Tax Treaty Case Law around the Globe 2017

S. 373United States: Assistance in the Collection of Taxes

Yariv Brauner

1. S. 374Introduction

This is a rather rare case in the United States concerning the treaty provision for assistance in the collection of taxes. It signals general compliance of the United States with OECD standards, at least in simple cases (involving friendly, OECD Member countries).

2. Facts of the Case

Mr. Dileng was legally resident in the United States when the Danish Tax Authorities made a request to the United States government for assistance in the collection of due taxes based on its obligations under article 27 of the Denmark-United States Income Tax Treaty (2000). Dileng was a Danish citizen and prior to moving to the United States had also been a Danish resident, and hence a taxpayer in Denmark.

Dileng was challenging the said (Danish) tax in Denmark, a challenge that was pending at the time the motion by Dileng was filed. The IRS announced to Dileng that it would place a levy on his United States assets to collect the Danish tax debt, and rejected the administrative motion he had submitted asking for the IRS to wait for his challenge of these taxes in Denmark. Dileng filed a court action based on the same argument...