SEC. 2. SCOPE

.01 General . The U.S. competent authority assists taxpayers with respect to matters covered in the mutual agreement procedure provisions of tax treaties in the manner specified in those provisions. A tax treaty generally permits taxpayers to request competent authority assistance when they consider that actions of the United States, the treaty country, or both, result or will result in taxation that is contrary to the provisions of a treaty. For example, tax treaties generally permit taxpayers to request assistance in order to relieve economic double taxation arising from an allocation under § 482 of the Internal Revenue Code or an equivalent provision under the laws of a treaty country. Competent authority assistance may also be available with respect to issues specifically dealt with in other provisions of a treaty. For example, Article XIII(8) of the U.S.-Canada income tax treaty permits taxpayers to request the competent authority to defer the recognition of profit, gain or income with respect to property alienated in the course of a corporate organization, reorganization or similar transaction. In addition, many tax treaties contain provisions concerning fiscal residence or concerning whether a taxpayer is entitled to the benefits of a treaty under specific limitation on benefits provisions. See section 3.07 and 3.08 of this revenue procedure. Taxpayers are urged to examine the specific mutual agreement procedure provisions or other specific provisions of the treaty under which they seek relief, in order to determine whether relief is available in their particular case. This revenue procedure is not intended to limit or expand any specific treaty provisions relating to competent authority matters.

.02 Requests for Assistance . In general, all requests for competent au

thority assistance must be submitted in accordance with this revenue procedure. However, where a treaty provides specific procedures for requests for competent authority assistance, those procedures shall apply, and the provisions of this revenue procedure shall not apply to the extent inconsistent with such treaty procedures. See also Rev. Proc. 91–22, 1991–1 C.B. 526, concerning requests for competent authority assistance with respect to an Advance Pricing Agreement (‘‘APA’’).

.03 U.S. Competent Authority . The Assistant Commissioner (International) acts as the U.S. competent authority in administering the operating provisions of tax treaties (including entering into a competent authority settlement in a specific case) and in interpreting and applying these treaties. The Tax Treaty Division assists the Assistant Commissioner (International) in these matters. In interpreting or applying tax treaties, the Assistant Commissioner (International) acts only with the concurrence of the Associate Chief Counsel (International). See Delegation Order No. 114 (Rev. 10). .04 General Process . If a taxpayer’s request for competent authority assistance is accepted, the U.S. competent authority generally will consult with the appropriate foreign competent authority and attempt to reach a mutual agreement that is acceptable to all parties. The U.S. competent authority also may initiate competent authority negotiations in any situation deemed necessary to protect U.S. interests. Such a situation may arise, for example, when a taxpayer fails to request competent authority assistance after agreeing to a U.S. or foreign tax assessment that is contrary to the provisions of an applicable tax treaty or for which correlative relief may be available.

.05 Failure to Request Assistance . Failure to request competent authority assistance or to take appropriate steps to maintain availability of the remedy may cause a denial of part or all of any foreign tax credits claimed. See § 1.901–2(e)(5)(i) of the Income Tax Regulations. See also section 11 of this revenue procedure concerning the determination of creditable foreign taxes.