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Competent authority assistance

 

Generally, if you are a U.S. resident for purposes of a U.S. income tax treaty, you can request assistance from the U.S. competent authority if you think that the actions of the United States, a treaty country, or both, cause or will cause double taxation or taxation otherwise inconsistent with the treaty. For instructions, see Revenue Procedure 2015-40 PDF, 2015-35 I.R.B 236. Before requesting assistance, you should read any specific treaty articles, including the Mutual Agreement Procedure (MAP) article, that apply in your situation (the filers of Competent Authority claims involving Article XIII(8) of the United States’ treaty with Canada also should consult Revenue Procedure 98-21 PDF, 1998-9 I.R.B. 27). To learn about the certain modifications announced regarding electronic submissions, see Competent authority filing modifications and APMA APA consultations.

It is important that you make your request for competent authority consideration as soon as you have been denied treaty benefits or it is likely that the actions of the United States or the foreign country have resulted (or will result) in double taxation or taxation otherwise inconsistent with the treaty. Except where otherwise provided in an applicable treaty, taxpayers have discretion over the time for filing a request; however, delays in filing may preclude effective relief. In addition to a timely request for assistance, you should take the following measures to protect your right to the review of your case by the competent authorities:

  • File a timely protective claim for credit or refund of U.S. taxes in accordance with Section 11 of Revenue Procedure 2015-40 PDF.
  • Take appropriate action under the procedures of the foreign country to avoid the lapse or termination of your right of appeal or competent authority consideration under the foreign country's income tax law. Many countries’ MAP procedures are summarized at the OECD page MAP profiles.

The U.S. competent authority cannot consider requests involving countries with which the United States does not have an applicable tax treaty.

The office of the U.S. competent authority lies within the Large Business and International Division. Two primary offices within the U.S. competent authority conduct the MAP process. Those offices are the Advance Pricing and Mutual Agreement Program (“APMA”) and the Treaty Assistance and Interpretation Team (“TAIT”).

  • APMA has primary responsibility for cases arising under the business profits and associated enterprises articles of U.S. tax treaties. An example of a competent authority issue handled by APMA is the economic double tax that could be incurred as a result of an allocation made by the IRS under section 482 of the Code or by a foreign tax authority under an equivalent provision in its domestic law.
  • TAIT has primary responsibility for competent authority issues arising under all other articles of U.S. tax treaties. TAIT also has primary responsibility for competent authority issues arising under U.S. tax treaties with respect to estate and gift taxes.
  • APMA and TAIT each can consider competent authority issues arising under the permanent establishment articles of U.S. tax treaties, and both offices will coordinate and collaborate on such cases and on any other cases as appropriate.

Competent authority assistance related to the U.S. territories

The tax coordination agreements between the United States and the territory tax departments contain provisions allowing the competent authorities of the United States and the relevant U.S. territory to resolve, by mutual agreement, inconsistent tax treatment by the two jurisdictions. Your request for competent authority assistance must be in the form of a letter addressed to the United States Competent Authority and may be filed electronically; paper copies are not required. It must contain a statement that competent authority assistance is requested under the mutual agreement procedure with the territory. You (or a person having authority to sign your federal return) must sign and date the request. For more information, see Revenue Procedure 2006-23 or the competent authority arrangements for the U.S. territories.

Contact us

APMA and TAIT contact information can be found at the Advance Pricing and Mutual Agreement Program contact information page.

References/related topics

Note: This page contains one or more references to the Internal Revenue Code (IRC), Treasury Regulations, court cases, or other official tax guidance. References to these legal authorities are included for the convenience of those who would like to read the technical reference material. To access the applicable IRC sections, Treasury Regulations, or other official tax guidance, visit the Tax code, regulations, and official guidance page. To access any Tax Court case opinions issued on or after May 1, 1986, visit the opinions search page of the United States Tax Court.