Foreign corporations are eligible for two extension periods.

• Author: Friedman, Steven M.

In Rev. Rul. 93-85, the IRS concluded that the two extension periods available to foreign corporations that maintain an office or place of business within the United States are not mutually exclusive. Thus, such foreign corporations may take advantage of both extensions--to file under Regs. Sec. 1.6081-3(a) and to file and pay under Regs. Sec. 1.6081-5(a)(3)--but may not defer filing for more than six months from the return's original due date.

Under Sec. 6072(b), a calendar-year corporation generally must file its tax return by March 15. However, under Sec. 6072(c), a calendar-year foreign corporation has until June 15 to file its tax return if it does not have an office or place of business in the United States and is not a foreign sales corporation (FSC) or a former FSC.

Sec. 6081(a) authorizes the Service to grant taxpayers reasonable extensions of time to file their returns. Except for taxpayers who are abroad, extensions may not be granted for more than six months. Regs. Sec. 1.6081-3(a) allows a corporation to obtain an automatic six-month extension to file its return, provided that a Form 7004, Application for Automatic Extension of Time to File U.S. Corporation Income Tax Return, is filed and its estimated unpaid tax liability is paid by the original filing deadline.

Regs. Sec. 1.6081-5(a)(3) also provides that a foreign corporation that maintains an office or place of business within the United States may obtain an automatic three-month extension, not only for filing its return, but also for payment of tax. To obtain this three-month extension, the foreign corporation must simply attach a statement to its return (when filed) demonstrating its eligibility for the extension.

Rev. Rul. 93-85 addressed the interplay of these two extension periods and noted that a foreign corporation may avail itself of both extensions for the same tax year. However, the maximum extension period is six months (from the original due date of the return), unless the taxpayer is "abroad." The revenue ruling concluded that the foreign corporation in the ruling was not "abroad" because it...