1. Sections 861 through 865 and the underlying regulations contain the general source rules for income and expense items. Provide a brief explanation of structure and the role that each of the following play:

1. Sections 861(a) and 862(a) b. Section 865

c. Section 863(a) and (b) d. Sec. 864

2. As a general rule, a nonresident alien of foreign corporation that conducts a U.S trade or business will be subject in 871(b)(1) and 882(a)(1) to the usual U.S. tax rates on net (i.e. taxable) income. The term trade or business within the United States is not defined in the Code. Do the regulations under Section 864 provide additional guidance? Please explain in what circumstance is a U.S. trade or business found to exist from your reading of the pertinent court cases presented in your text. Please make references to the specific cases cited.

3.How is a foreign entity which operates in the United States as a Branch taxed? Include in your answer a discussion of the branch profits tax and its operation with relevant code sections.

4. In many instances, tax planners have established corporate vehicles in third countries to take advantage of the benefits of a treaty between the third country and the country in which the income would be earned. Explain the following concepts:

a. Treaty Shopping;

b.The Judicial Doctrines the IRS has invoked to defend against treaty-shopping abuses;

c. Anti-Conduit Regulations.