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will be refunded, credited, rebated, abated, or
forgiven. * * *
Petitioner argues that this regulation is inapplicable
because it contains no indirect refund rule, and because a refund
must be authorized by the foreign government. Respondent argues
that, because the entire amount of Amoco Egypt's tax was claimed
as a credit by EGPC, there was a refund. Respondent reasons that
because "paid by" as used in section 1.901-2(f)(2), Income Tax
Regs., infra p. 80, is defined as meaning "paid or accrued by or
on behalf of" in section 1.901-2(g)(1), Income Tax Regs., section
1.901-2(e)(2), Income Tax Regs., applies to EGPC.
Respondent's position rests, in the first instance, on her
position that the credit taken by EGPC was authorized by Article
IV(f)(6) of the MCA. Our rejection of that position creates a
situation where it could hardly be said that it was "reasonably
certain" that any amount of Amoco Egypt taxes would be refunded,
etc. In any event, such a credit could not have been considered
a refund, etc., to Amoco Egypt. There is no question that Amoco
Egypt was subject to Egyptian income tax, and those taxes were,
at least initially, paid. The credit was against EGPC's taxes,
and no part of that credit inured to Amoco Egypt.
Steel Improvement & Forge Co. v. Commissioner, 36 T.C. 265
(1961), revd. on other grounds 314 F.2d 96 (6th Cir. 1963),
relied on by respondent, is clearly distinguishable. In that
case, the U.S. taxpayer claimed foreign tax credits for taxes
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