him, and a taxpayer who fails to comply with such request will incur the penalties prescribed by statute for delinquency in filing a return. (T. D. 2935, October 16, 1919, amending Art. 443.)

APPLICATIONS TO COMMISSIONER FOR OTHER EXTENSIONS. -Local collectors are not authorized to grant extensions of more than thirty days or in cases other than those of sickness or absence.14 The circumstances in which the Commissioner may grant a limited further extension are set forth in the following regulation.

"See preceding page.

REGULATION. If before the end of an extension of thirty days granted by the collector an accurate return can not be made, an appeal for a further extension must be made to the Commissioner with a full recital of the causes for the delay. The Commissioner will not grant an additional extension without a clear showing that a complete return can not be made at the end of the thirty day period. The Commissioner will grant no such extension beyond the original due date of the third installment of the tax. Either a complete or a tentative return, as complete as possible and giving a ground for assessment of the tax, must be submitted on or before the due date as extended, and the tax shown to be due must be paid with the submission of the return. If a complete return can not be made at that time, the facts must be submitted to the Commissioner for such further action as he deems warranted. In exceptional circumstances the taxpayer may apply originally to the Commissioner for an extension of time. (Art. 444.)

EXTENSION OF TIME FOR FILING RETURNS DUE MARCH 15, 1920.15—Under the law collectors may grant extensions of

[Former Procedure] EXTENSION OF TIME FOR FILING 1918 RETURNS.— Under the law, returns for the calendar year 1918 were due March 15, 1919. As no one knew what the law would be until it passed the Senate on February 13, 1919, and as no forms were available on March 15, an extension of time was inevitable. If the Commissioner had granted a general extension it would have postponed the receipt of the tax, or part of it, by the government, therefore taxpayers were granted extensions, upon their own application, which meant that the government could and did require that a tentative return should be filed on March 15 and that at least 25 per cent of the tax as estimated be paid on that date. If it were found that the estimate was too low, interest at the rate of 6 per cent per annum had to be paid on the insufficient payment. The first extension of this character was announced on February 12, 1919.

An extension of forty-five days (that is, to April 29, 1919) was granted to all who requested it-individuals as well as corporations. On April 14 (Mim. 2101) the Commissioner announced that a further extension, where needed, of forty-five days, would be granted to corporations, i.e., to June 15. The extension of time also applied to corporations whose fiscal years did not end December 31, 1918, which would otherwise have been in default.

The time for filing returns of information, etc., was also extended to June 15.

On May 6, 1919, as forms for corporations reporting for a fiscal year were not ready, the Commissioner ruled (Mim. 2129) that tentative returns might be filed on form 1031T and that such filing would automatically extend the time five and one-half months after the close of the corporation's fiscal year.

The time for filing returns of partnerships and personal service corporations having fiscal years ended January 31, February 28, March 31 or April 30, 1919, was extended to August 15, 1919. (T. D. 2883, July 9, thirty days in the case of sickness or absence. The Commissioner will grant extensions up to six months "whenever in his judgment good cause exists.” In view of the many and complicated problems involved it has become increasingly difficult for individuals and corporations to prepare their returns by March 15. It is, however, possible to submit tentative returns which contain merely an estimate of the amount of tax due. As the government can require that at least 25 per cent of the estimate be paid on or before March 15, and as in no event is any audit made of the returns until a year or more later, it may be expected that the Commissioner will freely accept tentative returns on March 15, 1920, and require final returns by, say, June 15. There are corporations with ramifications extending all over the world which have never before or since the existence of the federal income tax laws been able to close their books within a 75-day period. The Treasury has never dealt harshly with the latter class of taxpayers. It does, however, very properly require that when additional time is required, it shall be asked for in due season and that sound reasons shall be given for the request.

WHEN TAXPAYERS LIVE ABROAD.--Section 227 (a) of the law provides that the six months' limitation shall not cover the case of taxpayers who are abroad. American citizens residing abroad, who because of war conditions have not been able to file their returns for past years, may take advantage of this provision which operates generally and without request by the taxpayer. The details concerning extensions in such cases appear in the following recent Treasury decision :

REGULATION. In view of the disturbed conditions abroad and the consequent interference with the usual channels of communication, an extension of time for filing returns of income for 1918 and subsequent years and for paying the tax is hereby granted in the case of nonresident alien individuals and nonresident foreign corporations, or their proper representatives in the United States, and of American citizens residing or traveling abroad, including persons in military or naval service on duty outside the United States, for such

period as may be necessary, not exceeding ninety days after proclamation by the President of the end of the war with Germany. The installments of tax which are actually due must be paid at the time of filing the return and the other installments shall be paid as they fall due. In all such cases an affidavit must be attached to the return, stating the causes of the delay in filing it, in order that the Commissioner may determine that the failure to file the return in time was due to a reasonable cause and not to willful neglect and that the return was filed without any unnecessary delay. If the showing justifies the conclusion that the failure to file the return in time was excusable, no penalty will be imposed. This extension is granted as a matter of general expediency to all persons abroad owing income, war profits, and excess profits taxes to the Federal Government and is not granted upon the request of any particular taxpayer. Accordingly, in the case of taxpayers who take advantage of this general extension of time for the filing of returns and the payment of tax no interest will be collected from such taxpayers, but where a request is made by a taxpayer and an extension is granted for other reasons by the Commissioner, interest will be collected at the rate of one-half of one per centum per month from the time the tax would have been due if no extension had been granted. (Art. 445, as amended by T. D. 2844, May 17, 1919.)

EXTENSION OF TIME FOR NON-RESIDENT ENEMIES.

REGULATION. An extension of time is hereby granted for such period as may be necessary, not exceeding ninety days after proclamation by the President of the end of the war with Germany, for filing returns of income for 1918 and subsequent years and for paying the tax by or for nonresident enemies or allies of enemies, as defined by section 2 of the Trading with the Enemy Act of October 6, 1917, not holding licenses granted under the provisions of that act. The whole tax shown to be due must be paid at the time of filing the return. This extension, however, does not authorize any delay in filing returns of information. This extension is also subject to the condition that all persons who on October 6, 1917, had or since have had or may hereafter have control of any money or other property for any such enemy or ally of enemy, or who on October 6, 1917, were or since have been or may hereafter be indebted to any such enemy or ally of enemy, shall hold and deliver all said money and property in all respects subject to the Trading with the Enemy Act and to the orders of the President and of the alien property custodian thereunder, and shall in due course file returns of income in respect of all such money and property for such period as may elapse or have elapsed prior to the actual delivery of such money and property to the alien property custodian. .... (Art. 446.)

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