TAX CONVENTIONS

Rev. Rul. 2004–3, page 486. Service partnerships. This ruling provides guidance concerning the application of the U.S.-Germany income tax treaty to a nonresident partner in a service partnership that conducts activities in the United States. It makes clear that a nonresident partner is subject to U.S. income tax on his share of income from the partnership to the extent that such income is attributable to the partnership’s activities in the United States, without regard to whether the partner performs services in the United States. This ruling also applies to other U.S. income tax treaties that have the same or similar provisions as those in the U.S.-Germany treaty.