Rev. Proc. 78-27

Section 7.367(b)-1(c)(1) of the Temporary Income Tax Regulations requires that if any person referred to in section 6012 of the Internal Revenue Code of 1954 (relating to the requirement to make returns of income) realized gain or other income (whether or not recognized) on account of any exchange to which section 367(b) of the Code applies, such person must file a notice of such exchange on or before the last date for filing a federal income tax return (taking into account any extensions of time therefor) for the person's taxable year in which gain or other income is realized. This notice must be filed with the district director with whom the person would be required to file a federal income tax return for the taxable year in which the exchange occurs. Section 7.367(b)-1(c)(2) sets forth the information required to be furnished in such notice.

In order for the notice requirement of section 7.367(b)-1(c)(1) of the temporary regulations to be satisfied with respect to a particular shareholder of a foreign corporation, that shareholder must file the information required under section 7.367(b)-1(c)(2) of the temporary regulations. Should a shareholder fail to so file, the Commissioner shall make a determination whether the foreign corporation will be considered a corporation as to that shareholder based on all the facts and circumstances surrounding failure to comply. Section 7.367(b)-1(b) of the temporary regulations. The failure of any shareholder to file the required notice will not, however, prevent the foreign corporation from being treated as a corporation with respect to those shareholders of the foreign corporation who do satisfy this requirement.