How Do You Interpret the Last-in-Time Rule?

by Roger Alford

Boring tax case, interesting international law issue. That’s how I would summarize Jamieson v. CIR. The issue in Jamieson is what happens if a treaty says one thing, a subsequent statute conflicts with that treaty, and then there is a subsequent treaty change to the conflicting treaty provision, but that amendment does not remove the conflict. Under the last-in-time rule which provision prevails? Here is what the U.S. Tax Court ruled:

In 1986, while the U.S.-Canada Convention was in force, Congress amended the AMT imposed on noncorporate taxpayers by section 55 and added section 59 to the Code…. [Thereafter] the U.S.-Canada Convention was amended…. The revised Protocol Amending the Convention… made changes to Article XXIV affecting credits for Social Security tax, corporate tax exemptions, and the tax treatment of dividends, interest, and royalties,… but did not alter the general rule found in article XXIV, paragraph 1. Neither the Third nor the Fourth Protocol references section 59 [the earlier conflicting statutory provision].

It is well established that, where a statute and a treaty pertain to the same subject matter, they must be read so as to give effect to both if at all possible…. If, however, the statute and the treaty conflict, the last-in-time rule requires that “the last expression of the sovereign will … [controls].”…

Applying the last-in-time rule, we hold that section 59(a)(2) is the last expression of the sovereign will and that it takes precedence over the U.S.-Canada Convention to the extent there is a conflict between them. [The statute] makes it very clear that Congress intended the limitation of section 59(a)(2) to supersede existing treaty provisions prohibiting double taxation. The U.S.-Canada Convention was one of those treaties. Neither the Third nor the Fourth Protocol contains any provision clearly indicating that Congress’s intention to ensure that taxpayers with sufficient means should contribute a minimum amount of tax to the United States had been superseded.

So a treaty provision conflicts with a statute, and then that treaty provision is amended without fixing the conflict. Under the last-in-time rule, although the amended treaty provision came later, the failure to address the conflict means that the earlier conflicting statute controls? That logic seems more than a little curious to me. I wonder what others think.

One Response

  1. Well I think you’re right — it sounds muddled. This is potentially a key issue in the detainee cases as well, to the extent that the DTA or MCA might be thought to alter the Geneva Convnetions or other treaties in force and the treaty in question explicitly limits derogations. In the case of the Geneva Convnetions, a “denunciation” requires one-year advance notice to the Swiss Confederation and the convnetions retain full force until any pending armed conflict or occupation is resolved; see e.g. Geneva III POWs, Art. 142 (the other three Geneva Convnetions contain identical provisions):

    “Each of the High Contracting Parties shall be at liberty to denounce the present Convention.

    “The denunciation shall be notified in writing to the Swiss Federal Council, which shall transmit it to the Governments of all the High Contracting Parties.

    “The denunciation shall take effect one year after the notification thereof has been made to the Swiss Federal Council. However, a denunciation of which notification has been made at a time when the denouncing Power is involved in a conflict shall not take effect until peace has been concluded, and until after operations connected with release and repatriation of the persons protected by the present Convention have been terminated.

    “The denunciation shall have effect only in respect of the denouncing Power. It shall in no way impair the obligations which the Parties to the conflict shall remain bound to fulfil by virtue of the principles of the law of nations, as they result from the usages established among civilized peoples, from the laws of humanity and the dictates of the public conscience.”

    Note that the final paragrapgh echoes the Martens Clause of Hague II 1899 / Hague IV 1907.

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