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percent of the precredit tentative minimum tax pursuant to
section 59(a)(2). Accordingly, respondent determined a
deficiency in tax of $6,152.
A. The Arguments of the Parties
Petitioners contend that the U.S.-Canada treaty and section
59(a)(2) are in direct conflict because the language of article
XXIV, specifically paragraph 1, prohibits the application of
section 59(a)(2). Petitioners further contend that the Revised
United States-Canada Protocol to Amend the 1980 Treaty on Income
and on Capital, September 26, 1980, as amended by the Protocols,
June 14, 1983, and March 28, 1984, S. Treaty Doc. 104-4 (1995),
(hereinafter Third Protocol), and Protocol Amending the
Convention Between the United States of America and Canada With
Respect to Taxes on Income and on Capital, September 26, 1980,
as amended by the Protocols, June 14, 1983, March 28, 1984, and
March 17, 1995, S. Treaty Doc. 105-29 (1997) (hereinafter Fourth
Protocol), are the last expressions of sovereign will of the
United States and, thus, override the application of section
59(a)(2).
Respondent contends that section 59(a)(2) and the U.S.-
Canada treaty are in harmony with the result that petitioners
are subject to the limitation on the amount of their alternative
minimum tax foreign tax credit imposed by section 59(a)(2).
Respondent relies, in part, on this Court’s recent opinions in
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