(a) Develop the ability to identify major legal issues that arise for non-u.s. taxpayers when determining their U.S. federal income tax liabilities.

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1 University of Washington School of Law Autumn, 2018 International Tax I, T515 3 credits Class meets Thursdays 5:00-7:50pm, Room 117 Instructor: William Lu WilliamLu99@gmail.com Phone: Office: #446 Office Hours: Thursdays 4:15 5 Other times by appointment I will usually be on campus Monday through Thursday SYLLABUS Class Description This class will provide a detailed and thorough analysis of the U.S. taxation of the income produced through "inbound" transactions and investments. i.e. the income produced when non-u.s. taxpayers transact in the United States. The class will cover the definition of non-u.s. and U.S. taxpayers, the rules that determine the source of different income types, concepts relating to effectively connected income, issues raised by tax treaties including rules related to "permanent establishments" and treaty shopping, the branch profits tax ( 884), withholding on receipts of nonresident aliens (including classification issues relating to nonresident alien status), and rules relating to taxation of foreign investment in U.S. real property. Learning Objectives The main learning objectives in this course are as follows: (a) Develop the ability to identify major legal issues that arise for non-u.s. taxpayers when determining their U.S. federal income tax liabilities. (b) Master the fundamental concepts related to the U.S. taxation of inbound investments and transactions. (c) Develop fluency to read, and skills to interpret, the Internal Revenue Code and agency regulations, generally as well as those provisions that relate to the taxation of inbound transactions, specifically. To that end, I strongly recommend students first read the assigned Internal Revenue Code and Treasury Department Regulations, cases, and rulings before consulting the textbook or treatise. Learning to read the primary sources will be an invaluable skill for the future practitioner. (d) Understand the relative importance of various sources of tax law, including the Internal Revenue Code, Treasury Department Regulations, judicial cases interpreting the Code, as well as various forms of guidance issued by the Internal Revenue Service. (e) Engage in analysis and reasoning needed for problem solving in the field of U.S. International Taxation Law. Textbook

2 Misey & Schadewald, "Practical Guide to U.S. Taxation of International Transactions" 11th Edition. Students may also refer to the relevant sections of Kuntz, Peroni & Bogdanski, U.S. International Taxation available online on Ria Checkpoint. This treatise covers the material in greater depth (and length) than the Misey & Schadewald textbook, but is less user-friendly. Students may purchase any book that has a collection of the relevant international Code Sections and Regulations, such as Peroni, International Income Taxation Code & Regulations Edition, or instead access/print the relevant sections from Ria Checkpoint or any other online resource. Grading Subject to adjustments resulting from class participation and/or poor attendance, grades will be determined by a student s performance on the final exam. Final Exam The final exam is currently scheduled for 12/10/18 8:30 AM. You are responsible for reviewing the exam schedule to determine if there are any changes. The exam schedule for this quarter is posted at The final will be a open-book take-home exam, which the students will have 24 hours to submit their answers. Students are not permitted to collaborate in any way regarding the exam. Class Participation/Expectations At an absolute minimum, students are required to read all the primary source materials for each class. After reading the primary source materials, students should read the Misey textbook and/or the Kuntz treatise for additional color. Consistent, high quality class participation will result in an increase in final grade by one increment (e.g. B+ to A-). By high quality, I mean answers that demonstrate (1) that the student read the material before class and (2) insights into the issues raised by the question. The answer need not be correct to have a favorable impact, so long as the student showed good insight. Furthermore, wrong answers will not harm a student s grade. Course Evaluation Your course evaluation will be administered during the last week of class. Please bring your laptop or mobile device to class on this date to participate in the evaluation. Law School Attendance Policy Under changes to ABA Accreditation Standard 304, adopted in August 2004, a law school shall require regular and punctual class attendance. At any time after the fifth week of a course (halfway through a summer session course), a student who has been determined by the instructor to have attended fewer than 80 percent of the class sessions in any course will be required to drop the course from his or her registration upon the instructor s so indicating to the Academic Services Office. An instructor may also impose stricter attendance standards or other sanctions for nonattendance, including lowering of a grade, provided that students are informed at the start of the course of the instructor s attendance rules and possible sanctions.

3 Access and Accommodation Your experience in this class is important to me. If you have already established accommodations with Disability Resources for Students (DRS), please communicate your approved accommodations to me at your earliest convenience so we can discuss your needs in this course. If you have not yet established services through DRS, but have a temporary health condition or permanent disability that requires accommodations (conditions include but not limited to; mental health, attention-related, learning, vision, hearing, physical or health impacts), you are welcome to contact DRS at or uwdrs@uw.edu or disability.uw.edu. DRS offers resources and coordinates reasonable accommodations for students with disabilities and/or temporary health conditions. Reasonable accommodations are established through an interactive process between you, your instructor(s) and DRS. It is the policy and practice of the University of Washington to create inclusive and accessible learning environments consistent with federal and state law. Class Meetings CLASS 1 Thursday 9/27 Topic: Jurisdiction to tax, residency, and entity classification IRC 2(d); 11(a), (d); 61; 701; 702(a), (b); 871(a); 872(a); 877(a), (b), (h); 877A(a), (g); 881(a); 882; 7701(a)(3) - (5), (30), and (50); 7701(b)(1) (7) Treas. Reg (b); (a), (b); (a), (b)(1) (b)(8)(ii), and (c)(1) (c)(2)(iv); (a), (b)(1) (2), (c)(1), (f)(1) (2), and (g); ; (a); (b)-1(a)- (c), (e); (b)-2; (b)-3; (b)-4 Cook v. Tait, 265 US 47 (1924) Rev. Rul , C.B. 119 Littriello v. United States, 484 F.3d 372 (6th Cir. 2007) Rev. Rul. 99-5, CB 434 Rev. Rul. 99-6, CB 432 Misey & Schadewald 101; and/or Kuntz, Peroni & Bogdanski A103[1]; A104 CLASS 2 Thursday 10/4 Topic: Source rules IRC 861(a); 862(a); 863(a), (b); 864(c)(5); 865(a) (e)

4 Treas. Reg (a); (a)(1); (a), (b); (a), (c), (d); ; (a)-(d) (but note recent changes made by tax reform to 863(b)); ; Skim the following 3 cases enough to know the court s conclusions and reasoning: A.P. Green Export Co. v. United States, 284 F.2d 383 (Ct. Cl. 1960) Boulez v. Commissioner, 83 T.C. 584 (1984) Goosen v. Commissioner, 136 T.C. 547 (2011) Misey & Schadewald and/or Kuntz, Peroni & Bogdanski A201; A202[4], [5]; A203 CLASS 3 Thursday 10/11 Topic: Non-U.S. persons with non-business US source income IRC 103(a); 301(c); 316(a); 318(a); 861(a); 865(a), (d), (g); 871(a), (h), (i); (l), 873; 881(a), (c), (d); 1441(a), (b), (c)(1), (c)(8) (10); 1442(a), (b); 1461; 1471(a), (b); 1472(a), (b) Treas. Reg (a)(5); (f), (h) Examples 1-4; (a) (d); (a) - (c); (a), (b)(1) (b)(2)(i), (b)(2)(vii)(a), (b)(3)(i) (ii)(b), (b)(4) (introductory paragraph), (b)(7), (e)(1) (e)(3)(i), (e)(4)(ii)(a); T (b)(7)(ii)(b); ; (a) - (c)(2), (d); (a) - (b)(2); (a) (b)(2)(i)(a); (a), (b)(1); T(b)(1), (a), T US Model Income Tax Treaty Articles 10, 11 and 12 (text of model treaty can be found at: pdf) Central de Gas de Chihuahua v. Commissioner 102 T.C. 515 (1994) Misey & Schadewald ; 906 CLASS 4 Thursday 10/18 Topic: Non-U.S. persons doing business in the US IRC 864(b), (c); 865(e)(2); 871(b); 873; 874(a); 875; 882(a), (c); 1446

5 Treas. Reg ; (a), (b), (c)(1) (c)(4); (b); (f), (g) Examples 1 and 2; ; ; ; (b); (b); (g) US Model Income Tax Treaty Articles 5, 7 and 14 United States v. Balanovski, 236 F.2d 298 (2d Cir. 1956) Rev. Rul , C.B. 150 InverWorld, Inc. v. Commissioner, 71 T.C.M. (CCH) 3231 (1996) Taisei Fire and Marine Inc. Co. v. Commissioner, 104 T.C. 535 (1995) Misey & Schadewald 1001; 1005, 1006 CLASS 5 Thursday 10/25 Topic: Branch profits tax IRC 884 Treas. Reg (a) (c), (g); (a) US Model Income Tax Treaty Article 10(1), (2) and (10) Misey & Schadewald 1002 CLASS 6 Thursday 11/1 Topic: US real property IRC 871(d); 882(d); 897; 1445 Treas. Reg ; (a) (d); (a), (b), (d), (e); (a) (c) US Model Income Tax Treaty Articles 6 and 13(1), (2) and (6) Misey & Schadewald 905 CLASS 7 Thursday 11/8 Topic: Income tax treaties

6 IRC 884(e); 894(a), (c); 6114; 6712; 7701(l); 7852(d) Treas. Reg (a) and (b); (d)(1) (2)(ii)(A); (a) - (b)(1); T(b); (a) (c); (b)-7(a)(1); Skim (d)(3) - (4) US Constitution Article VI Clause 2 US Model Income Tax Treaty Articles 1, 3(2), 4, 12(1)-(7), 22, 24, skim (25) Misey & Schadewald 104.2; CLASS 8 Thursday 11/15 Topic: Base Erosion and Anti-Abuse Tax and Transfer pricing Section 482 IRC 59A, 482, 6662 Treas. Reg (a) (d)(3)(iii), (e), (f)(2)(i) (ii); T; (a)(1)(i), (a)(2)(i), (a)(2)(iii)(b); (a); (a), (b), (f); (a) (e); (a), (l)(1) (3) Bausch & Lomb Inc. v. Commissioner, 933 F.2d 1084 (2d Cir. 1991) Misey & Schadewald 1004, CLASS 9 Thursday 11/29 (pizza night) Topic: Structuring considerations and review session. IRC 163(j), 7874(a), (b) and (c) Misey & Schadewald 1003, 1405