PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 20-1648

VITALY NIKOLAEVICH BATURIN,

 Petitioner – Appellee,

 v.

COMMISSIONER OF INTERNAL REVENUE,

 Respondent – Appellant.

------------------------------

AARON Z. ROPER,

 Court-Assigned Amicus Counsel.

Appeal from the United States Tax Court. (Tax Ct. No. 014796-14)

Argued: March 8, 2022 Decided: April 6, 2022

Before MOTZ and DIAZ, Circuit Judges, and KEENAN, Senior Circuit Judge.

Reversed and remanded by published opinion. Judge Motz wrote the opinion, in which 

Judge Diaz and Senior Judge Keenan joined.

ARGUED: Ivan C. Dale, UNITED STATES DEPARTMENT OF JUSTICE, Washington, 

D.C., for Appellant. Aaron Z. Roper, WILLIAMS & CONNOLLY LLP, Washington, 

D.C., for Court-Assigned Amicus Counsel. Vitaly Nikolaevich Baturin, Appellee Pro Se. 

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ON BRIEF: David A. Hubbert, Acting Assistant Attorney General, Joan I. Oppenheimer, 

Tax Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for 

Appellant.

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DIANA GRIBBON MOTZ, Circuit Judge:

The Tax Court held that payments to a Russian scientist working in the United States 

were exempt from taxation under the United States-Russia Tax Treaty.1

 In doing so, the 

Tax Court misunderstood the basis of the Treaty’s distinction between a tax-exempt “grant, 

allowance, or other similar payments” and taxable “salaries, wages, and other similar 

remuneration.” For this reason, we reverse and remand for further proceedings consistent 

with this opinion. 

I.

In 2010 and 2011 (the two years at issue here), Dr. Vitaly Baturin, a Russian national 

and physicist, worked at Jefferson Lab, a Department of Energy facility in Newport News, 

Virginia. Jefferson Lab operates a particle accelerator, which smashes particles together 

to help researchers learn about the structure of the universe. Dr. Baturin’s work involved

a detector that would better enable researchers to see what happens at the sub-atomic level 

inside the accelerator. 

During this period, Dr. Baturin held a J-1 exchange visitor visa as a researcher 

sponsored by Jefferson Lab. He received W-2s from Jefferson Lab that reflected income 

of $76,729 and $79,061, in 2010 and 2011, respectively, for “wages, tips, [or] other 

comp[ensation].” He filed 1040-NR (nonresident) forms with the IRS, which claimed an

1 The Treaty’s full title is the “Convention Between the United States of America 

and the Russian Federation for the Avoidance of Double Taxation and the Prevention off 

Fiscal Evasion with Respect to Taxes on Income and Capital.” See June 17, 1992, T.I.A.S. 

No. 93-1216; S. Treaty Doc. No. 102-39. The United States signed the Treaty in 1992 and 

the Senate ratified it in 1993, shortly after the dissolution of the Soviet Union.

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exemption as to the entire amount he earned from Jefferson Lab each year pursuant to the 

United States-Russia Tax Treaty. In 2014, the IRS issued Dr. Baturin a Notice of 

Deficiency, stating that he owed a total of $22,229 in income taxes on his payments from 

Jefferson Lab for 2010 and 2011. After some administrative discussions, Dr. Baturin pro 

se petitioned the Tax Court, arguing that the Treaty exempted his income from taxation. 

The Tax Court agreed with Dr. Baturin, holding that the Treaty shielded from 

taxation his entire income in 2010 and 2011 as “a grant, allowance, or similar payments.” 

The Tax Court rejected the argument of the Commissioner of Internal Revenue that wages 

are categorically ineligible for exemption from taxation under the Treaty, reasoning that 

“wages may be eligible for exemption so long as they are similar to a grant or allowance.” 

Tax Ct. Op. at 19.

The Commissioner then noted this appeal, over which we have jurisdiction pursuant 

to I.R.C. § 7482(a)(1).

2

 “Decisions of the tax court are subject on appeal to the same 

standard we apply to civil bench trials on appeal from the district courts. Under this 

standard, we review factual findings for clear error, legal questions de novo, and mixed 

questions of law and fact de novo.” QinetiQ US Holdings, Inc. v. Comm’r, 845 F.3d 555, 

562 (4th Cir. 2017) (internal citations omitted). “Interpretation of an international treaty is 

an issue of law subject to de novo review.” United States v. Al-Hamdi, 356 F.3d 564, 569 

(4th Cir. 2004). And “[t]he general rule . . . is that a taxpayer claiming immunity from a 

2 We appointed amicus counsel to argue in support of the Tax Court’s decision. 

Amicus provided an excellent brief and argument, which we very much appreciate. 

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tax has the burden of establishing his exemption.” Norton Co. v. Dep’t of Rev., 340 U.S. 

534, 537 (1951).

II. 

Ordinarily, any income that a nonresident alien receives for personal services in the 

United States is taxable in this country. See I.R.C. §§ 864(b)(1); 872(a). However, “[t]he 

provisions of [the tax code] shall be applied to any taxpayer with due regard to any treaty 

obligation of the United States which applies to such taxpayer.” Id. § 894(a)(1). Thus, to 

resolve the case at hand, we must consider the United States-Russia Tax Treaty. 

“The interpretation of a treaty, like the interpretation of a statute, begins with its 

text.” Medellín v. Texas, 552 U.S. 491, 506 (2008). Two articles of that Treaty are 

particularly relevant here. On the one hand, Article 14 of the Treaty provides: 

Subject to the provisions of Articles 15 (Directors’ Fees), 16 (Government 

Service), and 17 (Pensions), salaries, wages, and other similar remuneration 

derived by a resident of a Contracting State [i.e., the United States or Russia] 

in respect of an employment shall be taxable only in that State unless the 

employment is exercised in the other Contracting State. If the employment 

is so exercised, such remuneration as is derived therefrom may be taxed in 

that other State. 

Art. 14(1) (emphasis added). On the other hand, Article 18 provides: 

An individual who is a resident of a Contracting State at the beginning of his 

visit to the other Contracting State and who is temporarily present in that 

other State for the primary purpose of: . . . (c) studying or doing research as 

a recipient of a grant, allowance, or other similar payments from a . . . 

scientific . . . organization, shall be exempt from tax by that other State . . . 

with respect to the grant, allowance, or other similar payments. 

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Art. 18(1).3

 

The text of the Treaty does not define what differentiates “salaries, wages, and other 

similar remuneration” in Article 14 from a “grant, allowance, or other similar payments”

in Article 18. But the text does tell us that these categories are mutually exclusive, given 

the simple fact that one is taxable and the other is not. 

The legislative history of the Treaty’s ratification reinforces our conclusion that 

salaries and grants are exclusive categories. See United States v. Stuart, 489 U.S. 353, 

366–67 (1989) (using legislative history of Senate ratification to establish a treaty’s 

meaning). Before the Senate ratified the Treaty, the Assistant Secretary for Tax Policy 

testified to the Senate Foreign Relations Committee that although “[s]pecial tax relief 

applies to grants . . . received by . . . researchers . . . the new treaty does not preserve the 

[predecessor Convention With the Union of Soviet Socialist Republics on Matters of 

Taxation, U.S.-U.S.S.R., June 20, 1973, 27 U.S.T. 3 (hereinafter “United States-Soviet 

Union Tax Treaty”)] two year exemption of personal service income earned by . . . 

researchers . . . . It is not the policy of . . . either of the two countries to provide special 

exemptions of the compensation earned by . . . researchers.” See Tax Conventions With: 

The Russian Federation, Treaty Doc. 102-39; United Mexican States, Treaty Doc. 103-7; 

the Czech Republic, Treaty Doc. 103-17; the Slovak Republic, Treaty Doc. 103-18; and 

the Netherlands, Treaty Doc. 103-6. Protocols Amending Tax Conventions With: Israel, 

3 Articles 18(2) and 18(3) set out a five-year time limit and a provision allowing for 

taxation of income from research “undertaken not in the public interest but primarily for 

the private benefit of a specific person or persons,” respectively. Neither of these 

provisions is at issue in this case. 

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Treaty Doc. 103-16; the Netherlands, Treaty Doc. 103-19; and Barbados, Treaty Doc. 

102-41, Before the Sen. Foreign Relations Comm., 103rd Cong., S. Hrg. 103-335, at 26 

(1993) (statement of Leslie B. Samuels, Assistant Sec’y for Tax Pol’y, Treasury Dep’t)

[hereinafter “Senate Hearing”].

4

 In short, the United States and Russia intentionally 

drafted the Tax Treaty to narrow a prior exemption that had covered a much broader swathe 

of researchers’ compensation. 

Thus, given the Treaty’s text and history, we must reject the Tax Court’s holding 

that under the Treaty, “wages may be eligible for exemption so long as they are similar to 

a grant or allowance.” Tax Ct. Op. at 19. The argument of amicus in support of this theory 

that “[g]rants are routinely paid out as salaries” misses the mark for the same reason. 

Amicus Br. at 28. Grants may be dispersed periodically, but for purposes of the Treaty, a 

grant paid as a salary is an oxymoron. The two are dichotomous and mutually exclusive. 

Either payments are Article 14 wages, salaries, or similar remuneration (and taxable); or 

they are Article 18 grants, allowances, or other similar payments (and thus tax-exempt). 

They cannot be both.

4 Article VI(1)(c)(1) of the United States-Soviet Union Tax Treaty provides: “An 

individual who is a resident of one of the Contracting States and who is temporarily present 

in the other Contracting State at the invitation of a . . . scientific research institution in that 

other Contracting State for the primary purpose of . . . engaging in research . . . shall not 

be subject to tax in that other Contracting State on his income from . . . research.” As 

should be immediately apparent from the text, this exemption is far broader than the current 

United States-Russia Tax Treaty’s exemption for grants, allowances, and similar payments. 

The United States-Soviet Union Tax Treaty still applies with respect to former Soviet states 

that have not signed successor tax treaties with the United States, such as Belarus.

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The central question in this case is thus whether Jefferson Lab’s payments to Dr. 

Baturin are taxable as “salar[y], wages, [or] other similar remuneration” under Article 14, 

or tax-exempt as “grant, allowance, or other similar payments” under Article 18. 

III. 

A.

Beyond establishing mutual exclusivity, however, the United States-Russia Tax 

Treaty is not very helpful in defining what distinguishes salaries and wages from grants 

and allowances. But Article 3(2) of the Treaty gives some guidance. It provides: 

As regards the application of the Convention by a Contracting State, any term 

not defined therein shall, unless the context otherwise requires or the 

competent authorities agree to a common meaning pursuant to [an 

inapplicable section], have the meaning which it has under the laws of that 

State concerning the taxes to which this Convention applies.

Art. 3(2) (emphasis added); see also Rebecca M. Kysar, Interpreting Tax Treaties, 101 

Iowa L. Rev. 1387, 1412 (2016) (“Tax treaties . . . invoke domestic law concepts by leaving 

terms vague . . . . The characterization of income is one such area, the outcome of which 

has a profound effect on tax liability.”). 

We turn, then, to the law of the United States. As the closest domestic tax law 

analogue, the Commissioner points us to I.R.C. § 117, which exempts from taxation as a 

“‘qualified scholarship’ . . . any amount received by an individual as a scholarship or

fellowship grant.” I.R.C. § 117(b) (emphasis added). The implementing regulations 

provide: “[a] fellowship grant generally means an amount paid or allowed to, or for the 

benefit of, an individual to aid him in the pursuit of study or research.” Treas. Reg. § 1.117-

3(c). 

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The regulations further provide: 

The following payments or allowances shall not be considered to be amounts 

received as a scholarship or a fellowship grant for the purpose of section 117: 

. . . (c) Amounts paid as compensation for services or primarily for the benefit 

of the grantor. 

(1) Except as provided in [two inapplicable sections], any amount paid 

or allowed to, or on behalf of, an individual to enable him to pursue 

studies or research, if such amount represents either compensation for 

past, present, or future employment services or represents payment for

services which are subject to the direction or supervision of the 

grantor. 

(2) Any amount paid or allowed to, or on behalf of, an individual to 

enable him to pursue studies or research primarily for the benefit of 

the grantor.

Treas. Reg. § 1.117-4 (emphasis added). Such payments are “a scholarship or fellowship 

grant . . . if the primary purpose of the . . . research is to further the education and training 

of the recipient . . . [and the payments do] not represent compensation or payment for . . . 

services.” Id.5

 

The Supreme Court interpreted and upheld these regulations in Bingler v. Johnson, 

394 U.S. 741 (1969). Bingler involved Westinghouse Electric engineers who, through a 

company program, took leaves of absence to receive postgraduate education at local 

universities. Id. at 742–44. Westinghouse paid these engineers “tuition remuneration” and 

5 The Tax Court declined to consider I.R.C. § 117, reasoning that if an Article 18 

“grant” meant the same thing as a § 117(a) “fellowship grant,” the Treaty’s “grant” 

exemption would be superfluous. Tax Ct. Op. at 12. But § 117’s exemption only covers 

“scholarships and fellowship grants” for “qualified tuition and related expenses” at certain 

educational institutions. I.R.C. § 117(b). Article 18 of the Treaty, in contrast, has no such 

expense-specific restrictions, and a grant need only be “from a . . . scientific . . . 

organization.” Thus, the two provisions are not coterminous. Rather, I.R.C. § 117, a 

provision of domestic law that Article 3(2) of the Treaty tells us to consider, properly 

informs our understanding of Article 18. 

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“stipend[s]” during their studies, but required the engineers to agree “to return to the 

employ of Westinghouse for a period of at least two years following completion of [their]

leave[s].” Id. at 742–44. The Supreme Court held that these payments were taxable: “the 

definitions supplied by the Regulation clearly are prima facie proper, comporting as they 

do with the ordinary understanding of ‘scholarships’ and ‘fellowships’ as relatively 

disinterested, ‘no-strings’ educational grants, with no requirement of any substantial quid 

pro quo from the recipients.” Id. at 751. Because “Westinghouse unquestionably extracted 

a quid pro quo,” id. at 757, the Court held these payments to be taxable compensation, 

rather than tax-exempt grants. 

In short, Bingler draws a line between work done as part of a “substantial quid pro 

quo,” which is taxable as compensation, and “relatively disinterested, ‘no-strings’ 

educational grants,” which are tax-exempt. Id. at 751. This distinction parallels the United 

States-Russia Tax Treaty’s distinction between taxable “salaries, wages, and other similar 

remuneration” and a tax-exempt “grant, allowance, or other similar payments.”6 Because 

the Treaty directs us to U.S. law, and because of the parallels between the Bingler 

6 The Commissioner relies on several revenue rulings that interpret the phrase

“grant, allowance or award” in the then-operative U.S.-Japan Income Tax Convention and 

similar tax treaties. Comm’r Br. at 30–32 (first citing Rev. Rul. 80-36, 1980-1 C.B. 366, 

1980 WL 129605, and then citing Rev. Rul. 87-40, 1987-1 C.B. 372, 1987 WL 383678). 

These revenue rulings rely in part on I.R.C. § 117 and its implementing regulations. We 

usually do defer to the Executive Branch’s interpretation of a treaty. See Abbott v. Abbott, 

560 U.S. 1, 15 (2010). But because these revenue rulings interpret a different (albeit 

similar) treaty, and because “revenue rulings are entitled to considerably less deference 

than an agency’s properly promulgated regulations,” Dominion Res., Inc. v. United States, 

219 F.3d 359, 366 (4th Cir. 2000), we do not here rely on them except to illustrate the 

viability of drawing on I.R.C. § 117 in the tax-treaty context. 

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framework and the Treaty’s structure, we look to I.R.C. § 117 and its implementing 

regulations to inform whether payments are tax-exempt “grant[s], allowance[s], or other 

similar payments” under Article 18 of the United States-Russia Tax Treaty.

B.

Amicus makes two arguments against relying on Bingler’s quid pro quo framework 

here. First, he contends that Bingler and the relevant regulations involved a prior version 

of the statute, which Congress has since altered. Amicus Br. at 34–35. It is true that 

Congress revised the statute in 1986. See 100 Stat. 2085, 2112 (1986). But that revision 

did not eliminate the concept of fellowship grants. Rather, it deleted a separate exemption 

for “research expenses,” but retained the exemption for “fellowship grants” as a kind of

“qualified scholarship.” Id. Courts have continued to apply Bingler’s quid pro quo

framework to the revised tax code. See, e.g., United States v. Mem. Sloan-Kettering Cancer 

Ctr., 563 F.3d 19, 30–32 (2d Cir. 2009); United States v. Det. Med. Ctr., 557 F.3d 412, 416 

(6th Cir. 2009). Thus, Bingler’s distinction between “‘no strings’ educational grants” and 

payments for compensation made as part of a “substantial quid pro quo” is still very much 

part of United States tax law. 394 U.S. at 751.

Next, amicus contends that the Commissioner’s interpretation of Article 18 

“grants,” which mirrors Treas. Reg. § 1-117.4(c)’s exclusion of “payment for services 

which are subject to the direction or supervision of the grantor,” is “staggeringly broad,” 

and if the exemption in Article 18 of the Treaty were interpreted as the Commissioner 

contends, it would cover only “a tiny sliver of grantees.” Amicus Br. at 35. This is so, 

amicus asserts, because “[e]ssentially all grants are ‘subject to the direction or supervision 

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of the grantor.’” Id. But this argument ignores the regulations. They provide that 

“[n]either the fact that the recipient is required to furnish reports of his progress to the 

grantor, nor the fact that the results of his studies or research may be of some incidental 

benefits to the grantor shall, of itself, be considered to destroy the essential character of 

such amount as a scholarship or fellowship grant.” Treas. Reg. § 1-117.4(c). 

IV. 

Two other arguments bear mentioning here. First, amicus and the Tax Court point 

to the United States-Russia Tax Treaty’s preamble, which proclaims its purpose to be the 

promotion of “scientific . . . cooperation.” Tax Ct. Op. at 12; Amicus Br. at 21–22. Amicus 

argues that exempting Dr. Baturin’s income from taxation advances this salutary purpose, 

such that we must affirm the Tax Court’s decision. We disagree.

Although it is true that “[t]reaties generally are liberally construed,” Tabion v. Mufti, 

73 F.3d 535, 537 (4th Cir. 1996), “[i]t is a mistake to allow general language of a preamble 

to create an ambiguity in specific . . . treaty text where none exists.” Jogi v. Voges, 480 

F.3d 822, 834 (7th Cir. 2007). And “[w]e may not read international treaties so broadly as 

to create unintended benefits or to reach parties not within the scope of a treaty’s language.” 

Int’l Bank for Reconstr. & Dev. v. Dist. of Columbia, 171 F.3d 687, 691 (D.C. Cir. 1999) 

(citing Maximov v. United States, 373 U.S. 49, 55–56 (1963)). This seems especially so 

when, as here, the cited language does not appear in operative text.

Moreover, courts construe treaties liberally to effectuate the intent of the parties, not 

simply in favor of the party invoking the treaty. See Nielsen v. Johnson, 279 U.S. 47, 51 

(1929) (“Treaties are to be liberally construed, so as to effect the apparent intention of the 

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parties.”). Here, the intent of the parties to the Treaty was to balance the promotion of 

scientific cooperation with each country’s sovereign right to tax productive activities 

within its borders. Indeed, as the legislative history makes clear, the United States-Russia

Tax Treaty was deliberately written to narrow the United States-Soviet Union Tax Treaty’s 

broad “exemption of personal service income earned by . . . researchers.” Senate Hearing 

at 26. Adopting the arguments of amicus and the Tax Court would effectively rewrite that 

history and ignore the actual intent of the Treaty.

Second, Dr. Baturin argues that his immigration status renders him per se eligible 

for Article 18’s exemption. He points to his DS-2019, a form necessary to obtain a J-1 

exchange visa. An applicant’s sponsor (here, Jefferson Lab) fills out the DS-2019 and the 

applicant signs it to verify the document’s accuracy. One box on the form, Box 5, asks for 

the following information: “During the period covered by this form, the total estimated 

financial support (in U.S. $) is to be provided to the exchange visitor by:” Jefferson Lab 

filled in Box 5 as follows:

5. During the period covered by this form, the total estimated financial 

support (in U.S. $) is to be provided to the exchange visitor by:

Current Program Sponsor funds: $75,000.00

Total: $75,000.00

Dr. Baturin argues that this “money, allotted in the DS[-]2019 certificate, [was] used 

to fund the specified . . . research program.” Baturin Br. at 11 (emphasis deleted). Thus, 

he contends, “the funds specified in block 5 of the Taxpayer’s DS[-]2019 certificate satisfy 

the requirements of the Treaty Art. 18 as [an] allowance (or grant), and, therefore, the 

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Taxpayer is exempt from taxes.” Id. at 12 (emphasis deleted). Dr. Baturin similarly 

argued7 to the Tax Court:

Baturin: [A]fter the funds are secured, the sponsor selects an exchange 

visitor, only after [the funds are] secured, put into some box 

and locked.

The Court: How is the amount established?

Baturin: How the amount is established? It’s specified in the DS[-]2019 

Form per year.

In short, Dr. Baturin argues that Box 5 represents a pot of money set aside specifically for 

him — i.e., a grant. 

Even assuming that Jefferson Lab set aside this money specifically for Dr. Baturin, 

that does not make it a grant. As amicus necessarily conceded at argument, an employer 

might well earmark certain funds for payroll. Oral Argument at 33:16–33:30, Baturin v. 

Comm’r, (4th Cir. Mar. 8, 2022) (No. 20-1648), 

https://www.ca4.uscourts.gov/OAarchive/mp3/20-1648-20220308.mp3. Amicus 

similarly had to acknowledge that under this theory, if those employees were researchers, 

the employer’s mere setting aside of payroll funds could constitute a tax-exempt “grant.” 

Id. But it is not the internal accounting method of a grantor/employer that matters here. It 

7 Amicus contends that Dr. Baturin so testified, rather than argued, and that the Tax 

Court’s conclusions as to the meaning of Box 5 thus constitute factual findings that we 

review for clear error. Amicus Br. at 38–42. But the transcript is quite clear that Dr. 

Baturin developed his understanding of the program and Box 5 not from any statement or 

assurance made to him, but from his reading of the relevant J-1 visa program regulations. 

So Dr. Baturin’s “testimony” is really legal argument, and the Tax Court’s conclusions as 

to the meaning of Box 5 are thus legal, rather than factual. In any case, as discussed herein, 

whether this money was specifically set aside for Dr. Baturin is largely irrelevant to 

whether those funds are a “grant.” 

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is instead whether there is a “requirement of any substantial quid pro quo” that 

distinguishes compensation for employment from a “relatively disinterested, ‘no-string’” 

grant. Bingler, 394 U.S. at 751. 

V. 

The Tax Court, of course, did not have the benefit of our decision when it heard 

testimony and decided this case. As a result, the record is not entirely clear as to the 

specifics of Dr. Baturin’s relationship with Jefferson Lab. We are not a fact-finding body, 

and the question of how best to characterize the payments at issue here is a largely factdependent question. 

Thus, on remand, the Tax Court should determine what Jefferson Lab gained from

having Dr. Baturin on staff. In doing so, the court should consider, for example, the 

following questions: If not Dr. Baturin, would Jefferson Lab have brought someone else 

to work on upgrading the detector? Did the projects Dr. Baturin worked on pre- and/or 

post-date his tenure at Jefferson Lab, or were they dependent on his presence? Did 

Jefferson Lab retain the rights to the product of Dr. Baturin’s research? How much 

discretion did Dr. Baturin have to direct the day-to-day performance of his work? Cf. Rev. 

Rul. 80-36, 1980 WL 129605, *1 (outlining relevant considerations to determine whether 

researchers’ income was tax-exempt under U.S.-Japan Income Tax Convention). In short, 

was there a “substantial quid pro quo” here? Bingler, 394 U.S. at 751. We trust the Tax 

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Court to answer these questions, and we think it appropriate to allow that court the 

opportunity to apply the framework we have described here in the first instance. 

REVERSED AND REMANDED FOR FURTHER 

PROCEEDINGS CONSISTENT WITH THIS OPINION

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