Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-14-01215/USCOURTS-caDC-14-01215-0/pdf.json

Parties Involved:
Commissioner of Internal Revenue Service
Appellee
Linda Coryell Eshel
Appellant
Ory Eshel
Appellant

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 6, 2015 Decided August 5, 2016

No. 14-1215

ORY ESHEL AND LINDA CORYELL ESHEL,

APPELLANTS

v.

COMMISSIONER OF INTERNAL REVENUE SERVICE,

APPELLEE

On Appeal from the 

United States Tax Court

Stuart E. Horwich argued the cause and filed the briefs 

for appellants.

Julie Ciamporcero Avetta, Attorney, U.S. Department of 

Justice, argued the cause for appellee. With her on the brief 

was Bridget M. Rowan, Attorney. Andrew Weiner, Attorney, 

entered an appearance.

Before: GRIFFITH, MILLETT, and PILLARD, Circuit 

Judges.

Opinion for the Court filed by Circuit Judge MILLETT.

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MILLETT, Circuit Judge: As a general rule, workers in 

the United States are taxed to support the payment of social 

security benefits to the retired and to individuals with 

disabilities. The expectation is that, having contributed to the 

national economy while actively employed, those workers 

will later become eligible beneficiaries rather than supporters 

of the social security system. See Flemming v. Nestor, 363 

U.S. 603, 608–610 (1960). 

That system gets complicated, however, for Americans 

who work overseas for part of their careers and, during those 

years, are required to pay taxes into a foreign government’s 

social security system. Foreign workers temporarily 

employed within the United States can sometimes confront a 

similar problem. 

With Congress’s blessing, Presidents have entered into 

so-called “totalization agreements” with foreign governments 

to limit social-security taxing rights to the country where the 

work is being done. The agreements also allow overseas 

workers from both countries to obtain social security benefits 

based on the periods for which they make social security 

contributions to foreign governments.

This case involves a totalization agreement between the 

United States and France. Specifically, the issue on appeal is 

whether or not two French taxes enacted into law after that

totalization agreement was adopted “amend[] or 

supplement[]” the French social security laws covered by the 

agreement, and thus fall within the agreement’s ambit. The 

tax court declared the status of those French laws not by 

analyzing the text of the totalization agreement or the 

understanding of the parties, but by resorting to American 

dictionaries. That was legal error. Because insufficient 

consideration was given to the text and the official views of 

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the United States and French governments, we reverse and 

remand.

I

A

In 42 U.S.C. § 433, Congress authorized the President to 

enter into social security coordination agreements—known as 

totalization agreements—with other countries, see id.

§ 433(a). Absent such agreements, workers who divide their 

careers among and pay taxes to multiple countries might pay 

into the social security systems of various nations, yet fail to 

qualify for benefits under any one system. Totalization 

agreements permit those workers to combine periods of 

payment into different countries’ social security systems to 

eventually become eligible to receive benefits under a 

signatory country’s system. Workers’ wages and selfemployment income are generally exempt from United States 

social-security taxation to the extent that they are subject to 

foreign social-security taxation. See 26 U.S.C. §§ 1401(c), 

3101(c), 3111(c).

Section 433 treats contributions to different countries’ 

social security systems as establishing “periods of coverage,” 

which are “period[s] of payment of contributions or [periods] 

based on wages for employment or on self-employment 

income[.]” 42 U.S.C. § 433(b)(2). Under a totalization 

agreement, employment creates a “period of coverage” under 

the social security system of one of the two signatories, but 

not both. Id. § 433(c)(1)(B)(i). That is, under Section 433, a 

citizen working in a foreign country makes payments to—and 

accrues periods of coverage under—only one social security 

system at a time. 

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Periods of coverage accrued under a foreign system may 

be combined with periods of coverage under the United States 

system “for the purposes of establishing entitlement” to 

United States social security benefits. 42 U.S.C. 

§ 433(c)(1)(A). An individual may also qualify for separate 

benefit payments from multiple countries, in which case the 

benefits payable by each system are based on the proportion 

of the taxpayer’s total periods of coverage accrued in each 

system. Id. § 433(c)(1)(C). Thus taxpayers whose careers 

take them from the United States to other countries do not 

suffer a diminution in their social security benefits upon 

retirement.

The United States generally taxes income earned by its 

citizens regardless of where the citizen resides, but a United 

States citizen may take a tax credit against his or her United 

States income tax liability for taxes paid to a foreign country. 

26 U.S.C. §§ 901(a) & (b). That credit shields taxpayers from 

double taxation. In contrast, taxes paid to a foreign country in 

accordance with a social security totalization agreement are 

not eligible for such a tax credit:

Notwithstanding any other provision of law, taxes 

paid by any individual to any foreign country with 

respect to any period of employment or selfemployment which is covered under the social 

security system of such foreign country in 

accordance with the terms of an agreement entered 

into pursuant to section 233 of the Social Security 

Act [42 U.S.C. § 433] shall not, under the income 

tax laws of the United States, be deductible by, or 

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creditable against the income tax of, any such 

individual. 

26 U.S.C. § 1401 note. 

Under that provision, a foreign tax will not be eligible for 

a tax credit if it is paid (i) with respect to a period of 

employment covered under the social security system of a 

foreign country, and (ii) “in accordance with” the terms of a 

totalization agreement. See Erlich v. United States, 104 Fed. 

Cl. 12, 17 (2012) (A tax is not creditable under this section 

when the “payment is consistent with the obligation of the 

taxpayer under the [totalization] agreement.”).

B

In 1987, the United States and France entered into a 

social security totalization agreement (“Totalization 

Agreement”). See Agreement on Social Security Between the 

United States of America and the French Republic, March 2, 

1987, 2260 U.N.T.S. 145, available at https://

www.ssa.gov/international/Agreement_Texts/french.html. In 

Article 2(1), the Totalization Agreement identifies the laws of 

each country under which qualifying taxes may be paid. The 

covered United States laws are specified provisions of the 

Social Security Act and the Internal Revenue Code.1

 The 

covered French laws are eight enumerated categories of 

 1 Specifically, the covered provisions of United States law are: 

“Title II of the Social Security Act and regulations pertaining 

thereto, except sections 226, 226A and 228 of that title and 

regulations pertaining to those sections,” and “Chapter 2 and 

Chapter 21 of the Internal Revenue Code of 1986 and regulations 

pertaining to those chapters[.]” Totalization Agreement, Art. 

2(1)(a).

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French social security laws.

2

 The Totalization Agreement 

also covers taxes paid under “legislation which amends or 

supplements the laws specified[.]” Totalization Agreement, 

Art. 2(3).

This case involves two payments made to the French 

government: Contribution Sociale Géneralisee (General 

Social Contribution, abbreviated as CSG) and Contribution 

pour le Remboursement de la Dette Sociale (Contribution for 

the Repayment of Social Debt, abbreviated as CRDS). Both

were enacted after the Totalization Agreement went into 

effect.

 2

 The covered provisions of French law are: (i) “laws establishing 

the administrative organization of social security programs”; (ii) 

“laws establishing the social insurance system for nonagricultural 

employees and laws establishing the social insurance system for 

agricultural employees”; (iii) “laws on prevention and 

compensation of occupational accidents and illnesses,” and “laws 

on nonoccupational accident insurance and insurance against 

occupational accidents and illnesses for self-employed persons in 

agricultural occupations”; (iv) “laws on family benefits”; (v) “laws 

concerning special social security systems to the extent they relate 

to the risks or benefits covered by the laws enumerated in the 

preceding clauses, but excluding the special system for civil 

servants”; (vi) “the law on the system for seamen”; (vii) “laws 

concerning sickness and maternity insurance for nonagricultural 

self-employed workers and laws concerning sickness and maternity 

insurance for agricultural self-employed workers”; and (viii) “laws 

concerning old-age allowances and old-age insurance for 

nonagricultural self-employed workers, laws concerning old-age 

and invalidity insurance for clergymen and members of religious 

orders, laws concerning old-age and invalidity insurance for 

attorneys, and laws concerning old-age insurance for agricultural 

self-employed workers.” Totalization Agreement, Art. 2(1)(b).

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The CSG law was enacted in December 1990. It is 

codified in the Code de la Sécurité Sociale (Social Security 

Code), which is not an enumerated French law in Article 

Section 2(1)(b) of the Totalization Agreement, but includes 

most provisions governing social security benefits in France. 

CSG on employment income is withheld by the employer in 

the same manner as other social security taxes and appears on 

the employee’s pay stub as a social contribution. Employers 

remit CSG directly to the Unions de Recouvrement des 

Cotisations de Sécurité Sociale et d’Allocations Familiales

(Union for the Recovery of Social Security and Family 

Allowances Premiums). The Union is a network of private 

organizations, the main task of which is to collect the 

employee and employer social security contributions that 

finance France’s social security system.

CSG revenues are allocated to five separate funds within 

the French government: the National Family Allowances 

Fund, compulsory health schemes, the Old-Age Solidarity 

Fund, the National Solidarity Fund for Autonomy for the 

elderly and disabled, and the Social Debt Redemption Fund. 

The Social Debt Redemption Fund is dedicated primarily to 

the retirement of debt incurred to fund French social security 

programs in the 1990s, but it also appears to finance certain 

payments made to France’s general budget. The percentage 

of CSG devoted to the National Solidarity Fund and the 

Social Debt Redemption Fund is variable. 

The CRDS law was enacted in January 1996 and is not 

codified. CRDS is withheld and collected in the same manner 

as CSG. CRDS proceeds go to the Social Debt Redemption 

Fund. 

In 2001, the French government amended the social 

security code to provide that CSG and CRDS are payable only 

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by individuals who are covered by a compulsory French 

sickness insurance scheme. However, a 2012 amendment 

made CSG and CRDS also applicable to gains realized on the 

sale of French real property by non-French residents. 

C

Ory and Linda Coryell Eshel are married and are dual 

citizens of the United States and France. In 2008 and 2009, 

they resided in France, and Mr. Eshel earned a salary for 

services performed in France. The Eshels paid various French 

taxes, including CSG, CRDS, and French income,

unemployment, and social security taxes. Because Mr. Eshel 

worked for a non-American employer, he was not required to 

pay social security taxes to the United States. 

As United States citizens, the Eshels were liable for 

United States income taxes for 2008 and 2009. They timely 

filed federal income tax returns for both years, claiming 

credits for French income tax, French unemployment tax, 

CSG, and CRDS. The CSG and CRDS credits amounted to 

$19,061 for 2008 and $32,672 for 2009. 

The Internal Revenue Service initially denied the entire 

foreign tax credit for both years, but later conceded that all of 

the claimed credits were valid except for CSG and CRDS. 

The Eshels timely petitioned the tax court for redetermination 

of the deficiencies. The parties also filed cross-motions for 

summary judgment on the issue of whether CSG and CRDS 

are foreign taxes that can be credited against tax liability.

The tax court granted summary judgment for the 

Commissioner. Because both CSG and CRDS were adopted 

after the Totalization Agreement went into effect, the tax 

court agreed with both parties that the central question was 

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whether the laws adopting those two taxes “amend or 

supplement” the French laws enumerated in Article 2(1)(b) of 

the Totalization Agreement. To answer that question, the tax 

court turned to four American dictionaries to define “amend” 

and “supplement,” and on the basis of those definitions

concluded that the phrase should mean “(1) formally altering 

one or more of these laws by striking out, inserting, or 

substituting words; (2) adding something to make up for a 

lack or deficiency in one or more of these laws; or (3) adding 

something to extend or strengthen the French social security 

system as a whole.” J.A. 143 (citing Webster’s New World 

College Dictionary (4th ed. 2010); Black’s Law Dictionary 

(9th ed. 2009); American Heritage Dictionary (4th ed. 2000); 

Webster’s New World Dictionary (2d coll. ed. 1980)).

Relying on its dictionary definitions, the tax court 

reasoned that CSG and CRDS “amend or supplement” the 

designated French laws as long as they “add[] something to 

extend or strengthen the French social security system as a 

whole.” J.A. 143. The tax court also noted that both taxes are 

administered by French social security officials and are 

collected in the same manner as French social security taxes. 

The court then determined that CSG “amends” the French 

social security laws because it adds words to the Code de la 

Sécurité Sociale, where most French social security laws are 

codified. Id. at 149. The tax court also decided that CSG and 

CRDS “supplement” the French social security laws because 

they fund some benefits under laws identified in Article 2 and 

discharge debt previously incurred to pay social security 

benefits. Id. at 149–150.

The tax court accordingly ruled that, because CSG and 

CRDS “amend or supplement” the French social security laws 

specified in the Totalization Agreement, they qualify as 

payments made “in accordance with” the Totalization 

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Agreement and cannot be credited against United States 

income tax liability. J.A. 124; 26 U.S.C. § 1401 note.

II

We review de novo the tax court’s grant of summary 

judgment, and can affirm only if there is no genuine dispute 

as to any material fact and the Commissioner is entitled to 

judgment as a matter of law. See, e.g., Byers v. 

Commissioner, 740 F.3d 668, 675 (D.C. Cir. 2014) (citing

Fed. R. Civ. P. 56(a)).

A

The issue in this case is whether CSG and CRDS 

“amend[] or supplement[]” the French laws enumerated in 

Article 2(1)(b), within the meaning of the Totalization 

Agreement. If they do, they are covered by the Totalization 

Agreement and the Eshels may not claim them as a credit on 

their United States tax returns. If they do not, they fall 

outside of the Agreement, and the Eshels may credit them 

against their United States income tax liability.

The tax court’s conclusion that CSG and CRDS “amend[]

or supplement[]” the designated French laws was the product 

of asking the wrong legal question. Rather than looking to the 

text of the Totalization Agreement or the signatory countries’ 

shared understanding, the tax court asked only what “amends

or supplements” means in domestic dictionaries, as it might 

do if construing a purely domestic statute.

But the Totalization Agreement is not a domestic statute. 

It is an executive agreement with a foreign country: initiated 

by the State Department, negotiated by the Social Security 

Administration, signed by the President and a foreign 

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government, and effective only after submission to Congress. 

See Allison Christians, Taxing the Global Worker: Three 

Spheres of International Social Security Coordination, 26 VA.

TAX REV. 81, 90–91 (2006). Executive agreements must be 

interpreted under the same principles applicable to 

international treaties. See Air Canada v. United States Dep’t 

of Transportation, 843 F.2d 1483, 1486 (D.C. Cir. 1988); see 

also Kwan v. United States, 272 F.3d 1360, 1362 (Fed. Cir. 

2001); Bank Melli Iran v. Pahlavi, 58 F.3d 1406, 1408 (9th 

Cir. 1995). 

International executive agreements and treaties are 

primarily “compact[s] between independent nations,” Lozano 

v. Montoya Alvarez, 134 S. Ct. 1224, 1232 (2014) (quoting 

Medellín v. Texas, 552 U.S. 491, 505 (2008)), and it is “our 

responsibility to read [them] in a manner ‘consistent with the 

shared expectations of the contracting parties,’” Lozano, 134 

S. Ct. at 1232 (emphasis in original) (quoting Olympic 

Airways v. Husain, 540 U.S. 644, 650 (2004)). Our goal is 

“to ascertain the intent of the parties by looking to the 

document’s text and context.” Lozano, 134 S. Ct. at 1232

(quoting United States v. Choctaw Nation, 179 U.S. 494, 535 

(1900)). To that end, it is inappropriate to make the United 

States’ maxims for statutory construction unilaterally 

dispositive. “Even if a background principle is relevant to the 

interpretation of federal statutes, it has no proper role in the 

interpretation of treaties unless that principle is shared by the 

parties to ‘an agreement among sovereign powers.’” Lozano, 

134 S. Ct. at 1232 (quoting Zicherman v. Korean Air Lines 

Co., 516 U.S. 217, 226 (1996)).

Instead, the tax court should have started with the 

Totalization Agreement’s plain text. “The interpretation of a 

treaty, like the interpretation of a statute, begins with its text.” 

Medellín, 552 U.S. at 506. The text of a treaty or executive 

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agreement controls “unless ‘application of the words of the 

treaty according to their obvious meaning effects a result 

inconsistent with the intent or expectations of its 

signatories.’” United States v. Stuart, 489 U.S. 353, 365–366 

(1989) (quoting Sumitomo Shoji America v. Avagliano, 457 

U.S. 176, 180 (1982)). 

Here, the Agreement’s text provides powerful evidence 

of its meaning. Article 1 defines certain terms in the 

Agreement, but does not define “amends or supplements.” 

For those undefined terms, Article 1 directs that “[a]ny term 

not defined in this Article shall have the meaning assigned to

it in the laws which are being applied.” Totalization 

Agreement, Art. 1(10). The Agreement defines “laws,” in 

turn, as “the laws and regulations specified in Article 2.” Id.

Art. 1(3). Those Article 2 laws are the laws covered by the 

Agreement: the eight enumerated types of French laws, two 

United States laws, and “legislation which amends or 

supplements the laws specified[.]” Id. Art. 2(3). Thus, 

whether CSG and CRDS “amend[] or supplement[]” the 

enumerated French laws is fundamentally an inquiry into the 

content and meaning of the Article 2 laws—in this case, the 

Article 2(b) French laws. For that reason, determining the 

“meaning” of “amend[ing] or supplement[ing]” the French 

laws should have at least in part been informed by French 

law.

The problems with the tax court’s approach do not stop 

there. The tax court also improperly divorced “amends or 

supplements” from its textual object. Rather than asking 

whether CSG and CRDS amend or supplement “the laws 

specified” in Article 2(1)(b), the tax court considered whether 

CSG and CRDS amend or supplement the “French social 

security system as a whole.” J.A. 143 (emphasis added). The 

court erroneously relied on the relationship between CSG and 

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CRDS and the French social security program generally, 

noting only that revenues from the taxes were allocated in 

some (unknown) part to social security schemes and debt 

incurred by social security programs. In short, the plain text 

of the Totalization Agreement forecloses the definition the 

court applied, which looked not to “the laws specified,” 

Article 2(3), but the French social security system as a whole.

Finally, at oral argument, the Commissioner admitted not 

knowing what one of the recipients of CSG taxes—the 

National Solidarity Fund for Autonomy—“actually funds.” 

Oral Arg. Tr. 36. But the Commissioner “submit[ted] that 

that’s immaterial because,” as long as a levy supplements

some “categories of laws that are included in the Treaty, the 

fact that some portion of the revenue is directed elsewhere 

does not mitigate th[e] conclusion” and the entire tax is 

deemed subject to the Totalization Agreement. Id. at 36. 

Indeed, in the Commissioner’s view, the CSG and CRDS 

would “amend[] or supplement[]” the French laws in the 

Totalization Agreement if even a single Euro of their 

proceeds funded any law included in the Agreement. Id. at 

48–49 (Q: “Your view of this agreement * * * is that if it 

were even de minimis one Euro it would count as 

‘supplement’?” A: “Based on the way that * * * the 

agreement is drawn, yes.”).

That extreme reading of the Totalization Agreement rests 

on nothing more than the Commissioner’s own say-so. It 

lacks any grounding in the Agreement’s text or in any 

principle governing the interpretation of international 

agreements. The tax court’s corresponding disregard of the 

Totalization Agreement’s textual direction concerning the role 

of French law in resolving undefined terms and in

determining the content of the laws enumerated in Article 

2(1)(b) was error and requires reversal. 

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B

To the extent that ambiguity remains about the status of 

CSG and CRDS and their relationship to the identified French 

laws, the tax court should have consulted sources illuminating 

the “shared expectations of the contracting parties,” such as 

“the negotiating and drafting history” and “the postratification 

understanding of the contracting parties.” Zicherman, 516 

U.S. at 223. Additionally, “[a]lthough not conclusive, the 

meaning attributed to treaty provisions by the Government 

agencies charged with their negotiation and enforcement is 

entitled to great weight.” Sumitomo, 457 U.S. at 184–185; see 

also Kolovrat v. Oregon, 366 U.S. 187, 194 (1961). 

For instance, in Kolovrat, the Supreme Court held that a 

treaty between the United States and Serbia trumped a state 

statute that would have limited the ability of aliens to inherit 

property. 366 U.S. at 188–189. In so holding, the Supreme 

Court relied upon “diplomatic notes exchanged between the 

responsible agencies of the United States and of Yugoslavia” 

to guide its determination of the agreement’s meaning. Id. at 

194.

Likewise, in Sumitomo, the Court analyzed whether 

Sumitomo was a company of Japan under the Friendship, 

Commerce, and Navigation Treaty between the United States 

and Japan. 457 U.S. at 179. As evidence of the Japanese 

position, the Court looked to a cable from the Japanese 

Ministry of Foreign Affairs to the Secretary of State, 

explicitly stating that a company in Sumitomo’s position was 

not covered by the relevant provision of the treaty. Id. at 184. 

As evidence of the federal government’s position, the Court 

looked to the brief for the United States as amicus curiae, 

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which communicated the State Department’s position and 

conformed with Japan’s view. Id. at 184 n.10. 

The tax court failed to follow that direction, relying 

instead on nontextual sources that did not purport to 

communicate the countries’ official positions or shared 

expectations.

The Commissioner argues that the United States 

government has consistently regarded CSG and CRDS as 

covered by the Totalization Agreement. But he builds that 

argument with the wrong tools. He relies on only a 

declaration of an individual in the Social Security 

Administration and a 1997 letter from the United States 

embassy, neither of which purports to offer an authoritative 

statement of the view of the United States as a party to the 

Totalization Agreement, let alone to reflect the shared 

understanding of both signatory governments. 

The declaration on which the Commissioner relied is by 

Vance Teel, the Associate Commissioner of the Office of 

International Programs of the Social Security Administration. 

In it, Teel states: “Based on information available to me and 

to the best of my understanding and belief,” CSG and CRDS 

are covered by the Totalization Agreement. J.A. 60–61. That 

is it. Teel provides no explanation about what information 

was available to him, nor does he identify the source of his 

understanding and belief. More to the point, the government 

conceded that the declaration “is not establishing an official 

state position of the United States of America” as a party to 

the Totalization Agreement, Oral Arg. Tr. 26, nor does it 

purport to document a settled understanding of the taxes’ 

status. 

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The 1997 letter is equally insufficient. The letter is from 

Donald Bandler, the interim head of the United States 

embassy in France at that time, and is addressed to the French 

Minister of Social Affairs and Employment. The letter 

discusses the tax treatment of United States “detached”

workers in France—that is, United States citizens working in 

France for a United States employer for a period of less than 

five years. J.A. 120; see Totalization Agreement, Art. 6(1). 

Detached workers are covered only by the tax laws and the 

social security system of the United States. Unlike the Eshels, 

they do not make payments into the French social security 

system. Totalization Agreement, Art. 6(1). In the letter, 

Bandler challenges the imposition of CSG and CRDS on 

detached workers and urges the French Minister to change his 

policy to treat CSG and CRDS as covered by the Totalization 

Agreement, and thereby inapplicable to United States 

detached workers. 

But that just shows that, at that time, the French 

government was imposing CSG and CRDS on United States 

detached workers. The letter thus suggests that the French 

government considered the taxes to be outside of the 

Totalization Agreement, and thus at most might indicate a 

conflict between the French and American positions, not a 

shared understanding. But it cannot even do that because the 

letter’s author asserted no authority to speak for the State 

Department or the United States government as a party to the 

Agreement. Nor did counsel claim that the letter had any 

such weight. To the contrary, counsel for the Commissioner

again admitted at oral argument that “nothing I say here is a 

pronouncement on the position of the United States in any 

matters related to foreign relations.” Oral Arg. Tr. 24.

3

 3 In 2001, the French government passed legislation that ended the 

imposition of CSG and CRDS on United States detached workers. 

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The Commissioner’s position, moreover, is the legal 

equivalent of trying to clap with one hand. The question of 

whether CSG and CRDS amend or supplement the French 

laws in the Totalization Agreement turns on the shared 

expectations of both the United States and French 

governments, which are grounded in the provisions of the 

Agreement that address the role of French law in discerning 

the amended or supplemented content of the French laws

enumerated in Article 2(b). See Totalization Agreement, Art. 

1(10).

The Eshels, for their part, relied principally on three

statements of the French government: a 1999 statement by 

the French Finance Minister in answer to a parliamentary 

question, a French “Statement of Practice” from 1998, and a 

statement of the French Minister of Foreign Affairs in May 

2007. See J.A. 24, 25, 70. The Eshels also provided the 

expert report of Philippe Derouin, a Paris tax lawyer. See id. 

at 94–113. 

The Eshels, however, offer little to no context for those 

assorted ministerial statements, and the record contains only 

excerpts of each. At this juncture, the Eshels provide no 

sound basis for this court to conclude as a matter of law that 

the statements represent the view of the French government 

on either the proper interpretation of the Totalization 

Agreement or on whether CSG and CRDS amend, 

 

If CSG and CRDS had actually amended or supplemented the 

designated French laws, the taxes would have fallen within the 

Totalization Agreement, raising a question as to the need for such 

independent legislation.

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supplement, or have any other legal relationship to the French 

laws specified in the Totalization Agreement.4

Moreover, the Eshels’ evidence primarily speaks to 

whether CSG and CRDS are covered by the French Income 

Tax Treaty, which coordinates the French and American 

assessment of income tax realized by residents of the foreign 

counterparty on domestic sources. At oral argument, the 

Eshels explained that the Income Tax Treaty and the 

Totalization Agreement are mutually exclusive: they cannot 

cover the same tax “if they give you different answers.” Oral 

Arg. Tr. 18. That argument certainly remains open to be 

explored on remand, but at this procedural juncture and on 

this limited record, it cannot be conclusive. Indeed, the 

Eshels’ own expert acknowledged that there is “no judicial or 

administrative precedent in France expressly addressing the 

question whether CSG and CRDS are covered by the U.S.-

France Totalization Agreement.” J.A. 94.

C 

The central problem in this case is that the tax court’s 

resort to American dictionary definitions pretermitted the

critical inquiry into the Agreement’s text and the signatory 

countries’ shared understanding of the Agreement. The text 

strongly suggests that the question whether CSG and CRDS 

amend or supplement the designated French laws—which is 

fundamentally an inquiry into the content and meaning of the 

textually enumerated French laws—should have involved 

reference to French law. Instead of heeding this instruction, 

 4 At oral argument, the Eshels represented that those ministers are 

overseen by the French liaison agencies identified in the 

Administrative Arrangement—the Center for Social Security of 

Migrant Workers and the National Independent Social Security 

Fund for Miners—but nothing in the record substantiates that point.

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the tax court consulted outside sources that were not reliable

expressions of either textual construction or the signatories’ 

intent.

In short-circuiting those inquiries, the tax court invoked 

Tax Court Rule 146, which provides that a dispute over 

foreign law is a legal, not a factual, dispute. We have no 

disagreement with that point. See Fed. R. Civ. P. 44.1 (“In 

determining foreign law * * * [t]he court’s determination 

must be treated as a ruling on a question of law.”); see also 

McKesson Corp. v. Islamic Republic of Iran, 753 F.3d 239, 

242 (D.C. Cir. 2014) (This court “review[s] de novo * * * the 

district court’s interpretation of foreign law.”). 

Where the tax court went astray was in the sources of 

legal authority on which it relied. In resolving difficult 

questions of foreign law and in attempting to ascertain the 

views of a foreign government on an agreement to which it is 

a party, courts are empowered to “insist on a complete 

presentation by counsel.” Fed. R. Civ. P. 44.1 Advisory 

Committee Notes 1966. If the litigants’ submissions come up

short, the court may choose to “request a further showing by 

counsel, or engage in its own research, or direct that a hearing 

be held, with or without oral testimony, to resolve the issue.” 

Charles Alan Wright & Arthur R. Miller, Federal Practice & 

Procedure, § 2444 Proof of Foreign Law (3d ed. 1998).

5

 

Courts may also request amicus submissions from the United 

States providing its official position on the interpretation of an 

agreement with a foreign government, and can ask the State 

Department to provide the views of the foreign government. 

 5 Those principles for district court litigation apply with equal force 

to this type of tax court determination. Cf. Byers, 740 F.3d at 675 

(“We review decisions of the Tax Court ‘in the same manner and to 

the same extent as decisions of the district courts in civil actions 

tried without a jury.’”) (quoting 26 U.S.C. § 7482(a)(1)).

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When, as here, the trial court failed to inquire properly

into the meaning of an international agreement, remand is 

appropriate. See Tobar v. United States, 639 F.3d 1191, 1200

(9th Cir. 2011) (“[T]he district court apparently did not 

recognize that, in its discretion, it could inquire further into 

the content of Ecuadorian law.”); cf. Railway Labor 

Executives’ Ass’n v. United States Railroad Retirement Bd., 

749 F.2d 856, 864 (D.C. Cir. 1984) (remanding to the 

Railroad Retirement Board because the Board did not 

coherently articulate why Canadian immigration regulations 

were covered by the relevant United States statutes).

III

The Totalization Agreement is an international executive 

agreement that must be interpreted in light of its full text and 

the shared expectations of the contracting governments. 

Because the tax court committed legal error in its analysis of 

those questions, we reverse the judgment of the tax court and 

remand for further proceedings consistent with this opinion. 

So ordered.

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