SEC. 8. SIMULTANEOUS APPEALS

PROCEDURE

.01 General . A taxpayer filing a request for competent authority assistance under this revenue procedure may, at the same time or at a later date, request Appeals’ consideration of the competent authority issue under the procedures and conditions provided in this section. The U.S. competent authority also may request Appeals’ involvement if it is determined that such involvement would facilitate the negotiation of a mutual agreement in the case or otherwise would serve the interest of the Service. The taxpayer may, at any time, request a pre-filing conference with the offices of the National Director of Appeals and the U.S. competent authority to discuss the Simultaneous Appeals procedure.

.02 Time for Requesting the Simul- taneous Appeals Procedure .

(a) When Filing For Competent Authority Assistance . The Simultaneous Appeals procedure may be invoked at any of the following times:

(1) When the taxpayer applies for competent authority assistance with respect to an issue for which the District has proposed an adjustment and before the protest is filed;

(2) When the taxpayer files a protest with Appeals and decides to sever the competent authority issue and seek competent authority assistance while other issues are referred to Appeals; and

(3) When the case is in Appeals and the taxpayer later decides to request competent authority assistance with respect to the competent authority

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issue. The taxpayer may sever the competent authority issue for referral to the U.S. competent authority and invoke the Simultaneous Appeals procedure at any time when the case is in Appeals but before settlement of the issue. Taxpayers, however, are encouraged to invoke the Simultaneous Appeals procedure as soon as possible, preferably as soon as practicable after the first Appeals conference.

(b) After Filing For Competent Au- thority Assistance . The taxpayer may request the Simultaneous Appeals procedure at any time after requesting competent authority assistance. However, a taxpayer’s request for the Simultaneous Appeals procedure generally will be denied if made after the date the U.S. position paper is communicated to the foreign competent authority, unless the U.S. competent authority determines that the procedure would facilitate an early resolution of the competent authority issue or otherwise is in the best interest of the Service.

.03 Cases Pending in Court . If the matter is pending before a U.S. court or has been designated for litigation and jurisdiction has been released to the U.S. competent authority, a request for the Simultaneous Appeals procedure may be granted only with the consent of the Chief Counsel.

.04 Request for Simultaneous Ap- peals Procedure . The taxpayer’s request for the Simultaneous Appeals procedure should be addressed to the U.S. competent authority either as part of the initial competent authority assistance request or, if made later, as a separate letter to the U.S. competent authority. The request should state whether the issue was previously protested to Appeals for the periods in competent authority or for prior periods (in which case a copy of the relevant portions of the protest and an explanation of the outcome, if any, should be provided). The U.S. competent authority will send a copy of the request to the National Director of Appeals, who, in turn, will forward a copy to the appropriate Regional Director of Appeals. When the U.S. competent authority invokes the Simultaneous Appeals procedure, the taxpayer will be notified. The U.S. competent authority has jurisdiction of the issue when the Simultaneous Appeals procedure is invoked.

.05 Role of Appeals in the Competent Authority Process .

ing an adjustment or seeking an appropriate correlative adjustment with respect to the U.S. or treaty country tax. A taxpayer should take protective measures in a timely manner, that is, in a manner that allows sufficient time for appropriate procedures to be completed and effective before barriers arise. Generally, a taxpayer should consider, at the time an adjustment is first proposed, which protective measures may be necessary and when such measures should be taken. However, earlier consideration of appropriate actions may be desirable, for example, in the case of a recurring adjustment or where the taxpayer otherwise is on notice that an adjustment is likely to be proposed. See section 9.05 of this revenue procedure regarding treaty provisions waiving procedural and other barriers. Taxpayers may consult with the U.S. competent authority to determine the need for and timing of protective measures in their particular case.

.02 Filing of Amended Tax Return in the United States . At the time the request for competent authority assistance is filed, the taxpayer also must file, in cases involving an adjustment proposed by a treaty country, an amended federal tax return (for example, a Form 1120X, Amended U.S. Corporation Income Tax Return, if a Form 1120 was originally filed) in the manner provided in the regulations under § 6402 of the Code. The amended tax return shall be limited to a claim for credit or refund of the taxes attributable to the matters under competent authority consideration. The amended tax return shall be filed by attaching it to the request for competent authority assistance. An amended return filed in accordance with this section should not be filed with any other office of the Service, notwithstanding any instructions concerning the place for filing on such forms or in such regulations. Final disposition of the amended return will be deferred by the Service until the U.S. competent authority disposes of the issues under consideration.

.03 Filing a Protective Claim in the United States .

(a) In General . There may be situations where a taxpayer is unable to file a formal competent authority assistance request before the statute of limitations expires with respect to the affected U.S. return. In this situation, before the statute of limitations expires, the tax

(a) Appeals Process . The Appeals representative assigned to the case will consult with the taxpayer and the U.S. competent authority for the purpose of reaching a resolution of the unagreed issue under competent authority jurisdiction before the issue is presented to the foreign competent authority. For this purpose, established Appeals procedures apply. The Appeals representative will consult with the U.S. competent authority during this process to ensure appropriate coordination of the Appeals process with the competent authority procedure, so that the terms of a tentative resolution and the principles and facts upon which it is based are compatible with the position that the U.S. competent authority intends to present to the foreign competent authority with respect to the issue. Any resolution reached with the Service under this procedure is subject to the competent authority process and, therefore, is tentative and not binding on the Service or the taxpayer. The Service will not request the taxpayer to conclude the Appeals process with a written agreement. The conclusions of the tentative resolution, however, generally will be reflected in the U.S. position paper used for negotiating a mutual agreement with the foreign competent authority. The procedures under this section do not give taxpayers the right to receive a fresh consideration of the issue by Appeals where the taxpayer applied for competent authority assistance after having received substantial Appeals consideration. Rather, the Service shall rely upon such previous consideration by Appeals when considering the case under the Simultaneous Appeals procedure.

(b) Assistance to U.S. Competent Authority . The U.S. competent authority is responsible for developing a U.S. position paper with respect to the issue and for conducting the mutual agreement procedure. Generally, requesting Appeals’ consideration of an issue under competent authority jurisdiction will not affect the manner in which taxpayers normally are involved in the competent authority process.

.06 Denial or Termination of Simul- taneous Appeals Procedure . (a) Tax- payer’s Termination . The taxpayer may, at any time, withdraw its request for the Simultaneous Appeals procedure.

(b) Service’s Denial or Termination . The U.S. competent authority, the National Director of Appeals, or the

appropriate Regional Director of Appeals may decide to deny or terminate the Simultaneous Appeals procedure if the procedure is determined to be prejudicial to the mutual agreement procedure or to the administrative appeals process. For example, a taxpayer that received Appeals consideration before requesting competent authority assistance, but was unable to reach a settlement in Appeals, may be denied the Simultaneous Appeals procedure. A taxpayer may request a conference with the offices of the U.S. competent authority and the National Director of Appeals to discuss the denial or termination of the procedure.

.07 Returning to Appeals . If the competent authorities fail to agree or if the taxpayer does not accept the mutual agreement reached by the competent authorities, the taxpayer will be permitted to refer the issue to Appeals for further consideration.

.08 Appeals Consideration of Non- Competent Authority Issues . The Simultaneous Appeals procedure does not affect the taxpayer’s rights to Appeals’ consideration of other unresolved issues. The taxpayer may pursue settlement discussions with respect to the other issues without waiting for resolution of the issues under competent authority jurisdiction.