Faye was a world-renowned rock star from ABC-Country. A record company located in the USA, named Platinum-USA Records, contracted with Faye to produce records. Platinum-USA Records retained all intellectual property rights in the recordings. The contract granted Faye payments or royalties based upon future sales of recordings. Faye paid taxes on the payments in ABC-Country as royalties. A treaty between the USA and ABC-Country exempts royalties from tax in the USA. However, the treaty, did not define royalties or compensation for personal services. The IRS has told Faye, that her contract with Platinum-USA generates personal service income in the United States. Prepare a tax research memo advising Faye on the appropriate tax treatment, given her situation, and with her type of income. The Memo Should have the following sections titles: RELEVANT FACTS TAX ISSUE CONCLUSION SUPPORT ACTION TO BE TAKEN