- 16 -
harmoniously. We addressed the taxpayers' argument as
follows:
Petitioners' argument misses the mark.
Petitioners urge us to find a conflict between
section 59(a)(2) and Article XXIV of the treaty
based upon the Third and Fourth Protocols, but
they fail to address the effect of the enactment
of section 1012(aa)(2) of TAMRA. As discussed
above in section 1012(aa)(2) of TAMRA, Congress
provided that section 701 of the Tax Reform Act
of 1986, including section 59(a)(2), would apply
"notwithstanding any treaty obligation of the
United States in effect on the date of the
enactment of the Reform Act". The Third and
Fourth Protocols on which petitioners rely,
became effective after Congress enacted section
59(a)(2) of the Code and section 1012(aa)(2) of
TAMRA. Neither of the later protocols mentions
the limitation of the alternative minimum tax
foreign tax credit imposed by section 59(a)(2) or
section 1012(aa)(2) of TAMRA. Thus, neither the
Third or Fourth Protocol contains a clearly
expressed intent to supercede section 59(a)(2).
To the contrary, the language of the Third
Protocol comtemplates that the U.S.-Canada treaty
accepted the changes to U.S. revenue laws that
were made by the Tax Reform Act of 1986,
including the enactment of section 59(a)(2).
As noted above, article 1 of the Third Protocol
expressly provides that the taxes existing on
March 17, 1995, to which the treaty applies, in
the case of the United States, are "the Federal
income taxes imposed by the Internal Revenue Code
of 1986." [TRA sec. 2(a) redesignated the
Internal Revenue Code of 1954 the "Internal
Revenue Code of 1986".] It was also the statute
that substantially revised the alternative
minimum tax on noncorporate taxpayers and enacted
the predecessor of section 59(a)(2). Tax Reform
Act of 1986, sec. 701, 100 Stat. 2320. Section
1012(aa)(2) of TAMRA which codified the last in
time rule with respect to the revision of the
alternative minimum tax rules was enacted as a
technical amendment to the Tax Reform Act of 1986
and was made effective as if it had been included
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