professional tax software tax research
Parker Tax Pro Library
online tax research tax and accountng professional tax research software Like us on Facebook Follow us on Twitter View our profile on LinkedIn Find us on Pinterest
CPA software
Professional Tax Software
tax and accounting
Tax Research Articles Tax Research Parker's Tax Research Articles Accounting Research CPA Client Letters Tax Research Software Client Testimonials Tax Research Software tax research

accounting software

CPA tax software



IRS Failed to Show that Dual Resident's Center of Vital Interests Were in the U.S.
(Parker Tax Publishing December 08, 2013)

The IRS failed to establish that a dual resident's center of vital interests was in the United States for tax purposes and that he was thus taxable as a U.S. resident. Escobedo v. U.S., 2013 PTC 367 (S.D. Cal. 11/14/13).

In 2005 and 2006, Federico Escobedo was a resident of both the United States and Mexico and maintained permanent homes in both counties. He timely filed a Form 1040, U.S. Individual Income Tax Return, for 2005 and 2006. In 2009, Federico filed amended Forms 1040, claiming refunds for all taxes paid for 2005 and 2006. He asserted that he was entitled to a refund because he should have been considered a resident of Mexico for tax purposes and thus not taxed on his worldwide income. The IRS denied Federico's refund claims. Federico filed suit in a district court and the IRS filed a motion for summary judgment.

The U.S.-Mexico bilateral treaty governs the tax liability of dual residents for federal income tax purposes. The tax treaty provides that where an individual is a resident of both the United States and Mexico, his residence and where he pays income tax, is determined by (1) where he has a permanent home; (2) where his personal and economic relations are closer (center of vital interests); or (3) where he has a habitual abode.

The IRS argued that Federico was properly considered a U.S. resident for tax purposes as his center of vital interests and habitual abode was in the United States.

A district court held that genuine issues of material fact existed as to whether Federico's center of vital interests was in the United States for tax purposes. The court looked to the model treaty of the Organization of Economic Cooperation and Development (OECD), which stated that if an individual has a permanent home in both countries, preference will be given to the one where economic and personal relations of the individual are closer. Factors such as family and social relations, occupation, political and cultural activities, and place of business demonstrate where the individual has retained his centers of vital interest.

During the years in issue, Federico did not dispute that he lived with his partner and three children in the United States and that he owned several homes and other personal property in the United States. His children attended U.S. universities and he received medical services in the United States. However, the court observed that the consideration of personal relations was only one factor in the center of vital interests determination.

Federico was an investor and manager of several businesses in Mexico, which he oversaw and directed. The IRS presented no authority that Federico's oversight did not constitute economic activity regarding the center of vital interests determination. Thus, the court said that there were genuine of issues of material fact with respect to Federico's economic relations within the United States and rejected the IRS's request for summary judgment.

For a discussion of U.S. taxation of U.S. citizens and resident aliens, see Parker Tax ¶200,100.(Staff Editor Parker Tax Publishing)

Disclaimer: This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer. The information contained herein is general in nature and based on authorities that are subject to change. Parker Tax Publishing guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. Parker Tax Publishing assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein.

Parker Tax Pro Library - An Affordable Professional Tax Research Solution.

Professional tax research

We hope you find our professional tax research articles comprehensive and informative. Parker Tax Pro Library gives you unlimited online access all of our past Biweekly Tax Bulletins, 22 volumes of expert analysis, 250 Client Letters, Bob Jennings Practice Aids, time saving election statements and our comprehensive, fully updated primary source library.

Parker Tax Research

Try Our Easy, Powerful Search Engine

A Professional Tax Research Solution that gives you instant access to 22 volumes of expert analysis and 185,000 authoritative source documents. But having access won’t help if you can’t quickly and easily find the materials that answer your questions. That’s where Parker’s search engine – and it’s uncanny knack for finding the right documents – comes into play

Things that take half a dozen steps in other products take two steps in ours. Search results come up instantly and browsing them is a cinch. So is linking from Parker’s analysis to practice aids and cited primary source documents. Parker’s powerful, user-friendly search engine ensures that you quickly find what you need every time you visit Our Tax Research Library.

Parker Tax Research Library

Dear Tax Professional,

My name is James Levey, and a few years back I founded a company named Kleinrock Publishing. I started Kleinrock out of frustration with the prohibitively high prices and difficult search engines of BNA, CCH, and RIA tax research products ... kind of reminiscent of the situation practitioners face today.

Now that Kleinrock has disappeared into CCH, prices are soaring again and ease-of-use has fallen by the wayside. The needs of smaller firms and sole practitioners are simply not being met.

To address the problem, I’ve partnered with a group of highly talented tax writers to create Parker Tax Publishing ... a company dedicated to the idea that comprehensive, authoritative tax information service can be both easy-to-use and highly affordable.

Our product, the Parker Tax Pro Library, is breathtaking in its scope. Check out the contents listing to the left to get a sense of all the valuable material you'll have access to when you subscribe.

Or better yet, take a minute to sign yourself up for a free trial, so you can experience first-hand just how easy it is to get results with the Pro Library!


James Levey

Parker Tax Pro Library - An Affordable Professional Tax Research Solution.

    ®2012-2017 Parker Tax Publishing. Use of content subject to Website Terms and Conditions.

IRS Codes and Regs
Tax Court Cases IRS guidance