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later contended as an alternative argument that petitioners had
failed to show that the Israeli tax payments satisfied the
creditability requirements of section 901 and the regulations
thereunder. We did not reach this argument in our previous
opinion as it was mooted by our decision relating to the source
of petitioners’ income.
Here then is the situation with which we are now faced. A
plain reading of the parties’ stipulations would seem to indicate
that respondent did not reserve the right to question the nature
of the remittances to Israel when he stipulated that they were
“Israeli Income Tax Paid”. Such, in turn, appears to have lulled
petitioners into assuming that respondent had conceded the
payments to be foreign income taxes as required for either a
credit or the alternative deduction. Consequently, petitioners
further assumed, the factual predicate having been established,
that the deductions fell within the standard for items which may
be taken into account under Rule 155.
Under Rule 155, the parties “submit computations pursuant to
the Court’s determination of the issues”. Rule 155(a). Thus the
Rule constitutes “the mechanism whereby the Court is enabled to
enter a decision for the dollar amounts of deficiencies and/or
overpayments” resulting from the Court’s substantive disposition.
Cloes v. Commissioner, 79 T.C. 933, 935 (1982). A Rule 155
proceeding is an appropriate vehicle for dealing with “‘purely
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