Rev. Rul. 63-18

Numerous inquiries have been received from affiliated corporations filing separate returns concerning the application of Revenue Ruling 62-204, C.B. 1962-2, 212. The question being asked is whether such corporations may make an election under this ruling to file separate returns for the first taxable year ending after the date of enactment of the Revenue Act of 1962, P.L. 87-834, C.B. 1962-3, 111, after having elected to file a consolidated return for the first taxable year for which returns are due to be filed after the date of such enactment. As stated in the headnote of Revenue Ruling 62-204, affiliated corporations filing consolidated returns may make a new election to file separate returns for either the first taxable year for which returns are due to be filed after the date of enactment of the Revenue Act of 1962, or for the first taxable year ending after the date of such enactment.

Revenue Ruling 62-204 applies only to affiliated corporations which filed a consolidated return for the first taxable year preceding the earliest taxable year for which a new election is available. It is emphasized that affiliated corporations which filed separate returns for the first taxable year preceding the earliest taxable year for which a new election is available may not elect, under Revenue Ruling 62-204, to file separate returns for the first taxable year ending after the date of enactment of the Revenue Act of 1962, after having elected to file a consolidated return for the first taxable year for which returns are due to be filed after the date of such enactment.

The purpose of the example in Revenue Ruling 62-204 was to illustrate a situation where affiliated corporations filed a consolidated return for the first taxable year for which returns are due to be filed after the date of enactment prior to the due date for the return (including any extensions of time granted by the Commissioner of Internal Revenue).

Revenue Ruling 62-204, C.B. 1962-2, 212, is hereby clarified.

¹ Based on Technical Information Release 439, dated Jan. 3, 1963.