finding Alexander "fully reconcilable with the principle that the Secretary's failure to issue regulations does not bar application of a beneficial tax statute"
How later courts described this case
- finding Alexander "fully reconcilable with the principle that the Secretary's failure to issue regulations does not bar application of a beneficial tax statute"
- not reaching "self-executing" issue because neither party raised it on appeal
- "Section 931(d)(2) * * * is silent as to whether those regulations may be issued under section 931 or another section of the Code, such as sections governing the determination of sources of income (sections 861-865). In the absence of regulations under section 931(d)(2), we believe it is appropriate to consider sections 861-865 and related regulations"
- " Section 931(d)(2) * * * is silent as to whether those regulations may be issued under section 931 or another section of the Code, such as sections governing the determination of sources of income ( sections 861-865 ). In the absence of regulations under section 931(d)(2
Written by the judges who cited it.
The opinion
Beghe, J., concurring: Having joined the majority opinion, I write separately to make two additional points in support of the results we reach in this case.
First, adoption of the dissenting view would be contrary to published guidance and administrative practice of the Internal Revenue Service; the Service has operated on the assumption that section 931 was in force during the years in issue, and that it continues in force, notwithstanding the failure to issue regulations. Since the Tax Implementation Agreement With American Samoa was entered into in 1988, the Service has issued Publication 570, Tax Guide For Individuals With Income From U.S. Possessions, which provides instructions and examples on reporting income from sources in American Samoa and other possessions and for preparing Form 4563, Exclusion of Income for Bona Fide Residents of American Samoa.
Although 14 years seems like plenty of time to come up with regulatory guidance, U.S. citizens residing and working in American Samoa have not been completely in the dark. I therefore see no objection to sustaining the Service’s stopgap effort to implement the statutory scheme.
Second, petitioner argues on brief that the United States should not interfere with American Samoa’s "primary tax jurisdiction” over his income-earning activities in international waters. Petitioner’s argument is belied by his otherwise unexplained claim — on his American Samoan tax returns for 1995, 1996, and 1997 — that his earned income for those years was completely exempt from American Samoan taxation “per fisherman’s agreement”. 1 Acceptance of this well-compensated U.S. citizen’s argument that he also has no U.S. income tax liability for the years in issue would result in his escaping virtually all income taxes for those years. Cf. Estate of Durkin v. Commissioner, 99 T.C. 561 (1992). Petitioner’s professed solicitude for American Samoa’s ability to collect its income tax from American Samoa-based workers earning income from personal services in international waters, majority op. p. 329, therefore strikes me as disingenuous and unworthy of credence. There will be time enough in some later case to consider the merits of the ultimate resolution of this issue after the Treasury finally gets around to issuing new section 931 regulations.
Materials in the record cited by respondent’s second supplemental brief would seem to indicate petitioner tried to attach himself as a free rider to a tax exemption certificate issued by the American Samoan government to Van Camp, or took the position that none of his income was earned in American Samoa pursuant to the fish purchase and sale agreement between Van Camp and petitioner’s employer.