Page:United States Statutes at Large Volume 53 Part 1.djvu/70

 58 CODIFICATION OF INTERNAL lEVENUE LAWS and excess-profits taxes imposed upon or with respect to such profits or income; and the Commissioner with the approval of the Secretary shall have full power to determine from the accumulated profits of what year or years such dividends were paid; treating dividends paid in the first sixty days of any year as having been paid from the accumulated profits of the preceding year or years (unless to his satisfaction shown otherwise), and in other respects treating dividends as having been paid from the most recently accumulated gains, profits, or earnings. In the case of a foreign corporation, the income, war-profits, and excess-profits taxes of which are deter- mined on the basis of an accounting period of less than one year, the word "year" as used in this subsection shall be construed to mean such accounting period. (g) CORPORATIONS TREATED AS FOREIGN.- For the purposes of this section the following corporations shall be treated as foreign cor- porations: (1) A corporation entitled to the benefits of section 251, by reason of receiving a large percentage of its gross income from sources within a possession of the United States; (2) A corporation organized under the China Trade Act, 1922, 42 Stat. 849 (U. S . C ., Title 15, c. 4), and entitled to the credit provided for in section 262. Supplement D-Returns and Payment of Tax [Supplementary to Subchapter B, Part V] SEC. 141. CONSOLIDATED RETURNS OF RAILROAD CORPORATIONS. (a) PRIVILEGE TO FILE CONSOLIDATED RETURNS. -An affiliated group of corporations shall, subject to the provisions of this section, have the privilege of making a consolidated return for the taxable year in lieu of separate returns. The making of a consolidated return shall be upon the condition that all the corporations which have been members of the affiliated group at any time during the taxable year for which the return is made consent to all the regu- lations under subsection (b) (or, in case such regulations are not prescribed prior to the making of the return, then the regulations pres'crild(l ui1der section 14L (1,) of the Revenue Act of 1936, 49 Stat. 1698, insofar as not inconsistent with this chapter) prescribed prior to tie making of such return; and the making of a consolidated re- turn shall be considered as such consent. In the case of a corpora- tion which is a member of the affiliated group for a fractional part of the year the consolidated return shall include the income of such corporation for such part of the year as it is a member of the affiliated group. (b) REGULATIONs.-T he Conmissioner, with the approval of the Secretary, shall prescribe such regulations as he may deem necessary in order that the tax liability of any affiliated group of corporations making a consolidated return and of each corporation in the group, both during and after the period of affiliation, may be determined, computed, assessed, collected, and adjusted in such manner as clearly to reflect the income and to prevent avoidance of tax liability. (c) COMPUTATION AND PAYMENT OF Tax.- In any case in which a consolidated return is made the tax shall be determined, computed, assessed, collected, and adjusted in accordance with the regulations under subsection (b) (or, in case such regulations are not prescribed prior to the making of the return, then the regulations prescribed under section 141 (b) of the Revenue Act of 1936 insofar as not inconsistent with this chapter) prescribed prior to the date on which such return is made.

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