SECTION 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:

(1) competent authority determines that the taxpayer is not entitled to the treaty benefit or safeguard in question or to the assistance requested;

(2) the taxpayer is willing only to accept a competent authority agreement under conditions that are unreasonable or prejudicial to the interests of the U.S. Government;

(3) the taxpayer rejected the competent authority resolution of the same or similar issue in a prior case;

(4) the taxpayer does not agree that competent authority negotiations are a government-to-government activity that does not include the taxpayer’s participation in the negotiation proceedings;

(5) the taxpayer does not furnish upon request sufficient information to determine whether the treaty applies to the taxpayer’s facts and circumstances;

(6) the taxpayer was found to have acquiesced in a foreign initiated adjustment that involved significant legal or factual issues that otherwise would be properly handled through the competent authority process and then unilaterally made a corresponding correlative adjustment or claimed an increased foreign tax credit, without initially seeking U.S. competent authority assistance;

2006–49 I.R.B. 1046 December 4, 2006

quest for consideration. Within 30 days of receipt of a complete submission, the U.S. competent authority will provide written notice to the taxpayer as to whether the request will be accepted or rejected for consideration. If a request is accepted, the taxpayer will be required to mail a check or money order in the appropriate amount, along with a copy of the written notice of acceptance to the IRS office identified below. The check or money order should be payable to the United States Treasury. The fee may be refunded as provided in section 14.05 of this revenue procedure.

.04 Address to Send Payment . The user fee should be sent along with a copy of the written notice of acceptance to the mailing address listed below:

IRS/BFC P.O. Box 9002 Beckley, WV 25802

.05 Refunds of User Fee . In general, a user fee will not be refunded once the U.S. competent authority accepts a request for consideration and the user fee is paid. For example, the IRS will not refund the user fee if the request for a discretionary determination is withdrawn by the taxpayer or if the taxpayer fails to submit additional information as requested by the U.S. competent authority. A user fee may be refunded, however, if: (a) a higher user fee is paid than is required; or (b) taking into account all the facts and circumstances, including the IRS’s resources devoted to the request, the Competent Authority declines to rule and, in his or her sole discretion, decides a refund is appropriate.