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from sources within the United States by" SDI Bermuda and are
thus subject to withholding under section 1441(a); (2) whether
petitioner can be considered a "withholding agent"; (3) whether
there is a limitations period that has expired in respect of
respondent's right to assess a deficiency in withholding tax
against petitioner; and (4) whether petitioner is liable for
additions to tax under section 6651(a)(1) for failure to file
withholding tax returns.
For reasons hereinafter set forth, we resolve the first
issue in petitioner's favor with the result that it is
unnecessary for us to address the remaining issues.13 Before
proceeding with our analysis of the first issue, however, it is
important to note that respondent does not question the existence
of petitioner as a valid Netherlands corporation or the
application of the treaty exemption insofar as the payments by
SDI USA to petitioner are concerned. Similarly, respondent does
not attack the arrangements under which petitioner had a license
of the worldwide rights and SDI USA had a license of the U.S.
rights, although respondent does ask us to take into account the
13 Similarly we have no need to decide further whether any
elements of proof should be placed on respondent under Rule
142(a) with respect of the increases in the deficiencies for
1987, 1988, and 1990 or whether any such burden should be applied
on an overall or year by year basis. See Zarin v. Commissioner,
92 T.C. 1084, 1089 (1989), revd. on other grounds 916 F.2d 110
(3d Cir. 1990).
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