Rev. Rul. 54-425

Corporations, unable to determine the amount of their tax liability on or before the statutory due date for filing their corporation income tax returns, as required by section 6072(b) of the Internal Revenue Code of 1954, may obtain extensions of time not to exceed the statutory limitation of 6 months provided in section 6081(a) of the Code in which to file such returns. Extensions thus granted are conditioned upon the filing of tentative returns and the payment of that portion of the tax shown thereon to be due on or before the date on which the completed returns are required to be filed. Cf. Mim. 6157, C.B. 1947-2, 64. Payments made on the basis of such tentative returns, as required by section 6152(a)(1) of the Code, in some instances exceed the tax liability disclosed by the completed returns. Held, the excess of the payments made on the basis of a tentative return over the amount of the tax liability disclosed by a completed return constitutes an overpayment of installments of tax within the meaning of section 6403 of the Code, which may be credited or refunded as provided by section 6402 of the Code. It is the policy of the Internal Revenue Service to refund such overpayments (1) without awaiting the examination of the completed return, (2) without awaiting the filing of a claim for refund, and (3) without submitting a report to the Joint Committee on Internal Revenue Taxation where the refund is in excess of $100,000, since such report is not required in the case of refunds of overpayments of installments of tax such as here involved. return either in full or in accordance with the provisions of law for installment payments.

SEC. 3. RETURNS BY CORPORATIONS FOR FISCAL YEARS BEGINNING IN 1953 AND ENDING AFTER MARCH 31, 1954.

.01 The 1954 Code amends the 1939 Code to eliminate the reduction of the normal tax rate for corporations from 30 percent to 25 percent (and the corresponding changes in the rates applicable in determining certain corporation credits) which were to take place on April 1, 1954. Accordingly, all corporations computing their tax under the 1939 Code for taxable years ending after March 31, 1954, shall compute such taxes without regard to such reduction in the corporation's normal tax rate and without regard to such changes in the determination of the credit for dividends received on preferred stock of public utilities, for dividends paid on certain preferred stock of public utilities, and the credit for Western Hemisphere Trade Corporations.

.02 Corporations having taxable years beginning in 1953 and ending after March 31, 1954, or short taxable years beginning in 1954 and ending after March 31, 1954, but before the date of enactment of the Internal Revenue Code of 1954, shall compute their tax on and file Form 1120, ,990-T, or 990-C, whichever is applicable to them, disregarding instructions contained on such forms with respect to the use in conjunction therewith of Forms 1120-FY or 990-T-FY. The computations of tax on Forms 1120, 990-T, and 990-C, reflect the proper rates of tax and the proper rate to be used in computing the credits for such taxable years under the amendments made by the Internal Revenue Code of 1954.

.03 Any corporation which has made a return for a taxable year described in paragraph .02 above on Form 1120-FY or on Form 990-T-FY should file an amended return as promptly as possible in accordance with paragraph .02, and should pay any additional tax due.

SEC. 4. OTHER RETURNS REQUIRED TO BE FILED DURING 1954.

Where returns have been filed in 1954 under the provisions of the 1939 Code which, because of the retroactive application of provisions of the 1954 Code, are now incorrect, it is the taxpayer's responsibility to file a correct `amended' return and pay any additional tax liability found due. If the `amended' return discloses an overpayment of tax, it may be used as the basis for a claim for refund (Form 843).

SEC. 5. APPLICATIONS FOR TENTATIVE CARRYBACK ADJUSTMENTS.

Taxpayers who have made application for tentative carryback adjustment in connection with net operating losses affected by the provisions of the 1954 Code (for example, affected by the provision for a two-year carryback) should submit corrected applications taking into account the provisions of the 1954 Code.

SEC. 6. EFFECT ON OTHER DOCUMENTS.

.01 It is not intended that this Revenue Ruling have any effect upon established policies relating to the subjects covered herein other than as such policies are specifically modified for the limited periods set forth.

.02 All other internal management documents the provisions of which are inconsistent or in conflict with the provisions of this Revenue Ruling are hereby amended or superseded accordingly.