International Tax

U.S. Income Tax Treaties — U.S. Competent Authority Functions and Procedures (Portfolio 6880)

  • This Portfolio addresses the administrative and competent authority procedures available to both taxpayers and the tax agencies of treaty partners under U.S. income tax treaties.

Description

In this Portfolio, the author covers: (i) the Mutual Agreement Procedures available to U.S. taxpayers that face so-called “double taxation” by the United States and it treaty partners; (ii) EOIR (exchanges of information on request) provisions and procedures under U.S. tax treaties; and (iii) tax-collection assistance by the U.S. and its treaty partners. In doing so, the Portfolio analyzes U.S., OECD, and U.N. model treaties and agreements, and where relevant, other areas of law, policy, practice, guidance and procedure.

A major portion of the Portfolio addresses how a U.S. taxpayer can request assistance from the USCA (U.S. Competent Authority) under various IRS administrative procedures, primarily Rev. Proc. 2015-40 (the CA Rev. Proc.), plus its companion, Rev. Proc. 2015-41 (the APA Rev. Proc.), and other applicable revenue procedures. In doing so, this Portfolio also analyzes and discusses a wide range of matters such as collateral adjustments, interrelated issues, statute of limitations and notifications, repayments, taxpayer-initiated positions, the interaction between the USCA and other administrative and judicial proceedings (including IRS Appeals), mandatory arbitration provisions, and other relevant procedural and substantive matters.

Also under U.S. treaties, numerous practices and procedures exist by which to guide and assist the IRS and its treaty partners in a wide range of administrative and procedural matters. These procedures include, for example, consulting on interpreting treaty terms, exchanging information on tax-law changes, EOIR for specific taxpayer matters, and assisting in enforcing and collecting taxes. The EOIR discussion also reviews the IRS’s ability to use certain domestic procedures (e.g., summons power and other maters) in order to enforce information requests, including requests from U.S. treaty partners. Further, the Portfolio covers other agreements that the United States, under treaty authority, executes with other tax jurisdictions, such as TIEAs (tax information exchange agreements), CAAs (Competent Authority Agreements), mutual assistance treaties, and other cooperation and assistance arrangements.

Wherever possible, this Portfolio provides internet (web page) citations to relevant documents and information. In past editions of this Portfolio, reproductions of relevant guidance, precedent, and information appeared in the Worksheets. But, by and large, all source documents in this Portfolio generally are available on the internet. Moreover, many tax authorities and international bodies — in particular, the OECD (Organization for Economic Cooperation and Assistance) and the U.N. (United Nations) — and even the IRS and the U.S. State and Justice Departments — maintain comprehensive web sites with hyperlinks to key documents and information. Thus, this Portfolio should be read as actively encouraging the use of the internet to supplement the discussions, information, and analyses herein.

The citation for this Portfolio is Bowen, 6880-1st T.M., U.S. Income Tax Treaties — U.S. Competent Authority Functions and Procedures. Discussion of the CA procedures of some U.S. treaty partners appears in 6885 T.M., Income Tax Treaties: Competent Authority Functions and Procedures of Selected Countries (A–C)6887 T.M., Income Tax Treaties: Competent Authority Functions and Procedures of Selected Countries (D–G)6890 T.M., Income Tax Treaties: Competent Authority Functions and Procedures of Selected Countries (H–K)6892 T.M., Income Tax Treaties: Competent Authority Functions and Procedures of Selected Countries (L–N), and 6895 T.M., Income Tax Treaties: Competent Authority Functions and Procedures of Selected Countries (O–Z).

Table of Contents

I. Introduction
II. The Competent Authority
III. MAP
IV. U.S. Revenue Procedures
V. CA Consultations to Interpret or Apply a Treaty
VI. Information Exchanges
VII. Collection Assistance

David N. Bowen
David N. Bowen
Professor of Practice
University of San Diego School of Law
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