Page:United States Statutes at Large Volume 102 Part 4.djvu/561

 PUBLIC LAW 100-647—NOV. 10, 1988

102 STAT. 3531

"(f) EXEMPTION FROM WITHHOLDING.—Notwithstanding subsection (b), the modification of section 884 of the Internal Revenue Code of 1986 by reason of the amendment to section 881 of such Code by section 1278(b)(1) of this Act shall apply to taxable years beginning after December 31, 1986." (2) Subsection (e) of section 1277 of the Reform Act is amended by striking out "The preceding sentence" and inserting in lieu thereof "Notwithstanding subsection (b), the preceding sentence", (aa) COORDINATION WITH TREATIES.— (1) TREATY OBLIGATIONS.—

(A) Subsection (d) of section 7852 of the 1986 Code is amended to read as follows: "(d) TREATY OBLIGATIONS.—

"(1) IN GENERAL.—For 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. "(2) SAVINGS CLAUSE FOR 1954 TREATIES.—No provision of this title (as in effect without regard to any amendment thereto enacted after August 16, 1954) shall apply in any case where its application would be contrary to any treaty obligation of the United States in effect on August 16, 1954." (B) Section 7852(d)(1) of the 1986 Code, as added by 26 USC 7852 subparagraph (A), shall apply to any taxable period with note. respect to which the time for assessment of any deficiency has not expired by reason of any law or rule of law before the date of the enactment of this Act. (2) CERTAIN AMENDMENTS TO APPLY NOTWITHSTANDING TREA- 26 USC 861 note. TIES.—The following amendments made by the Reform Act shall apply notwithstanding any treaty obligation of the United States in effect on the date of the enactment of the Reform Act: (A) The amendments made by section 1201 of the Reform Act. (B) The amendments made by title VII of the Reform Act to the extent such amendments relate to the alternative minimum tax foreign tax credit. (3) CERTAIN AMENDMENTS NOT TO APPLY TO THE EXTENT 26 USC 861 note. INCONSISTENT WITH TREATIES.—The following amendments made by the Reform Act shall not apply to the extent the application of such amendments would be contrary to any treaty obligation of the United States in effect on the date of the enactment of the Reform Act: (A) The amendments made by section 1211 of the Reform Act to the extent— (i) such amendments apply in the case of an individual treated as a resident of a foreign country under a treaty obligation of the United States as so in effect, or (ii) such amendments relate to income of a nonresident from the sale or exchange of inventory property which would otherwise be sourced under section 865(e)(2) of the 1986 Code. (B) The amendments made by section 1212(a) of the Reform Act; except for purposes of determining the amount of the foreign tax credit. (C) The amendments made by subsections (b) and (c) of section 1212 of the Reform Act.

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