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directly or indirectly, from the foreign countries in exchange
for payment of the levies. See sec. 1.901-2(a)(2), Income Tax
Regs. The regulations also provide that economic benefits that
foreign Governments do not make available on substantially the
same terms to substantially all persons subject to the generally
imposed income tax (such as a concession to extract Government-
owned petroleum) will be regarded as specific economic benefits.
See sec. 1.901-2(a)(2)(ii)(B), Income Tax Regs.
Exxon acknowledges that the licenses it received from the
United Kingdom to exploit North Sea petroleum resources
constitute the receipt of specific economic benefits and
therefore that Exxon is to be treated under the regulations as a
“dual capacity” taxpayer and as subject to the regulations with
regard thereto under sections 1.901-2(a)(2) and 1.901-2A, Income
Tax Regs. Thereunder, dual capacity taxpayers (who pay levies
and who also receive specific economic benefits from the
Government) have the burden to establish the extent, if any, to
which foreign levies they pay constitute taxes -- as opposed to
payments for the specific economic benefits received -- either by
relying on the regulations’ safe harbor method or on the facts
and circumstances method. See sec. 1.901-2A(c)(1) and (2),
Income Tax Regs. Exxon herein relies on the facts and
circumstances method, and Exxon is required to establish, under
all of the relevant facts and circumstances associated with its
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