U.S. Income Tax Treaties — U.S. Competent Authority Functions and Procedures (Portfolio 940)
This Portfolio addresses the administrative and competent authority procedures available under U.S. income tax treaties.
Tax Portfolio, U.S. Income Tax Treaties – U.S. Competent Authority Functions and Procedures, initially focuses on the Mutual Agreement Procedure that is available to U.S. taxpayers subject to double taxation by the United States and a nation with which the United States has an income tax treaty or taxation that is inconsistent with such a treaty.
This Portfolio discusses these provisions as set forth in the U.S. and OECD model treaties, and in the specific treaties entered into by the United States. The Portfolio describes how a taxpayer makes a request to the U.S. Competent Authority. It also discusses related statute of limitations issues, the small case procedure, and the interaction between the U.S. Competent Authority and IRS Appeals, and the mandatory arbitration provisions.
The Portfolio also addresses the administrative procedures available to the IRS and foreign tax authorities under the treaties. These procedures include consultation regarding the interpretation of treaty terms, exchange of information, and assistance in collection. The discussion of exchange of information reviews the IRS’s ability to use its summons power to enforce information requests made by a treaty partner, subject to certain limitations. In addition, the Portfolio reviews tax information exchange agreements entered into by the United States.
The Portfolio Worksheets are designed to assist in making a Competent Authority request, and include copies of the Competent Authority provisions of the U.S. Model Income Tax Treaty, IRS procedures for Competent Authority requests, and relevant portions of the Internal Revenue Manual. They also include a representative tax information exchange agreement and IRS guidelines for information exchanges.
Table of Contents
II. Role and Identification of the Competent Authority
III. Mutual Agreement Procedure (MAP) – Taxpayer Cases
IV. Consultation Between Competent Authorities Regarding Interpretation or Application of a Treaty
V. Exchange of Information
VI. Assistance in Collection
Special Advisor On Transfer Pricing
LB&I Division Internal Revenue Service
Senior Tax Manager