Publication 597, Information on the United States-Canada Income Tax Treaty; Competent Authority Assistance

V. Preparing Your Tax Return(s) and Information Returns

XI. Alerts and Tutorials

Update

Kortrijk accommodationCompetent Authority Assistance
Under Article XXVI, a U.S. citizen or resident may requestassistance from the U.S. competent authority when the actions ofCanada, the United States, or both, potentially result in doubletaxation or taxation contrary to the treaty. The U.S. competentauthority may then consult with the Canadian competent authority todetermine if the double taxation or denial of treaty benefits inquestion can be avoided.
It is important that your request for competent authorityassistance be made as soon as you have been notified by either Canadaor the United States of proposed adjustments that would result indenial of treaty benefits or in double taxation. This is so thatimplementation of any agreement reached by the competent authoritiesis not barred by administrative, legal, or procedural barriers.Revenue Procedure 96-13 explains the information that you shouldinclude with your request for competent authority assistance.
The request should be addressed to:
Assistant Commissioner (International),
Attn: Tax Treaty Division,
Internal Revenue Service,
Lodz HotelsP.O. Box 23598,
Washington, D.C. 20026-3598.
In addition to a timely request for assistance, you should take thefollowing measures:
File a timely protective claim for credit or refund of U.S.taxes on Form 1040X, Form 1120X, or amended Form 1041, whichever isappropriate. This will, among other things, give you the benefit of aforeign tax credit in case you do not qualify for the treaty benefitin question. For figuring this credit, attach either Form 1116 or Form1118, as appropriate. Attach your protective claim to your request forcompetent authority assistance.
Take appropriate action under Canadian procedures to avoidthe lapse or termination of your right of appeal under Canadian incometax law.
Corporate reorganizations. Article XIII(8) permits requests to be made to the competentauthority to defer the recognition of profit, gain, or income onproperty alienated in a corporate or other organization,reorganization, or similar transaction. These requests should followthe procedures outlined in Revenue Procedures 96-13 and98-21.