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statutory definition of this term. Also, as far as we can tell,
nowhere else in the Code is there a definition of this term as it
is used in section 936 or in any of the other Code sections in
which this term is used.
In MedChem (P.R.), Inc. v. Commissioner, 116 T.C. at 333, we
pointed out that “the roots of that section [936] are found in
section 262 of the Revenue Act of 1921”, and we briefly
summarized the purpose and history of the statute in accordance
with our analyses in G.D. Searle & Co. v. Commissioner, 88 T.C.
252, 350-351 (1987), and Coca-Cola Co. & Subs. v. Commissioner,
106 T.C. 1, 21 (1996). From section 262 of the Revenue Act of
1921 through section 931, I.R.C. 1954, a qualifying domestic
corporation was exempt from Federal income taxes on certain
9(...continued)
nonemotive, it is presumed that the author’s language
has been used, not for its artistic or emotional
effect, but for its ability to convey ideas.
Accordingly, it is presumed that the author has not
varied his terminology unless he has changed his
meaning, and has not changed his meaning unless he has
varied his terminology; that is, that he has committed
neither “elegant variation” nor “utraquistic
subterfuge”. This is the rebuttable presumption of
formal consistency. [Fn. refs. omitted.]
In United States v. Cleveland Indians Baseball Co., 532 U.S.
200, 213 (2001), the Supreme Court made it clear that there are
some circumstances where “‘the meaning [of the same words] well
may vary to meet the purposes of the law,’” quoting Atlantic
Cleaners & Dyers v. United States, 286 U.S. 427, 433 (1932). It
does not appear that the circumstances dealt with in Cleveland
Indians have a persuasive parallel as to the active-conduct-of-a-
trade-or-business issue. However, see infra II. C. for
discussion of the term “manufactured or produced”.
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