Page:United States Statutes at Large Volume 56 Part 1.djvu/944

 PUBLIC LAWS-CH. 619--OCT. 21, 1942 Business adversely affected by other fac- tors. 54 Stat. 980 . 26U.. C. 713; Supp. I, § 713. Ante, pp. 909, 910; post, p. 931. 54 Stat. 982. 26 U. S. C.§ 718; Supp. I, § 718. Ante, pp. 902, 911, 912. Post, p. 938. 55 Stat. 21 . 26 U.S. C ., Supp. I, 713 (g). Ante, p. 910. Post, p. 930. Post, p. 917. in the dissemination of information through the public press, of substantially all the assets of such competitor employed in such business with the result that competition between the tax- payer and the competitor existing before January 1, 1940, was eliminated, shall be deemed to be a change on December 31, 1939, in the character of the business, or "(5) of any other factor affecting the taxpayer's business which may reasonably be considered as resulting in an inadequate stand- ard of normal earnings during the base period and the application of this section to the taxpayer would not be inconsistent with the principles underlying the provisions of this subsection, and with the conditions and limitations enumerated therein. "(c) INVESTED CAPITAL CORPORATIONS, ETc. -The tax computed under this subchapter (without the benefit of this section) shall be considered to be excessive and discriminatory in the case of a taxpayer, not entitled to use the excess profits credit based on income pursuant to section 713, if the excess profits credit based on invested capital is an inadequate standard for determining excess profits, because- "(1) the business of the taxpayer is of a class in which intan- gible assets not includible in invested capital under section 718 make important contributions to income, "(2) the business of the taxpayer is of a class in which capital is not an important income-producing factor, or "(3) the invested capital of the taxpayer is abnormally low. In such case for the purposes of this subchapter, such taxpayer shall be considered to be entitled to use the excess profits credit based on income, using the constructive average base period net income deter- mined under subsection (a). For the purposes of section 713 (g) and section 743, the beginning of the taxpayer's first taxable year under this subchapter shall be considered to be that date after which capital additions and capital reductions were not taken into account for the purposes of this subsection. "(d) APPLICATION FOR RELIEF UNDER THIS SECTION.- The taxpayer shall compute its tax, file its return, and pay its tax under this sub- chapter without the application of this section, except as provided in section 710 (a) (5). The benefits of this section shall not be allowed unless the taxpayer, not later than six months after the date pre- scribed by law for the filing of its return, or if the application relates to a taxable year beginning after December 31, 1939, but not beginning after December 31, 1941, within six months after the date of the enactment of the Revenue Act of 1942, makes application therefor in accordance with regulations to be prescribed by the Commissioner with the approval of the Secretary, except that if the Commissioner in the case of any taxpayer with respect to the tax liability of any taxable year- "(1) issues a preliminary notice proposing a deficiency in the tax imposed by this subchapter such taxpayer may, within ninety days after the date of such notice make such application, or "(2) mails a notice of deficiency (A) without having previ- ously issued a preliminary notice thereof or (B) within ninety days after the date of such preliminary notice, such taxpayer may claim the benefits of this section in its petition to the Board or in an amended petition in accordance with the rules of the Board. If the application is not filed within six months after the date pre- scribed by law for the filing of the return, or if the application relates to a taxable year beginning after December 31, 1939, but not beginning after December 31, 1941, within six months after the date of the enact- ment of the Revenue Act of 1942, the operation of this section shall not reduce the tax otherwise determined under this subchapter by an [56 STAT.

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