SECTION 3. PROCEDURES FOR

REQUESTING ASSISTANCE FROM THE U.S. COMPETENT AUTHORITY

.01 In General. This section sets forth procedures, rules, and guidelines relevant to filing a MAP request with the U.S. competent authority. Instructions on preparing and filing a MAP request are also set forth in the appendix to this revenue procedure (generally referred to as the “appendix”).

.02 Pre-filing Procedures . (1) In General. In the interest of making the MAP process effective and effi

cient, the U.S. competent authority invites, and in some cases requires, the taxpayer to meet with the U.S. competent authority in a pre-filing conference prior to filing the MAP request. For the same reason, the U.S. competent authority invites, and in some cases requires, the taxpayer to submit a pre-filing memorandum prior to filing the MAP request. Pre-filing requirements are set forth in sections 3.02(2) through 3.02(7). Questions about pre-filing requirements may be directed to the U.S. competent authority by one of the means identified in the appendix.

(2) Requesting Pre-filing Conferences . A taxpayer that wishes to hold a pre-filing conference with the U.S. competent authority must submit its request as a part of a pre-filing memorandum filed pursuant to section 3.02(3) or 3.02(4).

(3) Mandatory Pre-filing Memoranda . A pre-filing memorandum must be submitted if the MAP issues will, or could reasonably be expected to, involve any of the following: (a) a foreign-initiated adjustment in which the total adjustments exceed $10 million for all MAP years combined; (b) a taxpayer-initiated position; (c) the license or other transfer of intangibles in connection with, or the development of intangibles under, an intangible development arrangement; (d) any arrangement that qualifies as a global trading arrangement; (e) unincorporated branches, pass-through entities, hybrid entities, or entities disregarded for U.S. tax purposes; (f) a request for discretionary LOB relief; or (g) other circumstances in which the taxpayer believes a MAP issue has arisen outside the context of an examination, such as in cases involving withholding taxes or guidance issued by a foreign tax authority. If a pre-filing memorandum is not submitted in any of the cases described in this section, the U.S. competent authority may, among other possible actions, require that the prefiling memorandum be submitted before it will take action on the MAP request.

(4) Optional Pre-filing Memoranda. An optional pre-filing memorandum may be submitted in cases other than those set forth in section 3.02(3). An optional prefiling memorandum may be advisable in cases that are expected to present novel or complex MAP issues.

(5) Contents of Pre-filing Memoran- dum . Whether submitted pursuant to section 3.02(3) or 3.02(4), a pre-filing memorandum must have a length and content appropriate to the stage, size, and complexity of the MAP issues underlying the proposed MAP request. The memorandum must also do the following:

(a) Include a “penalties of perjury” statement modeled on the statement set forth in the appendix;

(b) State whether the taxpayer requests a pre-filing conference and, if so, the particular issues the taxpayer wishes to discuss;

(c) Propose at least three possible dates for a pre-filing conference, whether or not the taxpayer seeks a pre-filing conference, in case the U.S. competent authority requires a pre-filing conference;

(d) List the name and contact information for the taxpayer’s point of contact and provide a Form 2848, Power of Attorney and Declaration of Representative, authorizing the point of contact to represent the taxpayer in connection with the MAP request, or a Form 8821, Tax Information Authorization, authorizing the point of contact to inspect or receive confidential tax information about the taxpayer in connection with the MAP request; and

(e) In the case of a non-U.S.-initiated action, explain the factual and legal basis of the action and describe any administrative, legal, or other procedural steps undertaken in the applicable treaty country and any communications with the foreign competent authority regarding the action.

(6) Place for Submission of Pre-filing Memorandum . Two printed copies and one electronic copy of the pre-filing memorandum must be submitted to APMA or TAIT at the address provided in section 5 of the appendix.

(7) Actions Taken with Respect to Pre- filing Conferences and Memoranda . The U.S. competent authority will notify the taxpayer whether it will accept or decline the taxpayer’s request to hold a pre-filing conference. The taxpayer will also be notified if a pre-filing conference is required, even if the taxpayer did not request a conference. If a pre-filing conference is held, it will address procedural and substantive issues pertinent to the MAP request. During the conference, the taxpayer should be prepared to discuss the relevant facts and circumstances surrounding the

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MAP issues. If the U.S. competent authority declines the taxpayer’s request for a pre-filing conference or decides no prefiling conference is required, it will instruct the taxpayer to proceed to file its MAP request.

(8) Informal Advice in Pre-filing Con- ference . Statements or representations made by the U.S. competent authority in a pre-filing conference constitute informal advice and are, therefore, advisory only ( see section 2.05).

.03 Persons Eligible or Required to File MAP Requests. The U.S. competent authority will consider MAP requests from taxpayers eligible to file MAP requests under U.S. tax treaties. If a case is presented by a foreign competent authority and no corresponding MAP request has been filed, the U.S. competent authority may require the relevant U.S. taxpayer, if any (or if none, the foreign person), to file a corresponding MAP request in accordance with this section, preceded, if required, by a pre-filing memorandum and a pre-filing conference.

.04 Time for Filing. (1) In General. Subject to the requirements regarding pre-filing memoranda and pre-filing conferences under section 3.02, a taxpayer may file a MAP request at the times specified in this section.

(2) U.S.-initiated Adjustments. In general, the U.S. competent authority will not accept a MAP request with regard to a U.S.-initiated adjustment before the IRS has communicated the amount of the proposed adjustment in writing to the taxpayer, e.g., a Form 5701 ( Notice of Pro- posed Adjustment ) or a Form 4549 ( Income Tax Examination Changes ). A MAP request will not be accepted if the resulting MAP case would be barred by the time limit set forth in the U.S. tax treaty or, if not tolled by the treaty or protective measures, limitations prescribed by domestic law in the United States or treaty country.

(3) Non-U.S.-initiated Actions. In the case of a non-U.S.-initiated action, the taxpayer may submit its mandatory or optional pre-filing memorandum or may file its MAP request as soon as it reasonably believes that a MAP issue exists or is likely to arise. A MAP request will not be accepted if the resulting MAP case would be barred by the time limit set forth in the

U.S. tax treaty or, if not tolled by the treaty or by a protective claim or treaty notification (as applicable), limitations prescribed by domestic law in the United States or treaty country ( see sections 13 and 14).

.05 Content and Form of MAP Re- quest .

(1) In General. The appendix sets forth the required contents of a MAP request, identifies the order in which such contents should be presented, and provides information and instructions on other administrative matters relevant to filing the request, including requirements on translations of documents not in English. The MAP request must comply with the requirements set forth in the appendix before it will be considered complete. Any questions about filing a MAP request not addressed in this section or in the appendix should be directed to APMA or TAIT by one of the means identified in the appendix.

(2) MAP Requests Submitted to For- eign Competent Authority. A MAP request filed with the U.S. competent authority must include a copy of any request filed by the taxpayer or a member of the controlled group with a foreign competent authority seeking assistance for the same MAP issue. The MAP request must also include a written explanation of the nature of any such related request, including any material differences between the MAP request filed under this revenue procedure and the request filed with the foreign competent authority. See gener- ally the appendix.

(3) Requested and Submitted Items. The taxpayer must provide both the U.S. and the foreign competent authority any information or documents requested by or submitted to either competent authority.

(4) Corrected and Updated Informa- tion. After the MAP request is filed, any material errors or any material omissions in the initial submission or subsequent submissions must be promptly corrected or remedied. Unless instructed otherwise, the taxpayer must update information and documents submitted in connection with the MAP request on a schedule acceptable to the U.S. competent authority. The taxpayer must also submit any other information or documents discovered or created during the MAP process that are, or rea

sonably may be, material to the MAP case.

.06 Additional Requirements and Pro- cedures Applicable to Residency and Dis- cretionary LOB Relief Cases.

(1) Residency Cases. U.S. competent authority assistance may be available to dual resident taxpayers (taxpayers resident in both the United States and the treaty country) seeking to determine their sole residence under the treaty. In such circumstances, the U.S. competent authority will only accept MAP requests concerning questions of residency under U.S. tax treaties if both: (a) the resolution of the residency issue is necessary to avoid double taxation or to determine the applicability of a benefit under the treaty; and (b) the issue requires consultation with the foreign competent authority to ensure consistent treatment under the applicable treaty. The U.S. competent authority will not unilaterally resolve a question of residency.

(2) Discretionary LOB Relief Cases. (a) No Relief Where Applicant Meets Objective Test. Most U.S. tax treaties contain an LOB article that enumerates objective tests to determine whether a foreign resident is a qualified resident of a treaty country eligible for benefits under the applicable U.S. tax treaty. The U.S. competent authority will not issue a determination regarding whether an applicant satisfies these objective LOB tests. In addition, it will not accept a request for discretionary LOB relief if the applicant cannot represent, and explain, as a part of its MAP request, why it does not meet the relevant objective tests. See section 2.01 of the appendix for the additional information applicants are required provide for requests for discretionary LOB relief.

(b) Factors Considered. In general, if the applicant’s case is accepted, all facts and circumstances may be considered, including whether the applicant previously qualified for treaty benefits and the reason for its current disqualification. The required pre-filing memorandum will be useful to determine what additional facts should be included with the actual MAP request. To obtain a favorable determination, the applicant must present facts that demonstrate that it has a sufficient relationship or nexus to the treaty country.

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(c) User Fee. Applicants requesting discretionary LOB relief must remit the user fee as provided in section 16 of this revenue procedure as well as comply with the instructions set forth in the appendix.

.07 Determinations Regarding Foreign Pensions .

(1) In General. Several U.S. tax treaties contain provisions relating to contributions to foreign pension funds. Under these provisions, if certain requirements are satisfied, individuals who perform services in the United States as employees (and in some cases as independent contractors) are allowed to deduct or exclude contributions to a foreign pension fund in computing U.S. taxable income. Some of these tax treaties also allow U.S. citizens who live and work in the treaty country to claim deductions or exclusions for U.S. tax purposes for contributions to a foreign pension fund. Many of these treaties allow U.S. employers a deduction on their U.S. income tax returns for contributions to a foreign pension fund on behalf of employees who perform services in the United States.

(2) “ Generally Corresponds” Determi- nations. The U.S. tax treaties described in section 3.07(1) provide that benefits are not available unless the U.S. competent authority has determined that the foreign pension plan “generally corresponds” to a pension plan recognized for tax purposes in the United States. In some cases, the treaty negotiators or the competent authorities have agreed on lists of types of plans in each country that are understood to generally correspond to a plan recognized for tax purposes in the other country. In other cases, however, it will be necessary for an employer, a plan trustee, or an individual plan participant to request a competent authority determination on whether a particular plan “generally corresponds.” An employer, plan trustee, or individual plan participant seeking such a determination must file a MAP request according to the instructions set forth in the appendix.

.08 E-mail Communications . A complete MAP request must include either an executed memorandum of understanding permitting the U.S. competent authority to communicate with its authorized representatives through encrypted e-mail or a statement that the taxpayer does not permit such e-mail communications and an explanation for its declining to do so. See the appendix. An electronic copy of the standard form memorandum of understanding is available on the APMA or TAIT website [link to be included when available]. This paragraph does not apply to individuals or to taxpayers eligible to file small case MAP requests under section 5.