(b) Where a separate return is so made and in all other cases where a separate return is required or permitted, by regulations prescribed by the Commissioner with the approval of the Secretary, to be made for a fractional part of a year, then the income shall be computed on the basis of the period for which separate return is made.

(c) If a separate return is made under subdivision (a) the net income, computed in accordance with the provisions of subdivision (b), shall be placed on an annual basis by multiplying the amount thereof by twelve and dividing by the number of months included in the period for which the separate return is made. The tax shall be such part of the tax computed on such annual basis as the number of months in such period is of twelve months.

(d) The Commissioner with the approval of the Secretary shall by regulations prescribe the method of applying the provisions of subdivisions (b) and (c) to cases where the taxpayer makes a separate return under subdivision (a) and it appears that for the period for which the return is so made he has derived a capital net gain, or sustained a capital net loss, or received earned income.

(e) In the case of a return made for a fractional part of a year, except a return made under subdivision (a), the credits provided in subdivisions (c), (d), and (e) of section 216 shall be reduced respectively to amounts which bear the same ratio to the full credits provided in such subdivisions as the number of months in the period for which return is made bears to twelve months.

ART. 431. Returns for periods of less than twelve months.-No return can be made for a period of more than twelve months. A separate return for a fractional part of a year is therefore required wherever there is a change, with the approval of the Commissioner, in the basis of computing net income from one taxable year to another taxable year. The periods to be covered by such separate returns in the several cases are stated in the statute. The requirements with respect. to the filing of a separate return and the payment of tax for a part of a year are the same as for the filing of a return and the payment of tax for a full taxable year closing at the same time. See sections 227 and 270 of the statute and articles 441-446 and 1201. The tax on net income computed on the basis of the period for which a separate return is made shall be paid thereon at the rate for the calendar year in which such period is included. In case of a change in the accounting period the net income computed on the return for the fractional part of a year shall be placed on an annual basis and the tax computed as provided in subdivision (c) of section 226. See illustration below. See further section 212 and articles 25 and 26, and as to corporations, sections 232 and 239 and articles 531 and 625. Since it is not required that income be placed on an annual basis except where the taxpayer voluntarily changes his accounting period, the income of a decedent or of his estate for the fractional parts of the year in which he died need not be placed on an annual basis.

The income tax of a citizen of the United States entitled to a personal exemption of $2,500, making a return for a six months' period of $10,000 net income, of which $5,000 is earned net income, is $502.50, computed as follows:

TIME AND PLACE FOR FILING INDIVIDUAL, PARTNERSHIP, AND

FIDUCIARY RETURNS

SEC. 227. (a) Returns (except in the case of nonresident aliens) shall be made on or before the fifteenth day of the third month following the close of the fiscal year, or, if the return is made on the basis of the calendar year, then the return shall be made on or before the 15th day of March. In the case of a nonresident alien individual returns shall be made on or before the fifteenth day of the sixth month following the close of the fiscal year, or, if the return is made on the basis of the calendar year, then the return shall be made on or before the 15th day of June. The Commissioner may grant a reasonable extension of time for filing returns, if application therefor is made before the date prescribed by law for filing the return, whenever in his judgment good cause exists, and shall keep a record of every such extension and the reason therefor. Except in the case of taxpayers who are abroad, no such extension shall be for more than six months.

(b) Returns shall be made to the collector for the district in which is located the legal residence or principal place of business of the person making the return, or, if he has no legal residence or principal place of business in the United States, then to the collector at Baltimore, Maryland.

ART. 441. Time for filing return.-Returns of income (except in the case of nonresident aliens) on a calendar year basis must be made on or before the fifteenth day of March following the taxable year, and returns on the basis of a fiscal year must be made on or before the fifteenth day of the third month following the close of the fiscal year. Returns in the case of nonresident aliens must be made on or before the fifteenth day of the sixth month following the close of the fiscal year or on or before the fifteenth day of June, if on the basis of the calendar year.

ART. 442. Time for filing return upon death, or termination of trust.After his appointment and qualification, an executor or administrator may immediately file a return for the decedent without wait

ing for the close of the taxable year. Upon the completion of the administration of an estate and final accounting, an executor or administrator may immediately file a return of income of the estate for the fractional part of the taxable year in which the administration was closed. Similarly upon the termination of a trust, the trustee may immediately make a return without waiting for the close of the taxable year. Any income return required to be filed for a decedent, or for the fractional part of a year in which an estate is closed or a trust terminated, is due on the fifteenth day of the third month following the close of the taxable year during which the decedent dies, the estate is closed, or the trust is terminated, which date shall also be the due date for payment of the tax or the first installment thereof if payment is made under the provisions of section 270(b). The payment of the tax before the end of the taxable year in such circumstances does not relieve the taxpayer from liability for any additional tax which might subsequently be imposed upon income of the taxable year. See sections 273 and 274 and articles 1231-1235.

The domiciliary representative is required to include in the return rendered by him as such domiciliary representative the entire income of the estate. Consequently the only return required to be filed by the ancillary representative is on Form 1041, which shall be filed with the collector for his district and shall show the name and address of the domiciliary representative, the amount of gross income received by the ancillary representative, and the deductions to be claimed against such income including any amount of income properly paid or credited by the ancillary représentative to any legatee, heir, or other beneficiary. If the ancillary representative for the estate of a nonresident alien is a citizen or resident of the United States, and the domiciliary representative is a nonresident alien, such ancillary representative is required to render the return otherwise required of the domiciliary representative.

ART. 443. Extension of time by Commissioner. It is important that the taxpayer render on or before the due date a return as complete and final as it is possible for him to prepare. However, the Commissioner, whenever in his judgment good cause exists, may grant a reasonable extension of time for filing the return, if application therefor is made by the taxpayer before the date prescribed by law for filing the return. Under the Revenue Act of 1924 the collector does not have authority to grant extensions in the case of income tax returns. See section 1003. Application to the Commissioner for an extension must contain a full recital of the causes for the

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delay. Except in the case of taxpayers who are abroad, no such extension will be granted for more than six months.

If the return is not filed within the time as extended, penalties for delinquency will attach. If a taxpayer finds that he is unable to file his return within the extended period, he should before the expiration of the extension make application to the Commissioner, setting forth fully therein the reasons why additional time is required. An extension of time under section 227 for filing a return does not extend the time for payment of the tax or any installment thereof unless so specified in the extension. For extensions of time for payment of tax see sections 270 (c) and 274(g) of the statute and articles 1201 and 1234. As a condition of granting an extension of time for filing a return the Commissioner may require the submission of a tentative return and estimate of the tax and the payment of at least one-fourth of the estimated amount of tax. A tentative return should be made on the usual return form, plainly marked "tentative" at the top, contain a statement as to the estimated amount of tax believed to be due, and be properly executed. No other data need be given. Tentative returns will not be accepted unless permission is obtained previous to filing. A copy of the authority for filing the tentative return must be attached thereto when filed. Where a taxpayer has filed a tentative return and has failed to file a complete return within the period of the extension granted to him, the complete return when filed is subject to penalties prescribed for delinquency.

ART. 444. Last due date. The last due date is the last day upon which a return is required to be filed in accordance with the provisions of the statute or the last day of the period covered by an extension of time granted by the Commissioner. When the last due date falls on Sunday or a legal holiday, the last due date for filing returns will be the day following such Sunday or legal holiday. If placed in the mails, the return should be posted in ample time to reach the collector's office, under ordinary handling of the mails, on or before the date on which the return is required to be filed. If a return is made and placed in the mails in due course, properly addressed and postage paid, in ample time to reach the office of the collector on or before the last due date, no penalty will attach should the return not actually be received by such officer until subsequent to that date. Where a question may be raised as to whether or not the return was posted in ample time to reach the collector's office on or before the due date, the envelope in which the return was transmitted will be preserved by the collector and forwarded to the Commissioner with the return.

ART. 445, Procedure in case of delinquency in filing return.--Section 3176 of the Revised Statutes as amended by section 1003 of the Revenue Act of 1924 provides:

SEC. 3176. If any person, corporation, company, or association fails to make and file a return or list at the time prescribed by law or by regulation made under authority of law, or makes, willfully or otherwise, a false or fraudulent return or list, the collector or deputy collector shall make the return or list from his own knowledge and from such information as he can obtain through testimony or otherwise. In any such case the Commissioner of Internal Revenue may, from his own knowledge and from such information as he can obtain through testimony or otherwise, make a return or amend any return made by a collector or deputy collector. Any return or list so made and subscribed by the Commissioner, or by a collector or deputy collector and approved by the Commissioner, shall be prima facie good and sufficient for all legal purposes.

If the failure to file a return (other than a return under Title II of the Revenue Act of 1924) or a list is due to sickness or absence, the collector may allow such further time, not exceeding thirty days, for making and filing the return or list as he deems proper.

The Commissioner of Internal Revenue shall determine and assess all taxes, other than stamp taxes, as to which returns or lists are so made under the provisions of this section. In case of any failure to make and file a return or list within the time prescribed by law, or prescribed by the Commissioner of Internal Revenue or the collector in pursuance of law, the Commissioner shall add to the tax 25 per centum of its amount, except that when a return is filed after such time and it is shown that the failure to file it was due to a reasonable cause and not to willful neglect, no such addition shall be made to the tax. In case a false or fraudulent return or list is willfully made, the Commissioner shall add to the tax 50 per centum of its amount.

The amount so added to any tax shall be collected at the same time and in the same manner and as a part of the tax unless the tax has been paid before the discovery of the neglect, falsity, or fraud, in which case the amount so added shall be collected in the same manner as the tax.

Accordingly, if any person charged by law or regulations with making a return fails to make such return or makes a false or fraudulent return, the collector or his deputy is required to make a return from his own knowledge and from such information as he can obtain from testimony or otherwise. In such a case the Commissioner may, from similar sources of information, make a return or amend the return made by the collector.

In case of failure to file a return on time a penalty of 25 per cent of the amount of the tax is added to the tax unless the return is later filed and failure to file the return within the prescribed time is satisfactorily shown to the Commissioner to be due to reasonable cause and not to willful neglect. Two classes of delinquents are liable to this penalty: (a) Those who do not file returns and for