Common Misconceptions: The Function and Framework of Trade or Business Within the United States

In this Article, Professor Kaufman examines the administrative and jurisdictional functions of the Internal Revenue Code\u27s term trade or business within the United States in the taxation of foreign persons\u27 income and the existing framework established for the term\u27s interpretation. The author contends that the courts, by relying on two common misconceptions of the term, have made the term\u27s application unpredictable. The author further believes that defining the term according to its functions would serve United States tax policy and economic interests. This definition would focus primarily on facts indicating an ongoing commitment to participation the United States economy. The author concludes that a trade or business within the United States should exist only if the foreign person engages in economic activities in the United States and such activities are considerable, continuous, and regular