                        T.C. Memo. 2005-137



                      UNITED STATES TAX COURT



                  PETER M. HAVER, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 15706-03.             Filed June 13, 2005.



     Peter M. Haver, pro se.

     Justin L. Campolieta, for respondent.



                        MEMORANDUM OPINION


     LARO, Judge:   Petitioner petitioned the Court to redetermine

the following Federal income tax deficiencies and additions to

tax under section 6651(a)(1):1



     1
       Unless otherwise noted, section references are to the
applicable versions of the Internal Revenue Code. Rule
references are to the Tax Court Rules of Practice and Procedure.
                                 - 2 -

                                         Addition to Tax

             Year        Deficiency      Sec. 6651(a)(1)
             1997          $3,663            $380.75
             1998           1,935             450.75
             1999           2,832             708.00
             2000           1,319             329.75

Following concessions by respondent and submission of the case

pursuant to Rule 122, we must decide whether the limitation on

the application of foreign tax credits to alternative minimum tax

(AMT) liability under section 59(a)(2) may be harmonized with

article 23(1) of the Convention Between the United States of

America and the Federal Republic of Germany for the Avoidance of

Double Taxation of August 29, 1989, 2 Tax Treaties (CCH) 77,021

(the U.S.-Germany treaty or article 23(1)).     We hold that it

may.2

                              Background

        All facts were stipulated or contained in the exhibits

submitted therewith.     We incorporate herein by this reference the

parties’ stipulation of facts and the exhibits submitted

therewith.     We find the stipulated facts accordingly.   Petitioner

resided in Dusseldorf, Germany, when his petition was filed in

this Court.



        2
       Petitioner has conceded that he is subject to the sec.
6651(a)(1) penalty, stating that his returns were filed
“belatedly in January, 2003.”
                                - 3 -

       Petitioner is a U.S. citizen who during the subject years

resided in Germany and was employed there as an attorney.      During

1997, 1998, 1999, and 2000, his income was derived entirely from

foreign sources, and he did not report an AMT liability as to the

income.    For each of the years in issue, he had foreign tax

available for credit, entitling him to foreign tax credits under

section 59(a), and tentative AMT, as follows:

              Foreign Tax
                Available          Sec. 59(a)        Tentative
Year           for Credit            Credit             AMT
1997            $75,148                 $44,008       $36,627
1998             42,586                  27,762        22,026
1999             65,161                  34,822        28,324
2000             37,730                  17,477        13,193

       Petitioner first filed income tax returns for these years in

January 2003.

                             Discussion

       While acknowledging that section 59(a)(2)(A) supports

respondent’s determination in full, petitioner argues that

section 59(a)(2)(A) is inapplicable to this case as it was

superseded by article 23(1).    Petitioner urges that this Court

was misguided in Pekar v. Commissioner, 113 T.C. 158, 163 (1999),

and Brooke v. Commissioner, T.C. Memo. 2000-194, affd. 13 Fed.

Appx. 7 (D.C. Cir. 2001), where we held that article 23(1)

harmonizes with the application of section 59(a)(2)(A) because

article 23(1) states that the U.S.-Germany treaty shall apply in
                                 - 4 -

“accordance with the provisions and subject to the limitations of

the law of the United States”.

        Petitioner notes that section 59(a)(2)(A) was enacted as

part of the Tax Reform Act of 1986, Pub. L. 99-514, sec. 701(a),

100 Stat. 2320, and that the U.S.-Germany treaty was ratified on

August 21, 1991.     Petitioner contends, contrary to our holdings

in Pekar and Brooke, that irreconcilable differences exist

between the U.S.-Germany treaty and section 59(a)(2)(A) and that

the treaty controls because it was ratified at a later date.

See, e.g., Taylor v. Morton, 23 F. Cas. 784, 786-787 (C.C.D.

Mass. 1855) (establishing the so-called later in time rule),

affd. 67 U.S. (2 Black) 481 (1863).      Petitioner concedes,

however, that we must attempt to reconcile a statute with a

potentially conflicting treaty before applying the later in time

rule.     See, e.g., Whitney v. Robertson, 124 U.S. 190, 194 (1888);

Murray v. Schooner Charming Betsy, 6 U.S. (2 Cranch) 64, 118

(1804) (“an Act of Congress ought never to be construed to

violate the law of nations if any other possible construction

remains”).     Respondent argues that this Court can reconcile the

statute with the treaty as it did in Pekar and Brooke, and that

we should follow those cases.     We agree with respondent.

        In Pekar v. Commissioner, supra, and Brooke v. Commissioner,

supra, we concluded that article 23(1) specifically recognized

the “provisions” and “limitations” of existing U.S. law,
                              - 5 -

including those contained in section 59(a)(2)(A).       We find no

reason to depart from these holdings to follow petitioner down a

twisting path of legal analysis whose ultimate destination would

require us to reverse two prior holdings and find a provision of

U.S. law in conflict with the U.S.-Germany treaty.       We hold in

accordance with our previous decisions in Pekar and Brooke that

the limitation of section 59(a)(2)(A) applies to petitioner.3

     We have considered all of the parties’ arguments and

rejected those not discussed herein as meritless.       To reflect

respondent’s concession,


                                           Decision will be entered

                                      under Rule 155.




     3
       Petitioner raises for our consideration Kappus v.
Commissioner, 337 F.3d 1053 (D.C. Cir. 2003), affg. T.C. Memo.
2002-36, where the Court of Appeals for the District of Columbia
Circuit opted not to decide whether sec. 59(a)(2)(A) conflicted
with an article of the U.S.-Canada treaty similar to article
23(1), by holding that sec. 59(a)(2)(A) controlled the outcome as
the later of the two provisions. Petitioner infers erroneously
from the court’s holding in Kappus that the statute and the U.S.-
Germany treaty cannot be reconciled. The court never considered
that question. Nor did the court say anything inconsistent with
its previous affirmance of our decision in Brooke v.
Commissioner, T.C. Memo. 2000-194.
