- 35 -
fact, a literal application of section 864 to section 931 would
result in no U.S. citizen’s qualifying under the effectively
connected prong. Nevertheless, the “principles” of an inapplicable
section (i.e., section 864) are being relied on, and the mandate of
the applicable section (i.e., section 931(d)(2)) is ignored in a
desperate attempt to make the statute work. See majority op. p.
26. The bottom line is that, other than section 931, there are no
statutes or regulations addressing whether an individual’s income
is “effectively connected with the conduct of a trade or business
by such individual within * * * [American Samoa]”. Sec. 931(a)(2).
Rather than adhere to the statute, the majority relies on
effectively connected “concepts” and “principles”. See majority
op. pp. 27-28. The statute, legislative history, and Implementing
Agreement do not authorize the application of section 864's
“principles”. In numerous other grants of regulatory authority
Congress explicitly provided that the “principles” of a particular
section should be applicable, but with respect to section 931
Congress failed to provide such direction. See sections
41(f)(1)(B), 52(b), 120(d)(6)(B), 127(c)(4)(B), 129(e)(5)(B),
267(a)(3), 367(e)(1), 383(b), 404(g)(3)(C), 414(c),
416(i)(1)(B)(iii)(II), 597(b), 1092(b)(1), 2663(2), et al. In
order to give effect to section 931(d)(2), the Court must follow,
not ignore, its mandate.
Page: Previous 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 NextLast modified: May 25, 2011