Sayre & Company, Ltd. v. R. A. Riddell, Commissioner of Revenue and Taxation

We are called upon again, as we were in Atkins-Kroll (Guam) Ltd. v. Government of Guam, 367 F.2d 127 (1966), to interpret sections 881 and 7701 of the Internal Revenue Code of 1954, 26 U.S.C. §§ 881 , 7701 (1964), as applied to Guam by section 31 of the Organic Act of Guam, 64 Stat. 392 (1950), as amended, 72 Stat. 681 (1958), 48 U.S.C. § 1421i (1964).

Upon re-examination of our interpretation of these statutes we have concluded that AtJcins-Ki'oll must be overruled.

Section 31 of the Organic Act, as amended, 48 U.S.C. § 1421i, provides in subsection (a) that the income tax laws in force in the United States shall likewise be in force in Guam. Subsection (d) (1) limits this incorporation by reference to those provisions of the federal income tax code which are “not manifestly inapplicable or incompatible with the intent of this section.” Subsection (e) provides that “Guam” is to be substituted for “United States” in the applicable provisions of the federal statute “except where it is manifestly otherwise required,” and that the federal statute is to be read “with other changes in nomenclature and other language, including the omission of inapplicable language, where necessary to…