Sally Suarez is an associate in a law firm in Panama, of which she is a citizen and resident. She comes to New York to work on the acquisition of a Panamanian corporation by a US corporation, which is a client of her firm. She spends 30 consecutive days in New York working working on the deal and living in a fancy hotel. She receives compensation from the law firm of $10,000 for the time spent working in New York. The firm, which has no office in the United States, collects fees of $30,000 from the US corporation as a result of the work of Suarez in New York.

Required:

1. Assuming the the 2016 US Model Treaty is in force between Panama and the United States, are either Suarez or the firm subject to US income tax on the amounts they receive?

2. Would the US tax tax consequences be altered if the law firm had an office in New York and Suarez did most of her work on the deal in that office?