SEC. 12. ACTION BY U.S.

COMPETENT AUTHORITY

.01 Notification of Taxpayer . Upon receiving a request for assistance pursuant to this revenue procedure, the U.S. competent authority will notify the taxpayer whether the facts provide a basis for assistance.

.02 Denial of Assistance . The U.S. competent authority generally will not accept a request for competent authority assistance or will cease providing assistance to the taxpayer if:

payer should file a protective claim for refund or credit of the taxes attributable to the potential competent authority issue to ensure that assistance will not be barred. Situations for which a protective filing may be appropriate include: (i) the treaty country is considering but has not yet proposed an adjustment; (ii) the treaty country has proposed an adjustment but the related taxpayer in the treaty country decides to pursue administrative or judicial remedies in the foreign country; or (iii) the terms of the applicable treaty require notification to be made to the competent authority within a certain time period. In considering whether to accept a taxpayer’s request for competent authority assistance, the U.S. competent authority will consider whether the taxpayer has filed a protective claim in accordance with this subsection.

(b) Filing of Protective Claim . A protective claim is made by filing an appropriate amended federal tax return, as provided in section 9.02 of this revenue procedure. The amended tax return is filed with the U.S. competent authority at the address indicated in section 4.02 of this revenue procedure and before the expiration of any applicable time limitations. The amended return shall indicate that the taxpayer is filing a protective claim and shall set forth, to the extent available, the information required under section 4.05 (a) through (j) or under section 5.03 (a) through (e) of this revenue procedure. An amended tax return filed in this manner will be considered a properly filed amended tax return, notwithstanding any other instruction on the form or in regulations concerning the place for filing.

(c) Notification Requirement . After filing a protective claim, the taxpayer periodically must notify the U.S. competent authority whether the taxpayer still is considering filing for competent authority assistance. The notification must be filed every six months until the formal request for competent authority assistance is filed. The U.S. competent authority may deny competent authority assistance if the taxpayer fails to file this semi-annual notification.

(d) No Consultation between Compe- tent Authorities until Formal Request is Filed . The U.S. competent authority generally will not undertake any consultation with the treaty country’s competent authority with respect to a

protective claim. The U.S. competent authority shall place the protective claim in suspense until either a formal request for competent authority assistance is filed or the taxpayer notifies the U.S. competent authority that competent authority consideration is no longer needed.

.04 Effect of an Amended Tax Return . An amended tax return filed under either sections 9.02 and 9.03 of this revenue procedure only allows a credit or a refund to the extent agreed to by the U.S. and foreign competent authorities or to the extent unilaterally allowed by the U.S. competent authority. This revenue procedure does not grant a taxpayer the right to invoke § 482 of the Code in its favor or compel the Service to allocate income or deductions or grant a tax credit or refund.

.05 Treaty Provisions Waiving Pro- cedural Barriers . In those cases where the mutual agreement procedure provision of a tax treaty waives or removes procedural barriers to the credit or refund of tax, taxpayers may be allowed a credit or refund of U.S. or foreign tax even though the otherwise applicable period of limitations has expired, prior closing agreements have been entered into, or other actions have been taken or omitted that ordinarily would foreclose relief in the form of a credit or refund of tax. However, because of differences in interpreting these waiver provisions or other difficulties that may arise in their application, taxpayers nonetheless should take appropriate protective measures as described under this revenue procedure or under applicable foreign procedures. In considering whether to accept a taxpayer’s request for competent authority assistance, the U.S. competent authority will consider whether the taxpayer took protective measures in accordance with this section.