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INTERNATIONAL GIVING BY INDIVIDUALS DURING LIFETIMEAdoption of these guidelines, as subsequently cited with approval by the IRS, 32can strengthen the case for the deductibility of contributions as charitable gifts.§ 18.5 SUMMARYAlthough the requirements of the U.S. tax law with respect to tax exemption as acharitable organization 33 and deductibility of charitable gifts 34 are parallel inmany respects, they are not identical. In some situations, contributions to or forthe use of a foreign organization are not deductible for income tax purposesbecause the domestic organization requirement 35 is not met. As for a domesticorganization that serves as a conduit for a foreign charitable organization, contributionsto the domestic organization are no more deductible as charitable giftsthan if they had been made directly to the foreign organization.In most other situations, these two provisions operate in parallel. If a domesticorganization transmits its funds to a foreign private organization but retainsthe required control and discretion over the funds—as detailed in examples 4and 5 of the IRS ruling discussed earlier 36 —contributions to the domestic organizationwill be deductible as charitable gifts. Conversely, a domestic organizationotherwise qualified as a charitable entity forfeits its qualification for tax-exemptand charitable donee status if it regularly transmits its funds to any organizationthat is not described in the U.S. rules for charitable organizations, because it thencannot demonstrate that it is operated exclusively for charitable purposes. Further,if the domestic organization fails to exercise discretion and control over theuse of funds transmitted to a foreign organization, to assure their use exclusivelyfor purposes that qualify as charitable under U.S. law, those contributions to itwill not be deductible.§ 18.6 INCOME TAX TREATIESIn connection with the international law aspects of the federal income tax,income tax treaties often must be considered, in addition to the principles of U.S.tax law as set forth in the Internal Revenue Code, regulations, rulings, and courtopinions. The United States presently is a party to more than 50 income tax treaties,although most of them do not contain provisions relevant to the deductibilityof cross-border contributions. Indeed, the U.S. prototype income tax treaty issilent on the subject. 37The income tax treaty between the United States and Canada 38 provides thatcontributions by a citizen or resident of the United States to an organization thatis resident in Canada and is generally exempt from Canadian tax are treated as32 Gen. Couns. Mem. 37444.33 That is, an IRC § 501(c)(3) organization.34 IRC § 170(c)(2).35 IRC § 170(c)(2)(A).36 Rev. Rul. 63-252, 1963-2 C.B. 101.37 U.S. Model Income Tax Convention of September 20, 1996. This model convention recognizes tax-exemptorganizations as entities in the sense that they are entitled to the general benefits of the convention.38 Convention Between the U.S. and Canada With Respect to Taxes on Income and on Capital, effective as ofJanuary 1, 1985. 556