For which of the following tax-related matters can an affiliated group's parent corporation act as the group's agent?

a. Consent by a subsidiary corporation to the filing of a consolidated tax return.

b. Changing a subsidiary corporation's accounting method.

c. Corresponding with the IRS during its audit regarding a subsidiary corporation's transaction that affects the group's consolidated taxable income.

d. Requesting an extension of time to file a consolidated tax return.

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A. All of the tax-related matters allow an affiliated group's parent corporation to act as the group's agent since once a subsidiary becomes 80% or more owned by a parent corporation, all tax-related matters must be answered through the parent corporation.

B. Only a and c are tax-related matters that allow an affiliated group's parent corporation to act as the group's agent because the parent files the initial consent for allowing subsidiaries to file consolidated returns and they also work directly with the IRS in all correspondence following that initial consenting return.

C. None of the tax-related matters allow an affiliated group's parent corporation to act as the group's agent because each entity is considered a standalone entity for tax-related matters such as those listed.

D. Only b, c, and d are tax-related matters which the parent corporation can act as the group's agent. Each subsidiary corporation must first consent to participate in a consolidated return; thus giving the parent the right to act on their behalf for the other three actions.