November 13, 2000
U.S. - U.K. Develop New Adminstrative
Arrangements for Mutual Agreement Procedure
WASHINGTON - The Internal Revenue Service and the U.K. Inland Revenue have agreed to new Administrative Arrangements that outline guiding principles to follow when using the Mutual Agreement Procedure (the MAP) found in Article 25 of the U.S.-U.K. Income Tax Convention. The Arrangements were developed to make sure the MAP works as quickly and effectively as possible, and that taxpayers are kept informed about the way their cases are being handled.
Article 25 of the U.S.-U.K. Income Tax Convention provides for a mutual agreement procedure under which the tax authorities of the two countries try to resolve, by mutual agreement, cases where taxpayers believe they are being taxed by either country in a way that is not in accordance with the Convention. It also attempts to resolve any difficulties or doubts concerning the interpretation or application of the Convention. In general, taxpayers may invoke the MAP in relation to any aspect of the tax treatment provided by the Convention.
Both countries are committed to making the MAP work as quickly and effectively as possible. The IRS and the Inland Revenue have therefore agreed on certain Administrative Arrangements to describe how they will operate the MAP. In particular the Arrangements set a target timetable for dealing with particular cases. Where it does not prove possible to resolve a particular case within that timeframe, the case will be reviewed at a more senior level to ensure that all appropriate action is being taken to resolve the case. Taxpayers will be kept informed of the progress of their case.
The operation of the Arrangements will be kept under review. The text of the Administrative Arrangements is attached.
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