ment of $600 in income tax for 1940. The $750 increase in income tax for 1940 which was determined under section 3807 may be assessed as if on September 15, 1944 one year remained before the expiration of the period of limitations upon assessment of income tax for 1940. The $60 overpayment of income tax for 1940 may then be credited against the assessment of $750 increase in income tax for 1940. The remaining $150 of such increase in income tax may be collected under the law and regulations applicable to the collection of such tax.

The crediting of the above $600 overpayment of income tax against the above $750 increase in income tax is, moreover, the allowance of a credit under a determination in respect of a tax imposed by chapter 1 within the meaning of section 3807 (b) (1) so as to serve as the basis for a further adjustment in excess profits tax for 1940 under the provisions of section 3807.

$ 473.7 Application to affiliated groups. Section 3807 is applicable to affiliated groups which filed consolidated returns, and operates whether the determination specified in section 3807 (b) (1) and in $ 473.4 is made in respect of a tax reported on the basis of a consolidated return or in respect of a tax reported on the basis of a separate return. In the case of a member of an affiliated group, the words “any other tax of the taxpayer" are to include any other tax imposed by chapter 1 or chapter 2 upon any other member of the group, whether such tax is reported on the basis of a consolidated return or on the basis of a separate return. Thus, if a deficiency is assessed, or a refund allowed, in respect of a tax reported on the basis of a consolidated return, adjustments under section 3807 may be made in respect of the other taxes of the affiliated group reported on the basis of a consolidated return and also in respect of the taxes of all the members of such group not reported upon the basis of such a consolidated return. Similarly, if the deficiency or refund is in respect of a tax of a member of an affiliated group not reported on the basis of a consolidated return, adjustments may be made not only in other taxes of such member, but also in any tax which such group reported upon the basis of a consolidated return and in any tax of any other member of the group which was reported on the basis of a separate return. These adjustments may be made even though the several taxable periods involved are not

the same if the taxable year for which the adjustments are made coincides in whole or in part with the taxable year for which the deficiency was assessed or the refund allowed.

The application of section 3807 to affiliated groups may be illustrated by the following example:

Example: Corporation X, which makes its tax returns upon the basis of the calendar year, becomes a member of an affiliated group on July 1, 1940. Such group likewise makes its returns on the basis of the calendar year. A consolidated excess profits tax return was filed for the group for the year 1940 on March 15, 1941. Likewise, Corporation X filed an excess profits tax return for the short taxable year January 1 through June 30, 1940, and an income tax return for the calendar year 1940. On December 1, 1945 Corporation X is allowed a refund of income tax for 1940 attributable to a casualty loss, Proper adjustments, though barred under other provisions of law or rules of law, may be made under section 3807 in the consolidated excess profits tax (1) to reflect such loss, (2) to reflect any other deductions, credits, allowances, or adjustments which are limited to or by net income or the amount of income from property, and (3) to reflect the proper deduction for Corporation X's income tax in computing consolidated excess profits net income. Similarly, such adjustments may be made in Corporation X's separate excess profits tax return for the short taxable year January 1 through June 30, 1940. Adjustments may likewise be made in the taxes of other members of the group which were reported on the basis of separate returns. Any adjustment to taxes of other members of the affiliated group reported on the basis of separate returns which flow from the adjustments made in the consolidated excess profits tax, or from adjustments made to Corporation X's taxes reported on the basis of separate returns, may likewise be made. All such adjustments may be made as if the period of limitations upon assessment or upon allowance of refunds, as the case may be, did not expire until December 1, 1946.

If a deficiency or refund is assessed or allowed in respect of a tax reported on the basis of a consolidated return, appropriate adjustments can be made in any tax of the affiliated group reported on the basis of a consolidated return, or in any tax of any member of such group reported on the basis of a separate return.

a

PART 701-RULES OF PRACTICE

Sec. 701.24 Substitution or withdrawal of coun

sel; notice of appearance. (Amend

ed] 701.44 Subpoenas. (Amended) 701.48 Commissioners of The Tax Court.

(Added] 701.51 Costs; preparation of record on re

view. (Amended] 701.52 Costs; printing of record on review.

(Revoked] 701.53 Copies of records; fees for furnishing.

(Amended) 701.62 Special assessment. (Revoked] 701.64 Renegotiation of war contract cases.

(Added] $ 701.24 Substitution or withdrawal of counsel; notice of appearance.

CODIFICATION: The following sentence was added at the end of $ 701.24, June 26, 1944, 9 F.R. 7046: Only the original and two copies of such motion need be filed.

§ 701.44 Subpoenas. CODIFICATION: The second sentence of $ 701.44 (b) was amended to read as follows, June 26, 1944, 9 F.R. 7046: Only the original of the application need be filed.

$ 701.48 Commissioners of the Tax Court. (a) The term "commissioner" as used in this section applies to any attorney on the legal staff of this Court who shall have been designated by the Presiding Judge as a "commissioner in a particular case” pursuant to section 1114 of the Internal Revenue Code, as amended by section 503 of the Revenue Act of 1943.

(b) The commissioner shall conduct the hearing in such case in accordance with the Court's rules of practice. He shall rule upon objections and other evidentiary matters in accordance with the rules of evidence as provided in section 1111, and shall exercise such further and incidental authority, including the issuance of subpoenas, as may be necessary for the conduct of the hearing.

(c) Unless otherwise directed the parties shall have 30 days from the closing

of proof in the case for filing proposed findings of fact. Such findings of fact shall be prepared in the manner and form prescribed in the first paragraph of $ 701.35 (b).

Upon the filing by the parties of their proposed findings of fact, the commissioner shall prepare and submit to the Court or a Division thereof a report of his findings of fact based upon the evidence in the case, and copies thereof shal) be served upon both parties.

Within 20 days from the filing of the commissioner's proposed findings of fact the parties may file exceptions thereto which will be considered by the Division to which the case is assigned.

(d) Unless otherwise directed by the Court, the parties shall have 45 days from the date of the filing of the commissioner's proposed findings of fact within which to file briefs, and 15 days additional within which to file reply briefs. Each brief shall be prepared in the manner and form prescribed in $ 701.35.

(e) Upon motion of either party, or upon its own motion, the Division to which the case is assigned ray in its discretion direct oral argument and set a date therefor. (53 Stat. 160; 26 U.S.C. 1111) [Rule 48, June 26, 1944, 9 F.R. 7046]

§ 701.51 Costs; preparation of record on review.

CODIFICATION: In $ 701.51, the citation in parentheses at the end of the first paragraph was amended to read as follows, Oct. 19, 1944, effective Oct. 20, 1944, 9 F.R. 12629: (43 Stat. 857, 858, as amended by 58 Stat. 743; 28 U.S.C. and Sup., 548–554).

$ 701.52 Costs; printing of record on review. [Revoked]

CODIFICATION: $ 701.52 was revoked June 26, 1944, 9 F.R. 7046.

$ 701.53 Copies of records; fees for furnishing.

(1) A caption in the following form: THE TAX COURT OF THE UNITED STATES

CODIFICATION: The citation in parentheses at the end of $ 701.53 was amended to read as follows, Oct. 19, 1944, effective Oct. 20, 1944, 9 F.R. 12629: (43 Stat. 857, 858, as amended by 58 Stat. 743; 28 U.S.C. and Sup., 548–554).

Petitioner

Docket No.

V.

§ 701.62 Special assessment. (Revoked]

CODIFICATION: $ 701.62 was revoked June 26, 1944, 9 F.R. 7047.

$ 701.64 Renegotiation of war contracts cases. (a) Except as otherwise prescribed by this section, proceedings for the redetermination of excessive profits under the Renegotiation Act' shall be governed by the existing regulations in this part. Where any of the existing regulations or the matter contained in the appendix thereto refer to the Commissioner, such regulations and the matter in the appendix, when applied to a proceeding for the redetermination of excessive profits under the Renegotiation Act, shall refer to the War Contracts Price Adjustment Board or to the Secretary as defined and used in that act. Similarly references to the taxpayer shall refer to the contractor or subcontractor; references to tax shall refer to profits under a contract or subcontract subject to renegotiation, or to excessive profits thereunder, dependent upon context; and references to the determination of a deficiency, or a notice of such determination, shall refer to the order of the Board or the Secretary determining the amount of excessive profits.

(b) A proceeding for the redetermination of excessive profits under the Renegotiation Act shall be initiated by the filing of a petition, as provided in $$ 701.4, 701.5, 701.7 and 701.8. (See $ 711.2)

In proceedings initiated under section 403 (e) (1) of the act, the War Contracts Price Adjustment Board shall be shown as the respondent. In proceedings initiated under section 403 (e) (2) of the act, the Secretary as referred to in that section shall be shown as the respondent.

The petition shall be complete in itself so as fully to state the issues. It shall contain:

Respondent

PETITION (2) Proper allegations showing jurisdiction in the Court.

(3) A statement of the amount of excessive profits determined by the Board or the Secretary, as the case may be, the period for which determined and the amount thereof in controversy. If the determination of excessive profits was made on the basis of a specific contract or contracts, the petition shall identify the contract or contracts and shall state the period covered thereby.

(4) Clear and concise assignments of each and every error which the petitioner alleges to have been committed by the Board or the Secretary in the determination of excessive profits. Each assignnient of error shall be numbered.

(5) Clear and concise numbered statements of the facts upon which the petitioner relies as sustaining the assignments of error. The allegations of fact shall contain a statement of the amount received or accrued during the period in question under the contracts or subcontracts subject to renegotiation, the costs paid or incurred with respect thereto and the profits derived therefrom, the type and character of business done, and any other facts pertinent to a determination of the errors alleged.

(6) A prayer, setting forth relief sought by the petitioner.

(7) The signature of the petitioner or that of his counsel. (See $ 701.4.)

(8) A verification by the petitioner in accordance with the applicable provision of $ 701.6 (h).

(9) A copy of the order of the Board or of the Secretary, as the case may be, determining the amount of excessive profits, which order forms the basis for the initiation of the proceeding, shall be appended to the petition. If a statement has been furnished to the petitioner by the Board or the Secretary setting forth the facts upon which the determination of excessive profits was based and the reasons for such determination, a copy of such statement shall also be appended to the petition.

Section 403 of the Sixth Supplemental National Defense Appropriation Act, 1942, as amended by section 701, Revenue Act of 1943.

(c) Any claim for the redetermination of an amount of excessive profits greater than the amount shown in the notice of determination shall be made by the respondent in his answer filed under $ 701.14, or in an amendment thereto filed under $ 701.17 at or before the time of the hearing.

(d) With respect to the matter covered by $ 701.60, attention is directed to section 403 (e) (1) of the Renegotiation Act. (53 Stat. 160; 26 U.S.C. 1111) (Rule 64, Mar. 27, 1944, effective Mar. 28, 1944, 9 F.R. 3286]

4. The determination of tax set forth in the said notice of deficiency is based upon the following errors: (Enumerate specifically the assignments of error in a concise manner and avoid pleading facts which properly belong in the succeeding paragraph.)

5. The facts upon which the petitioner relies as the basis of this proceeding are as follows: (Here set forth allegations of the facts relied upon-but not the evidence-in orderly and logical sequence, with sub-paragraphs lettered, so as fully to inform the Board of the issues to be presented and to enable the Commissioner to admit or deny each specific allegation.)

Wherefore, the petitioner prays that this Board may hear the proceeding and (Here state the relief desired). (Signed)

(Petitioner or counsel)

PART 711-FORMS Sec. 711.2 No. 2. Petition. [Corrected]

$ 711.2 No. 2. Petition. (See $$ 701.4701.8.) United States Board of Tax Appeals Docket No.

Petitioner

V.
Commissioner of Internal Revenue,

Respondent

Petition The above-named petitioner hereby petitions for a redetermination of the deficiency set forth by the Commissioner of Internal Revenue in his notice of deficiency (bureau symbols) dated

19., and as a basis of his proceeding alleges as follows:

1. The petitioner is (set forth whether individual, corporation, fiduciary, etc., as provided in $ 701.6) with principal office (or residence) at (Street)

(City) The return for the period (State) here involved was filled with the collector for the district of

2. The notice of deficiency (a copy of which is attached and marked Exhibit A) was mailed to the petitioner on

--, 19.-. 3. The taxes in controversy are (income, profits, estate, or gift) taxes for the (calendar or fiscal year) year 19.- and in the amount of

dollars (state as exactly as possible the amount in dispute).

(Post-office address) State of County of

SS:

being duly sworn, says that he is the petitioner (if a corporation, or fiduciary, state title of office or trust of person verifying and that he is duly authorized to verify the foregoing petition) above named: that he has read the foregoing petition, or had the same read to him, and is familiar with the statements contained therein, and that the statements contained therein are true, except those stated to be upon information and belief, and that those he believes to be true.

(Signed) Subscribed and sworn to before me this day of

19.-. (Signed)

(Official title) (SEAL) (Sec. 601, 45 Stat. 872; 26 U.S.C. 611) [Rules of practice before the United States Board of Tax Appeals, revised to Jan. 1, 1938, 2 F.R. 2957]

Note: $ 711.2 is reprinted in its entirety in this Supplement to correct a typographical error in paragraph 3 of the section as originally presented in the Code of Federal Regulations.