- 12 -
give effect to each.” Pekar v. Commissioner, 113 T.C. at 161.
However, if there is a conflict between a Code provision and a
tax treaty, the “last-in-time” rule will override the earlier
provision. Id.; Whitney v. Robertson, supra at 194.
Petitioners' position, that they are not subject to section
59(a)(2), is based upon two elements. The first is their
assertion that the U.S.-Canada treaty and section 59(a)(2) are in
conflict and the second is their assertion that the U.S.-Canada
treaty is later in time than section 59(a)(2) by reason of the
Third and Fourth Protocols, with the result that the provisions
of the treaty override section 59(a)(2). Both of these elements
must be established in order for petitioners to prevail in this
case. If the treaty and section 59(a)(2) are not in conflict,
then effect must be given to the provisions of both without
regard to which of the two is later in time. Pekar v.
Commissioner, supra. In that event, we must find that
petitioners are subject to section 59(a)(2). On the other hand,
if there is a conflict between the two, and if section 59(a)(2),
as opposed to the treaty, is found to be later in time, then
section 59(a)(2) controls as the last expression of the sovereign
will. Jamieson v. Commissioner, T.C. Memo. 1995-550, affd.
without published opinion 132 F.3d 1481 (D.C. Cir. 1997).
As to the first element of their position, petitioners
assert that the limitation on the foreign tax credit imposed by
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011