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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. * * * [Sec. 1.864-
7(d)(1)(i), Income Tax Regs.]
The regulations also provide:
an agent shall be considered regularly to exercise
authority to negotiate and conclude contracts or
regularly to fill orders on behalf of his foreign
principal only if the authority is exercised, or the
orders are filled, with some frequency over a
continuous period of time. This determination shall be
made on the basis of the facts and circumstances in
each case, taking into account the nature of the
business of the principal; but, in all cases, the
frequency and continuity tests are to be applied
conjunctively. Regularity shall not be evidenced by
occasional or incidental activity. An agent shall not
be considered regularly to negotiate and conclude
contracts on behalf of its foreign principal if the
agent’s authority to negotiate and conclude contracts
is limited only to unusual cases or such authority must
be separately secured by the agent from his principal
with respect to each transaction effected. * * * [Sec.
1.864-7(d)(1)(ii), Income Tax Regs.]
(4) Employee activity. The regulations provide:
Ordinarily, an employee of a nonresident alien
individual or a foreign corporation shall be treated as
a dependent agent to whom the rules of paragraph (d)(1)
of this section apply if such employer does not in and
of itself have a fixed facility (as defined by
paragraph (b) of this section) in the United States or
outside the United States, as the case may be.
However, where the employee, in the ordinary course of
his duties, carries on the trade or business of his
employer in or through a fixed facility of such
employer which is regularly used by the employee in the
course of carrying out such duties, such fixed facility
shall be considered the office or other fixed place of
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