Comments on Rev. Proc. 91-23: Competent Authority

In a letter to Assistant Commissioner (International) Regina Deanehan, the Tax Executives Institute (TEI) presented comments concerning the competent authority process. Rev. Proc. 91-23 sets forth the procedures concerning requests for assistance of the US Competent Authority in resolving instances of taxation in contravention of an income, estate, or gift tax treaty to which the US is a party. Rev. Proc. 91-23 was generally a welcome development for taxpayers because it reaffirmed the government's commitment to implementing treaty protections against double taxation. The TEI believes that the efficiency and effectiveness of the process in eliminating double taxation can be increased by implementing these recommendations: 1. Taxpayers should be authorized to request Competent Authority assistance before pursuing a case with Appeals. 2. Taxpayers should be encouraged to become more involved in the process. 3. The revised revenue procedure should specifically address issues of deficiency interest or exchange gain or loss resulting from settlement. 4. The IRS should adopt procedures to coordinate Competent Authority cases. 5. Certain areas should be discussed between the Competent Authority and US treaty partners.