446
Opinion of the Court
gorical treatment of R&D conflicted with congressional intent that there be a "direct" relationship between items of gross income and expenses "related thereto," and with a specific DISC regulation giving the taxpayer the right to group and allocate income and costs by product or product line. The Court of Appeals for the Ninth Circuit reversed, 258 F. 3d 958 (2001), and we granted certiorari to resolve the conflict between the Circuits, 535 U. S. 1094 (2002). We now affirm.
II
Section 861 of the Internal Revenue Code distinguishes between United States and foreign source income for several different purposes. See 26 U. S. C. § 861. The regulation at issue in this suit, 26 CFR § 1.861-8(e)(3) (1979), was promulgated pursuant to that general statute. Separate regulations promulgated under the DISC statute, 26 U. S. C. §§ 991-997, incorporate 26 CFR § 1.861-8(e)(3) (1979) by specific reference. See § 1.994-1(c)(6)(iii) (citing and incorporating the cost allocation rules of § 1.861-8). Boeing does not claim that its method of accounting for Company Sponsored R&D complied with § 1.861-8(e)(3). Rather, it argues that § 1.861-8(e)(3) is so plainly inconsistent with congressional intent and with other provisions of the DISC regulations that it cannot be validly applied to its computation of CTI for DISC purposes.
Boeing argues, in essence, that the statute and certain specific regulations promulgated pursuant to 26 U. S. C. § 994 give it an unqualified right to allocate its Company Sponsored R&D expenses to the specific products to which they are "factually related" and to exclude any allocated R&D from being treated as a cost of any other product. The relevant statutory text does not support its argument.
As we have already mentioned, the DISC statute gives the taxpayer a choice of three methods of determining the transfer price for an exported good. Boeing elected to use only the second method described in the following text:
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