file evidence with the collector showing that the individual for whom he acts did not receive taxable income during the year, or that the agent filed the return with some other collector, as provided by law.16

Corporation, Fiduciary and Partnership Returns. The subject of returns by corporations, including the new provisions regarding consolidated returns by affiliated corporations and the subject of returns by partnerships and fiduciaries are discussed in previous chapters.17

Where Returns Are Filed. Returns of income must be delivered or mailed to the collector for the district of the legal residence or principal place of business of the person making the return. Persons having no domicile or place of business in the United States, and persons in the military or naval service of the United States, may file their returns of income with the collector at Baltimore.18 Although the law permits the return to be filed in either one of the two districts indicated above, the Treasury Department desires, for administrative purposes, that the return be filed in the district in which the individual resides.19

When Filed. Returns of income must be made on or before the fifteenth day of March following the taxable year, except that returns on the basis of a fiscal year other than the calendar year must be made on or before the fifteenth day of the third month following the close of the fiscal year.20 The dates above indicated will be the primary due dates for all returns of income. Unless an extension of time is obtained, the taxpayer will be held delinquent if his return is not filed on or before the primary date and will be subject to the 25% additional tax and the penalties

16 Reg. 33, Art. 18.

17 See Chapters 10, 8 and 6.

18 Revenue Act of 1918, § 227; Reg. 45, Art. 448.

19 Letter from Treasury Department dated December 17, 1914; I. T. S. 1918, ¶596. The Treasury Department recognizes that the individual has the right to choose one of two districts, where he resides in one and does business in another, and the filing in either district will be a proper compliance with the law. For the year 1913 the Treasury Department requested the filing of returns in the district in which the individual's principal place of business was located. This threw an undue burden on the Collectors in large cities and the subsequent ruling was made in order to remedy this condition.

20 Revenue Act of 1918, § 227; Reg. 45, Art. 441.

provided by the law.21 The rule in regard to the time for filing returns upon the death of a taxpayer or the termination of a trust is set forth elsewhere.22

LAST DUE DATE. These words are used to designate the last day upon which a return is required to be filed in accordance with the provisions of the law, or the last day of the period covered by an extension of time granted by the collector or Commissioner.23 When the last due date as above defined falls on a Sunday or a legal holiday, the last due date will be considered the day next following, and the return should be filed not later than such following day, or, if placed in the mails, it should be posted in ample time to reach the collector's office, under ordinary handling of the mails, on or before the date on which the return as here indicated is required to be filed.24

MAILING RETURNS. If a return is placed in the mails in due course properly addressed and postage paid, in ample time to reach the office of the collector on or before the last due date, no penalty will attach should the return not actually be received by such officer until subsequent to that date. Where a question may be raised as to whether or not the return was posted in ample time to reach the collector's office on or before the due date, the envelope in which the return was transmitted will be preserved by the collector and forwarded to the Commissioner with the return.25

Returns When Accounting Period Changed. No return can be made for a period of more than twelve months. A separate return for a fractional part of a year is, therefore, required wherever there is a change, with the approval of the Commissioner, in the basis of computing net income, from one taxable year to another taxable year or wherever a taxpayer making his first return of income does so on the basis of a fiscal year.26 If the change is from calendar year to fiscal year, a separate return must be made. for the period between the close of the calendar year for which return was made and the date designated as the close of the fiscal

21 T. D. 2001; Reg. 45, Art. 441.

22 See Reg. 45, Art. 442. See Chapter 6.

23 Reg. 45, Art. 447; Reg. 33 Rev., Art. 218. 24 Reg. 45, Art. 447; Reg. 33 Rev., Art. 219.

25 Reg. 45, Art. 447; Reg. 33 Rev., Art. 52.

28 Revenue Act of 1918, § 226; Reg. 45, Art. 431.

year. If the change is from one fiscal year to another fiscal year, a separate return must be made for the period between the close of the former fiscal year and the date designated as the close of the new fiscal year. If the taxpayer making his first return keeps his accounts on the basis of a fiscal year, he must make a separate return for the period between the beginning of the calendar year in which such fiscal year ends and the end of such fiscal year.27 The requirements with respect to the filing of a separate return and the payment of tax for a part of a year, are the same as for the filing of a return and the payment of tax for a full taxable year closing at the same time.2

28

Extension of Time. The Revenue Act of 1918 makes provision in certain cases for an extension of time for filing returns. As indicated in the following paragraphs, such extensions may be granted by collectors or by the Commissioner.

EXTENSION OF TIME BY COLLECTOR. 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.29 The application for such extension must be made prior to the expiration of the period for which the extension is required. 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 1040 T in the case of individuals, or on Form 1031 T in the case of corporations, and the payment of one-fourth of the estimated amount of tax.30 Where a taxpayer has filed a tentative return and has failed to file a com

27 Revenue Act of 1918, § 226.

28 Revenue Act of 1918, §§ 226 and 239; Reg. 45, Art. 431.

29 Revised Statutes § 3176, as amended by the Revenue Act of 1918, § 1317. Reg. 45, Art. 443.

30 Reg. 45, Art. 443.

plete 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.31

EXTENSION OF TIME BY COMMISSIONER. In addition to the limited extension of thirty days which may be granted by collectors, the Commissioner may grant a reasonable extension of time for filing returns whenever, in his judgment; good cause exists. He is required to keep a record of such extensions and the reasons therefor. Except in the case of taxpayers who are abroad, no such extension may be for more than six months.32 If, before the end of a thirty day extension granted by a collector, an accurate return cannot 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 cannot be made before 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 cannot 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.33

EXTENSION OF TIME IN THE CASE OF PERSONS ABROAD. 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

31 T. D. 2935.

32 Revenue Act of 1918, § 227 (a); Reg. 45, Art. 445.

33 Reg. 45, Art. 444.

1

and for paying the tax has been granted in the case of non-resident alien individuals and non-resident 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 must 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 wilful 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. This extension also applies to domestic corporations whose records are kept and business transacted abroad.34

EXTENSION OF TIME TO ENEMIES. An extension of time has been 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 non-resident 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 exten

34 Reg. 45, Art. 445, as amended by T. D. 2844; telegram from Treasury De partment dated April 19, 1919; I. T. S. 1919, ¶ 3312.