• IRS Advises Taxpayers to Engage U.S. Competent Authority Early
  • May 19, 2011 | Author: Edward Tanenbaum
  • Law Firm: Alston & Bird LLP - New York Office
  • At a recent meeting of tax professionals in New York, Michael Danilack, Deputy Commissioner (International) of the IRS Large Business and International Division (LB&I) and U.S. Competent Authority under tax treaties, stated that U.S. taxpayers must contact the U.S. Competent Authority in relation to a proposed treaty country tax adjustment, which implicates a U.S. correlative adjustment. Danilack warned that without clearance by the U.S. Competent Authority, U.S. taxpayers should not rely on the use of U.S. foreign tax credit rules in the face of such foreign adjustments and urged U.S. taxpayers to focus on lowering foreign taxes through the mutual agreement procedure (MAP). Danilack noted that depending on the circumstances, the U.S. Competent Authority would choose among these alternatives: