American Air Liquide, Inc. and Subsidiaries - Page 11

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          133 U.S. 258, 271 (1890).  When a treaty and a statute relate to            
          the same subject, courts attempt to construe them so as to give             
          effect to both, see Whitney v. Robertson, 124 U.S. 190, 194                 
          (1888), because “the intention to abrogate or modify a treaty is            
          not to be lightly imputed to the Congress”, Menominee Tribe v.              
          United States, 391 U.S. 404, 413 (1968) (quoting Pigeon River Co.           
          v. Cox Co., 291 U.S. 138, 160 (1934)); see also Estate of                   
          Burghardt v. Commissioner, 80 T.C. 705, 713 (1983), affd. without           
          published opinion 734 F.2d 3 (3d Cir. 1984).                                
               Petitioner argues that the characterization of royalty                 
          income under section 904 must be identical for royalties received           
          by a U.S. subsidiary from a foreign parent corporation and                  
          royalties received by a domestic corporation from a controlled              
          foreign corporation.  Petitioner argues that to not characterize            
          its royalty income from L’Air as section 904(d)(1)(I) general               
          limitation income would violate Article 24(3) of the U.S.-France            
          Treaty.  Petitioner cites the deficiency itself as evidence of              
          the detriment it suffers because respondent treats the royalty              
          income as passive income rather than general limitation income.             
          We disagree with petitioner’s analysis.  Petitioner’s analysis              
          ignores the differences in the tax treatment, imposed by subpart            
          F, sections 951 to 964, of the Code, and consequently the                   
          circumstances of the respective taxpayers mentioned.                        
               Article 24(3), which corresponds to Article 24(5) of the               

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