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respondent's motion. On November 30, 1994, a hearing was held on
respondent's motion. On December 5, 1994, respondent's motion
was denied.
OPINION
I. Statutory Framework
A. Section 842 and Section 864(c)
Under section 842(a),2 a qualified foreign company carrying
on a life insurance business within the United States is taxable
on its income effectively connected with its conduct of any trade
or business within the United States under subchapter L, part I.
Domestic life insurance companies are also taxed pursuant to the
latter provisions. Sec. 801 et seq. Section 864(c)3 and the
2Sec. 842(a) provides in pertinent part:
(a) Taxation under this subchapter.--If a foreign
company carrying on an insurance business within the
United States would qualify under part I * * * of this
subchapter for the taxable year if (without regard to
income not effectively connected with the conduct of
any trade or business within the United States) it were
a domestic corporation, such company shall be taxable
under such part on its income effectively connected
with its conduct of any trade or business within the
United States * * *.
3Sec. 864(c) provides in pertinent part:
(c)(2) Periodical, etc., income from sources
within United States--factors.--In determining whether
income from sources within the United States of the
types described in section 871(a)(1), section 871(h),
section 881(a), or section 881(c) or whether gain or
loss from sources within the United States from the
sale or exchange of capital assets, is effectively
(continued...)
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