## Facts

- Georges Simenon, a Belgian citizen and professional fiction writer, earned income from writing and licensing rights for royalties.
- He entered the United States in 1947, maintained a residence in Connecticut, and operated his writing and literary business there, including use of a home office.
- Simenon left the United States with his family on March 19, 1955, lived in France until June 20, 1956, and later established residence in Switzerland.
- For 1955, he filed a U.S. individual income tax return for the short period January 1 through March 19, 1955.
- During 1955, after departing the United States and while living in France, he received royalties from U.S. sources.
- He claimed the post-departure U.S.-source royalties were exempt from U.S. tax under Article 7 of the U.S.–France income tax convention, which conditioned exemption on the recipient being a French resident and not having a U.S. permanent establishment.
- Evidence showed he maintained and used a Connecticut home office as a business location, including identifying it as a business address and claiming substantial business-use allocations and depreciation for the home and business assets.

## Issues

1. Whether Simenon proved he was a “resident” of France for purposes of Article 7 of the U.S.–France income tax convention during the relevant period in 1955.
2. Whether Simenon had a “permanent establishment” in the United States during January 1 to March 19, 1955 under Article 7 and the implementing regulations.
3. Whether U.S.-source royalties received after March 19, 1955 were exempt from U.S. income tax under the treaty.

## Decision

- The Tax Court sustained the Commissioner’s deficiency determination.
- The court held Simenon failed to prove French treaty residency during the relevant period.
- The court found Simenon had a U.S. permanent establishment through March 19, 1955 based on his fixed home office used in carrying on his writing business.
- The court concluded the 1955 U.S.-source royalties received after March 19 were not exempt from U.S. income tax under the treaty and regulations.

## Legal Principles

- A taxpayer claiming an income tax treaty benefit bears the burden to prove eligibility, including satisfying the treaty’s residence requirements as informed by the other country’s tax-residence standards.
- A fixed place of business in the United States, including a home office used and treated as business property, can constitute a treaty “permanent establishment.”
- Treaty-based royalty exemptions conditioned on absence of a U.S. permanent establishment and foreign treaty residency do not apply when the taxpayer fails to establish foreign treaty residence and maintained a qualifying U.S. business location during the relevant period.

## Conclusion

The Tax Court held that Simenon could not exclude U.S.-source royalties under the U.S.–France treaty because he did not prove he was a French treaty resident and he maintained a U.S. permanent establishment through his Connecticut home office, making the royalties taxable by the United States.


Simenon v. Commissioner, 44 T.C. 820 (1965)