Domestic Law and Tax Treaties: The United States

Abstract:     
In this paper, I provide an overview of the interaction between U.S. domestic law and tax treaties. This paper was prepared for, and was presented at, a conference on domestic law and tax treaties that took place in Milan, Italy in November 2005, under the aegis of the Italian Council of Ministers and the Organisation for Economic Co-operation and Development. The papers presented at the conference (including this paper) are scheduled to be published in book form - as part of the International Bureau of Fiscal Documentation's "EC and International Law Series" - in early 2006.

As is the case with each of the country reports for the conference, this paper is split into four parts: In the first part, I discuss where tax treaties fit into the hierarchy of U.S. law. In the second part, I discuss references to domestic law made by tax treaties and references to tax treaties made by domestic law. In the third part, I discuss the rise of treaty overrides and the codification of the later-in-time rule, the method for analyzing potential legislative overrides, the questionable potential for administrative overrides, and remedies for breach of a treaty through override. In the final part, I discuss the federal courts' use of judicial doctrines to combat abuse of treaties as well as legislative and administrative anti-abuse measures, focusing in particular on the extent to which the use of these doctrines and the application of these measures are viewed as consistent with treaty obligations.

Number of Pages in PDF File: 24

Keywords: tax, treaty, international, override, domestic law

JEL Classification: K33, K34

Accepted Paper Series