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1986 of old section 931 was not effective for their taxable year
2001 since certain implementing agreements were not entered into
between the United States and the specified possessions identi-
fied in section 931 after that amendment; and (2) after the
amendment by the TRA 1986 of old section 931 the Treasury did not
amend or withdraw section 1.931-1, Income Tax Regs., promulgated
under old section 931, and therefore petitioners were entitled to
rely on that regulation. Around 6� months before petitioners
signed their 2001 joint return,12 we rejected both of those
arguments in Specking v. Commissioner, 117 T.C. 95 (2001). As
discussed above, in Specking, we held that the amendment of old
section 931 by the TRA 1986 became effective as to taxpayers who
earned compensation while working on Johnston Island for taxable
years that began after December 31, 1986. Id. at 109-110. In so
holding, we rejected the argument advanced by the taxpayers in
Specking and petitioners here that the existence of certain
implementing agreements between the United States and the speci-
fied possessions identified in section 931 after its amendment by
the TRA 1986 was a condition precedent to the effective date of
such amendment of old section 931. Id. As also discussed above,
in Specking, we further rejected the argument of the taxpayers
there and petitioners here that section 1.931-1, Income Tax
Regs., promulgated under old section 931 continued to apply after
12See supra note 6.
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