SECTION 4. PROCEDURES FOR

REQUESTING COMPETENT AUTHORITY ASSISTANCE

.01 Time for Filing. A request for competent authority assistance generally should be filed as soon as it appears that the taxpayer or a related person is or would be subject to inconsistent tax treatment by the IRS and a possession tax agency. In a case involving a U.S. initiated adjustment of tax or income resulting from a tax examination, a request for competent authority assistance may be submitted as soon as practicable after the amount of the proposed adjustment is communicated in writing to the taxpayer. Where a U.S. initiated adjustment has not yet been communicated in writing ( e.g., a notice of proposed adjustment) to the taxpayer, the U.S. competent authority generally will deny the request as premature. In the case of a possession examination, a request may be submitted as soon as the taxpayer believes such filing is warranted based on the actions of the possession proposing the adjustment. In a case involving the re-allocation of income or deductions between related entities, the request should not be filed until such time that the taxpayer can establish that there is the probability of double taxation. In cases not involving an examination, a request can be made when the taxpayer believes that an action or potential action warrants the assistance of the U.S. competent authority. Examples of such action include a ruling or promulgation by a possession tax agency concerning a taxation matter, or the withholding of a tax by a withholding agent. Except as otherwise provided in a coordination agreement, taxpayers have discretion over the time for filing a request; however, delays in filing may preclude effective relief. See section 9 of this revenue procedure, which explains protective measures to be taken by the taxpayer and any concerned

section 9 of this revenue procedure concerning protective measures and section 11 of this revenue procedure concerning the determination of creditable taxes.

.05 Issues Regarding Cover Over. Requests for competent authority assistance under this revenue procedure are not proper in cases involving the cover over of funds, for example under section 7654 of the Code. The taxpayer lacks standing in such cases because matters concerning cover over are resolved on a government-to-government basis.