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and third sentences of the temporary regulation would not have been
made (in 1987) to contradict the fourth sentence (which was carried
over from section 1.993-3(f)(3), Income Tax Regs., to the temporary
regulation).
According to petitioner, computer software masters are “master
recording tapes” (within the purview of the fourth sentence)
licensed for reproduction outside the United States, and thus
constitute export property. We disagree. Read in context, a
“master recording tape” does not include computer software.
Because the second sentence interprets the general rule (that
copyrights are not export property), “reproduction” in the fourth
sentence refers to a copyright transaction described in the second
sentence. The fourth sentence emphasizes that sound recording
masters fall within the parenthetical and thus are not disqualified
by the second sentence. Contrary to petitioner’s assertion, the
fourth sentence is not “trumped” by the second sentence because the
fourth sentence concerns a “master recording tape” whereas the
second sentence concerns computer software and books. (It was
unnecessary to refer to motion pictures in the fourth sentence
because the legislative history reflects that copyrights in motion
pictures fall within the exception, and the motion picture industry
did not lobby for modification.) Petitioner’s interpretation of the
fourth sentence would nullify, rather than harmonize with, other
provisions of the temporary regulation.
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