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U.S. possession other than Guam, American Samoa, or the CNMI as a
U.S. possession for purposes of section 931 is inconsistent with
the statute, and hence invalid, for any taxable year beginning
after December 31, 1986. Hereinafter, for purposes of this case,
possessions of the United States other than Guam, American Samoa,
the CNMI, and the Virgin Islands14 will be referred to as the
other U.S. possessions.
Respondent maintains that, in TRA 1986 section 1272(a),
Congress clearly intended to limit the exclusion provided by
section 931 to bona fide residents of only Guam, American Samoa,
and the CNMI, and to income derived from sources therein. Thus,
respondent argues, under TRA 1986 sections 1272(a) and 1277(a),
the existence of an implementing agreement is not a condition
precedent for the effectuation of the amendments to old section
931 for residents of Johnston Island; rather, under TRA 1986
sections 1271(b) and 1277(b), that requirement applies only to
bona fide residents of the specified possessions and to income
derived from sources within those possessions. Therefore,
respondent asserts, the question of whether a valid implementing
agreement exists between the United States and American Samoa,
Guam, or the CNMI is not relevant in this case. Respondent
argues that, for years beginning after 1986, bona fide residents
14We include the Virgin Islands here because other
provisions in subtit. G of tit. XII apply specifically to the
Virgin Islands. TRA 1986 secs. 1273-1277, 100 Stat. 2595-2600.
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