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SUPPLEMENTAL MEMORANDUM FINDINGS OF FACT AND OPINION
JACOBS, Judge: This case is before the Court on remand from
the U.S. Court of Appeals for the District of Columbia Circuit
for further consideration consistent with its opinion in Riggs
Natl. Corp. & Subs. v. Commissioner, 295 F.3d 16 (D.C. Cir. 2002)
(Riggs IV), revg. and remanding T.C. Memo. 2001-12 (Riggs III).
The sole issue to be decided on remand is whether, in
computing petitioner’s foreign tax credits under section 9011 for
1984 and 1985, Brazilian income taxes withheld by Banco Central
do Brasil (the Central Bank) must be reduced by the pecuniary
benefit (equal to 40 percent of those withheld Brazilian income
taxes) that the Central Bank received from 1984 through June 28,
1985.2
1Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
2We have previously held that, in computing a U.S. lender’s
foreign tax credit, Brazilian taxes withheld and paid on behalf
of the lender must be reduced by the pecuniary benefit received
by the Brazilian borrower. Nissho Iwai Am. Corp. v.
Commissioner, 89 T.C. 765 (1987); Norwest Corp. v. Commissioner,
T.C. Memo. 1992-282, affd. 69 F.3d 1404 (8th Cir. 1995); First
Chicago Corp. v. Commissioner, T.C. Memo. 1991-44; Continental
Ill. Corp. v. Commissioner, T.C. Memo. 1988-318, affd. in part
and revd. in part 998 F.2d 513 (7th Cir. 1993), affd. per curiam
sub nom. Citizens & S. Corp. & Subs. v. Commissioner, 919 F.2d
1492 (11th Cir. 1990). In the cited cases, unlike here, the
withheld taxes were not paid, and the pecuniary benefit was not
received, by a tax-immune Brazilian governmental entity such as
the Central Bank.
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