- 57 -
be usable by more than one such trade or business
simultaneously. * * * [H. Conf. Rept. 100-495 (1987)
at 984, 1987-3 C.B. 193, 264.]
But such a conclusion does not affect the outcome of this case.
To begin with, as previously noted, the issues in this case do
not concern policy in section 842(b) or any other provisions of
the Internal Revenue Code. Rather, the issues concern whether
the statute comports with our convention obligations.
Unfortunately, in the instant case, section 842(b) cannot survive
in the presence of the Canadian Convention.
Finally, respondent argues that we should construe section
842(b) as agreeing with the Canadian Convention because the
United States Senate, which advised and consented to the Canadian
Convention and approved the statute, believed the statute did not
violate any existing conventions. In support, respondent points
to several statements in the conference report to section
842(b).20
20The conference report, H. Conf. Rept. 100-495, at 983-984,
1987-3 C.B. 263-264, listed several factors, originally developed
by the Treasury Department, indicating why section 842(b) and
United States treaties were consistent:(1) Section 842(b) applies
to life insurance companies in a manner substantially similar to
the present-law rules which Treasury did not consider to violate
United States treaties; (2) section 842(b) attributes to the U.S.
trade or business of a foreign life insurance company an amount
of assets determined by reference to the assets of comparable
domestic insurance companies, thereby reasonably measuring the
amount of assets that the U.S. trade or business of a foreign
insurance company would be expected to have were it a separate
company dealing independently with non-United States offices of
the foreign insurance company; and (3) section 842(b) furnishes
(continued...)
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