Rev. Rul. 69-520

Advice has been requested whether an extension of the period for furnishing certain information required by section 147.3-1(e)(2)(x)(b) of the Temporary Regulations (relating to the qualification of a foreign corporation as a less developed country corporation for purposes of the exclusion from the interest equalization tax provided by section 4916(a) of the Internal Revenue Code of 1954 for stock or debt obligations of such corporations) can be granted where the application for the extension is not made within the period prescribed for making the application.

The taxpayer, a foreign corporation, was issued a ruling that it qualified as a less developed country corporation for its annual accounting period ending December 31, 1968, and that acquisitions by United States persons of stock or debt obligations of such corporation during such period are exempt from interest equalization tax under the provisions of section 4916(a) of the Internal Revenue Code of 1954. Subsequent to March 31, 1969, the taxpayer requested an extension of time within which to furnished certain information required by section 147.3-1(e)(2)(x)(b) of the regulations.

Section 147.3-1(e)(2)(x)(b) of the regualtions requires the foreign corporation to furnish certain information to the Commissioner of Internal Revenue within 90 days after the close of the annual accounting period with respect to which a ruling was issued. Timely filing of such information also constitutes a request for a ruling for the next succeeding annual accounting period. The Commissioner may grant reasonable extensions of the 90-day period upon application made within such period and based upon inability to obtain the information within such perod.

Section 147.3-1(e)(5) of the regulations states that a ruling issued that a foreign corporation shall be treated as a less developed country corporation expires if the information required under section 147.3-1(e)(2)(x)(b) of the regulations is not furnished within the time prescribed (including extensions of time) by such section. Any acquisition of stock or debt obligations of such corporation after the date of expiration of the ruling (the 90th day after the close of the annual accounting period of the corporation with respect to which the ruling was issued) will be treated as an acquisition of stock or debt obligations of a foreign corporation which is not a less developed country corporation.

Section 147.3-1(e)(2)(x)(b) of the Temporary Regulations is explicit in requiring that an application for an extension of the 90-day period for filing the information required by that section be made within such period. An extension of time cannot be granted where the application for such extension is not made within the prescribed 90-day period.

Accordingly, since the taxpayer in the instant case did not make application for an extension of the 90-day period before the expiration of such period (March 31, 1969), an extension of time within which to file the required information cannot be granted.

Thus, under section 147.3-1(e)(5) of the regulations, the ruling issued to the taxpayer for its annual accounting period ending December 31, 1968, expired on March 31, 1969, and any acquisition of stock or debt obligations of the taxpayer by a United States person after March 31, 1969, shall be treated as an acquisition of stock or debt obligations of a foreign corporation which is not a less developed country corporation for purposes of the exclusion from the interest equalization tax provided by section 4916(a) of the Code. However, the taxpayer may request a ruling pursuant to the procedures contained in section 147.3-1(e) of the regulations that it is a less developed country corporation for the remaining part of its annual accounting period ending December 31, 1969.