In response to a congressional request, GAO provided information on the types of withholding systems that U.S. tax treaty partners use when taxing passive income that their citizens earn.

GAO found that: (1) most U.S. citizens and foreigners who reside in countries without tax treaties were evading the withholding tax on certain U.S.-source income through false residency claims; and (2) the Department of the Treasury sent a letter to 42 U.S. treaty partners that described three types of withholding systems that would help them devise more effective methods of administering U.S. treaty obligations.