L & F International Sales Corporation v. United States

In this federal income tax case involving eligibility for preferable treatment to a domestic international sales corporation, the question presented is whether an intercor-porate payment should have been made within sixty days (as prescribed by the Secretary of the Treasury) or within two and one-half months (as contended by the taxpayer).

I

A

Before we turn to the facts in this appeal from judgment dismissing a complaint seeking a refund of federal income tax, it is appropriate for us to set forth the relevant statutory and policy background. Deficits in the United States’ balance of trade with foreign countries moved Congress to enact a tax incentive to place American companies engaging in international trade through a domestic subsidiary on a more nearly equal footing with companies that sell their products abroad through foreign subsidiaries. To increase exports, Congress included in the Revenue Act of 1971, Pub.L. No. 92-178, 85 Stat. 497, new sec tions 991 through 997 of the Internal Revenue Code, which created favorable tax status for an entity known as a domestic international sales corporation (“DISC”). A corporation qualifying as a DISC is not subject to current…