Cite as: 537 U. S. 437 (2003)
Thomas, J., dissenting
1981,14 a 1984 conference agreement specified that the moratorium would "not apply for other purposes, such as the computation of combined taxable income of a DISC (or FSC) and its related supplier." H. R. Conf. Rep. No. 98-861, p. 1263 (1984). The fact that Congress did not legislatively override 26 CFR § 1.861-8(e)(3) (1979) in enacting the FSC provisions in 1984 serves as persuasive evidence that Congress regarded that regulation as a correct implementation of its intent. See Lorillard v. Pons, 434 U. S. 575, 580-581 (1978).
The judgment of the Court of Appeals is affirmed.
It is so ordered.
Justice Thomas, with whom Justice Scalia joins, dissenting.
Before placing its hand in the taxpayer's pocket, the Government must place its finger on the law authorizing its action. United Dominion Industries, Inc. v. United States, 532 U. S. 822, 839 (2001) (Thomas, J., concurring) (citing Leavell v. Blades, 237 Mo. 695, 700-701, 141 S. W. 893, 894 (1911)). Despite the Government's failure to do so here, the Court holds in its favor; I respectfully dissent.
To read the majority opinion, one would think that the Court has before it a perfectly clear statutory and regulatory scheme and that the position of petitioners/cross-respondents (hereinafter Boeing) is utterly without support. Nothing could be further from the facts of this suit. Indeed, the Internal Revenue Service (IRS) itself initially read the statu-14 In 1981, Congress imposed a temporary moratorium on the application of the cost allocation rules of 26 CFR § 1.861-8(e)(3) (1979) solely for the geographic sourcing of income. See Economic Recovery Tax Act of 1981, Pub. L. 97-34, § 223, 95 Stat. 249. As a result, research expenditures made for research conducted in the United States were allocated against United States source gross income only—not between United States source income and foreign source income. See H. R. Conf. Rep. No. 98-861, p. 1262 (1984).
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