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Without detailing the relationships of the various entities
that respondent contends exist, we note that respondent
determined generally that certain U.S. entities related to Ladney
are dependent agents of petitioner which, within the context of
section 864(c)(5),1 negotiated contracts on behalf of
petitioner. On that premise, respondent determined that
petitioner’s income is from sources outside the United States
which are effectively connected with petitioner’s U.S. trade or
business. Apparently, petitioner does not deny that it had a
U.S. trade or business but disputes that its income from sources
outside the United States is effectively connected with its U.S.
trade or business.
Respondent seeks copies of deposition transcripts taken in
connection with litigation in the U.S. District Court for the
Middle District of Florida. Petitioner was a defendant in
litigation styled Cinpres Ltd. v. Hendry, Case No. 96-752-CIV-T-
24B (M.D. Fla., Dec. 12, 1998) (Cinpres case). That case
involved a patent infringement action brought by Cinpres, a
British company, against petitioner and a competitor of
petitioner. Petitioner, a foreign corporation, questioned the
U.S. District Court’s jurisdiction over it, and depositions were
taken, in part, to discern the relationship between petitioner
1 Section references are to the Internal Revenue Code, and
Rule references are to the Tax Court Rules of Practice and
Procedure.
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