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Limitation on Benefits Provisions: Analyzing Article 22, U.S. Model Treaty and LOB in Specific U.S. Tax Treaties

Meeting Residency Requirements, Withstanding IRS Challenges

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Monday, February 5, 2024

Recorded event now available

or call 1-800-926-7926

This webinar will take a comprehensive look at the limitation on benefits (LOB) provisions in U.S. income tax treaties. Our panel of prominent international tax attorneys will review the purpose of LOB clauses in these treaties and discuss meeting residency requirements using the U.S. Model Treaty as a guide. They will also analyze these provisions in U.S. income tax treaties with specific countries.


Article 22 of the 2016 U.S. Model Income Tax Convention contains the LOB provisions. These provisions were designed to prevent treaty shopping--utilizing low withholding, exemption from withholding, or low tax rates provided by treaties in third countries. Article 22 contains four tests often found in U.S. income tax treaties that taxpayers can use to meet residency requirements, without consideration given to underlying motives, and qualify for treaty benefits.

Aware of the substantive tax benefits of U.S. income tax treaties, the IRS' Large Business and International Division has an active campaign targeting nonresident alien tax treaty exemptions. International taxpayers can unlock valuable benefits in U.S. income tax treaties by meeting the criteria of the LOB provisions. Tax advisers and multinational taxpayers must understand how to analyze and interpret these paragraphs in treaties since not meeting the requirements can negate otherwise available benefits.

Listen as our panel of foreign tax experts examines the limitation on benefits provisions in U.S. income tax treaties for international taxpayers and their advisers.



  1. LOB provisions in treaties: an introduction
  2. LOB definition and purpose
  3. U.S. Model Treaty, Article 22
  4. Typical compliance tests
  5. LOB examples from specific countries
  6. Withstanding IRS challenges


The panel will cover these and other critical issues:

  • Utilizing the LOB provisions to obtain specific treaty benefits
  • Applying LOB criteria in specific countries based on the relative U.S. income tax treaty
  • The state of the current IRS initiative regarding nonresidents' eligibility for treaty benefits
  • Qualifying for residency under Paragraph 1 of the U.S. Model Income Tax Treaty


Kennedy-C. Edward
C. Edward (Ed) Kennedy, Jr., CPA, JD

Managing Director
C Edward Kennedy Jr

Mr. Kennedy has more than 42 years of experience dealing with a variety of international tax matters, specializing...  |  Read More

McCormick, Patrick
Patrick J. McCormick, J.D., LL.M.

Founder/Managing Partner
McCormick Tax

Mr. McCormick specializes in the areas of international taxation, tax compliance, and offshore reporting...  |  Read More

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