- 5 -
Pekar v. Commissioner, 113 T.C. 158, 161 (1999), and in Brooke
v. Commissioner, T.C. Memo. 2000-194, affd. per curiam 13 Fed.
Appx. 7 (D.C. Cir. 2001), which held that section 59(a)(2) and
the double taxation provision of the Convention Between the
Federal Republic of Germany and the United States of America for
the Avoidance of Double Taxation and the Prevention of Fiscal
Evasion With Respect to Taxes on Income and Capital and to
Certain Other Taxes (hereinafter U.S.-Germany treaty), August 29,
1989, U.S.-Germany, art. 23, 30 I.L.M. 1778, 1779, were in
harmony. Respondent further contends that if the Court were to
find that section 59(a)(2) and the treaty are in conflict, then
section 59(a)(2) is the last expression of the sovereign will of
the United States and must be applied to petitioners, in any
event.
B. Applicable Statutes and U.S.-Canada Treaty Provisions
The U.S.-Canada treaty, signed on September 26, 1980, and
amending protocols, signed on June 14, 1983 (First Protocol)4
and March 28, 1984 (Second Protocol)5, respectively, were entered
4 Protocol Amending the Convention Between the United
States of America and Canada With Respect to Taxes on Income and
on Capital, Sept. 26, 1980, S. Treaty Doc. 98-7 (1983)
(hereinafter First Protocol).
5 Protocol Amending the Convention Between the United
States of America and Canada With Respect to Taxes on Income and
on Capital, Sept. 26, 1980, as amended by the Protocol on June
14, 1983, S. Treaty Doc. 98-22 (1984) (hereinafter Second
(continued...)
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