TreatiseTreatise

International Tax Controversies: A Practical Guide (2018 Edition)

 by Steptoe & Johnson LLP, Philip R West, J. Walker Johnson, Amanda P Varma, Michael C Durst
 
 Copyright: 2017

 Product Details >> 

Product Details

  • ISBN Number: 9781402429750
  • Page Count: 434
  • Number of Volumes: 1
  •  

With the U.S. Justice Department taking an ever-closer look at cross-border transactions and their tax implications, the new International Tax Controversies: A Practical Guide provides a detailed roadmap to how to prepare for a tax audit that involves an international component. Creating and retaining the proper transaction-related documentation, and understanding what additional documentation might be needed for an international examination, is vital to a successful audit.

International Tax Controversies describes the process of how an international audit proceeds, including providing information on:

  • How the IRS audit team is chosen
  • What the limits are of the scope of the examination
  • The type of examination that will be conducted and the kinds of documents that will need to be provided by the taxpayer and third parties
  • The kinds of enforcement procedures that may be brought

In international tax situations, there are often conflicting positions taken by the U.S. Internal Review Service and a non-U.S. tax authority. Tax treaties containing mutual agreement procedures (MAPs) are often invoked to protect the taxpayer from paying double taxes. International Tax Controversies describes the process by which MAPs may be invoked and a binding resolution created.

As most disagreements between international taxing entities involve transfer pricing issues, there is generally an opportunity to obtain an advance pricing agreement (APA) to protect the taxpayer. International Tax Controversies analyzes the APA process, providing a detailed guide on facilitating the process for your client. It also describes the many tax information exchange treaties and agreements that the U.S. has entered into, and the impact they have had on the U.S. taxpayer.



  Table of Contents
Chapter 1: Early Preparation and Documentation for Audit and Controversy
  • § 1:1 : Introduction1-1
  • § 1:2 : Sensitizing the Business1-2
  • § 1:3 : Documenting the Business Purpose Narrative1-4
  • § 1:4 : Developing Documentation Supporting the Tax Treatment of the Transaction1-6
  • § 1:5 : Avoiding the Creation of Contradictory Documents1-9
  • § 1:6 : Transactions Likely to Be Scrutinized1-9
  • § 1:7 : Case Studies1-11
    • § 1:7.1 : International Hybrid Instrument Transactions1-11
    • § 1:7.2 : Transfer Pricing Issues1-14
  • § 1:8 : Conclusion1-17
Chapter 2: Pre-Audit Planning, Including Document Retention and Spoliation
  • § 2:1 : Introduction2-2
  • § 2:2 : The Duty to Retain Documents2-2
  • § 2:3 : Establishing an Effective Document Retention Policy2-5
    • § 2:3.1 : What Documents Should Be Retained2-6
    • § 2:3.2 : Document Retention Periods2-9
    • § 2:3.3 : Special Consideration for Email and Other Electronically Stored Information2-10
    • § 2:3.4 : Document Retention Policy Training2-10
    • § 2:3.5 : Accidental Document Destruction2-11
  • § 2:4 : Protecting Privileges Applicable to Retained Documents2-12
    • § 2:4.1 : Attorney-Client Privilege2-13
    • § 2:4.2 : Work Product Doctrine2-19
    • § 2:4.3 : Section 7525: Communications with Federally Authorized Tax Practitioners2-24
    • § 2:4.4 : Privilege in the International Context2-25
      • [A] : Whose Privilege Law Applies?2-25
      • [B] : Can U.S. Privilege Be Waived by Disclosure to Another Jurisdiction?2-28
  • § 2:5 : Spoliation2-29
    • § 2:5.1 : Interplay with Work Product Doctrine2-33
    • § 2:5.2 : Litigation Holds2-35
  • § 2:6 : Conclusion2-39
Chapter 3: Handling the International Examination
  • § 3:1 : Introduction3-2
  • § 3:2 : The IRS’s Selection of Returns to Be Examined3-2
  • § 3:3 : The IRS’s Authority to Examine Returns3-2
  • § 3:4 : Time Limits on the Examination3-4
  • § 3:5 : The Composition of the IRS Examination Team3-5
  • § 3:6 : The Type of Examination to Be Conducted3-8
  • § 3:7 : Setting the Ground Rules for the Examination3-11
  • § 3:8 : Information Document Requests3-12
  • § 3:9 : Interviews and Facility Visits3-18
  • § 3:10 : Formal Document Requests3-19
  • § 3:11 : The Summons Process3-19
    • § 3:11.1 : Issuance of Administrative Summons to the Taxpayer3-19
    • § 3:11.2 : Issuance of a Designated Summons to the Taxpayer3-22
    • § 3:11.3 : Judicial Enforcement of Summons Issued to the Taxpayer3-24
  • § 3:12 : Requests for Information from Third Parties3-36
  • § 3:13 : Issuance of Summons to Third Parties3-38
  • § 3:14 : Judicial Enforcement of a Third-Party Summons3-40
  • § 3:15 : IRS Development of Issues and Proposed Adjustments3-43
  • § 3:16 : Special Examination Processes and Procedures3-43
  • § 3:17 : Mutual Agreement Procedure and Competent Authority3-46
  • § 3:18 : Resolution of Issues During the Examination3-47
Chapter 4: Special Document Issues in International Examinations
  • § 4:1 : Introduction4-1
  • § 4:2 : Information Made Available to the IRS4-2
  • § 4:3 : Information Document Requests4-3
  • § 4:4 : Examination of Documentation or Facilities at Foreign Sites4-4
  • § 4:5 : Formal Document Requests for Foreign-Based Documentation4-4
  • § 4:6 : Administrative Summons4-16
  • § 4:7 : Judicial Enforcement of Summonses4-17
  • § 4:8 : Judicial Review of Section 6038A Summons4-28
  • § 4:9 : Privilege Defenses to Production4-29
Chapter 5: IRS Appeals and Special Appeals Procedures
  • § 5:1 : Introduction5-1
  • § 5:2 : Resolution of Issues in Fast Track and Early Referral5-2
    • § 5:2.1 : Fast Track Settlement5-2
    • § 5:2.2 : Early Referral5-3
  • § 5:3 : Issuance of a Revenue Agent’s Report5-5
  • § 5:4 : Potential Responses to the Revenue Agent’s Report5-6
  • § 5:5 : Deciding Whether to File a Protest5-7
  • § 5:6 : Preparation of the Protest5-9
  • § 5:7 : Exams’ Rebuttal to the Protest and the Ex Parte Conference5-10
  • § 5:8 : Extensions of the Assessment Period5-11
  • § 5:9 : Conduct of the Appeals Conference5-11
  • § 5:10 : Appeals Settlement Authority5-12
  • § 5:11 : Appeals Settlement Considerations and Procedures5-13
  • § 5:12 : Appeals Alternative Dispute Resolution Programs5-16
  • § 5:13 : Appeals and Competent Authority Cases5-16
  • § 5:14 : Concluding the Appeals Process5-18
  • § 5:15 : Taking Unagreed Issues into Litigation5-19
Chapter 6: The Role of the Competent Authority: Mutual Agreement Procedures
  • § 6:1 : Introduction6-2
  • § 6:2 : Legal Basis and Organization of U.S. Competent Authority Office6-5
  • § 6:3 : Overview of the Competent Authority Process6-6
  • § 6:4 : The Taxpayer’s Interest and Involvement in Competent Authority Negotiations6-8
  • § 6:5 : Common Kinds of Double Taxation Issues6-9
    • § 6:5.1 : Transfer Pricing Issues6-9
    • § 6:5.2 : Permanent Establishment Issues6-10
    • § 6:5.3 : Residency Issues6-11
    • § 6:5.4 : Limitation on Benefits Issues6-12
    • § 6:5.5 : Withholding Tax Issues6-16
    • § 6:5.6 : Thin Capitalization/Debt Equity Issues6-17
    • § 6:5.7 : Pension Plan Qualification6-18
  • § 6:6 : Do Taxpayers Have a “Right” to Competent Authority Consideration?6-18
  • § 6:7 : Exhaustion of Foreign Administrative Remedies: Seeking Competent Authority Relief Can Be a Requirement for Claiming Foreign Tax Credits6-22
  • § 6:8 : Procedures for Requesting Competent Authority Assistance6-23
    • § 6:8.1 : Importance of Reference to Revenue Procedure and Procedural Rules of Applicable Treaty6-23
    • § 6:8.2 : Deadlines for Seeking Competent Authority Assistance6-23
    • § 6:8.3 : Need for Taxpayer to Keep U.S. and Foreign Statutes of Limitations Open Pending Competent Authority Negotiations6-29
    • § 6:8.4 : Drafting and Filing the Competent Authority Request6-30
    • § 6:8.5 : User Fees6-31
    • § 6:8.6 : Pre-Filing Conferences6-32
  • § 6:9 : Coordination of Competent Authority Negotiations with Other Administrative and Judicial Proceedings6-34
    • § 6:9.1 : Suspension of U.S. Administrative Action6-34
    • § 6:9.2 : Coordination of Competent Authority and IRS Administrative Proceedings6-36
    • § 6:9.3 : Competent Authority and Litigation6-37
  • § 6:10 : Practical Observations on the Competent Authority Negotiation Process6-38
    • § 6:10.1 : Taxpayer’s Role in Negotiation6-38
    • § 6:10.2 : “Tacking On” Additional Years to Ongoing Competent Authority Negotiation6-39
    • § 6:10.3 : Closing Agreements and Correlative Adjustments6-40
    • § 6:10.4 : Small Case Procedure6-42
  • § 6:11 : Effectiveness of the Competent Authority Process6-42
  • § 6:12 : Tax Treaty Arbitration6-43
Chapter 7: Advance Pricing Agreements
  • § 7:1 : Introduction7-1
  • § 7:2 : APA Program Organization Within IRS7-4
  • § 7:3 : The Process of Obtaining an APA7-5
    • § 7:3.1 : When to Seek an APA7-5
    • § 7:3.2 : Timing of APA Requests7-8
    • § 7:3.3 : Filing a Request7-8
    • § 7:3.4 : Fees7-9
    • § 7:3.5 : Pre-Filing Conference7-10
    • § 7:3.6 : The APA Negotiation Process7-12
    • § 7:3.7 : Critical Assumptions7-15
    • § 7:3.8 : IRS Internal Review of APAs7-15
    • § 7:3.9 : IRS Checks on Compliance with APAs7-16
  • § 7:4 : Cancellation and Revocation of APAs7-17
  • § 7:5 : APA Renewals7-18
  • § 7:6 : APAs Involving Branches7-19
  • § 7:7 : Financial Products APAs7-20
  • § 7:8 : Customs Considerations and APAs7-22
    • § 7:8.1 : Transfer Pricing Methodologies Used in APAs7-23
    • § 7:8.2 : APAs and State and Local Taxation7-24
    • § 7:8.3 : APAs in the Context of Tax Policy; Future of APAs7-25
    • § 7:8.4 : Public Disclosure of APAs7-26
Chapter 8: Exchange of Information
  • § 8:1 : Introduction8-2
  • § 8:2 : Tax Treaty Information Exchange8-5
    • § 8:2.1 : Standard for Information Exchange8-6
      • [A] : Overview8-6
      • [B] : Requests Lacking a Taxpayer Name8-9
    • § 8:2.2 : Limitations on Obligation to Provide Information8-14
    • § 8:2.3 : Restrictions on Use of Information by Contracting State8-15
    • § 8:2.4 : Other Common Provisions8-16
      • [A] : Domestic Tax Interest8-16
      • [B] : Form of Information Provided8-17
      • [C] : Mode of Application8-17
  • § 8:3 : Tax Information Exchange Agreements8-18
  • § 8:4 : Mutual Legal Assistance Treaties8-19
  • § 8:5 : Confidentiality of Information Exchanged8-20
  • § 8:6 : Types of Information Exchange8-23
    • § 8:6.1 : Overview8-23
    • § 8:6.2 : Specific Requests8-23
      • [A] : Overview8-23
      • [B] : Foreign-Initiated Requests8-24
        • [B][1] : Process8-24
        • [B][2] : Summons to Obtain Information to Be Exchanged8-26
        • [B][3] : Considerations for Taxpayers Who Are the Subject of a Foreign-Initiated Information Exchange Request8-29
      • [C] : U.S.-Initiated Requests8-30
        • [C][1] : Process8-30
        • [C][2] : Considerations for Taxpayers Who Are the Subject of a U.S.-Initiated Information Exchange Request8-32
        • [C][3] : IRS Use of Summons in Lieu of Information Exchange8-32
    • § 8:6.3 : Routine/Automatic Exchange8-34
      • [A] : In General8-34
      • [B] : FATCA and Other Developments in Automatic Information Exchange8-35
    • § 8:6.4 : Spontaneous Exchange8-36
    • § 8:6.5 : Industry-Wide Exchanges of Information8-37
    • § 8:6.6 : Simultaneous Examination, Simultaneous Criminal Investigation Programs, and Joint Audits8-37
  • § 8:7 : Joint International Tax Shelter Information Centre8-38
  • § 8:8 : Collection Assistance8-39
    • § 8:8.1 : Overview8-39
    • § 8:8.2 : The Revenue Rule8-40
    • § 8:8.3 : U.S. Tax Treaty Modification of the Revenue Rule8-42
      • [A] : In General8-42
      • [B] : Collection Assistance Treaty Provisions8-42
        • [B][1] : Broad Assistance Provision8-43
        • [B][2] : Restrictive Collection Assistance Provision8-43
        • [B][3] : The OECD Convention on Mutual Assistance in Tax Matters8-45
Chapter 9: Post-Appeals Litigation Options and Choice of Forum
  • § 9:1 : Introduction9-1
  • § 9:2 : Exiting Appeals While Positioning a Case for Litigation9-2
    • § 9:2.1 : Positioning a Case for Tax Court Litigation9-2
    • § 9:2.2 : Positioning a Case for Refund Litigation9-3
  • § 9:3 : The Process of Initiating the Litigation9-4
    • § 9:3.1 : Steps to Initiate Tax Court Litigation9-4
    • § 9:3.2 : Steps to Initiate Refund Litigation9-5
  • § 9:4 : Choice of Forum Considerations9-8
    • § 9:4.1 : Need to Pay the Asserted Tax Deficiency9-8
    • § 9:4.2 : Applicable Precedent9-8
    • § 9:4.3 : The Government’s Ability to Raise New Issues in Litigation9-9
    • § 9:4.4 : The Taxpayer’s Ability to Raise New Issues in Litigation9-11
    • § 9:4.5 : Allowable Discovery9-14
    • § 9:4.6 : The Tax Expertise and Experience of the Judge9-15
    • § 9:4.7 : The Attorneys Representing the Government9-16
    • § 9:4.8 : The Location of the Trial9-17
    • § 9:4.9 : The Possibility of a Jury Trial9-17
  • § 9:5 : Supreme Court Review9-18
Chapter 10: Discovery in International Tax Cases
  • § 10:1 : Introduction10-1
  • § 10:2 : Overview of Discovery Methods10-2
  • § 10:3 : Discovery in U.S. District Courts10-3
  • § 10:4 : Discovery in the Court of Federal Claims10-10
  • § 10:5 : Discovery in the U.S. Tax Court10-11
  • § 10:6 : Hague Evidence Convention10-15
    • § 10:6.1 : Letters of Request10-15
    • § 10:6.2 : Deposition Testimony Taken Through Diplomatic or Consular Officers and Appointed Commissioners10-19
  • § 10:7 : Letters Rogatory10-21
  • § 10:8 : Coordination Between the Hague Evidence Convention and Discovery Rules10-23
  • § 10:9 : Practical Considerations for Using Letters of Request and Letters Rogatory10-28
  • § 10:10 : Practical Considerations for Using Letters of Request and Federal Rules of Civil Procedure Discovery10-29
  • § 10:11 : Discovery in the United States for Use in Foreign Proceeding10-31
Chapter 11: Trial and Appellate Practice
  • § 11:1 : Introduction11-1
  • § 11:2 : Trial Practice11-2
    • § 11:2.1 : Drafting the Complaint or Petition11-2
    • § 11:2.2 : Local Rules and Judge-Specific Rules11-3
    • § 11:2.3 : Foreign Witnesses11-3
    • § 11:2.4 : Foreign Documents11-6
    • § 11:2.5 : Foreign Law11-10
    • § 11:2.6 : Foreign Experts11-11
    • § 11:2.7 : Burden of Proof11-12
    • § 11:2.8 : The “Electronic Courtroom”11-14
    • § 11:2.9 : Use of Demonstratives11-15
    • § 11:2.10 : Settlement11-16
    • § 11:2.11 : Coordination with Competent Authority Proceedings11-17
  • § 11:3 : Appellate Practice11-18
    • § 11:3.1 : The Decision to Appeal11-18
    • § 11:3.2 : Appellate Venue11-20
    • § 11:3.3 : Notice of Appeal11-20
    • § 11:3.4 : Appeal Bond11-21
    • § 11:3.5 : Appellate Procedures11-22
    • § 11:3.6 : Final Decision or Judgment11-23
  Index

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