Alan Horowitz comments on the Fifth Circuit's unpublished decision upholding the Tax Court ruling in Container Corp. v. Commissioner, which found that guaranty fees paid by a U.S. subsidiary to a Mexican corporation are analogous to payments for a service and are not U.S-source income. Horowitz said that the enactment of the Small Business Jobs Act of 2010 has limited the significance of the Fifth Circuit's ruling. "The practical impact of this decision is limited because Congress had already responded to the Tax Court's decision by enacting legislation specifically providing that a guarantee fee paid by a U.S. company is U.S.-sourced income," Horowitz said. "Thus, the result in Container will be a dead letter for future tax years. But for guarantees issued on or before September 27, 2010 (the effective date of the new legislation), taxpayers that paid guarantee fees to foreign affiliates will be able to rely on this decision and treat those fees as foreign-source income."