Global

Details

  • Service: Tax, International Corporate Tax, Global Transfer Pricing Services, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 11/22/2013

United States - Proposed procedures for Competent Authority assistance, APAs 

November 22: The IRS today released two notices containing “draft” revenue procedures providing guidance and instructions with respect to competent authority (CA) assistance and advance pricing agreements (APAs).

Read the draft revenue procedures in Notice 2013-78 [PDF 205 KB] and Notice 2013-79 [PDF 201 KB]

KPMG observation

These draft revenue procedures represent substantial changes from the current revenue procedures that were issued in 2006. These changes reflect a desire by the IRS to enhance integration between Competent Authority matters and APAs and to increase transparency and efficiency in these processes. These draft revenue procedures are out for comments, which are due by March 10, 2014.

Competent Authority assistance

The following discussion provides a summary of certain proposed changes, based on a preliminary reading of today’s IRS notices.


The proposed revision of procedures for Competent Authority (CA) assistance under tax treaties (contained in Notice 2013-78):


  • Clarifies that CA issues may arise as a result of taxpayer-initiated positions
  • Makes clear that the offices of the U.S. CA are available for informal consultations on CA-related issues
  • States that U.S. CA may seek to initiate a mutual agreement procedure (MAP) case in the absence of a MAP request or may require that the scope of a MAP case be expanded
  • Provides new pre-filing procedures applicable to MAP cases, including mandatory submission of a pre-filing memorandum depending on the nature of the issues or the adjustment amount involved
  • Provides a revised listing of the standard specifications for the content of a request for CA assistance in various types of cases
  • Elaborates on potential interactions of requests for CA assistance, accelerated competent authority process (ACAP) and APAs

APAs

The proposed revision of procedures for APAs (contained in Notice 2013-79):


  • Provides expanded pre-filing procedures, including mandatory submission of a pre-filing memorandum in cases raising certain issues
  • Provides for a new filing deadline for bilateral and multilateral APA requests
  • Provides a revised listing of the specifications for the content of APA requests
  • Clarifies that a complete APA request (updated and supplemented as required) will be a factor in determining whether the taxpayer has met the documentation requirements of Reg. section 1.6662-6(d)(2)(iii) for the proposed APA years
  • Describes new general practices that will be followed after an APA request has been filed with respect to, among other things, issuing case plans, conducting due diligence, and conveying its views on APA requests to the taxpayer
  • Consistent with the proposed change above with respect to CA assistance, increased coordination between requests APAs, requests for CA assistance and ACAP including procedures for filing an abbreviated APA request in certain circumstances
  • Provides that there may be coordination with applicable IRS offices to pursue an APA rollback to any or all of the taxpayer’s open pre-APA years, regardless of whether the taxpayer requests an APA rollback
  • Provides that a taxpayer may seek permission to submit an abbreviated APA request in cases involving renewals of current APAs

Additional information will be provided in a future update.


For more information, contact a tax professional with KPMG’s Global Transfer Pricing Services group:


Jana Lessne

(202) 533-3066


Cameron Taheri

(202) 533-3384




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