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section 1.864-7(d)(1)(i), Income Tax Regs.14 Accordingly,
petitioners contend that INC's office in San Antonio should not
be considered LTD's "office or other fixed place of business" in
the United States because INC did not have the authority to
negotiate or to conclude contracts on behalf of LTD. Petitioners
argue that, "Even if INC is deemed to be a dependent agent, by
its agreement with LTD it had 'no authority to act for,
represent, bind or obligate * * * [LTD]' without first obtaining
LTD’s consent and in fact it did not do so without first
obtaining the consent of LTD."
Respondent also seeks to apply section 1.864-7(d)(1)(i),
Income Tax Regs., contending that INC's San Antonio office should
be considered LTD's office for the purpose of applying the
regulation.
Section 1.864-7(d)(1)(i), Income Tax Regs., provides that
the office of an agent who is not an independent agent will be
disregarded in the determination of whether a taxpayer has "an
14
Sec. 1.864-7(d)(1)(i), Income Tax Regs., provides:
In determining whether a nonresident alien
individual or a foreign corporation has an office or
other fixed place of business, the office or other
fixed place of business of an agent who is not an
independent agent, as defined in subparagraph (3) of
this paragraph, shall be disregarded unless such agent
(a) has the authority to negotiate and conclude
contracts in the name of the nonresident alien
individual or foreign corporation, and regularly
exercises that authority, or (b) has a stock of
merchandise belonging to the nonresident alien
individual or foreign corporation from which orders are
regularly * * * [filled] on behalf of such alien
individual or foreign corporation * * *.
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