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[Convention Between the United States of America and Canada with
Respect to Taxes on Income and on Capital, Sept. 26, 1980, art. IV,
par. 2, T.I.A.S. No. 11,087, 1986-2 C.B. 258, 259, as amended by
protocol, June 14, 1983, 1986-2 C.B. 270, and by second protocol,
Mar. 28, 1984, 1986-2 C.B. 274 (hereinafter, Canada Convention).]
Paragraph 1 of the treaty defines the term "resident" as
follows:
1. For the purposes of this Convention, the term "resident of
a Contracting State" means any person who, under the laws of that
State, is liable to tax therein by reason of his domicile,
residence, place of management, place of incorporation or any other
criterion of a similar nature, but in the case of an estate or
trust, only to the extent that income derived by such estate or
trust is liable to tax in that State, either in its hands or in the
hands of its beneficiaries. [Canada Convention, art. IV, par. 1.]16
Consequently, for the "tie-breaker" rules to apply, it must be
shown that, in addition to being a resident of the United States,
Victor, Jr. also is treated as a Canadian resident under Canadian
law for the 1990 taxable year. Victor, Jr. has introduced evidence
tending to show his physical, social, and personal nexus with
Canada. Neither party, however, has introduced any evidence of the
16 On Aug. 31, 1994, the United States and Canada signed a
third protocol to the treaty. A revised protocol was signed by
the United States and Canada on Mar. 17, 1995, and replaced the
protocol signed during Aug. 1994. The revised protocol modified
the definition of resident contained in article IV. The new
definition, however, is not applicable to the year at issue.
A fourth protocol between the United States and Canada was
signed in Ottawa during July 1997. On June 8, 1998, the IRS
announced that the United States recently exchanged instruments
of ratification for this protocol with Canada. Announcement 98-
47, 1998-23 I.R.B. 5 (June 8, 1998).
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