- 38 -
Petitioner claims that because computer software involves a
creative industry where important jobs are performed in the United
States, it belongs in the parenthetical. Respondent posits that the
question is not whether jobs are being performed in the United
States but rather whether jobs that also could be performed in the
United States are moved offshore because copyrights and other
intangibles are exported under license. We agree with respondent.
(2) The temporary regulation reflects Congress’ decision not
to expand export property treatment for intangibles beyond
copyrights in motion pictures and sound recordings. The 1976 and
1982 amendments to the DISC provisions reflected Congress’
continuing concern with the cost and revenue effects of the DISC
regime. Despite pleas from the representatives of the software
industry for a change in the statutory language to include computer
software as export property, section 993(c)(2)(B) was reenacted9 as
section 927(a)(2)(B) without the requested inclusion, apparently on
the basis that the requested change would not be revenue neutral and
that U.S. jobs would be moved offshore. See TSR, Inc. & Sub. v.
Commissioner, 96 T.C. 903, 916-917 (1991). Had Congress desired to
make FSC benefits available to computer software copyrights in 1984,
9 The 1984 FSC legislation replaced many of the tax rules
that had been applicable to DISCs. DISCs were not abolished;
however, their tax benefits were limited, and an interest charge
on tax-deferred amounts was imposed on DISC shareholders. See
Deficit Reduction Act of 1984, Pub. L. 98-369, sec. 802(b),
98 Stat. 494, 997.
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