Tax Treaty Case Law around the Globe 2024

32.1. Introduction

This is one of the few recent cases pertaining to exchange of information and assistance in collection provisions in US tax treaties. US tax treaties do not include many of the latter (assistance in collection of taxes) provisions, but exchanges of taxpayer information provisions are very ubiquitous, and the US insists on their broad application and scope.

32.2. Facts of the case

The petitioner, Mr. Juan Ramon Gomis Rabassa (“Rabassa”), whose residence status was unclear, was the subject of an assistance request by Spain based on article 27 of the 1994 US-Spain tax treaty. On 26 January 2022, the respondent, the IRS, issued a summons to Banco de Sabadell, S.A. in Miami, Florida, seeking records “with respect to any account - including credit or debit card accounts and investment accounts - in the name of, under signature of, or for the benefit of” Rabassa. The summons stated that it was issued regarding Spanish income and capital tax liabilities of Rabassa.

Rabassa filed a Petition to quash the summons and the IRS moved to dismiss the petition to quash. Rabassa argued, first, that the IRS could not have pursued the summons in good faith because the US-Spain Treaty, u...