-74-
supra at 19, 1966-2 C.B. at 1071. The Senate report also
expresses Congress’s reluctance through the Foreign Investors Tax
Act of 1966 to disallow a nonresident alien’s deductions related
to his or her investment in U.S. real estate because such a
disallowance “would tend to discourage foreign investment in U.S.
realty”. S. Rept. 1707, 89th Cong., 2d Sess., supra at 26-27,
1966-2 C.B. at 1076-1077.
Respondent acknowledges that the disputed regulations are
invalid if the relevant text is unambiguous in including no
timely filing requirement. In contrast to the Secretary’s
statement in the preamble to the 1990 regulations, respondent
argues that the caselaw suggests that the relevant text is
ambiguous. Respondent observes that some of this caselaw states
that a foreign corporation must file a “timely” return in order
to benefit from its deductions. Respondent notes especially the
court’s use of the word “timely” in Blenheim Co. v. Commissioner,
supra at 908-910, 912.
We disagree with respondent that the caselaw interprets the
relevant text as including the Secretary’s timely filing
requirement. In Blenheim Co. v. Commissioner, 125 F.2d 906 (4th
Cir. 1942), the Court of Appeals for the Fourth Circuit did state
that a foreign corporation must file a “timely” return in order
to deduct its expenses; however, the court used the word “timely”
to mean that the foreign corporation had to file its return
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