US Tax Treaty Reference

When is Form 8833 required?

IRC §6114 and Treas. Reg. §301.6114-1 require disclosure on Form 8833 whenever a taxpayer takes a return position that a treaty overrides or modifies a provision of the Internal Revenue Code. This includes claiming reduced withholding rates on dividends, interest, or royalties; exempting pension income; or claiming any other treaty benefit that differs from the Code's default treatment.

What must Form 8833 disclose?

• The treaty and specific article relied upon
• The Code provision being overridden or modified
• The nature and amount of the treaty benefit claimed
• A brief explanation of the legal basis for the position

Penalty for failure to disclose

Failure to file Form 8833 when required carries a penalty of $1,000 per failure for individuals and $10,000 per failure for corporations (IRC §6712). The penalty applies even if the underlying treaty position is correct.

Savings clause interaction

Every US treaty contains a savings clause reserving the US right to tax its citizens and residents as if the treaty did not exist. Most treaty benefits are subject to the savings clause — meaning US citizens cannot use most treaty provisions to reduce their US tax liability, even if they reside in the treaty country.