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the years in issue, petitioner was an "inhabitant" of the USVI
within the meaning of section 28(a) of the Revised Organic Act.
Through the Naval Appropriations Act, ch. 44, 42 Stat. 122
(1921), Congress made the United States income tax laws
applicable to the USVI. See Danbury, Inc. v. Olive, 820 F.2d
618, 620 (3d Cir. 1987); Condor Intl., Inc. v. Commissioner, 98
T.C. 203, 211 (1992), affd. in part and revd. in part on other
grounds 78 F.3d 1355 (9th Cir. 1996). The Naval Appropriations
Act created a separate territorial income tax which the USVI
Government would collect by applying the United States income tax
laws with necessary changes where appropriate. See Bizcap, Inc.
v. Olive, 892 F.2d 1163, 1165 (3d Cir. 1989); Condor Intl., Inc.
v. Commissioner, supra. A "mirror" system of taxation was
created by substituting "Virgin Islands" for "United States", in
the Internal Revenue Code. See Bizcap, Inc. v. Olive, supra;
Condor Intl., Inc. v. Commissioner, supra. To satisfy a USVI tax
obligation, a corporation inhabiting the USVI was required to pay
the same amount of taxes to the USVI Bureau of Internal Revenue
(BIR) as a domestic U.S. corporation would be required to pay to
the Internal Revenue Service (IRS) under the same circumstances.
See Bizcap, Inc. v. Olive, supra; Condor Intl., Inc. v.
Commissioner, supra.
The Naval Appropriations Act required some corporations to
file two returns. For example, a domestic U.S. corporation doing
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