- 5 - TRA 1986 repealed the "inhabitant rule" and required U.S. corporations that were inhabitants of the USVI to report and pay tax on their worldwide income to the IRS.2 Section 1277(c)(2)(A) of TRA 1986 applied the amendments of section 1275(b) of TRA 1986 not only to any taxable year beginning after the effective date of TRA 1986 but also to any "pre-1987 open year." Section 1277(c)(2)(C) of TRA 1986 defines a "pre-1987 open year" as "any taxable year beginning before January 1, 1987, if on the date of the enactment of this Act the assessment of a deficiency of income tax for such taxable year is not barred by any law or rule of law." Respondent determined that 1984 and 1985 are "pre-1987 open years" within the meaning of section 1277(c)(2)(C) of TRA 1986 and, accordingly, contends that petitioner is required to pay tax to the United States on its worldwide income during those years. Petitioner does not dispute respondent's position with regard to 2 The Tax Reform Act of 1986, Pub. L. 99-514, sec. 1275(b), 100 Stat. 2085, provides: SEC. 1275(b) Clarification of Treatment of Virgin Islands Inhabitants.-–Subparagraph (B) of section 7651(5) (relating to the Virgin Islands) is amended to read as follows: (B) For purposes of this title, section 28(a) of the Revised Organic Act of the Virgin Islands shall be effective as if such section 28(a) had been enacted before the enactment of this title and such section 28(a) shall have no effect on the amount of income tax liability required to be paid by any person to the United States.Page: Previous 1 2 3 4 5 6 7 8 Next
Last modified: May 25, 2011