and Z together owned 50 percent of all classes of the outstanding shares of M Corporation. On January 28, 1975, all of the shareholders of M Corporation exchanged their shares in M Corporation for shares of a new N Corporation. As a result of that exchange, X, Y and Z together own 50 percent of the common stock of N Corporation, the only class of N Corporation stock outstanding after the exchange. N Corporation furnishes the services formerly furnished by M Corporation. N Corporation will be deemed to have ordinarily and customarily furnished such services on June 30, 1974, for purposes of section 2003(c)(2)(D) of the Act.

Example (4). I Corporation ordinarily and customarily furnished certain services on June 30, 1974. On November 3, 1975, I Corporation organizes a wholly owned subsidiary, S Corporation, which furnishes the same services ordinarily and customarily furnished by I Corporation on June 30, 1974. S Corporation will be deemed to have ordinarily and customarily furnished such services on June 30, 1974, for purposes of section 2003(c)(2)(D) of the Act.

Example (5). X Corporation, whollyowned and controlled by A, ordinarily and customarily furnished certain services on June 30, 1974. Y Corporation did not perform such services on that date. On January 2, 1976, X Corporation is merged into Y Corporation and although a received less than 50 percent of the total outstanding shares of Y Corporation, after such merger A has control over the management and policies of Y Corporation. Y Corporation furnishes the same services that were formerly furnished by X Corporation. Y Corporation will be deemed to have ordinarily and customarily furnished such services on June 30, 1974, for purposes of section 2003(c)(2)(D) of the Act. [T.D. 7491, 42 FR 32388, June 24, 1977]

(a) Minimum funding standards or excess contributions for self-employed individuals and section 403(b)(7)(A) custodial accounts. Any employer or individual liable for tax under section 4971, 4972 or 4973(a)(2) (for a custodial account under section 403(b)(7)(A)) shall file an annual return on Form 5330 and shall include therein the information required by such form and the instructions issued with respect thereto.

(b) Tax on prohibited transactions. Every disqualified person (as defined

in section 4975(e)(2)) liable for the tax imposed under section 4975(a) with respect to a prohibited transaction shall file an annual return on Form 5330 and shall include therein the information required by such form and the instructions issued with respect thereto. The annual return on Form 5330 shall be filed with respect to each prohibited transaction and for each taxable year (or part thereof) of the disqualified person in the taxable period (as defined in section 4975(f)(2)) beginning on the date on which such prohibited transaction occurs.

[T.D. 7838, 47 FR 44249, Oct. 7, 1982]

PART 55-EXCISE TAX ON CERTAIN REAL ESTATE INVESTMENT TRUSTS Subpart A-Tax on Certain Real Estate Investment Trust Taxable Income Not Distributed During the Taxable Year

Sec.

55.4981-1 Imposition of excise tax on certain real estate investment trust taxable income not distributed during the taxable year.

Subpart B-Procedure and Administration 55.6001-1 Notice or regulations requiring

records, statements, and special returns. 55.6011-1 General requirement of return, statement, or list.

55.6061-1 Signing of returns and other documents.

55.6065-1 Verification of returns. 55.6071-1 Time for filing returns.

55.6081-1 Extension of time for filing the return.

55.6091-1 Place for filing Cchapter 44 tax returns.

55.6091-2 Exceptional cases.

55.6161-1 Extension of time for paying tax or deficiency.

55.6165-1 Bonds where time to pay tax or deficiency has been extended."

AUTHORITY: Sections 6001, 6011, 6071, 6091, and 7805 of the Internal Revenue Code of 1954 (68A Stat. 731, 732, 749, 752, 917; 26 U.S.C. 6001, 6011, 6071, 6091, and 7805).

SOURCE: T.D. 7767, 46 FR 11282, Feb. 6, 1981; 46 FR 15263, Mar. 5, 1981, unless otherwise noted.

Subpart A-Tax on
on Certain Real
Estate Investment Trust Taxable
Income Not Distributed During the
Taxable Year

§ 55.4981-1 Imposition of excise tax on certain real estate investment trust taxable income not distributed during the taxable year.

Section 4981 imposes an excise tax on a real estate investment trust if the deduction for dividends paid for the taxable year does not equal at least 75 percent of its real estate investment trust taxable income (computed as provided in section 4981) for the taxable year. For purposes of section 4981, the deduction for dividends paid is computed without regard to capital gains dividends (as defined in section 857(b)(3)(C)) and without regard to any dividends actually paid after the close of the taxable year. Thus, dividends considered as paid during the taxable year under section 858 are disregarded. Deficiency dividends (as defined in section 859(d)) paid with respect to the taxable year are also disregarded. The return referred to in the last sentence of section 4981 in the income tax return. Section 4981 applies only to taxable years beginning after December 31, 1979, for which the taxpayer is taxable under Part II of Subchapter M of Chapter 1 of subtitle A as a real estate investment trust.

Subpart B-Procedure and Administration

§ 55.6001-1 Notice or regulations requiring records, statements, and special returns.

(a) In general. Any person subject to tax under Chapter 44 of the Code shall keep such complete and detailed records as are sufficient to enable the district director to determine accurately the amount of liability under Chapter 44.

(b) Notice by district director requiring returns, statements, or the keeping of records. The district director may require any person, by notice served upon him, to make such returns, render such statements, or keep such specific records as will enable the district director to determine whether or

not such person is liable for tax under Chapter 44.

(c) Retention of records. The records required by this section shall be kept at all times available for inspection by authorized internal revenue officers or employees, and shall be retained so long as the contents thereof may become material in the administration of any internal revenue law.

§ 55.6011-1 General requirement of return, statement, or list

Every person liable for tax under section 4981 shall file an annual return with respect to the tax on the form prescribed by the Internal Revenue Service for such purpose and shall include therein the information required by the form and the instructions issued with respect thereto.

§ 55.6061-1 Signing of returns and other documents.

Any return required to be made by a real estate investment trust with respect to the tax imposed by Chapter 44 shall be signed by a person authorized by section 6062 of the Code to sign the income tax return of the real estate investment trust. Any statement or other document required to be made with respect to the tax imposed by Chapter 44 shall be signed by the person required or duly authorized to sign in accordance with the regulations, forms, or instructions prescribed with respect to such statement or document. An individual's signature on a return, statement, or other document made by or for the real estate investment trust shall be prima facie evidence that the individual is authorized to sign the return, statement, or other document.

§ 55.6065-1 Verification of returns.

If a return, statement, or other document made under the provisions of Chapter 44 or Subtitle F or the Code or the regulations thereunder with respect to any tax imposed by Chapter 44 of the Code, or the form and instructions issued with respect to such return, statement, or other document, requires that it shall contain or be verified by a written declaration that it is made under the penalties of

perjury, it must be so verified by the person or persons required to sign such return, statement, or other document. In addition, any other statement or document submitted under any provision of Chapter 44 or Subtitle F of the Code or regulations thereunder with respect to any tax imposed by Chapter 44 of the Code may be required to contain or be verified by a written declaration that it is made under the penalties of perjury.

§ 55.6071-1 Time for filing returns.

A return required by § 55.6011-1 shall be filed at the time (including any extension of time granted or allowed under section 6081) that the real estate investment trust is required to file its income tax return under section 6012 for the taxable year for which the tax under section 4981 is imposed.

§ 55.6081-1 Extension of time for filing the return.

District directors and directors of service centers are authorized to grant a reasonable extension of time for filing any return, statement, or other document which relates to any tax imposed by Chapter 44 and which is required under the provisions of Chapter 44 or the regulations thereunder. Extensions of time shall not be granted for more than 6 months. An extension of time for filing a return shall not operate to extend the time for the payment of the tax or any part thereof unless specified to the contrary in the extension. The rules relating to an application for extension in § 53.60811(b) of this Chapter (relating to foundation excise taxes) shall apply to an application for an extension of time for filing the return of tax imposed by Chapter 44. If an extension of time for filing the return is granted, a return shall be filed before the expiration of the period of extension.

§ 55.6091-1 Place for filing Chapter 44 tax returns.

Except as provided in § 55.6091-2 (relating to exceptional cases)—

(a) In general. Chapter 44 tax returns shall be filed with the district director for the internal revenue district in which is located the principal place

of business or principal office or agency of the real estate investment trust.

(b) Returns filed with service centers or by hand carrying. Notwithstanding paragraph (a) of this section, unless a return is filed by hand carrying, whenever instructions applicable to Chapter 44 tax returns provide that the returns be filed with a service center, the returns must be so filed in accordance with the instructions. Returns which are filed by hand carrying shall be filed with the district director (or with any person assigned the administrative supervision of an area, zone, or local office constituting a permanent post of duty within an internal revenue district of such director) in accordance with paragraph (a) of this section.

§ 55.6091-2 Exceptional cases.

Notwithstanding the provisions of § 55.6091-1, the Commissioner may permit the filing of any Chapter 44 tax return in any internal revenue district.

§ 55.6161-1 Extension of time for paying tax or deficiency.

(a) In general—(1) Tax shown or required to be shown on return. A reasonable extension of the time for payment of the amount of any tax imposed by Chapter 44 and shown or required to be shown on any return, may be granted by the district directors at the request of the taxpayer. The period of such extension shall not be in excess of 6 months from the date fixed for payment of such tax.

(2) Deficiency. The time for payment of any amount determined as a deficiency in respect of tax imposed by Chapter 44 may, at the request of the taxpayer, be extended by the internal revenue officer to whom the tax is required to be paid. The extension may be for a period not to exceed 18 months from the date fixed for pay. ment of the deficiency, as shown on the notice and demand. In exceptional cases, a further extension for a period not in excess of 12 months may be granted. No extension of time for payment of a deficiency shall be granted if the deficiency is due to negligence,

to intentional disregard of rules and regulations, or to fraud with intent to evade tax.

(3) Extension of time for filing distinguished. The granting of an extension of time for filing a return does not operate to extend the time for the payment of the tax or any part thereof unless so specified in the extension.

(b) Certain rules relating to extension of time for paying income tax to apply. The provisions of § 1.6161-1 (b), and (c), and (d) of this hapter (relating to a requirement for undue hardship, the application for extension, and payment pursuant to an extension) shall apply to extensions of time for payment of the tax imposed by Chapter 44.

§ 55.6165-1 Bonds where time to pay tax or deficiency has been extended.

If an extension of time for payment of tax or deficiency is granted under section 6161, the district director or the director of the service center may, if he deems it necessary, require a bond for the payment of the amount in respect of which the extension is granted in accordance with the terms of the extension. However, the bond shall not exceed double the amount with respect to which the extension is granted. For provisions relating to form of bonds, see the regulations under section 7101 contained in Part 301 of this chapter (Regulations on Procedure and Administration).

§ 57.6011(a)-1 Returns.

(a) In general. Effective as of April 1, 1981, liability for tax imposed under section 4611, Imposition of Tax on Petroleum, or section 4661, Imposition of Tax on Certain Chemicals, shall be reported on Form 720, Quarterly Federal Excise Tax Return. Except as provided in paragraphs (b)(1) and (2) of this section, a return on Form 720 shall be filed for a period of one calendar quarter beginning with the quarter ending June 30, 1981. Every person required to make a return on Form 720 for the return period ended June 30, 1981, shall make a return for each subsequent calendar quarter, month, or semimonthly period (whether or not liability was incurred for any tax reportable on such return for such return period) until a final return has been filed in accordance with § 57.6011(a)-2. Every person not required to make a return on Form 720 for the return period ended June 30, 1981, shall make a return for the first calendar quarter thereafter in which the person incurs liability for tax imposed under section 4611 or section 4661 and shall make a return for each subsequent calendar quarter month or semimonthly period until a final return has been filed in accordance with § 57.6011(a)-2.

(b) Monthly and semimonthly returns-(1) Requirement. If the district director determines that any taxpayer who is required to make a deposit of taxes under the provisions

of

§ 57.6302(c)-1 has failed to make deposits of such taxes, such taxpayer shall be required, if so notified in writing by the district director, to file a monthly or semimonthly return on Form 720, except that, if some other form is furnished by the district director for use in lieu of Form 720, the return shall be made on such other form. Every person so notified by the district director shall make a return for the calendar month or semimonthly period (as defined in § 57.6302(c)1(c)(1)) in which the notice is received and for each calendar month or semimonthly period thereafter until the taxpayer has filed a final return or is required to make returns on the basis of a different return period pursuant

to notification as provided in paragraph (b)(2) of this section.

(2) Change of requirement. At the district director's discretion, the taxpayer may be notified in writing that the taxpayer is required to make a quarterly or monthly return, if the taxpayer has been filing returns for a semimonthly period or is required to make a quarterly or semimonthly return, if the taxpayer has been filing monthly returns.

(3) Return for period change takes effect. If a taxpayer who has been filing quarterly returns receives notice to file a monthly or semimonthly return or a taxpayer who has been filing monthly returns receives notice to file a semimonthly return, the first return required pursuant to the notice shall be made for the month or semimonthly period in which the notice is received and all prior months or semimonthly periods which are not includible in a prior period for which the taxpayer is required to file a return. If a taxpayer who has been filing monthly or semimonthly returns receives notice to file a quarterly return, the last month or semimonthly period for which a return shall be made is the last month or semimonthly period of the calendar quarter in which such notice is received. If a taxpayer who has been filing semimonthly returns receives notice to file a monthly return, the last semimonthly period for which a return shall be made is the last semimonthly period of the month in which such notice is received.

§ 57.6011(a)-2 Final returns.

(a) In general. Any person who is required to make a return on Form 720 pursuant to § 57.6011(a)-1, and who in any return period ceases operations in respect of which the person is required to make a return on such form, shall make such return for such period as a final return. Each return made as a final return shall be marked "Final Return" by the person filing the return. A person who has only temporarily ceased to incur liability for tax required to be reported on Form 720, because of temporary or seasonal suspension of business or for other reasons, shall not make a final return but shall continue to file returns.

(b) Statement to accompany final return. There shall be executed as a part of each final return a statement showing the address at which the records required by the regulations in this part will be kept, the name of the person keeping such records, and, if the business of a taxpayer has been sold or otherwise transferred to another person, the name and address of such person and the date on which such sale or transfer took place. If no such sale or transfer occurred or the taxpayer does not know the name of the person to whom the business was sold or transferred, that fact should be included in the statement.

§ 57.6071(a)-1 Time for filing returns.

(a) Quarterly returns. Each return required to be made under paragraph (a) of § 57.6011(a)-1 for a return period of not less than one calendar quarter shall be filed on or before the last day of the first calendar month following the period for which it is made. However, a return may be filed

on

or before the 10th day of the second calendar month following such period if timely deposits under section 6302(c) of the Code and the regulations thereunder have been made in full payment of such taxes due for the period. For the purpose of the immediately preceding sentence, a deposit which is not required by such regulations in respect of the return period may be made on or before the last day of the first calendar month following the close of such period, and the timeliness of any deposit will be determined by the earliest date stamped on the applicable deposit form by an authorized financial institution or by a Federal Reserve bank.

(b) Monthly and semimonthly return—(1) Monthly returns. Each return required to be made for a monthly period under paragraph (b)(1) of § 57.6011(a)-1 shall be filed not later than the 15th day of the month following the period for which it is made.

(2) Semimonthly returns. Each return required to be made for a semimonthly period under paragraph (b)(1) of § 57.6011(a)-1 shall be filed not later than the 10th day of the