- 87 -
abroad.41 Petitioner, nevertheless, contends that the March 1984
Brazilian IRS private ruling issued to the Central Bank must be
accorded conclusive effect under the act of state doctrine. On
brief, petitioner asserts:
Even if Respondent were correct and * * * [the
March 1984 Brazilian IRS private ruling] represented a
change in the * * * [Brazilian IRS's] historical
position, this would not affect * * * [the March 1984
ruling's] validity. * * * [Respondent] regularly
defends her ability to revise her rulings as necessary
and appropriate in the circumstances.
* * * Therefore, the * * * [Brazilian IRS would
not have been required to follow an erroneous prior
practice any more than * * * [respondent] would be
required to follow such a practice.
* * * * * * *
Respondent's argument would require this Court to
disregard * * * [the March 1984 Brazilian IRS ruling
issued to the Central Bank] and the Minister of Finance's
directive that taxes be withheld on the DFA and CGA
interest payments. Respondent argues that the * * *
[Brazilian IRS] "compromised" Brazilian tax law, and that
this Court must rule against the * * *[Brazilian IRS] on
a question of Brazilian tax law. Thus, Respondent
invites the Court to violate the Act of State doctrine by
"declar[ing] invalid, and thus ineffective as 'a rule of
decision for the courts of this country,' the official
act of a foreign sovereign." W.S. Kirkpatrick & Co. v.
Environmental Tectonics Corp. Int'l., 493 U.S. 400, 405
(1990) * * *.
41 In Amoco Corp. v. Commissioner, T.C. Memo. 1996-159, we
held that an Egyptian Tax Department determination reflected the
applicable Egyptian law and rejected the Commissioner's argument
that this Tax Department determination could have been
successfully challenged. We stated that whether the Tax
Department's determination could have been successfully
challenged was unclear, because, at the time, there was no
existing precedent that focused on the precise issue involved.
We further stated that, on the facts presented, we perceived no
reason to delve into the motives of a foreign government in
connection with its tax determinations. The instant case is
distinguishable from Amoco.
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