IRS Offers Leniency for Subsidiaries Not Filing Consolidated Group Form

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Subsidiaries of an affiliated group of corporations can be treated as though they had filed the form needed for them to be included in a consolidated income tax return in some circumstances even if they didn't file the form, the Internal Revenue Service said in Revenue Procedure 2014-24.
The March 10 guidance allows this treatment in some cases where Form 1122, Authorization and Consent of Subsidiary Corporation to Be Included in a Consolidated Income Tax Return, wasn't filed due to a mistake of law or fact, or where it was inadvertently not filed.
As one example, the benefit is available in some cases where the affiliated group didn't file the form because it believed the subsidiary was taxable as a partnership. All of the exceptions require that the subsidiary's income and deductions be reflected on the consolidated return.