Inverworld, Inc., et al. - Page 219

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            Fixed facilities, (2) management activity, (3) agent activity,                                
            (4) employee activity, and (5) office or other fixed place of                                 
            business of a related person.  Sec. 1.864-7, Income Tax Regs.  We                             
            examine each of the factors in turn.                                                          
                  (1)  Fixed facilities.  The general rule is that "an office                             
            or other fixed place of business is a fixed facility, that is, a                              
            place, site, structure, or other similar facility, through which                              
            a nonresident alien individual or a foreign corporation engages                               
            in a trade or business."  Sec. 1.864-7(b)(1), Income Tax Regs.                                
            "A fixed facility may be considered an office or other fixed                                  
            place of business whether or not the facility is continuously                                 
            used by a nonresident alien individual or foreign corporation."                               
            Id.  Furthermore:                                                                             
                        A nonresident alien individual or a foreign corporation                           
                  shall not be considered to have an office or other fixed                                
                  place of business merely because such alien individual or                               
                  foreign corporation uses another person’s office or other                               
                  fixed place of business, whether or not the office or other                             
                  fixed place of business of a related person, through which                              
                  to transact a trade or business, if the trade or business                               
                  activities of the alien individual or foreign corporation in                            
                  that office or other fixed place of business are relatively                             
                  sporadic or infrequent, taking into account the overall                                 
                  needs and conduct of that trade or business.  * * * [Sec.                               
                  1.864-7(b)(2), Income Tax Regs.]                                                        
                  (2)  Management activity.  The regulations take into account                            
            where the "top management" decision-making takes place and where                              
            "the day-to-day trade or business of the foreign corporation”                                 
            occurs.  Sec. 1.864-7(c), Income Tax Regs.                                                    
                  (3)  Agent activity.  The regulations provide:                                          





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