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respondent. It is well settled that when a regulation conflicts
with a subsequently enacted statute, the statute controls.
Bingler v. Johnson, 394 U.S. 741, 750 (1969); Commissioner v. S.
Tex. Lumber Co., 333 U.S. 496, 501 (1948); Farrell v. United
States, F.3d at .
We decided this issue in Specking v. Commissioner, supra at
111. One of the years at issue in that case was 1997, which is
the year at issue here. In Specking, we said:
For the years in issue, section 931 does not apply
to the compensation petitioners received for services
they performed on Johnston Island. * * * [Id.]
The U.S. Court of Appeals for the Ninth Circuit, to which this
case is appealable, reached the same conclusion in Farrell.
Petitioner also contends, on the basis of a footnote in
Specking v. Commissioner, supra at 106 n.15, that former section
931 still applies to Johnston Island. The footnote states:
Thus, had American Samoa and the United States not
entered into an implementing agreement, income from
sources within that possession would qualify for the
exclusion provided by old sec. 931. * * * [Id.]
We disagree. Former section 931 applied to Johnston Island.
However, section 931, as amended by 1986 TRA section 1272(a),
does not. Note 15 in Specking does not provide otherwise. 1986
TRA section 1277(a) and (b), 100 Stat. 2600, provides the
following effective dates for the amendments to section 931:
(a) In General.--Except as otherwise provided in
this section, the amendments made by this subtitle
shall apply to taxable years beginning after December
31, 1986.
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