United States Tax Court

United States Tax Court

163 T.C. No. 3

J.E. RYCKMAN,

Petitioner

v.

COMMISSIONER OF INTERNAL REVENUE,

Respondent

—————

Docket No. 750-21L.

Filed August 1, 2024.

—————

P owes approximately $200,000 in Canadian tax for

tax years 1993 and 1994. In 2017 the Canada Revenue

Agency sent the Internal Revenue Service (IRS) a mutual

collection assistance request (MCAR) under the CanadaU.S. Income Tax Treaty (Treaty).

Once the U.S.

Competent Authority granted the MCAR, the IRS filed a

notice of federal tax lien (NFTL) against P. The IRS

notified P of the NFTL filing but stated that she had no

right to a collection due process (CDP) hearing under I.R.C.

§§ 6320 and 6330. P nonetheless requested a CDP hearing

within 30 days of the IRS’s notice. When the IRS denied

P’s request, she petitioned for review of that denial under

the color of I.R.C. § 6330(d)(1).

Held: We have jurisdiction under I.R.C. § 6330(d)(1)

to review a determination only if, in making that

determination, the IRS was subject to one or more

obligations imposed by I.R.C. § 6320 or § 6330.

Held, further, Treaty Article XXVI A requires the

United States to collect an accepted Canadian revenue

claim as it would a U.S. tax assessment for which the

taxpayer’s right to a CDP hearing (among other rights) has

lapsed or been exhausted. Consequently, P has no

additional rights under I.R.C. § 6320 or § 6330 with respect

Served 08/01/24

2

to the IRS’s collection of her Canadian tax liability, and

those statutes imposed no obligations on the IRS with

respect to P’s hearing request.

Held, further, we lack jurisdiction over P’s Petition

because the IRS did not issue a determination letter to P

that would invoke our jurisdiction under I.R.C.

§ 6330(d)(1), and it had no obligation to do so.

—————

David R. Jojola, Derek W. Kaczmarek, Nicholas Michaud, and Paul J.

Vaporean, for petitioner.

Ping Chang and Derek S. Pratt, for respondent.

OPINION

COPELAND, Judge: Petitioner, J.E. Ryckman, filed her Petition

to contest the determination of the Commissioner of Internal Revenue

(Commissioner) to deny her a hearing to challenge the filing of a notice

of federal tax lien (NFTL) against her by the Internal Revenue Service

(IRS). The NFTL was filed to secure Ms. Ryckman’s tax liabilities owed

to Canada. The IRS is attempting to collect those liabilities on Canada’s

behalf pursuant to Article XXVI A (Assistance in Collection) of

the Canada-U.S. Income Tax Treaty (Treaty). 1

The Commissioner has moved to dismiss Ms. Ryckman’s Petition

for lack of jurisdiction. This case raises a question of first impression

for our Court: whether we have jurisdiction to review an IRS denial of a

hearing request regarding collection of taxes pursuant to a mutual

collection assistance request (MCAR) made by Canada under the

Treaty.

1 Convention With Respect to Taxes on Income and on Capital, Can.-U.S.,

Sept. 26, 1980, T.I.A.S. No. 11,087, as Amended by the Protocols signed on June 14,

1983, T.I.A.S. No. 11,087 (Protocol 1), and March 28, 1984, T.I.A.S. No. 11,087

(Protocol 2), as reprinted in 1986-2 C.B. 258. It was further amended by Protocols

signed on March 17, 1995, T.I.A.S. No. 97-1216 (Protocol 3), July 29, 1997, T.I.A.S. No.

97-1216 (Protocol 4), and September 21, 2007, T.I.A.S. No. 08-1215.2 (Protocol 5). We

refer to the Convention and the Protocols collectively as the Treaty.

3

Background

The following background is drawn from the parties’ pleadings,

Motion papers, and Exhibits. This background is stated solely for the

purpose of ruling on the Commissioner’s Motion to Dismiss for Lack of

Jurisdiction and not as findings of fact. Ms. Ryckman resided in Arizona

when she filed her Petition.

According to the Canada Revenue Agency (CRA), Ms. Ryckman

owes approximately $200,000 in Canadian tax for tax years 1993 and

1994. Ms. Ryckman resided in the United States in 2017 when the CRA

sent the IRS an MCAR in accordance with Treaty Article XXVI A(2)

(Ryckman MCAR), representing that the 1993 and 1994 tax liabilities

are “finally determined” within the meaning of Treaty Article XXVI A(2),

i.e., Canada “has the right under its internal law to collect the revenue

claim and all administrative and judicial rights of the taxpayer to

restrain collection in [Canada] have lapsed or been exhausted.” 2 The

U.S. Competent Authority, an office within the IRS, granted the MCAR

under Treaty Article XXVI A(3) 3 and forwarded it to an IRS collection

office.

On December 7, 2020, IRS Revenue Officer Susan Mitchell

(RO Mitchell) mailed the NFTL to the Maricopa County Recorder in

Phoenix, Arizona. The NFTL lists Ms. Ryckman’s 1993 and 1994

liabilities along with the following explanation:

THIS AMOUNT IS DUE, OWING, AND UNPAID TO THE

GOVERNMENT OF CANADA, AND IS BEING

COLLECTED

ON BEHALF

OF CANADA IN

ACCORDANCE WITH ARTICLE XXVIA OF THE USACANADA

INCOME

TAX

CONVENTION

AND

APPLICABLE INTERNAL REVENUE LAWS OF THE

UNITED STATES OF AMERICA. PAYMENTS SHOULD

BE MADE PAYABLE TO THE RECEIVER GENERAL OF

CANADA, NOT THE IRS, BUT SHOULD BE MAILED TO

THE ADDRESS CONTAINED HEREIN.

THE IRS

In later correspondence with the IRS, the CRA represented that Ms.

Ryckman’s liabilities will remain collectable under Canadian law until June 2026.

2

3 Treaty Article XXVI A was added to the Treaty by Article 15 of Protocol 3,

which entered into force on November 9, 1995. However, Article 21(3) of Protocol 3

provides that Article XXVI A “shall have effect for revenue claims finally determined

by a requesting State after the date that is 10 years before the date on which the

Protocol enters into force.”

4

COORDINATOR WILL FORWARD THE PAYMENT TO

OTTAWA.

On January 25, 2021, RO Mitchell mailed Ms. Ryckman a letter

informing her that the NFTL was filed “and that you have the right to a

hearing to discuss collection options.”

However, RO Mitchell

represented that a statutory hearing under section 6320(b) 4 was “NOT

available to you as a Canadian taxpayer in the United States.” On

February 4, 2021, Ms. Ryckman’s representative faxed to RO Mitchell

Form 12153, Request for a Collection Due Process or Equivalent

Hearing, requesting a collection due process (CDP) hearing on the NFTL

filing under section 6320(b) and indicating that Ms. Ryckman could not

fully pay the balance and would like the IRS to consider an installment

agreement.

On February 8, 2021, RO Mitchell mailed Ms. Ryckman a letter

titled “Request for Collection Due Process Hearing - Denied” (denial

letter). In the denial letter, RO Mitchell stated that the IRS could not

grant Ms. Ryckman’s request for a CDP hearing for the following reason:

Because the foreign tax liability is treated as a finally

determined U.S. tax liability, your procedural rights to

restrain collection under U.S. law through a CDP hearing

under Internal Revenue Code Sections 6320 or 6330 are

treated as lapsed or exhausted.

However, RO Mitchell indicated that Ms. Ryckman could still “request

review under the Collection Appeal Program (CAP) of the IRS

Independent Office of Appeals to contest the filing of [the NFTL].”

On February 18, 2021, Ms. Ryckman filed her Petition, asking us

to determine that the Commissioner erred in denying her a CDP hearing

and to remand her case to the IRS Independent Office of Appeals

(IRS Appeals) for a statutory hearing.

4 Unless otherwise indicated, statutory references are to the Internal Revenue

Code, Title 26 U.S.C. (I.R.C. or Code), in effect at all relevant times, and regulation

references are to the Code of Federal Regulations, Title 26 (Treas. Reg.), in effect at all

relevant times.

5

Discussion

I.

Tax Court Jurisdiction Generally

The Tax Court is a court of limited jurisdiction and may exercise

jurisdiction only to the extent expressly authorized by Congress. See

I.R.C. § 7442; Hallmark Rsch. Collective v. Commissioner, 159 T.C. 126,

135 (2022); Breman v. Commissioner, 66 T.C. 61, 66 (1976). We are

without authority to enlarge upon that statutory grant. McCrory v.

Commissioner, 156 T.C. 90, 93 (2021). Nevertheless, we always have

jurisdiction to determine whether we have jurisdiction over a case.

Cooper v. Commissioner, 135 T.C. 70, 73 (2010). The party seeking to

invoke our jurisdiction must affirmatively show that we have

jurisdiction. See David Dung Le, M.D., Inc. v. Commissioner, 114 T.C.

268, 270 (2000), aff’d, 22 F. App’x 837 (9th Cir. 2001). If we lack

jurisdiction to consider an issue, then despite a party’s choice of our

Court as a forum to settle the dispute, we may not decide the issue.

Naftel v. Commissioner, 85 T.C. 527, 530 (1985).

II.

Overview of Sections 6320 and 6330

Sections 6320 and 6330 (CDP statutes) specify CDP rights for

taxpayers against whom the IRS has made an NFTL filing or proposes

a levy to collect an assessed tax liability. Sections 6320(a) and 6330(a)

require the IRS to notify a taxpayer of an NFTL filing or a proposed levy,

respectively, and of the taxpayer’s right to request (within 30 days of the

notice) a CDP hearing with IRS Appeals. Sections 6320(b)(2) and

6330(b)(2) each specify that the taxpayer “shall be entitled to only one

hearing under this section with respect to the taxable period to which

the unpaid tax [subject to the lien or levy] relates.” Section 6320(c)

provides that the provisions of section 6330(c), (d) (other than paragraph

(3)(B)), (e), and (g) apply to a hearing conducted under section 6320(b).

Section 6330(c) requires the Appeals officer who conducts the

CDP hearing to verify satisfaction of all requirements of law and

administrative procedure applicable to the NFTL filing or levy, to

generally consider any other issues raised by the taxpayer at the

hearing, and to consider whether the NFTL filing or levy balances the

need for the efficient collection of taxes with the taxpayer’s legitimate

concern that collection actions be no more intrusive than necessary.

Section 6330(g) provides that if the IRS determines that any

portion of a hearing request is based on a position that the IRS has

officially identified as frivolous or otherwise reflects a desire to delay or

6

impede the administration of federal tax law, see I.R.C. § 6702(b)(2)(A),

then the IRS “may treat such portion as if it were never submitted and

such portion shall not be subject to any further administrative or judicial

review.”

Section 6330(e)(1) provides generally that once a taxpayer timely

requests a CDP hearing, then while the hearing and any appeals are

pending the IRS may not proceed with any proposed levy action (if

applicable) and the period of limitations under section 6502 for collecting

the tax is suspended.

Section 6330(d)(1) provides that the taxpayer who requests a CDP

hearing “may, within 30 days of a determination under this section,

petition the Tax Court for review of such determination (and the Tax

Court shall have jurisdiction with respect to such matter).”

The legislative history of the CDP statutes indicates Congress’s

desire that a taxpayer who submits a CDP hearing request after the

30-day deadline of section 6330(a)(3)(B) still should be afforded a

hearing. See H.R. Rep. No. 105-599, at 266 (1998) (Conf. Rep.),

reprinted in 1998-3 C.B. 747, 1020 (“The Secretary must provide a

hearing equivalent to the pre-levy hearing if later requested by the

taxpayer.”) The Commissioner has issued regulations providing for an

“equivalent hearing” for taxpayers who make untimely requests under

either section 6320(b)(1) or section 6330(b)(1).

See Treas. Reg.

§ 301.6320-1(i). “The equivalent hearing will be held by Appeals and

generally will follow Appeals’ procedures for a CDP hearing.” Id.

subpara. (1). However, generally neither collection action nor the period

of limitations for collection is suspended while an equivalent hearing is

pending. Id. subpara. (2), Q&A-I3, I4; cf. H.R. Rep. No. 105-599, at 266,

reprinted in 1998-3 C.B. at 1020 (“[T]he Secretary is not required to

suspend the levy process pending the completion of a hearing that is not

requested within 30 days of the mailing of the Notice [of Intent to

Levy].”). Furthermore, determinations made in equivalent hearings are

not subject to judicial review. See Ramey v. Commissioner, 156 T.C. 1,

11 (2021).

III.

Treaty Article XXVI A

Treaty Article XXVI A provides in relevant part:

1. The Contracting States undertake to lend assistance to

each other in the collection of taxes referred to in

paragraph 9, together with interest, costs, additions to

7

such taxes and civil penalties, referred to in this Article as

a “revenue claim”.

2. An application for assistance in the collection of a

revenue claim shall include a certification by the

competent authority of the applicant State that, under the

laws of that State, the revenue claim has been finally

determined. For the purposes of this Article, a revenue

claim is finally determined when the applicant State has

the right under its internal law to collect the revenue claim

and all administrative and judicial rights of the taxpayer

to restrain collection in the applicant State have lapsed or

been exhausted.

3. A revenue claim of the applicant State that has been

finally determined may be accepted for collection by the

competent authority of the requested State and, subject to

the provisions of paragraph 7, if accepted shall be collected

by the requested State as though such revenue claim were

the requested State’s own revenue claim finally

determined in accordance with the laws applicable to the

collection of the requested State’s own taxes.

4. Where an application for collection of a revenue claim in

respect of a taxpayer is accepted

(a) By the United States, the revenue claim shall be

treated by the United States as an assessment under

United States laws against the taxpayer as of the time the

application is received[.]

....

5. Nothing in this Article shall be construed as creating or

providing any rights of administrative or judicial review of

the applicant State’s finally determined revenue claim by

the requested State, based on any such rights that may be

available under the laws of either Contracting State. If, at

any time pending execution of a request for assistance

under this Article, the applicant State loses the right under

its internal law to collect the revenue claim, the competent

authority of the applicant State shall promptly withdraw

the request for assistance in collection.

8

6. Subject to this paragraph, amounts collected by the

requested State pursuant to this Article shall be forwarded

to the competent authority of the applicant State. Unless

the competent authorities of the Contracting States

otherwise agree, the ordinary costs incurred in providing

collection assistance shall be borne by the requested State

and any extraordinary costs so incurred shall be borne by

the applicant State.

7. A revenue claim of an applicant State accepted for

collection shall not have in the requested State any priority

accorded to the revenue claims of the requested State.

....

9. Notwithstanding the provisions of [Treaty] Article II

(Taxes Covered), the provisions of this Article shall apply

to all categories of taxes collected, and to contributions to

social security and employment insurance premiums

levied, by or on behalf of the Government of a Contracting

State.

10. Nothing in this Article shall be construed as:

....

(b) Imposing on either Contracting State the

obligation to carry out administrative measures of a

different nature from those used in the collection of its own

taxes or that would be contrary to its public policy . . . .

IV.

Analysis of Ms. Ryckman’s Petition

Ms. Ryckman argues that we have jurisdiction over her case

under sections 6320(c) and 6330(d)(1). Section 6330(d)(1) provides as

follows:

The person may, within 30 days of a determination under

this section, petition the Tax Court for review of such

determination (and the Tax Court shall have jurisdiction

with respect to such matter).

(Emphasis added.) Accordingly, section 6330(d)(1) grants us jurisdiction

only to review an IRS determination made “under this section.”

9

Therefore, we must decide whether the denial letter constituted a

determination under section 6330 (and, by cross-reference, section

6320).

A.

Jurisdiction Under Section 6330(d)(1)

We have consistently held that our jurisdiction under section

6330(d)(1) is contingent on (1) the issuance of a valid notice of

Goza v.

determination and (2) a timely petition for review. 5

Commissioner, 114 T.C. 176, 182 (2000). We now clarify whether a

denial letter refusing a CDP hearing regarding the collection of

Canadian taxes under the Treaty can be construed as a determination

letter that would give us jurisdiction. In other words, we must decide

whether the denial letter was issued “under this section” (i.e., section

6330 or, by cross-reference, section 6320), which in turn means that in

making that determination the IRS was subject (or purported itself to

be subject) to one or more obligations imposed (whether expressly or

implicitly) by section 6320 or 6330. See Under, Merriam-Webster’s

Collegiate Dictionary 1287 (10th ed. 1997), (“subject to the authority,

control, guidance, or instruction of”). For instance, if a taxpayer timely

files a CDP hearing request, then generally the IRS has an express

obligation to hold a hearing, see I.R.C. §§ 6320(b)(1), 6330(b)(1), and then

an implied obligation to make a determination on the basis of the

hearing, see I.R.C. § 6330(c)(3). Accordingly, both the prehearing

determination of whether to grant the taxpayer a hearing and the

posthearing determination of whether to uphold the NFTL filing or levy

are made “under this section.”

Our interpretation of the phrase “under this section” is consistent

with our caselaw interpreting the CDP statutes. For instance, if a

taxpayer fails to timely file a CDP hearing request, then absent grounds

for equitable tolling of the 30-day deadline, see Organic Cannabis

Found., LLC v. Commissioner, No. 381-22L, 161 T.C., slip op. at 31

(Sept. 27, 2023), the IRS is not obligated by either CDP statute to hold

a hearing or make a determination. (If the IRS has any obligation to

hold a hearing in this circumstance, it is imposed by Treasury

Regulation § 301.6320-1(i).) We have consistently held that “[a] decision

letter issued after an equivalent hearing generally is not considered a

determination under section 6330 and is therefore insufficient to invoke

5 In Boechler, P.C. v. Commissioner, 142 S. Ct. 1493, 1501 (2022), the Supreme

Court held that the 30-day petition filing deadline specified in section 6330(d)(1) is

nonjurisdictional and subject to equitable tolling.

10

our jurisdiction.” Ramey, 156 T.C. at 11; see also Moorhous v.

Commissioner, 116 T.C. 263, 270 (2001) (“[B]ecause [the taxpayer] . . .

failed to file a timely request for an Appeals Office hearing, the Appeals

Office was not obliged to conduct such a hearing. In this regard, the

decision letter issued to [the taxpayer] . . . was not, and did not purport

to be, a determination letter pursuant to section 6320 or section 6330.”

(Emphasis added.)).

There are limited exceptions to the rule stated in Ramey, such as

when the taxpayer timely requests a CDP hearing but the IRS offers

only an equivalent hearing and issues a decision letter rather than a

notice of determination. See Craig v. Commissioner, 119 T.C. 252, 259

(2002) (holding that we have jurisdiction over the IRS’s determination

on a timely requested CDP hearing notwithstanding the determination’s

label). But in such a case the IRS was in fact obligated by section 6320

or 6330 to make a posthearing determination. Conversely, if the

taxpayer was not in fact entitled to a CDP hearing but the IRS issues a

notice that purports to be a notice of determination under the CDP

statutes and contains no indications to the contrary, then we have held

that we have jurisdiction to review the notice. See Shirley v.

Commissioner, T.C. Memo. 2014-10, at *13–14; Kim v. Commissioner,

T.C. Memo. 2005-96, 89 T.C.M. (CCH) 1123, 1125–26.

Our

interpretation of the phrase “under this section” is consistent with these

holdings because in such cases the IRS purports to be making a

determination subject to obligations imposed by the CDP statutes.

We have also held that we have jurisdiction over the IRS’s

determination that some or all portions of a hearing request are

frivolous positions or have a delaying motive, such that administrative

and judicial review is not available. See I.R.C. § 6330(g); Buczek v.

Commissioner, 143 T.C. 301, 307–09 (2014); Thornberry v.

Commissioner, 136 T.C. 356, 367 (2011). Such a determination is

subject to the obligation implicitly imposed on the IRS by section 6330(g)

to not act arbitrarily and capriciously in determining whether some or

all portions of a hearing request are frivolous. See Buczek, 143 T.C.

at 309. Meanwhile, we have held that if we determine that all portions

of a hearing request are indeed frivolous, then we lack jurisdiction to

review the IRS’s determination to proceed with collection against the

taxpayer. Id. In that situation the IRS’s determination to proceed with

collection is not subject to any obligations imposed by either CDP

statute, since section 6330(g) denies the taxpayer any further rights

under those statutes.

11

B.

Scope of the CDP Statutes

What we must decide is whether the IRS was subject to any

obligations imposed by the CDP statutes when it denied Ms. Ryckman’s

CDP hearing request. To answer this question, we begin with the

statutory text. Pursuant to section 6320(a)(1), the provisions of section

6320 apply only to a “person described in section 6321,” viz, a person

“liable to pay any tax [who] neglects or refuses to pay the same after

demand.” Meanwhile, although section 6330(a)(1) does not specifically

cross-reference section 6331 (which generally authorizes the IRS to

collect an unpaid “tax” by levy), section 6330(a)(3)(A) provides that the

levy notice sent to the taxpayer must include “the amount of unpaid tax.”

Therefore, we hold that the rights afforded by the CDP statutes apply

only to those people subject to IRS actions to collect “tax.”

Ms. Ryckman argues that the word “tax” in the CDP statutes is

not limited to taxes imposed by the Code but also encompasses foreign

taxes being collected by the IRS pursuant to the provisions of an in-force

treaty (for instance, the Canadian taxes at issue in this case). We agree

that “if the United States accepts a request from Canada to collect a

revenue claim, the United States must collect the revenue claim as if it

were its own revenue claim,” and that “[Treaty] Article 26A authorizes

th[e] IRS to employ the procedures created under I.R.C. §§ 6201, 6301

to pursue and collect Canadian revenue claims.” Retfalvi v. United

States, 930 F.3d 600, 610–11 (4th Cir. 2019); see also Lidas, Inc. v.

United States, 238 F.3d 1076, 1081 (9th Cir. 2001) (holding that the IRS

is “bound by law to employ the same procedures to obtain information

requested by France pursuant to the [France-U.S. Income Tax] Treaty

as it would employ in the investigation of a domestic tax liability”).

However, we must still consider how the Treaty provisions interact with

the CDP statutes.

C.

Interpretation of Treaty Article XXVI A

1.

General Principles

Income tax treaties to which the United States is a party are on

an equal footing with domestic law in that both are “the supreme Law

of the Land.” U.S. Const. art. VI, cl. 2; see also I.R.C. § 894(a) (“The

provisions of this title [i.e., the Code] shall be applied to any taxpayer

with due regard to any treaty obligation of the United States which

applies to such taxpayer.”); I.R.C. § 7852(d)(1) (“For purposes of

determining the relationship between a provision of a treaty and any

12

law of the United States affecting revenue, neither the treaty nor the

law shall have preferential status by reason of its being a treaty or

law.”). When a treaty and an act of Congress “relate to the same subject,

the courts will always endeavor to construe them so as to give effect to

both, if that can be done without violating the language of either; but, if

the two are inconsistent, the one last in date will control the other.”

Whitney v. Robertson, 124 U.S. 190, 194 (1888). 6

When interpreting a treaty, we begin with the text of the treaty

and give the terms their ordinary meaning unless a more restricted

sense is clearly intended. Sumitomo Shoji Am., Inc. v. Avagliano, 457

U.S. 176, 180 (1982); Am. Air Liquide, Inc. & Subs. v. Commissioner,

116 T.C. 23, 29 (2001), aff’d, 45 F. App’x 721 (9th Cir. 2002). The plain

meaning of a treaty’s text controls unless its effect is contrary to the

intent or expectations of the treaty partners. Sanchez-Llamas v.

Oregon, 548 U.S. 331, 346 (2006); Sumitomo Shoji Am., Inc., 457 U.S.

at 180; Amaral v. Commissioner, 90 T.C. 802, 812 (1988). Treaties

generally should be liberally construed to give effect to the purpose of

the treaty. United States v. Stuart, 489 U.S. 353, 368 (1989); Estate of

Silver v. Commissioner, 120 T.C. 430, 434 (2003). “[W]here a provision

of a treaty fairly admits of two constructions, one restricting, the other

enlarging, rights which may be claimed under it, the more liberal

interpretation is to be preferred . . . .” Stuart, 489 U.S. at 368 (quoting

Bacardi Corp. of Am. v. Domenech, 311 U.S. 150, 163 (1940)). In

addition to consulting the ordinary meaning of a treaty’s terms, we may

consult the interpretation of a treaty provision adopted by the relevant

Government agency (here, the IRS). While not dispositive, the agency’s

interpretation “is entitled to great weight.” Sumitomo Shoji Am., Inc.,

457 U.S. at 184–85. 7

The dissenting opinion states that the opinion of the Court “presents an

irreconcilable conflict with the later-enacted statutory CDP provisions.” See dissenting

op. p. 25. While we agree that the CDP statutes would trump the Treaty in the case

of an irreconcilable conflict (because they were enacted later in time), we do not see

there to be a conflict. We address the dissent’s concerns infra notes 10–12.

6

7 The dissenting opinion cites a nonprecedential memorandum issued by the

IRS Office of Chief Counsel in 1999 as evidence that the IRS has interpreted Treaty

Article XXVI A as not foreclosing CDP rights for U.S. taxpayers subject to IRS

collection activity for Canadian revenue claims. See I.R.S. Chief Couns. Adv. Mem.

199939034, 1999 WL 779472 (Oct. 1, 1999); dissenting op. p. 29. However, the dissent

fails to mention that since at least 2005 the Internal Revenue Manual (IRM)—another

nonprecedential IRS publication—has consistently reflected the position that CDP

13

Treaty Article III(2) provides:

As regards the application of the Convention by a

Contracting State any term not defined therein shall,

unless the context otherwise requires . . . , have the

meaning which it has under the law of that State

concerning the taxes to which the Convention applies.

2.

The Treaty’s Foreclosure of CDP Rights

Under Treaty Article XXVI A(4)(a), once the United States

accepts a Canadian revenue claim, it is required to treat that claim “as

an assessment under United States laws against the taxpayer.” On the

basis of this provision’s context (viz, a tax treaty article dealing with

collection of tax liabilities), we interpret Treaty Article XXVI A(4)(a) to

require the United States to treat an accepted Canadian revenue claim

as a U.S. tax assessment.

However, Treaty Article XXVI A(3) provides the caveat that an

accepted revenue claim “shall be collected by the requested State as

though such revenue claim were the requested State’s own revenue

claim finally determined in accordance with the laws applicable to the

collection of the requested State’s own taxes.” The definition of “finally

determined” is indicated by Treaty Article XXVI A(2): “[A] revenue claim

is finally determined when the applicant State has the right under its

internal law to collect the revenue claim and all administrative and

judicial rights of the taxpayer to restrain collection in the applicant

State have lapsed or been exhausted.” Accordingly, we interpret Treaty

rights do not attach to MCARs under tax treaties. See IRM 5.21.7.4.1(10)(b) (June 3,

2020) (“A taxpayer identified in an inbound MCAR case is not entitled to a Collection

Due Process (CDP) hearing because the tax liability at issue is a foreign tax liability.

A taxpayer may request review under the Collection Appeals Program (CAP).”);

IRM 5.21.7.4.5 (Nov. 13, 2015) (“The taxpayer does not have a CDP right for a foreign

tax liability, but is entitled to Collection Appeals Program (CAP) rights.”);

IRM 5.1.8.7.7.1(6) (June 1, 2010) (“Taxpayers on incoming MCAR cases are not entitled

to Collection Due Process (CDP) rights, but are entitled to Collection Appeals Program

(CAP) rights.”); IRM 5.1.8.7.7.1(6) (Apr. 22, 2008) (“Taxpayers on incoming MCAR

cases are not entitled to CDP rights but are entitled to CAP rights.”);

IRM 5.12.6.3.6.1(3) (2005) (“Collection Due Process rights are not available for MCARs.

However, . . . a Collection Appeals Program hearing may be requested by the taxpayer

. . . .”). Although neither the IRM nor Chief Counsel Advice has the force of law or

confers substantive rights on taxpayers, the IRM “govern[s] the internal affairs and

administration of the IRS, and reliably describes the functions delegated to the

different offices within the IRS.” DelPonte v. Commissioner, 158 T.C. 159, 161 n.4

(2022).

14

Article XXVI A(3) to provide that when the United States accepts a

Canadian revenue claim, the claim must be treated as a U.S. tax

assessment for which all rights to restrain collection have lapsed or been

exhausted.

The Treaty does not define the phrase “restrain collection,” but

the right to request a CDP hearing under section 6320(b) or 6330(b) is

manifestly a right to restrain collection. If IRS Appeals agrees with the

taxpayer in a levy hearing, the IRS will not proceed with the levy (or

will return previously seized property to the taxpayer). Agreement with

the taxpayer in an NFTL hearing might result in release or withdrawal

of the NFTL, see I.R.C. §§ 6325(a)(1), 6323(j), thereby removing any

priority the IRS held over the taxpayer’s other secured creditors, see

I.R.C. § 6323(a). Therefore, when the United States accepts a Canadian

revenue claim, it must collect the revenue claim as it would a U.S. tax

assessment for which the taxpayer’s administrative and judicial rights

to restrain collection, including rights to a CDP hearing, have lapsed or

been exhausted. Sections 6320(b)(2) and 6330(b)(2) generally grant only

one opportunity for a CDP hearing (and thus a judicial appeal) with

respect to a given tax period and a given collection action. See Treas.

Reg. §§ 301.6320-1(d)(1) and (2), Q&A-D1, 301.6330-1(d)(1) and (2),

Q&A-D1. Therefore, it would be unreasonable to interpret Treaty

Article XXVI A as providing an additional administrative or judicial

forum in the United States when the opportunity for such appeals in

Canada has been exhausted. To hold otherwise would make superfluous

the requirement in Treaty Article XXVI A(2) that “all administrative

and judicial rights of the taxpayer to restrain collection in the applicant

State have lapsed or been exhausted.” Finally, Treaty Article XXVI A(5)

reiterates that “[n]othing in this Article shall be construed as creating

or providing any rights of administrative or judicial review of the

applicant State’s [i.e., Canada’s] finally determined revenue claim by the

requested State [i.e., the United States], based on any such rights that

may be available under the laws of either Contracting State.”

Accordingly, Treaty Article XXVI A forecloses the administrative

and judicial protections of the CDP statutes in the case of Canadian

revenue claims. Even if the CDP statutes in principle apply to the IRS’s

collection of foreign taxes, Treaty Article XXVI A(3) requires the United

States to treat a Canadian revenue claim as though the taxpayer has

exhausted all CDP rights. Therefore, when the IRS granted the

Ryckman MCAR and filed an NFTL against Ms. Ryckman, the Treaty

precluded her from having what would effectively be an additional CDP

hearing because such rights were exhausted or lapsed in Canada.

15

Ms. Ryckman’s situation is analogous to that in which the IRS denies a

CDP hearing request for a tax period and collection action for which the

taxpayer already had a hearing opportunity. We have held that we lack

jurisdiction to review a decision letter issued after an equivalent hearing

on a nonstatutory request. See Orum v. Commissioner, 123 T.C. 1,

11–12 (2004), aff’d, 412 F.3d 819 (7th Cir. 2005).

Absent a

determination made by the IRS under section 6320 or 6330, Ms.

Ryckman lacked the jurisdictional hook to enter this Court.

Furthermore, Treaty Article XXVI A(10)(b) does not alter this

result. That subparagraph provides that nothing in Article XXVI A

“shall be construed as . . . [i]mposing on either Contracting State the

obligation to carry out administrative measures of a different nature

from those used in the collection of its own taxes or that would be

contrary to its public policy.” Of course, the United States generally does

not collect U.S. taxes by NFTL filing or levy without first affording the

taxpayer a right to a CDP hearing. However, if Treaty Article

XXVI A(10)(b) were read to import the full range of legal protections for

taxpayers under the Code, then it would directly conflict with Treaty

Article XXVI A(3) (which requires the requested State to collect an

accepted revenue claim as though all rights to restrain collection in the

requested State have lapsed or been exhausted) and also Treaty Article

XXVI A(5) (which provides that nothing in Treaty Article XXVI A shall

be construed as creating or providing any rights of administrative or

judicial review of the applicant State’s revenue claim by the requested

State). The best way to harmonize these provisions is to interpret

Treaty Article XXVI A(10)(b) as clarifying that neither Contracting

State has an obligation to carry out administrative measures of a

different nature than those used in the collection of its own finally

determined taxes. Cf. United Sav. Ass’n of Tex. v. Timbers of Inwood

Forest Assocs., 484 U.S. 365, 371 (1988) (“A provision that may seem

ambiguous in isolation is often clarified by the remainder of the

statutory scheme . . . [e.g.,] because only one of the permissible meanings

produces a substantive effect that is compatible with the rest of the law

. . . .”). In fact, it would be a very unusual step to require the IRS to

verify that all requirements of Canadian law and Canadian

administrative procedure were followed in making the revenue claim

that the Treaty has tasked the IRS with collecting. Cf. I.R.C.

§ 6330(c)(1) (“The appeals officer shall at the hearing obtain verification

from the Secretary that the requirements of any applicable law or

administrative procedure have been met.”). Likewise, it would be

untenable for the IRS to grant a collection alternative, such as an

16

installment payment arrangement or an offer-in-compromise, 8 on behalf

of the CRA. 9 Finally, we note that we are unaware of any public policy

reason for ensuring CDP rights with respect to accepted Canadian

revenue claims for which the taxpayer’s analogous Canadian rights have

lapsed or been exhausted.

Ms. Ryckman argues that to the extent Treaty Article XXVI A

conflicts with the CDP statutes, the Code sections must prevail since

they were enacted later in time. 10 See Whitney, 124 U.S. at 194.

8 In fact, the acceptance of an offer-in-compromise would reduce the amount of

the revenue claim—improperly impeding the CRA from collecting the full amount of

Canadian tax due.

9 We have not been asked (and we decline to address) whether Ms. Ryckman

could pursue collection alternatives directly with the CRA.

10 The CDP statutes were added to the Code by the IRS Restructuring and

Reform Act of 1998, Pub. L. No. 105-206, § 3401, 112 Stat. 685, 746–50, and would

clearly be controlling under the last-in-time rule if the Treaty and the CDP statutes

could not be harmonized. For the reasons set forth in this Opinion, we see no reason

to resort to that rule. Furthermore, the last-in-time rule is analogous to the doctrine

of implied repeal, under which courts give precedence to a later-in-time statute that

contradicts an earlier one (but first endeavor to interpret the statutes to avoid a

conflict). See Fund for Animals, Inc. v. Kempthorne, 472 F.3d 872, 880 (D.C. Cir. 2006)

(Kavanaugh, J., concurring) (“The [last-in-time rule] is quite similar to the familiar

doctrine against implied repeal of statutes—under which courts will not interpret an

ambiguous statute to repeal a prior statute.”). As the Supreme Court reminds us:

“‘[R]epeals by implication are not favored’ and will not be presumed unless the

‘intention of the legislature to repeal [is] clear and manifest.’” Nat’l Ass’n of Home

Builders v. Defenders of Wildlife, 551 U.S. 644, 662 (2007) (second alteration in

original) (quoting Watt v. Alaska, 451 U.S. 259, 267 (1981)). The Supreme Court has

clarified this principle as follows: “It is a basic principle of statutory construction that

a statute dealing with a narrow, precise, and specific subject is not submerged by a

later enacted statute covering a more generalized spectrum.” Radzanower v. Touche

Ross & Co., 426 U.S. 148, 153 (1976). What that means here is that the provisions for

collection of finally determined Canadian revenue claims set forth by the earlier

enacted Treaty should not be subsumed by the more general CDP statutes (which are

not by their terms limited to any particular type or types of tax). Further, the U.S.

Court of Appeals for the Ninth Circuit, to which an appeal of this case would lie absent

a contrary stipulation by the parties, see I.R.C. § 7482(b)(1)(G)(i), has adopted a “minor

exception” corollary to the doctrine of implied repeal, under which, “by creating minor

exceptions to later-enacted statutes based on earlier ones, both statutes can be

preserved,” Ledezma-Galicia v. Holder, 636 F.3d 1059, 1070 (9th Cir. 2010) (quoting

Lujan-Armendariz v. INS, 222 F.3d 728, 744 (9th Cir. 2000)); see also Donaldson v.

United States, 653 F.2d 414, 418 (9th Cir. 1981). Because we follow a court of appeals

decision that is squarely on point if appeal of our decision lies to that court of appeals

alone, we take heed of relevant Ninth Circuit precedent here. See Golsen v.

Commissioner, 54 T.C. 742, 757 (1970), aff’d, 445 F.2d 985 (10th Cir. 1971). The Ninth

17

However, Treaty Article XXVI A does not conflict with either CDP

statute. Rather, while those statutes by default provide taxpayers with

certain rights to restrain collection, they also limit administrative and

judicial review in certain circumstances. Treaty Article XXVI A, as well,

forecloses those default rights in the context of Canadian revenue claims

accepted by the IRS. 11 Neither CDP statute provides that its provisions

apply notwithstanding any other law. By contrast, in Whitney, 124 U.S.

at 192–93, a treaty provided that the United States would not impose

any higher duties than those specified in the treaty on certain imports

from the Dominican Republic, while a later U.S. statute imposed duties

“of general application, making no exception in favor of goods of any

country.” In such a true conflict as that, the Supreme Court held that

the later-in-time law must prevail. Id. at 194. In this case, by contrast,

Circuit has clarified that the presence of a “notwithstanding any other law” clause in

the later-enacted statute may defeat the minor exception corollary. See United States

v. Novak, 476 F.3d 1041, 1052–53 (9th Cir. 2007). However, as noted in the text above,

the CDP statutes do not contain a “notwithstanding” clause. Therefore, to the extent

that our interpretation of Treaty Article XXVI A is construed as potentially conflicting

with the CDP statutes (a construction we reject), the last-in-time rule still does not

apply in favor of the CDP statutes. Rather, Treaty Article XXVI A might then be seen

as a minor exception to the general CDP statutes (an exception involving only the

narrow class of accepted Canadian revenue claims). “At most this leaves a small

puncture in a broad shield.” Donaldson, 653 F.2d at 418.

The CDP statutes provide (among other things) prerequisites for the

existence of a taxpayer’s CDP rights: The taxpayer must timely request a hearing,

I.R.C. §§ 6320(a)(3)(B), 6330(a)(3)(B); Treas. Reg. § 301.6330-1(b)(2), Q&A-B2, and the

taxpayer generally is not entitled to more than one CDP hearing opportunity per tax

period, I.R.C. §§ 6320(b)(2), 6330(b)(2); Treas. Reg. § 301.6330-1(d)(2), Q&A-D1. (We

do note however that the 30-day deadline for the taxpayer to request a CDP hearing

after receiving a lien or levy notice, see I.R.C. §§ 6320(a)(3)(B), 6330(a)(3)(B), may be

equitably tolled where the circumstances warrant it, Organic Cannabis Found., LLC,

161 T.C., slip op. at 31.) By contrast, Treaty Article XXVI A(2) and (3) provide (by

implication) that those prerequisites are deemed unsatisfied in the case of an accepted

Canadian revenue claim. (That is, Treaty Article XXVI A(2) and (3) in effect direct the

IRS to treat the taxpayer, for purposes of section 6330, as though she either failed to

timely request a CDP hearing or already received one.) Therefore, the CDP statutes

and Treaty Article XXVI A(2) and (3) address different subject matters—the

prerequisites for CDP rights in the one case, and conditions for deeming those

prerequisites unsatisfied in the other—and thus cannot conflict with each other. (For

instance, the CDP statutes nowhere say that their prerequisites can never be deemed

or treated as unsatisfied. Likewise, Treaty Article XXVI A never provides a different

set of prerequisites for CDP rights than those provided in section 6330.) Treaty Article

XXVI A(3) instructs the United States to treat an accepted Canadian revenue claim as

a finally determined revenue claim under U.S. law concerning collection (of which the

CDP statutes are an instance). This instruction does not contradict the CDP statutes

because the hearing rights they afford do not apply to finally determined revenue

claims in the first place.

11

18

it is entirely possible to construe the CDP statutes and Treaty Article

XXVI A so as to give effect to both, and we are therefore bound to do so.

Whitney, 124 U.S. at 194. Moreover, Treaty Article XXVI A does not

fairly admit of a construction under which Ms. Ryckman would have

additional administrative or judicial rights such as those to a CDP

hearing with respect to the NFTL. Cf. Stuart, 489 U.S. at 368. 12

12 The dissenting opinion points to the Convention for the Avoidance of Double

Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income,

Japan-U.S., Nov. 6, 2003, T.I.A.S. No. 04-330, as Amended by the Protocols signed on

November 6, 2003, T.I.A.S. No. 04-330, and January 24, 2013, S. Treaty Doc. No. 114-1

(2015) (Japan-U.S. Convention), and the U.S. Treasury Department’s Technical

Explanation of the 2013 Protocol as evidence for a contrary interpretation of the

Treaty. See dissenting op. p. 30. Article 27 of the Japan-U.S. Convention institutes a

mutual collection assistance regime similar to that under the Treaty, and the Technical

Explanation indicates that outstanding CDP rights do not preclude a U.S. revenue

claim from being “finally determined.” However, the Japan-U.S. Convention cannot

be taken as evidence (other than evidence by contrast) of what the United States and

Canada agreed to in the Treaty with regard to CDP rights. This is because there are

at least four significant differences between the Japan-U.S. Convention and the Treaty

that bear on the CDP rights issue:

1. Article 27(5) of the Japan-U.S. Convention defines a revenue claim as

“finally determined” not when all administrative and judicial rights “to

restrain collection” in the applicant State have lapsed or been

exhausted (as in Treaty Article XXVI A(2)), but instead when all

administrative and judicial rights “to dispute or appeal the revenue

claim” have lapsed or been exhausted. The latter definition, unlike the

former, does not clearly encompass challenges to “collection” as

opposed to the “liability” amount.

2. Paragraph 15(a)(i) of the 2003 Protocol to the Japan-U.S. Convention

provides that “[f]or the purposes of evaluating the final determination

of a revenue claim [in the context of Article 27(5)] . . . in the case of the

United States, any administrative or judicial rights available to the

taxpayer in connection with the revenue claim that arise after the

collection of the revenue claim . . . shall not be taken into account.” The

Treaty contains no comparable proviso.

3. Article 27(6) of the Japan-U.S. Convention provides that once a

revenue claim has been accepted, it “shall be collected by the requested

State as though such revenue claim were the requested State’s own

revenue claim in accordance with the laws applicable to the collection

of the requested State’s own revenue claims.” This provision is

markedly different from Treaty Article XXVI A(3), which requires the

requested State to collect an accepted revenue claim as though it were

its own revenue claim “finally determined in accordance with the laws

applicable to the collection of the requested State’s own taxes.”

(Emphasis added.) It is telling that the words “finally determined”

19

D.

The IRS’s Determination on Ms. Ryckman’s Hearing

Request

Because Ms. Ryckman had no additional administrative or

judicial rights in the United States under the CDP statutes with respect

to the NFTL, neither statute imposed any obligations on the IRS in its

treatment of her hearing request. Therefore, the IRS’s denial letter

foreclosing Ms. Ryckman’s CDP hearing request was not a

determination letter subject to judicial review under section 6330(d)(1),

and we are without jurisdiction to consider Ms. Ryckman’s Petition.

To reflect the foregoing,

An order of dismissal for lack of jurisdiction will be entered.

Reviewed by the Court.

KERRIGAN, FOLEY, NEGA, JONES, GREAVES,

MARSHALL, JJ., agree with this opinion of the Court.

and

BUCH, PUGH, ASHFORD, URDA, TORO, and WEILER, JJ.,

dissent.

were removed from the collection procedures in the Japan-U.S.

Convention.

4. Article 27(7) of the Japan-U.S. Convention provides, in relevant part,

that “acts of collection carried out by the requested State in pursuance

of an application for assistance, which, according to the laws of the

applicant State, would have the effect of suspending or interrupting

the period of limitation on the collection of a revenue claim in the

applicant State if carried out by the applicant State, shall also have

this effect with respect to the revenue claim under the laws of the

applicant State.” There is no comparable provision in the Treaty,

which means that if Ms. Ryckman were given a CDP hearing, the

relevant Canadian periods of limitation on collection would continue to

run for the duration of that hearing and any subsequent judicial action.

(Canada’s Income Tax Act, R.S.C. 1985, c. 1, §§ 222(8)(a) and 225.1,

pauses the Canadian period of limitation on collection if the taxpayer

appeals the tax assessment in a Canadian court, but no mention is

made of appeals to any foreign collection authority or foreign court.)

This scenario may well demonstrate at least one reason why Treaty

Article XXVI A(5) clarifies that the Treaty does not provide for any

further administrative or judicial review of Canada’s finally

determined revenue claims by the United States.

20

JONES, J., concurring: I join the opinion of the Court in full.

I write separately to underscore why the Constitution requires steadfast

adherence to the text of the Canada-U.S. Income Tax Treaty, 1 which is

an agreement that was negotiated and duly enacted pursuant to the

authority vested in the political branches under our constitutional

scheme. The Court’s role in interpreting treaties is to faithfully interpret

the text of the agreement, and the opinion of the Court is consistent with

that mandate.

The Treaty Clause of the Constitution provides that the President

“shall have Power, by and with the Advice and Consent of the Senate, to

make Treaties, provided two thirds of the Senators present concur.”

U.S. Const. art. II, § 2, cl. 2. The Canada-U.S. Income Tax Treaty is one

such treaty, duly enacted by the authority vested in the President, by

and with the advice and consent of the Senate. “The interpretation of a

treaty, like the interpretation of a statute, begins with its text.” Medellín

v. Texas, 552 U.S. 491, 506 (2008). Further, as the opinion of the Court

explains, we give the terms of the Treaty their ordinary meaning unless

a more restricted interpretation is clearly intended. See, e.g., Sumitomo

Shoji Am., Inc. v. Avagliano, 457 U.S. 176, 180 (1982); Bhutta v.

Commissioner, 145 T.C. 351, 360 (2015); see also op. Ct. p. 12. “The clear

import of treaty language controls unless ‘application of the words of the

treaty according to their obvious meaning effects a result inconsistent

with the intent or expectations of its signatories.’” Sumitomo Shoji Am.,

Inc., 457 U.S. at 180 (quoting Maximov v. United States, 373 U.S. 49, 54

(1963)); see also Bhutta, 145 T.C. at 360; op. Ct. p. 12.

Treaties generally should be liberally construed to give effect to

their purpose. See, e.g., United States v. Stuart, 489 U.S. 353, 368 (1989).

However, courts “may not read international treaties so broadly as to

create unintended benefits or to reach parties not within the scope of a

treaty’s language.” Int’l Bank for Reconstr. & Dev. v. Dist. of Columbia,

171 F.3d 687, 691 (D.C. Cir. 1999) (citing Maximov, 373 U.S. at 55–56);

1 Convention With Respect to Taxes on Income and on Capital, Can.-U.S., Sept.

26, 1980, T.I.A.S. No. 11,087, as Amended by the Protocols signed on June 14, 1983,

T.I.A.S. No. 11,087 (Protocol 1), and March 28, 1984, T.I.A.S. No. 11,087 (Protocol 2),

as reprinted in 1986-2 C.B. 258. It was further amended by Protocols signed on

March 17, 1995, T.I.A.S. No. 97-1216 (Protocol 3), July 29, 1997, T.I.A.S. No. 97-1216

(Protocol 4), and September 21, 2007, T.I.A.S. No. 08-1215.2 (Protocol 5). The opinion

of the Court refers to the Convention and the Protocols collectively as the Treaty. See

op. Ct. note 1.

21

see also Baturin v. Commissioner, 31 F.4th 170, 176 (4th Cir. 2022), rev’g

and remanding 153 T.C. 231 (2019).

The United States ratified the Treaty with the expectation that it

would be interpreted according to its terms. Sanchez-Llamas v. Oregon,

548 U.S. 331, 346 (2006) (citing 1 Restatement (Third) of Foreign

Relations Law of the United States § 352(1) (Am. L. Inst. 1986)). By

agreeing to assist Canada under these terms, the United States is bound

in a matter of grace and comity. See Opati v. Republic of Sudan, 590

U.S. 418, 421 (2020). Further, the Treaty embodies those judgments that

the Constitution reserves to the political branches. See U.S. Const.

art. II, § 2, cl. 2. Therefore, faithful adherence to and interpretation of

the text of the Treaty is critical so as not to upset these complex and

delicate foreign policy judgments. See Borochov v. Islamic Republic of

Iran, 94 F.4th 1053, 1067 (D.C. Cir. 2024).

The opinion of the Court closely adheres to the text of the Treaty.

Specifically, the opinion of the Court carefully and persuasively

considers the phrases “finally determined” and “restrain collection” in

Article XXVI A(2). See op. Ct. pp. 13–15. 2 Further, the opinion of the

Court hews to the plain text of the Treaty, which prohibits the provision

of any rights of administrative or judicial review of a Canadian revenue

claim by the United States. Specifically, Article XXVI A(5) of the Treaty

provides that “[n]othing in this Article shall be construed as creating or

providing any rights of administrative or judicial review of the applicant

State’s finally determined revenue claim by the requested state, based

on any such rights that may be available under the laws of either

Contracting State.” See op. Ct. pp. 13–15. Accordingly, the Court

properly concludes that an accepted Canadian revenue claim must be

treated as a U.S. tax assessment for which all rights to restrain

collection have been exhausted. See op. Ct. p. 13.

2 Although the definition in Article XXVI A(2) is formulated solely in terms of

the applicant State (Canada here), see dissenting op. pp. 27–28, it seems rather

unlikely that the Treaty partners intended the phrase “finally determined” as used in

Article XXVI A(3) (in regard to the requested State (the United States here)) to be

defined without reference to the definition just given in Article XXVI A(2).

And it is noteworthy that Article XXVI A(3) refers to the laws applicable to

collection, not simply assessment. CDP rights are part of the collection process. So it

would be odd to determine that a U.S. tax liability is “finally determined in accordance

with the laws applicable to . . . collection” when the taxpayer’s rights to a CDP hearing

have not yet lapsed or been exhausted.

22

The dissent misses the forest for the trees in its effort to create

friction between the Code and the Court’s interpretation of the Treaty.

See dissenting op. pp. 24–25. In doing so, it forsakes the crucial

perspective that this case arises under a treaty, duly negotiated and

approved by the political branches. The Court’s interpretation is

respectful of our role in the constitutional scheme and faithful to the text

of the agreement between the sovereigns. The dissent’s reading would

impermissibly expand the scope of the Treaty and create benefits

unsupported by its plain text. See, e.g., Int’l Bank for Reconstr. & Dev.,

171 F.3d at 691 (citing Maximov, 373 U.S. at 55–56); see also op. Ct.

pp. 13–14. The opinion of the Court correctly avoids opening the door to

a legal process that the text of the Treaty does not support and that the

political branches have not clearly authorized.

FOLEY, NEGA, and COPELAND, JJ., agree with this concurring

opinion.

23

URDA, J., dissenting: The opinion of the Court posits that the

United States relinquished by treaty in 1995 procedural safeguards that

Congress did not enact until 1998. The opinion of the Court’s reading of

the Treaty—at once too broad and too narrow—generates an

irreconcilable conflict between the Treaty and the CDP procedures

subsequently enshrined in the Code. The later enactment must control.

The attempt of the opinion of the Court to harmonize the two is little

more than wishing away the problem that it birthed. Nonetheless,

harmony is possible in this case, as the applicable Treaty provisions,

properly read together, are fully consistent with the procedural

protections governing collection that Congress saw fit to enact. Under

that harmonious reading of the Treaty and the CDP procedures, Ms.

Ryckman prevails.

I.

A survey of the conflict between the Treaty and the Code that the

opinion of the Court has created must be grounded in the legal principles

governing this area. “Where the Code and a treaty pertain to the same

subject matter but manifest an irreconcilable conflict, ‘the last

expression of the sovereign will * * * control.’” Adams Challenge (UK)

Ltd. v. Commissioner, 156 T.C. 16, 44 (2021) (quoting Chae Chan Ping

v. United States, 130 U.S. 581, 600 (1889)). “A conflict is found only

where there is ‘a clear repugnancy’ between the statute and the treaty.”

Id. at 45 (quoting Georgia v. Pa. R.R. Co., 324 U.S. 439, 457 (1945)). On

the other hand, “if there is no conflict between the two, then the Code

and the treaty should be read harmoniously, to give effect to each.” Id.

at 44 (quoting Pekar v. Commissioner, 113 T.C. 158, 161 (1999)).

The Supreme Court has “held ‘that an Act of Congress . . . is on a

full parity with a treaty, and that when a statute which is subsequent

in time is inconsistent with a treaty, the statute to the extent of conflict

renders the treaty null.’” Breard v. Greene, 523 U.S. 371, 376 (1998)

(quoting Reid v. Covert, 354 U.S. 1, 18 (1957) (plurality opinion)). 1 To

put it another way, “it is within Congress’ power to change domestic law,

even if the law originally arose from a self-executing treaty.” Noriega v.

Pastrana, 564 F.3d 1290, 1295–96 (11th Cir. 2009). “Whether or not the

United States ‘undertakes’ to comply with a treaty says nothing about

1 The opinion of the Court attempts to avoid controlling treaty interpretation

principles by importing the doctrine of implied repeal, which the Court thinks provides

firmer footing. See op. Ct. note 10. The doctrine of implied repeal has no applicability

to this treaty interpretation question.

24

what laws it may enact. The United States is always ‘at liberty to make

. . . such laws as [it] think[s] proper.’” Medellín v. Texas, 552 U.S. 491,

509 n.5 (2008) (quoting Todok v. Union State Bank of Harvard, Neb.,

281 U.S. 449, 453 (1930)).

The treaty interpretation put forward by the opinion of the Court

produces an irreconcilable conflict with procedural protections later

enacted in sections 6320 and 6330. The opinion of the Court reads

Article XXVI A to foreclose access to any procedural safeguards with

respect to the issuance of an NFTL to collect a liability under the Treaty.

Just three years after the Treaty’s ratification, however, Congress saw

fit to condition the IRS’s use of liens and levies to collect a liability on

access to procedural safeguards including a CDP hearing and judicial

review.

As there is a clear repugnancy between the Court’s

interpretation of the Treaty (no rights tied to an NFTL filing) and the

statutory provisions (yes, rights), the later enactment must control. See,

e.g., Medellín, 552 U.S. at 509 n.5; Breard, 523 U.S. at 376; see also

Adams Challenge, 156 T.C. at 44.

The opinion of the Court makes a half-hearted attempt to

harmonize the two authorities, but the clash remains. The opinion of

the Court hangs its hat on the fact that “[n]either CDP statute provides

that its provisions apply notwithstanding any other law.” See op. Ct.

p. 17. This view is askew. The CDP statutes did not need any additional

text to make clear that they trump prior conflicting law, including

treaties. See, e.g., Medellín, 552 U.S. at 509 n.5; Breard, 523 U.S. at 376.

And where Congress has wished to preserve earlier agreements with

other nations in the face of conflicting subsequent legislation, it has

added text to that effect, which it did not do here. See S. Rep. No.

100-445, at 318–19 (1988), reprinted in 1988 U.S.C.C.A.N. 4515, 4830

(collecting examples where Congress circumscribed scope of certain tax

provisions in deference to preexisting treaty obligations); see also

28 U.S.C. § 1604 (stating that the Foreign Sovereign Immunities Act’s

baseline grant of immunity to foreign sovereigns is “[s]ubject to existing

international agreements to which the United States [was] a party at

the time of enactment” of the Act); Simon v. Republic of Hung., 77 F.4th

1077, 1091 (D.C. Cir. 2023) (discussing “treaty exception” text in the

25

Foreign Sovereign Immunities Act); Moore v. United Kingdom, 384 F.3d

1079, 1083–84 (9th Cir. 2004) (same). 2

In summary, the opinion of the Court endorses an interpretation

of the relevant Treaty provisions that presents an irreconcilable conflict

with the later-enacted statutory CDP provisions. The opinion of the

Court fails to pay due heed to the long-established rules governing the

resolution of such conflicts, which dictate that the later-in-time statute

applies to render the Treaty provisions null to the extent of the conflict.

Given the conflict that plainly flows from the opinion of the Court’s

interpretation, Ms. Ryckman should be entitled to avail herself of the

later enacted statutory protections Congress put in place before the IRS

attempts to collect a liability by lien or levy. 3

2 In a note the opinion of the Court states that Paragraphs 2 and 3 of the Treaty

here “provide (by implication) that those [CDP] prerequisites are deemed unsatisfied

in the case of an accepted Canadian revenue claim.” See op. Ct. note 11. The Treaty

contains no support for this novel concept and, as we will describe below, the text of

the Treaty does not support the attempt to conflate the distinct requirements of

Paragraphs 2 and 3. The Court is attempting to fit the CDP regime on a procrustean

bed of its own design, rather than allowing the Treaty and the regime to operate

harmoniously. To the extent that they cannot (as seems to be the case under the

opinion of the Court’s view), the CDP regime must win.

3 The concurrence emphasizes the importance of faithful treaty construction

and suggests that this dissent fails to accord the proper deference due to the actions of

the political branches. Au contraire. Like the concurrence, this dissent respects the

political sensitivities accompanying treaties and rejoices in the splendors of our

separation of powers, which undergirds our system of government. But this case does

not implicate those principles. Congress’s ratification of a treaty places it on par with

any other law that has been passed by Congress and signed by the President, and

Congress remains free to change its mind. See U.S. Const. art. VI, cl. 2 (“This

Constitution, and the Laws of the United States which shall be made in Pursuance

thereof; and all Treaties made, or which shall be made, under the Authority of the

United States, shall be the supreme Law of the Land . . . .”). The political branches

have underscored this point in the tax context by enacting section 7852(d)(1), which

provides that “[f]or purposes of determining the relationship between a provision of a

treaty and any law of the United States affecting revenue, neither the treaty nor the

law shall have preferential status by reason of its being a treaty or law.” See also

S. Rep. No. 100-445, at 325, reprinted in 1988 U.S.C.C.A.N. at 4836 (“[T]he committee

finds it disturbing that some assert that a treaty prevails over later enacted conflicting

legislation in the absence of an explicit statement of congressional intent to override

the treaty; that it is treaties, not legislation, which will prevail in the event of a conflict

absent an explicit and specific legislative override.”). See generally id. at 321–28,

reprinted in 1988 U.S.C.C.A.N. at 4832–40 (discussing at length treaty-statute

interactions under the U.S. Constitution, as well as common interpretive errors).

Under the opinion of the Court’s view of what the Treaty says, a conflict exists between

26

II.

And yet it does not have to be this way. The conflict generated by

the Court’s interpretation may be avoided by a better reading of the

relevant Treaty provisions.

“In interpreting treaties, ‘we begin with the text of the treaty and

the context in which the written words are used.’” Water Splash, Inc. v.

Menon, 581 U.S. 271, 276 (2017) (quoting Volkswagenwerk

Aktiengesellschaft v. Schlunk, 486 U.S. 694, 699 (1988)); see also Air Fr.

v. Saks, 470 U.S. 392, 396–97 (1985); Toulouse v. Commissioner, 157

T.C. 49, 57–58 (2021). “The plain meaning of a treaty’s text controls

unless its effect is contrary to the intent or expectations of the treaty

partners.” Toulouse, 157 T.C. at 57; accord Sumitomo Shoji Am., Inc. v.

Avagliano, 457 U.S. 176, 180 (1982); cf. Rocca v. Thompson, 223 U.S.

317, 332 (1912) (“[T]reaties are the subject of careful consideration

before they are entered into, and are drawn by persons competent to

express their meaning, and to choose apt words in which to embody the

purposes of the high contracting parties.”).

Treaties “are construed more liberally than private agreements,

and to ascertain their meaning we may look beyond the written words

to the history of the treaty, the negotiations, and the practical

construction adopted by the parties.” E. Airlines, Inc. v. Floyd, 499 U.S.

530, 535 (1991) (quoting Saks, 470 U.S. at 396). “Because a treaty

ratified by the United States is ‘an agreement among sovereign powers,’”

the Supreme Court has considered as “‘aids to its interpretation’ the

negotiation and drafting history of the treaty as well as ‘the

postratification understanding’ of signatory nations.” Medellín, 552

U.S. at 507 (quoting Zicherman v. Korean Air Lines Co., 516 U.S. 217,

226 (1996)); see also United States v. Stuart, 489 U.S. 353, 365–66

(1989); Adams Challenge, 156 T.C. at 45.

“The practice of treaty signatories counts as evidence of the

treaty’s proper interpretation, since their conduct generally evinces

their understanding of the agreement they signed.” Stuart, 489 U.S.

at 369 (citing Trans World Airlines, Inc. v. Franklin Mint Corp., 466 U.S.

243, 259 (1984)). “Similarly, ‘[a]lthough not conclusive, the meaning

attributed to treaty provisions by the Government agencies charged

with their negotiation and enforcement is entitled to great weight.’” Id.

the Treaty provisions here and Congress’s subsequent enactment of safeguards that

click into place when the IRS collects by lien or levy. Its later choice governs.

27

(quoting Sumitomo, 457 U.S. at 184–85); see also United States v. Global

Fishing, Inc. (In re Premises Located at 840 140th Ave. NE, Bellevue,

Wash.), 634 F.3d 557, 568 (9th Cir. 2011). This Court has previously

“found the Treasury Department’s technical explanations of income tax

treaties helpful in interpreting treaty provisions.”

Smith v.

Commissioner, 159 T.C. 33, 39 n.11 (2022). We have likewise considered

IRS guidance memoranda “to show the IRS’ position.”

Adams

Challenge, 156 T.C. at 43 n.14.

“Where a treaty and a statute relate to the same subject, courts

attempt to construe them to give effect to both.” Toulouse, 157 T.C.

at 58; accord Whitney v. Robertson, 124 U.S. 190, 194 (1888); Adams

Challenge, 156 T.C. at 44. Specifically, “[i]n non-tax contexts the

Supreme Court has sought to read statutes in harmony with treaties

and rejected constructions of terms that would unnecessarily create

conflict between the two.” Adams Challenge (UK), Ltd. v. Commissioner,

154 T.C. 37, 62 n.18 (2020) (citing Menominee Tribe of Indians v. United

States, 391 U.S. 404, 412–13 (1968) (declining to interpret a statute to

abrogate hunting and fishing rights granted to Native Americans by a

treaty)); accord United States v. Payne, 264 U.S. 446, 448 (1924) (stating

that a later-enacted statute, while controlling in case of conflict, “should

be harmonized with the letter and spirit of the treaty, so far as that

reasonably can be done”); Whitney, 124 U.S. at 194 (stating that, where

a treaty and legislation relate to the same subject, “the courts will

always endeavor to construe them so as to give effect to both, if that can

be done without violating the language of either”).

The Treaty provisions here can—and thus should—be read

harmoniously with the subsequently enacted safeguards in sections

6320 and 6330.

The relevant Treaty provisions contemplate a

distinction between the substance of the revenue claim underlying the

request for assistance and the procedures by which the claim is to be

collected. The Treaty uses the law of the applicant country as to the

former and the requested country as to the latter.

Paragraphs 2 and 5 of the Treaty relate to what is to be collected.

Paragraph 2 requires that an applicant state certify that the claim is

finally determined under the applicant state’s own laws, which is

defined to mean “when the applicant State has the right under its

internal law to collect the revenue claim and all administrative and

judicial right of the taxpayer to restrain collection in the applicant State

have lapsed or been exhausted.” Paragraph 5 then clarifies that the

acceptance of the claim prohibits any merits-based challenge, providing

28

that “[n]othing in this Article shall be construed as creating or providing

any rights of administrative or judicial review of the applicant State’s

finally determined revenue claim by the requested State.” These

provisions enshrine the law of the applicant state as governing the

substantive validity of the underlying claim. See Treasury Department

Technical Explanation of the U.S.-Canada Income Tax Treaty, as

Amended by the Protocol Signed on June 14, 1983, and the Protocol

Signed on March 28, 1984, at 77, https://www.irs.gov/pub/irstrty/canatech.pdf (last visited July 23, 2024) (“Thus, when an

application for collection assistance has been accepted, the substantive

validity of the applicant State’s revenue claim cannot be challenged in

an action in the requested State.”); Canada: Senate Foreign Relations

Committee Report 06/13/1995 (1980 Protocol), Tax Treaties (RIA),

(Westlaw 2024), RIA TAXT 1370 (“Nothing in the assistance in

collection article shall be construed as creating or providing any rights

of administrative or judicial review of the applicant country’s finally

determined revenue claim by the requested country . . . .”).

On the other side of the ledger lie Paragraphs 3, 4, and 10, which

address how the claim is to be collected. Paragraph 3 provides that, once

a revenue claim of an applicant state is accepted, that claim “shall be

collected by the requested State as though such revenue claim were the

requested State’s own revenue claim finally determined in accordance

with the laws applicable to the collection of the requested State’s own

taxes.” Paragraph 4 puts meat on the bones, assigning the accepted

claim a specific status in the requested state’s tax regime. Thus, under

Paragraph 4(a), a finally determined Canadian revenue claim is “treated

by the United States as an assessment under United States laws against

the taxpayer as of the time the application is received.” For its part,

Paragraph 10(b) provides that the Treaty does not “[i]mpos[e] . . . the

obligation to carry out administrative measures of a different nature

from those used in the collection of its own taxes or that would be

contrary to its public policy.” Read together, these provisions illustrate

that the law of the requested state supplies the procedures governing

collection.

The opinion of the Court goes astray by grafting the

understanding of “finally determined” from the specific context of an

applicant state’s application for assistance onto the requested state’s

manner of collecting the claim. The definition of “finally determined”

set forth in Paragraph 2 is tailored to the obligations of the applicant

state and cannot be imported into the Paragraph 3 context, which deals

exclusively with the conduct of the requested state. Moreover,

29

Paragraphs 4, 5, and 10 would seem to have little function if “finally

determined” under Paragraph 3 meant that all procedural rights under

the requested state’s law were deemed to have lapsed and been

exhausted. And the opinion of the Court’s approach would appear to

give priority to a revenue claim from Canada in contravention of

Paragraph 7, with the removal of CDP procedures ostensibly allowing a

Canadian claim to cut ahead of a U.S. counterpart that must comply

with such procedures.

The most apt reading of the relevant provisions together is that

the exhaustion text of Paragraph 2 is confined to that Paragraph and

that the normal collection procedures of the requested state apply. 4

Under this reading, there is no conflict with the CDP safeguards,

including the requirements of a hearing and judicial review.

The postratification actions of the implementing agency provide

support for this view. The IRS considered the interplay between the

Treaty and the CDP procedures in 1999, taking the position (in a

nonprecedential memorandum) that “sec. 6330 applies to treaty levies

but that only issues concerning the Service’s administrative collection

procedures (e.g., challenges as to whether the procedural requirements

have been met for the Service’s use of summonses, liens, and/or levies)

and not issues concerning the liability itself, may be raised at a hearing.”

I.R.S. Chief Couns. Adv. Mem. 199939034, 1999 WL 779472 (Oct. 1,

1999). 5

The opinion of the Court attempts to refute this point by noting

that the IRS switched positions six years later, citing Internal Revenue

Manual provisions offering administrative options rather than the CDP

regime with respect to the Treaty. See op. Ct. note 7. This course of

conduct undermines, rather than bolsters, the opinion of the Court’s

interpretation of “finally determined.” That interpretation is premised

on the Treaty’s purported foreclosure of “all administrative and judicial

4 Although Paragraph 2 prefaces the definition of “finally determined” with the

phrase “[f]or the purposes of this Article,” this definition is inherently limited to a

revenue claim of an applicant state by its own text, which exclusively refers to rights

in an “applicant state.” This reading does not render the introductory phrase

surplusage as the concept of a revenue claim of an applicant state being “finally

determined” recurs in Paragraphs 3 and 5.

5 We have previously considered such nonprecedential memoranda “to show

the IRS’ position.” Adams Challenge, 156 T.C. at 43 n.14.

30

rights.” The IRS plainly does not see it that way, as it has offered first

judicial, then administrative, processes since at least 1999.

The Government’s approach to a similar Collection Assistance

provision in the tax treaty with Japan, another close treaty partner,

sheds further light. See Treasury Department Technical Explanation of

the 2013 Protocol Amending the U.S.-Japan Income Tax Treaty 23,

https://home.treasury.gov/system/files/131/Treaty-Japan-Pr2-TE-10-29

-2015.pdf (last visited July 23, 2024). This technical explanation states

that “Paragraph 5 requires the applicant State to certify that the

revenue claim for which collection assistance is sought has been ‘finally

determined,’” a term defined in the same manner as in the 1995 protocol

to the Treaty at issue in this case. The technical explanation goes on to

clarify that neither CDP rights in the United States nor certain rights

under Japanese law (dating to 1962) preclude a revenue claim from

being “finally determined” under the relevant law. Although the opinion

of the Court goes to great lengths to point out differences between the

Treaty here and the treaty with Japan, see op. Ct. note 12, it misses the

key lesson from the Japanese treaty: The postratification conduct

suggests that the United States has embraced the notion that CDP

rights happily coexist with a “finally determined” claim, which is the

result the text read harmoniously supports here.

The opinion of the Court objects, however, that this result would

grant two bites at the procedural apple—first in Canada and then in the

United States. See op. Ct. pp. 13–14. The Treaty allows for just that,

and it makes sense to do so. The Treaty is structured to ensure that,

before requesting assistance, the applicant country exhausts all

remedies available to it. One can well understand why sovereign

nations would wish certitude before entertaining an application for

collection assistance. See, e.g., Richard E. Andersen, Andersen Analysis

of United States Income Tax Treaties ¶ 24.03[1][b][ii] (2010) (“In

accordance with th[e] doctrine [of the revenue rule], . . . the United

States typically does not assist another country in the collection of

taxes.”). Although the opinion of the Court reflects an ostensible belief

that the exhaustion of remedies in Canada should count as the

exhaustion of remedies in the United States, this position lacks any

support in the Treaty, which establishes that the law of the requested

state governs collection procedures, or from Congress, which has not

seen fit to strip away American procedural safeguards where a close

Treaty partner has conducted its own proceedings.

31

The opinion of the Court also observes that it would be passing

strange for the IRS to be in the position of verifying requirements of

Canadian law or to grant a collection alternative. It is not odd, however,

for sovereign nations to respect and abide by each other’s collection

procedures. The practical concerns recited by the opinion of the Court

are mole hills, nothing more. Verification in this context would be

accomplished by confirming that an application was properly made

under the Treaty. And the grant of a collection alternative would not

compromise Canada’s tax claim but merely represent the IRS’s best

judgment as to what part of the claim may be collected and which

collection mechanisms the United States will employ to do so.

To sum up, the Treaty can be harmonized with the later enacted

CDP safeguards in sections 6320 and 6330. Under a correctly

harmonized view, Ms. Ryckman is entitled to the protections outlined in

those sections before the IRS moves to collect by lien or levy.

BUCH, PUGH, ASHFORD, TORO, and WEILER, JJ., agree with

this dissent.