John A. Francisco - Page 19




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          source.  Section 1.863-6, Income Tax Regs., states that the                 
          principles of sections 1.861-1 through 1.863-5, Income Tax Regs.,           
          are applied in determining whether gross income is from sources             
          within or without a possession of the United States.  Section               
          1.863-6, Income Tax Regs., also provides that, in applying                  
          sections 1.861-1 through 1.863-5, Income Tax Regs., the name of             
          the possession shall be substituted for the term “United                    
          States”.11  Thus, the effect of section 1.863-6, Income Tax                 
          Regs., is to treat income from personal services which would be             
          sourced in the United States under sections 1.861-1 through                 
          1.863-5, Income Tax Regs., if the services were performed in the            
          United States, as sourced in American Samoa if the services were            
          performed in American Samoa.                                                



               11  Sec. 1.863-6, Income Tax Regs., provides:                          
               Sec. 1.863-6.  Income From Sources Within a Foreign                    
               Country or Possession of the United States.                            
                    The principles applied in ��1.861-1 to 1.863-5,                   
               inclusive, for determining the gross and the taxable                   
               income from sources within and without the United                      
               States shall generally be applied, for purposes of the                 
               income tax, in determining the gross and the taxable                   
               income from sources within and without a foreign                       
               country, or * * * possession of the United States.                     
               * * * In the application of this section the name of                   
               the particular foreign country or possession of the                    
               United States shall be substituted for the term “United                
               States, * * *”                                                         
          The last sentence quoted above was added to sec. 1.863-6, Income            
          Tax Regs., in 1975.  T.D. 7378, 1975-2 C.B. 272, 283.                       





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