Rev. Rul. 75-327

Advice has been requested whether a Form 1120, U.S. Corporation Income Tax Return, marked "Tentative" will be accepted as a return for the purpose of processing a Form 1139, Corporation Application for Tentative Refund from Carryback of Net Operating Loss, Net Capital Loss, Unused Investment Credit, or Unused Work Incentive (WIN) Program Credit, and for issuing a tentative refund under section 6411 of the Internal Revenue Code of 1954.

The corporation filed it's calendar year 1974 income tax return, Form 1120, on February 1, 1975. The return was marked "Tentative" and reflected a net operating loss. On the same date the corporation filed Form 1139, requesting a tentative refund from the carryback of the net operating loss. The corporation used the net operating loss shown on the Tentative Form 1120 in computing its net operating loss deduction so as to arrive at the amount of the tentative refund.

Section 6011(a) of the Code provides that every person required to make a return shall include therein the information required by the forms or regulations prescribed by the Secretary or his delegate.

Section 6012(a)(2) of the Code requires every corporation subject to taxation under subtitle A to make a return with respect to income taxes.

Section 6411(a) of the Code provides, in part, that the application for a tentative carryback adjustment shall be filed on or after the date of filing of the return for the taxable year of the net operating loss in the manner and form required by regulations prescribed by the Secretary or his delegate.

Section 1.6011-1(b) of the Income Tax Regulations provides, in part, that each taxpayer should carefully prepare his return and set forth fully and clearly the information required to be included therein. Returns that have not been so prepared will not be accepted as meeting the requirements of the Code.

Section 1.6411-1(c) of the regulations provides, in part, that the application for a tentative carryback adjustment shall be filed on or after the date of the filing of the return for the taxable year of the net operating loss. Any application filed prior to the date that the return for the taxable year of the loss is filed shall be considered to have been filed on the date such return is filed.

At one time the Internal Revenue Service accepted a "Tentative" return for purposes of granting an extension of time to file a return, to pay the tax due on such return, and for the privilege of paying the tax due in installments. See Rev. Rul. 54-425, 1954-2 C.B. 38, declared obsolete by Rev. Rul. 74-622, 1974-2 C.B. 405. A Form 7004, Application for Automatic Extension of Time to File Corporation Income Tax Return, that indicates the tentative amount of tax due is now the proper form to use for the above purpose.

A Form 1120 marked "Tentative" would be nothing more than a detailed Form 7004. In Florsheim Brothers Drygoods Co. v. United States, 280 U.S. 453 (1930), 1X-1 C.B. 260 at 263 (1930), the Supreme Court of the United States held that a Form 1031T, a form then used for basically the same purpose as the Form 7004, was not a return for the purpose of starting the period of limitations for the assessment of tax. The Court stated, in part, that:

(T)he filing of a return which is defective or incomplete under section 239 is sufficient to start the running of the period of limitation. * * * But the defective or incomplete return purports to be a specific statement of the items of income, deductions and credits in compliance with section 239. And, to have that effect, it must honestly and reasonably be intended as such. There is not a pretense of such purpose with respect to Form 1031T.

Section 239 of the Revenue Act of 1918 is a predecessor of section 6012(a)(2) of the Code.

The decision in Florsheim that a tentative return is not a return for purposes of section 239 of the Revenue Act of 1918 is applicable under section 6012(a)(2) of the Code.

The Service must presume that a return marked "Tentative" supplies only estimated or unverified information and such return would, therefore, not meet the requirements of section 6011(a) of the Code or the regulations thereunder since the information required would not be set forth fully and clearly.

The Service must rely on the information provided by the taxpayer on Form 1139 and much of this information, such as the amount of net operating loss, is based on the return for the loss year. Thus, section 6411(a) of the Code requires that the return for the loss year be filed before the application for tentative refund can be made, so that there is some reasonable basis for relying on the application. Since a return marked "Tentative" is not a return for purposes of sections 6011(a) or 6012(a)(2), it will not be accepted as meeting the requirement of a return for purposes of section 6411(a).

Accordingly, a Form 1120 marked "Tentative" will not be accepted as a return for the purpose of processing a Form 1139 and issuing a tentative refund under section 6411 of the Code.