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In support of their position that the application of
section 59(a)(2) conflicts with the provisions of article
XXIV, petitioners make three arguments. First, petitioners
point out that paragraph 1 of article XXIV provides that
the treaty is "subject to the limitations of the law of the
United States (as it may be amended from time to time
without changing the general principle hereof)".
Petitioners argue that section 59(a)(2) is not only adverse
to the principle of the elimination of double taxation but
"repudiates" that principle in that it "subjects a certain
portion of a U.S. taxpayer's income to double taxation".
Thus, they argue that section 59(a)(2) is not an amendment
of U.S. law that is compatible with article XXIV of the
treaty dealing with the elimination of double taxation.
Second, they argue that section 59(a)(2) cannot be
harmonized with paragraphs 4, 5, and 6 of article XXIV, and
that the entire paragraph 1 is "subject to the provisions
of paragraphs 4, 5, and 6". According to petitioners,
paragraphs 4, 5, and 6 of article XXIV provide, in
substance, that the United States and Canada have agreed to
a method for allocating a U.S. citizen's tax liabilities
between the two countries in the case of a U.S. citizen who
resides in Canada. In making that allocation, petitioners
argue, the United States has agreed that a U.S. citizen
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