Rev. Rul. 60-13

Advice has been requested whether a life insurance company will be denied the protection accorded to other corporations under section 6655(d)(1) of the Internal Revenue Code of 1954 where on or before September 15, 1959, it filed its declaration of estimated tax for 1959 and paid the first installment due thereon, but, under properly authorized extensions of time, did not file its final 1958 corporate tax return until after September 15, 1959.

Section 6655(d) of the Code provides, in part, as follows:

(d) EXCEPTION.-Notwithstanding the provisions of the preceding subsections, the addition to the tax with respect to any underpayment of any installment shall not be imposed if the total amount of all payment of estimated tax made on or before the last date prescribed for the payment of such installment equals or exceeds the amount which would have been required to be paid on or before such date if the estimated tax were whichever of the following is the lesser-

(1) The tax shown on the return of the corporation for the preceding taxable year reduced by $100,000, if a return showing a liability for tax was filed by the corporation for the preceeding taxable year and such preceding year was a taxable year of 12 months.

Section 3(i) of the Life Insurance Company Income Tax Act of 1959, Public Law 86-69, C.B. 1959-2, 654, extended the due date for filing income tax returns for 1958 by life insurance companies to September 15, 1959. However, the Act does not provide for an extension of time for filing declarations of estimated tax for 1959.

Generally, calendar-year corporations were required under section 6074 of the Code to file their declarations of estimated tax for 1959 on or before September 15, 1959, and pay the first installment of tax due on or before that date. By such date, most corporations had filed their final returns for the previous year since the maximum extension of time for filing domestic corporate returns under section 6081(a) of the Code is six months. However, if life insurance companies applied for extensions of time for filing 1958 income tax returns beyond the prescribed filing date of September 15, 1959, they were required to estimate and pay their first installment of 1959 estimated tax on or before September 15, 1959, before they file their 1958 returns.

Although many insurance companies knew with reasonable certainty what their 1958 tax liability was, they were not in a position to file their 1958 tax returns on September 15, 1959, because of the many new elections that had to be made on their first return under the new law, which will have to be followed in subsequent years.

Section 3(i) of the Life Insurance Company Income Tax Act of 1959, supra , states, in part, as follows:

The return required by this subsection for such taxable year shall constitute the return for such taxable year for all purposes of the Internal Revenue Code of 1954; * * *.

Accordingly, it is held that the Life Insurance Company Income Tax Act of 1959, supra , will not deny life insurance companies the benefits of section 6655(d)(1) of the Code if they filed their 1959 estimated tax returns on or before September 15, 1959, accompanied by the first installment of tax due on such date, and if they timely file their 1958 income tax returns on or before the due date or during properly authorized extension periods.