IRS Proposes Changes to Advance Pricing Agreement Procedures

PURPOSE

This notice proposes a revenue procedure that would update and supersede Rev. Proc. 2006-9, 2006-1 C.B. 278, as modified by Rev. Proc. 2008-31, 2008-1 C.B. 1133, which is also superseded. The proposed revenue procedure would provide guidance and instructions on APAs and guidance and information on the IRS's administration of APAs.

The proposed revenue procedure would substantially restate Rev. Proc. 2006-9 to improve clarity, readability, and organization. The proposed revenue procedure also would reflect structural changes undertaken by the IRS since 2006, including the establishment of the Large Business & International Division, the realignment and consolidation of IRS transfer pricing resources under the Director, Transfer Pricing Operations, and the creation of the Advance Pricing and Mutual Agreement Program, the office responsible for evaluating, executing, and administering APAs on behalf of the IRS.

Additionally, the proposed revenue procedure would effect a limited number of significant substantive changes. These changes may be summarized as follows:

 Section of

The procedures for APAs are proposed to be revised as follows:

 PROPOSED REVENUE PROCEDURE

.01 Definitions. For purposes of this revenue procedure, the following terms have the meanings set forth in this section.

 Abbreviated APA request               An APA request from which

.03 Deadline References. If a deadline under this revenue procedure falls on a Saturday, Sunday, or a legal holiday in the District of Columbia, the deadline is extended to the next succeeding day that is not a Saturday, Sunday, or a legal holiday in the District of Columbia.

SECTION 2: PURPOSE, BACKGROUND, SCOPE, AND GENERAL CONDITIONS UNDER WHICH THIS PROCEDURE APPLIES

.01 Purpose. This revenue procedure provides taxpayers with guidance and instructions on filing APA requests and guidance and information on the administration of APAs. This revenue procedure updates and supersedes Rev. Proc. 2006-9, 2006-1 C.B. 278, as modified by Rev. Proc. 2008-31, 2008-1 C.B. 1133, which is also superseded.

.02 Background and Principles.

(1) In February 2012, the IRS established APMA to oversee its APA program and to act as the representative office of the U.S. competent authority responsible for handling MAP cases arising under the business profits and associated enterprises articles of U.S. tax treaties. APMA also has shared responsibility for cases arising under the permanent establishment articles of U.S. income tax treaties. (See section 2.04 of Rev. Proc. 2014-XX.) In accordance with its mission, APMA endeavors to administer the programs within its jurisdiction in a manner that secures the appropriate tax bases of the United States and its treaty partners, prevents fiscal evasion, and is otherwise consistent with sound tax administration.

(2) APMA's APA program provides a voluntary process whereby the IRS and taxpayers may resolve transfer pricing issues and issues for which transfer pricing principles may be relevant in a principled and cooperative manner on a prospective basis. APMA is committed to conducting the APA process in a manner that is fair, timely, and consistent with principles of sound tax administration. The APA process increases the efficiency of tax administration by encouraging taxpayers to come forward and present all the facts necessary for a proper evaluation of their coverable issues and to work towards a resolution of such issues in a spirit of openness and cooperation. The voluntary and prospective nature of the APA process lessens the burden of compliance by giving taxpayers greater certainty regarding their covered issues and promotes the principled resolution of these issues by allowing for their discussion and resolution in advance before the consequences of such resolution are fully known to either taxpayers or the IRS.

(3) APAs and MAP resolutions of MAP cases are two interconnected means by which taxpayers can manage and address transfer pricing and other cross-border tax issues. In recognition of these connections, APMA seeks to resolve APA and MAP requests to achieve substantive and procedural consistency and coordination in their coverage and application. For example, when warranted by similarity of facts and circumstances across taxable years, APMA will encourage a taxpayer to expand the scope of its APA request to include an APA rollback (with appropriate modifications, if necessary) when a comprehensive resolution of coverable issues would further the interests of sound tax administration. APMA may also condition its acceptance of an APA request upon the taxpayer's agreement to roll back the terms of its proposed APA (with appropriate modifications, if necessary) where APMA has clear interests in doing so and the taxpayer does not offer clear reasons against doing so. Conversely, APMA may require a taxpayer that has sought APMA's assistance for a MAP case to pursue ACAP to extend the MAP resolution of the MAP case to one or more of its ACAP years. APMA may also encourage the taxpayer to extend the MAP resolution even further into APA years. The relationship between APAs, MAP cases, and ACAP is addressed in more detail in section 5 and in Rev. Proc. 2014-XX.

(4) APMA's interest in coordinating APAs and MAP cases is also reflected in its preference for bilateral and multilateral APAs over unilateral APAs. To minimize taxpayer and governmental uncertainty and administrative cost, bilateral and multilateral APAs are generally preferable to unilateral APAs, particularly when a contemporaneous bilateral or multilateral APA request would have been effective and practical (within the meaning of Treas. Reg. § 1.901-2(e)(5)(i)) to obtain consistent treatment of the covered issue(s) with a treaty country or treaty countries. Furthermore, in some circumstances, APMA may reject a unilateral APA request if accepting it would be inconsistent with procedures and practices established with particular treaty partners. For these reasons, the taxpayer must explain in a pre-filing memorandum why a unilateral APA is appropriate to cover an issue that could be covered by a bilateral or multilateral APA (see section 3.02(4)).

(5) Additionally, because APMA has a strong interest in resolving transfer pricing and other coverable issues in a timely manner, APMA may encourage the taxpayer to expand the scope of the proposed APA to include coverable issues relevant to the proposed covered issues when a comprehensive resolution of coverable issues would further the interests of sound tax administration. APMA may also condition its acceptance of an APA request upon the taxpayer's agreement to include such other issues among the covered issues, when APMA has clear interests in doing so and the taxpayer does not offer clear reasons against doing so.

(6) As appropriate, APMA will provide oral, informal advice to taxpayers, whether or not in the course of the APA process, on general and specific matters concerning APAs, including whether an issue may be covered by an APA. Any such informal advice is advisory and is not binding on the IRS.

.03 General Requirements for Initiating and Continuing the APA Process.

(1) To initiate the APA process, the taxpayer must (i) meet the pre-filing requirements set forth in section 3.02, as applicable; (ii) submit a complete APA request, as described in section 3.04; and (iii) pay the correct user fee, as described in section 3.05 and as instructed in the appendix to this revenue procedure (generally referred to as the "appendix").

(2) Throughout the APA process, the taxpayer must supplement its APA request and provide updated information in accordance with sections 3.10 and 3.11.

(3) Throughout the APA process, the taxpayer and the IRS will execute consent agreement(s) as necessary to extend the period of limitations for assessment of tax for each proposed APA year and for each proposed APA rollback year. The taxpayer will be instructed as to the type of consent to execute, viz., general or restricted, and the duration of the extension for each proposed APA year and each proposed APA rollback year. Any general questions regarding the execution of consents required by this section may be directed to APMA by one of the means identified in the appendix.

SECTION 3: PROCEDURES FOR FILING APA REQUESTS

.01 General. This section sets forth procedures, rules, and guidelines relevant to filing an APA request. This section also addresses the taxpayer's obligations before and after filing the request. Instructions on preparing and filing an APA request are also set forth in the appendix.

.02 Pre-filing Requirements and Requests for Pre-filing Guidance.

(1) General. In the interest of making the APA process effective and efficient, APMA invites, and in some cases requires, the taxpayer to meet with APMA in a pre-filing conference prior to filing the APA request. For the same reason, APMA invites, and in some cases requires, the taxpayer to submit a pre-filing memorandum prior to filing the APA request. Pre-filing requirements are set forth in sections 3.02(3) through 3.02(7). Questions about pre-filing requirements may be directed to APMA by one of the means identified in the appendix.

(2) APA Requests Eligible for Small Case APA User Fee. The pre-filing requirements set forth in sections 3.02(3) through 3.02(7) do not apply to APA requests that are eligible for the small case APA user fee. A taxpayer that seeks to file such an APA request may submit the small case APA user fee together with a complete APA request or may contact APMA by one of the means identified in the appendix to discuss filing an abbreviated APA request.

(3) Requesting Pre-filing Conferences. A taxpayer that wishes to hold a pre-filing conference with APMA must submit its request as part of a pre-filing memorandum filed pursuant to section 3.02(4) or 3.02(5).

(4) Mandatory Pre-filing Memoranda. A pre-filing memorandum must be filed if (a) the taxpayer wishes to file a unilateral APA request to cover an issue that is eligible for coverage by a bilateral or multilateral APA (see section 2.02(4)); (b) the taxpayer seeks permission to file an abbreviated APA request (see section 5.01 or 8); or (c) the covered issue(s) proposed by the taxpayer will, or could reasonably be expected to, involve any of the following: (i) the license or other transfer of intangibles in connection with, or the development of intangibles under, an intangible development arrangement; (ii) any arrangement that qualifies as a global trading arrangement; or (iii) unincorporated branches, pass-through entities, hybrid entities, or entities disregarded for U.S. tax purposes. If a pre-filing memorandum is not filed in the cases described in this section, APMA may, among other possible actions, require that a pre-filing memorandum be submitted before it will take action on the APA request from the taxpayer. APMA will not accept anonymous pre-filing memoranda in the cases described in this section.

(5) Optional Pre-filing Memoranda. A taxpayer may voluntarily submit a pre-filing memorandum in cases other than those set forth in section 3.02(4). Although not required, APMA recommends that a pre-filing memorandum be submitted for APA requests that may present novel or complex substantive or procedural issues. Optional pre-filing memoranda may be submitted on an anonymous basis. APMA generally recommends, however, that optional pre-filing memoranda be provided on a named basis so as to facilitate a more informed understanding of the procedural and substantive issues that may arise during the APA process.

(6) Contents of Pre-filing Memorandum. If submitted pursuant to section 3.02(4), a pre-filing memorandum must have a length and content appropriate to the size and complexity of the covered issue(s) proposed by the taxpayer. If submitted pursuant to section 3.02(5), the pre-filing memorandum must have a length and content appropriate to the substantive or procedural issues the taxpayer wishes to raise with APMA. The memorandum must also do the following:

(a) Include a "penalties of perjury" statement modeled on the statement set forth in the appendix (unless the memorandum is submitted on an anonymous basis);

(b) State whether the taxpayer seeks a pre-filing conference and, if so, the issues the taxpayer wishes to discuss;

(c) Propose at least three possible dates for a pre-filing conference, whether or not the taxpayer seeks a pre-filing conference, in case APMA requires a pre-filing conference;

(d) Include covered issue diagrams if the pre-filing memorandum is required under section 3.02(4);

(e) If the pre-filing memorandum is submitted pursuant to section 3.02(4)(b), it must (i) present the taxpayer's arguments that the applicable law, facts and circumstances, economic conditions, and other factors surrounding its proposed covered issue(s) and method(s) for the proposed APA years are substantially the same as those surrounding the current APA or surrounding the MAP resolution in the MAP case, (ii) specify any information, documents, or other materials the taxpayer proposes to omit from its APA request, and (iii) discuss the taxpayer's arguments that the information, documents, or other materials the taxpayer proposes to omit from its APA request are not necessary for APMA's evaluation of the APA request (see sections 5.01 and 8);

(f) List the name and contact information for the taxpayer's point of contact and, unless the pre-filing memorandum is submitted on an anonymous basis, provide a Form 2848 authorizing the point of contact to represent the taxpayer in connection with the APA request or a Form 8821 authorizing the point of contact to inspect or receive confidential tax information about the taxpayer in connection with the APA request; and

(g) Identify all open pre-APA years of the taxpayer and which of such years, if any, are under examination by the IRS.

(7) Place for Submission of Pre-filing Memorandum. Two printed copies and one electronic copy of the pre-filing memorandum must be submitted to APMA at the address provided in section 4 of the appendix.

(8) Actions Taken with Respect to Pre-filing Conferences and Memoranda.

(a) APMA will notify the taxpayer whether it will accept or decline the taxpayer's request to hold a pre-filing conference. The taxpayer will also be notified if a pre-filing conference is required, even if the taxpayer did not request a conference. If a pre-filing conference is held, it will address procedural and substantive issues pertinent to the APA request. During the conference, the taxpayer should be prepared to discuss the relevant facts and circumstances surrounding the issue(s), method(s), and terms and conditions it proposes to cover in the APA. If APMA declines the taxpayer's request for a pre-filing conference or decides that no pre-filing conference is required, APMA will direct the taxpayer as to how to proceed with its APA request.

(b) Unless the taxpayer is required to submit a pre-filing memorandum pursuant to section 3.02(4), a pre-filing conference may be held on an anonymous basis. APMA generally recommends, however, that pre-filing conferences be held on a named basis so as to facilitate a more informed discussion of procedural and substantive issues that may arise during the APA process.

(9) Informal Advice in Pre-filing Conference. Statements or representations made by APMA in a pre-filing conference constitute informal advice and are, therefore, advisory only (see section 2.02(6)).

.03 Time for filing.

(1) In General. An APA request must be filed by the applicable deadline set forth in this section.

(2) Unilateral APA Requests. Except as provided in section 3.03(4), the taxpayer must file a complete unilateral APA request no later than the due date prescribed by statute (including extensions) for filing its Federal income tax return (or, if the taxpayer receives an extension to file its Federal income tax return, a date no later than the actual filing date of the return) ("return due date") for the first proposed APA year.

(3) Bilateral and Multilateral APA Requests. A complete bilateral or multilateral APA request must be filed no later than the earlier of (i) the return due date for the first proposed APA year, except as provided in section 3.03(4), and (ii) within 60 days after the bilateral or multilateral APA request regarding the same proposed covered issue(s) and APA years has been filed with a foreign competent authority, except as provided in section 3.03(5).

(4) "Dollar File" Requests. APMA will consider an APA request as having been filed on the return due date for the first proposed APA year if (i) the correct user fee is paid (within the meaning of section 7502(a) of the Code) by the return due date for the first proposed APA year, and (ii) a complete APA request is filed within 120 days of the return due date for the first proposed APA year. APMA may agree to extend the 120-day filing deadline by 30 days if the taxpayer requests such an extension before the 120-day filing deadline expires. This paragraph does not apply to APA requests that must meet the filing deadline set forth in section 3.03(3)(ii) or 3.03(5).

(5) Transition Rule for Bilateral and Multilateral APA Requests. For some taxpayers, the filing deadline set forth in section 3.03(3)(ii) will be on a date before the effective date of this revenue procedure (see section 11). This paragraph presents a transition rule that provides such taxpayers with a grace period by which to submit the correct user fee and complete APA request, as follows. If (a) the taxpayer intends to file a bilateral or multilateral APA request that must meet the filing deadline set forth in section 3.03(3)(ii), and (b) the filing deadline set forth in section 3.03(3)(ii) is before the effective date of this revenue procedure, then APMA will consider the APA request as having been filed by the deadline set forth in section 3.03(3)(ii) so long as all of the following conditions are met: (i) the taxpayer pays the correct user fee no later than the earlier of (A) 30 days from the effective date of this revenue procedure, and (B) the return due date for the first proposed APA year; and (ii) the taxpayer submits a complete bilateral or multilateral APA request no later than the earlier of (A) 120 days from the effective date of this revenue procedure, and (B) 120 days from the return due date for the first proposed APA year.

.04 Content and Form of Complete APA Requests.

(1) In General. The appendix sets forth the required contents of a complete APA request, identifies the order in which such contents should be presented, and provides information and instructions on other administrative matters relevant to filing a request. An APA request must comply with the requirements set forth in the appendix before it will be considered complete. Any questions about filing an APA request not addressed in this section or in the appendix should be directed to APMA by one of the means identified in the appendix.

(2) Any information submitted by a taxpayer in connection with its APA request must be true, correct, and complete (see the appendix). All documents in or described in the APA request must be explained in sufficient detail to make their contents readily understandable. Such an explanation might include, for example, definitions of terms used, explanations of the goal and flow of calculations, the sources of data, and the identity of a document's creator and the purpose for which it was created.

.05 User Fees.

(1) The user fee requirements and rules of application are set forth in the appendix. A taxpayer that seeks a decision on the user fee applicable to its APA request must contact APMA or submit a pre-filing memorandum.

(2) The taxpayer must pay the applicable user fee no later than the date it files the APA request. User fees must be paid through the Pay.gov website. APMA will consider an APA request to be complete only when the correct user fee has been paid through the Pay.gov website.

(3) APMA will notify the taxpayer if it has paid less than the correct user fee. In such a case, the taxpayer has the option of making up the difference or withdrawing its APA request and receiving a refund of the amount it has paid.

.06 E-mail Communications. A complete APA request must include either an executed memorandum of understanding permitting APMA to communicate with the taxpayer's authorized representatives through encrypted e-mail or a statement that the taxpayer does not permit such e-mail communications and an explanation for its declining to do so. See the appendix. An electronic copy of the standard form memorandum of understanding is available on the APMA website [link to be included when available].

.07 APA Request as Protective Claim. For purposes of this revenue procedure only, a protective claim for credit or refund may be made by including the claim in a bilateral or multilateral APA request. To be a valid protective claim for credit or refund, the protective claim must fulfill the requirements of section 13.02(3) of Rev. Proc. 2014-XX. See section 13 of Rev. Proc. 2014-XX and the appendix.

.08 Effect of Filing. The submission of a complete APA request, updated and supplemented in accordance with the requirements of this section 3, will be a factor taken into account in determining whether the taxpayer has met the documentation requirements of Treas. Reg. § 1.6662-6(d)(2)(iii) for the proposed APA years. Submission of a complete APA request does not, in itself, suspend examination or enforcement proceedings. Although APMA will coordinate within the IRS to minimize duplicative requests in conducting its due diligence, the taxpayer remains obligated to respond to information document requests issued, and according to deadlines set, by other IRS offices in any examination or enforcement proceedings.

.09 APA Term. In its APA request, the taxpayer must propose a term for the APA that is appropriate to the proposed covered issue(s) and to the commercial factors surrounding the taxpayer's industry and line(s) of business. Although the appropriate APA term will be determined on a case-by-case basis, a request for an APA should propose an APA term of at least five years, unless the taxpayer states a compelling reason for a shorter term. Additionally, it is in the interest of sound tax administration for APMA to seek to have at least three prospective taxable years remaining in the APA term upon the execution of an APA (in the case of a unilateral APA) or upon the execution of a MAP resolution (in the case of a bilateral or multilateral APA). Accordingly, APMA may require that the taxpayer agree to extend the APA term in order to ensure such prospectivity. In the case of a bilateral or multilateral APA, any proposed term extension will be coordinated with the relevant foreign competent authority(ies).

.10 Requested and Supplemental Items.

(1) The information, documents, and materials required of APA requests that are identified in the appendix may not exhaust items relevant to an APA team's evaluation of a given APA request. If the APA team determines that it needs additional information to analyze the APA request, the taxpayer will be asked, and thereby required, to provide such information. The taxpayer must respond similarly to requests made by a foreign competent authority, as applicable.

(2) In general, the taxpayer must provide to all relevant competent authorities any responses, information, documents, or analyses that it provides to one competent authority, whether such responses, information, documents, or analyses are provided in response to a request from a competent authority or are submitted voluntarily by the taxpayer in support of its APA request. In the interest of minimizing administrative burdens, the APA team will work with the taxpayer during the APA process to find efficient procedures for disseminating responses, information, documents, or analyses to the competent authorities, such as using indexes to catalogue information, documents, or analyses the taxpayer will make available to the competent authorities upon request.

.11 Corrected and Updated Information.

(1) After the APA request is filed, any material errors or any material omissions in the APA request or in supplemental submissions must be promptly corrected or remedied. The taxpayer must also submit any information or documents discovered or created during the APA process that are, or reasonably may be, relevant to the APA request.

(2) The taxpayer must notify APMA of all material changes and updates to information previously submitted in connection with the APA request.

(3) Any financial data produced in connection with the APA request during the APA process must be updated annually or on a schedule that is mutually acceptable to the taxpayer and to APMA. In addition, the APA request must be supplemented with a demonstration of the application of the proposed covered method(s) to the actual financial results of the applicable members of the proposed covered group for each taxable year completed while the APA request is pending. Such a supplemental submission must be provided within 180 days of the close of the taxable year. APMA may, at its discretion, grant an extension or modify these requirements if the taxpayer provides written notification before the date the supplemental submission would otherwise be due.

.12 Withdrawing the Request. The taxpayer may withdraw its APA request at any time before it executes the APA. APMA generally will not refund user fees if the taxpayer withdraws its APA request after APMA has begun its due diligence.

SECTION 4: ACTIONS ON APA REQUESTS

.01 Decision Letter and Contact Information. APMA will notify the taxpayer in writing that it has received the APA request. The letter will also provide the name and contact information of the assigned APA team leader to which the request has been assigned. In addition, the letter will state either: (1) that the request is complete and that the APA process will proceed, together with any administrative or procedural steps the taxpayer must take pertaining to the APA request; (2) that the request is provisionally accepted but that the APA process will not proceed until specified deficiencies in the request have been addressed; or (3) that the request is rejected and the circumstances, if any, under which the request might be accepted. APMA will also instruct the taxpayer as to other offices within the IRS to which full or partial copies of the APA request must be provided.

.02 Denial of Assistance.

(1) APMA may deny assistance, in whole or in part, at any point in the APA process, either at the outset by rejecting the APA request or by terminating or suspending the APA process after it has accepted an APA request. APMA will generally take such actions if any of the circumstances described in, or similar to those described in, section 6.02 of Rev. Proc. 2014-XX are present, including failure to include the materials required by this revenue procedure in the APA request (see section 3) or the materials requested by the APA team during the APA process.

(2) If APMA denies assistance, it will determine whether to refund the taxpayer's user fee. APMA will base its decision on various considerations, including the extent of the due diligence and analysis the APA team had undertaken before further assistance is denied.

(3) APMA's decision as to whether an APA request is complete or to deny, suspend, or terminate assistance is not subject to administrative review.

.03 Formation of APA Team, Opening Conference, Case Plan, and Taxpayer Review

(1) Once APMA has determined that the APA request is complete and that it will continue with the APA process, the APA team leader will contact the taxpayer to set a date for an opening conference or, depending on the nature of the proposed covered issue(s) and method(s) and other aspects of the APA request, to inform the taxpayer that an opening conference may be unnecessary before the APA team moves forward with its analysis. If the opening conference is held, the taxpayer may be asked to respond to questions from the APA team about the APA request by a given date before the opening conference or at the opening conference itself. The APA team leader may postpone the opening conference if the responses are not provided by the date set or agreed to by the APA team leader.

(2) The primary purpose of an opening conference is to give the taxpayer an opportunity to acquaint the APA team with the APA request and the issue(s), method(s), and terms and conditions the taxpayer is proposing to be covered by the APA. The meeting may also include a more detailed discussion of particular aspects of the taxpayer's proposals. Accordingly, the taxpayer should be prepared to discuss the APA request in detail and respond as fully as possible to questions about its proposals.

(3) The opening conference will also cover general procedural issues, including whether a case plan is appropriate and, if so, when it may be useful in the APA process for a case plan to be implemented, in light of the due diligence and analysis the APA team expects to undertake in the APA process. If feasible in light of the scope and complexity of the proposed APA, the APA team may also provide an estimate of the time it will take to complete its evaluation of the APA request. Whether this estimate holds true in any given case will primarily depend upon a variety of factors: the quality of the APA request; the extent of the taxpayer's cooperation with the APA team, including the completeness and timeliness of its responses to information requests and other due diligence inquiries during the APA process; and, in the case of bilateral or multilateral APAs, the speed with which the foreign competent authority is able to be prepared to discuss the case with the APA team. Accordingly, any timetable discussed or set forth in a case plan is only an estimate and is subject to revision and extension.

(4) For a bilateral or multilateral APA request, APMA will consider requests from, and may invite or require, the taxpayer to make presentations jointly to the U.S. and foreign competent authorities during the APA process. APMA will consult with the foreign competent authority as to its interest in joint presentations and notify the taxpayer accordingly.

(5) At the conclusion of the APA team's due diligence and evaluation of a bilateral or multilateral APA request, the APA team leader will provide to the taxpayer a memorandum conveying the substance of the APA team's views on the proposed APA. The memorandum will have a length, content, and format appropriate to the size and complexity of the proposed covered issue(s) and method(s) and other relevant facts and circumstances surrounding the case. The taxpayer will be invited to respond to the memorandum by a deadline set by the APA team leader.

.04 Finalizing the APA. In the case of a unilateral APA, the APA team and taxpayer will proceed to finalize an APA after the APA team has completed its due diligence and evaluation of the APA request. In the case of a bilateral or multilateral APA, the APA team and the taxpayer will proceed to finalize an APA after a MAP resolution has been reached in the case.

.05 Arbitration. The mutual agreement procedure article in arbitration treaties requires that the competent authorities refer certain cases to mandatory arbitration in the event direct consultation does not lead to a mutual agreement within a prescribed time period. Taxpayers requesting bilateral or multilateral APAs should consult the mutual agreement procedure article under the applicable U.S. tax treaty and any ancillary agreements to determine whether it is an arbitration treaty and the extent to which mandatory arbitration applies to cases initiated by bilateral or multilateral APA requests under such treaty. See section 12 of Rev. Proc. 2014-XX.

.06 Execution of Agreement. The APA will enter into force as of the date it is executed by APMA and by the taxpayer and have effect as provided therein. In the case of an APA that includes a member of a consolidated group other than the common parent (as defined in Treas. Reg. § 1.1502-1), the common parent must also sign the APA as provided in Treas. Reg. § 1.1502-77. The person signing the APA must be an authorized officer of the taxpayer, have personal knowledge of the APA's covered issue(s), covered method(s), and terms and conditions, perform duties not limited to obtaining letter rulings or determination letters from the IRS or entering into APAs, and have authorization to sign the taxpayer's income tax return pursuant to section 6062 of the Code. The person signing for any non-corporate taxpayer must be an individual having personal knowledge of the APA's covered issue(s), covered method(s), and terms and conditions and have authorization to sign the taxpayer's income tax return pursuant to sections 6061 or 6063 of the Code, as applicable.

.07 Not an Examination. APMA's evaluation of the APA request will not constitute an examination or inspection of the taxpayer's books and records under section 7605(b) or other provisions of the Code.

SECTION 5: APA ROLLBACKS AND COORDINATION WITH REV. PROC. 2014-XX

.01 Extension from MAP or ACAP Years to APA Years

(1) Under Rev. Proc. 2014-XX, APMA may propose that a taxpayer pursue ACAP to extend a MAP resolution in its MAP case to one or more ACAP years. APMA may also affirmatively seek of its own accord to roll forward a MAP resolution in a MAP case to the taxpayer's ACAP years where it is feasible, practicable, and in the interest of sound tax administration to do so. APMA may also discuss with the taxpayer the possibility of extending the MAP resolution into APA years. A request to extend a MAP resolution into APA years may be made either by filing a complete APA request or by filing an abbreviated APA request. A taxpayer must file a complete APA request unless it has obtained APMA's permission to file an abbreviated APA request. APMA will grant permission to file an abbreviated APA request only if (i) the taxpayer satisfies the pre-filing requirements set forth in section 3 and detailed in this section 5, and (ii) the applicable law, facts and circumstances, economic conditions, and other relevant factors surrounding the taxpayer's proposed APA years and proposed APA rollback years are reasonably expected to be substantially the same as such factors surrounding its MAP years or its MAP and ACAP years covered by the MAP resolution. If either of these requirements is not satisfied, the taxpayer must file a complete APA request and otherwise comply with all other provisions of this revenue procedure.

(2) As noted in section 3.02(4), a taxpayer that seeks to file an abbreviated APA request to extend a MAP resolution in a MAP case to APA years must submit a pre-filing memorandum. Among the other required items, the pre-filing memorandum must (i) present the taxpayer's arguments that the applicable law, facts and circumstances, economic conditions, and other factors surrounding its proposed covered issue(s) and method(s) for the proposed APA years and any proposed APA rollback years are substantially the same as those surrounding the MAP resolution in the MAP case, (ii) specify any information, documents, or other materials the taxpayer proposes to omit in its submission, and (iii) discuss the taxpayer's arguments that the information, documents, or other materials the taxpayer proposes to omit from its APA request are not necessary for APMA's evaluation of the APA request.

(3) In accordance with section 3.02(8), APMA will determine whether to hold a pre-filing conference after reviewing the pre-filing memorandum. APMA may determine that no pre-filing conference is required and that an abbreviated APA request will be acceptable. In that event, APMA will provide the taxpayer with instructions on preparing the request. If APMA determines that a pre-filing conference is required, the taxpayer will be expected to discuss the arguments presented in its pre-filing memorandum. If APMA decides to accept an abbreviated APA request after the pre-filing conference, it will provide the taxpayer with instructions on preparing the abbreviated APA request. If APMA decides that it will not accept an abbreviated APA request, the taxpayer will be instructed to file a complete APA request.

.02 APA Rollbacks

(1) A taxpayer may request an APA rollback to cover one or more of its pre-APA years. An APA rollback request should be included in the taxpayer's APA request. APMA may consider a later request for an APA rollback only if the APA rollback request is submitted in writing within 3 months after the APA request is filed, unless APMA agrees otherwise.

(2) Whether included in the APA request or in a subsequent written request, the APA rollback request must include the same information for the pre-APA years that is required to be submitted for the APA years proposed by the taxpayer.

(3) After coordinating and collaborating with other offices within the IRS, APMA will inform the taxpayer whether its APA rollback request has been accepted.

(4) Regardless of whether the taxpayer pursues an APA rollback request, APMA reserves the right to coordinate with applicable IRS offices to pursue an APA rollback to any or all of the taxpayer's open pre-APA years. In general, APMA will consider taking such action where there is sufficient similarity in relevant facts and circumstances across the taxpayer's APA and pre-APA years. APMA will inform the taxpayer in writing, either before the APA process begins or at any time during the APA process, whether it will pursue an APA rollback and the pre-APA years it will seek to cover. If the taxpayer refuses to accept an APA rollback, APMA may decline to initiate the APA process or suspend or terminate the process if it has already begun.

(5) An APA rollback request submitted in connection with a bilateral or multilateral APA request and involving a taxable year under the jurisdiction of IRS Appeals will be deemed to constitute a request for SAP review, provided that an affirmative statement requesting SAP review is included in the APA request or in the subsequent written APA rollback request (see the appendix). Any request for SAP review made in connection with an APA request will be subject to the provisions governing SAP review set forth in section 8 of Rev. Proc. 2014-XX.

(6) Except in unusual circumstances, APMA will not accept a rollback to a taxable year whose period of limitations for assessment of tax has expired in the United States.

SECTION 6: LEGAL EFFECT OF THE APA

.01 Binding Agreement. An APA is a binding agreement between the taxpayer and the IRS.

.02 Effect of Compliance. If the taxpayer complies with the APA terms and conditions, the IRS will not contest the application of the covered method(s) to the covered issue(s) of the APA except as provided in this revenue procedure. The taxpayer remains otherwise subject to U.S. income tax laws and applicable U.S. income tax treaties.

.03 Scope of Agreement. An APA will have no legal effect except with respect to the taxpayer, taxable years, and issues to which the APA specifically relates.

.04 Use as Evidence. Unless provided otherwise by written agreement or regulations, the IRS and the taxpayer may not introduce the APA or non-factual oral and written representations made in conjunction with the APA request as evidence in any judicial or administrative proceeding regarding any tax year, issue, or person not covered by the APA. This paragraph does not preclude the IRS and the taxpayer from agreeing to roll back the APA covered method(s), or the IRS's use of any non-factual material otherwise discoverable or obtained other than in the APA process merely because the parties considered the same or similar material in the APA process.

.05 Use as Admissions. Unless provided otherwise by written agreement or regulations, the IRS and the taxpayer may not introduce a proposed, cancelled, or revoked APA, or any non-factual oral or written representations or submissions made during the APA process, as an admission by the other party, in any judicial or administrative proceeding regarding any taxable year of the requested APA term. This paragraph does not preclude the IRS's use of any non-factual material otherwise discoverable or obtained other than in the APA process merely because APMA and the taxpayer considered the same or similar material in the APA process.

SECTION 7: ADMINISTERING THE APA

.01 Annual Reports

(1) An APA annual report must be filed for each APA year. The report must demonstrate the taxpayer's compliance with the APA terms and conditions, including the amount of any APA primary adjustment for a given APA year. The report must also include all other items required by the APA and disclose any pending or contemplated requests to renew, modify, or cancel the APA. In addition, the report must identify and correct any materially false, incorrect, or incomplete information submitted during the APA process that the taxpayer discovers during the APA year.

(2) The taxpayer must file two printed copies and one electronic copy of the annual report before the later of (i) the fifteenth day of the twelfth month following the close of the APA year, and (ii) 90 days after the effective date of the APA. APMA may agree to alternative filing dates if requested by the taxpayer. The taxpayer must file all three copies of the annual report with APMA at the address set forth in the appendix. For bilateral and multilateral APAs, APMA may require the taxpayer to simultaneously file a copy of the annual report with the applicable foreign competent authority(ies).

(3) The taxpayer will be notified if it is necessary to clarify or complete the information submitted in the annual report. The taxpayer must supply the additional information by the date specified in the notice.

(4) Any request the taxpayer receives to clarify or complete information in an annual report is not an examination or the commencement of an examination of the taxpayer for purposes of section 7605(b) of the Code or any other provision of the Code.

(5) The taxpayer must amend its annual report within 45 days after becoming aware of any incomplete or incorrect information or any incorrect application of the covered method(s) presented in the report.

(6) APMA may, at its discretion, grant an extension to submit the annual report if the taxpayer provides written notification of its request before the due date and explains the circumstances necessitating the extension.

(7) The annual report must contain the following declarations, as applicable: Under penalties of perjury, I declare that I have examined this annual report including accompanying documents, and, to the best of my knowledge and belief, this annual report contains all the relevant facts relating to the annual reporting requirements pursuant to the APA, and such facts are true, correct, and complete. [If applicable: An adjustment to conform taxable income and other relevant items to reflect the results reported herein has been reported to IRS Examination.] [If applicable: An amended income tax return to conform taxable income and other relevant items to reflect the results reported herein [has been] [will be] filed with the appropriate Internal Revenue Service Center.]

(8) The taxpayer must sign the declaration according to the instructions in the appendix regarding perjury statements.

(9) Failure to file a timely, complete, or accurate annual report may be grounds for canceling or revoking the APA under section 7.06.

.02 APA Repatriation

(1) Bilateral and Multilateral APAs. Subject to the requirements of section 7.02(2), APMA will apply the rules and principles set forth in section 11 of Rev. Proc. 2014-XX governing MAP repatriation to determine the terms of APA repatriation for bilateral and multilateral APAs. When MAP repatriation is not agreed to as part of the MAP resolution, APMA will instead determine the terms of APA repatriation for bilateral and multilateral APAs by following the terms under which repatriation payments may be made under Rev. Proc. 99-32.

(2) Requirements Pertaining to Repatriation in Bilateral or Multilateral APAs. APMA will not apply the rules and principles set forth in section 11 of Rev. Proc. 2014-XX governing MAP repatriation to determine the terms of APA repatriation in a bilateral or multilateral APA unless the following conditions are satisfied: (i) no person (whether or not a "United States taxpayer" within the meaning of Rev. Proc. 99-32) that will make or receive repatriation payments would be barred from making or receiving repatriation payments under the principles of section 3.01 or 3.03 of Rev. Proc. 99-32; and (ii) the taxpayer explicitly requests MAP repatriation in its APA request or in a supplemental written submission filed with APMA prior to a MAP resolution being reached in its case.

(3) Unilateral APAs. APMA will determine the terms of APA repatriation for unilateral APAs by following the terms under which repatriation payments may be made under Rev. Proc. 99-32.

.03 Examination

(1) With respect to the covered issue(s) in the APA, the IRS will not reconsider the covered method(s) but will instead limit the examination of a taxpayer's income tax return in any given APA year to, and may require that the taxpayer establish, the following: (i) the taxpayer's compliance with the APA terms and conditions; (ii) the accuracy of the APA annual report's material representations; and (iii) the correctness of the supporting data and computations used to apply the covered method(s).

(2) The IRS may audit and propose adjustments to the taxpayer's results as determined under the covered method(s) of the APA without affecting the APA's validity or applicability. The taxpayer may agree with the proposed adjustments in the same manner as any other adjustment, in which case the IRS will assess any resulting additional tax or refund any resulting overpayment of tax accordingly. If it does not agree with the proposed adjustment, the taxpayer may contest it through available administrative and judicial procedures. The taxpayer must include the audit adjustments as finally determined for the purpose of applying the covered method(s). As necessary, it must also make any APA primary adjustments, unless otherwise determined by APMA.

.04 Record Retention

(1) The taxpayer must maintain books and records that are sufficiently detailed to verify that it has complied with the APA terms and conditions. The taxpayer's compliance with this paragraph fulfills the record-keeping requirements of sections 6038A and 6038C of the Code as applied to the covered issue(s).

(2) Upon examination, IRS may request that the taxpayer submit additional information or translate specific documents within 30 days. The IRS may extend this period for good cause. The fact that a non-U.S. jurisdiction may impose a penalty upon the taxpayer or other person for disclosing any such requested material will not constitute reasonable cause for noncompliance with the IRS's request.

.05 Revising the APA

(1) An APA may be revised by agreement of the parties (including the foreign competent authority(ies) in the case of a bilateral or multilateral APA) and any such revision is effective upon the date of the execution of the revision. APMA may agree to revise an APA in lieu of canceling or revoking it.

(2) If APMA agrees to revise a bilateral or multilateral APA, it will submit the revised APA to obtain the consent of the applicable foreign competent authority(ies) to do the same. If the foreign competent authority(ies) refuse(s) to accept the revised APA, or if the competent authorities cannot agree on a revised APA acceptable to all parties, APMA and the taxpayer may agree to (i) apply the existing APA or the revised APA for domestic U.S. purposes to one or more APA years, or (ii) seek to cancel the APA as of a specific date.

.06 Revoking or Canceling the APA

(1) APMA may revoke an APA due to fraud or malfeasance (as defined in section 7121 of the Code), or disregard (as defined in sections 6662(b)(1) and (c) of the Code) by the taxpayer in connection with the APA, including, but not limited to, fraud, malfeasance, or disregard involving (i) material facts in the request or subsequent submissions (including an annual report) or (ii) lack of good faith compliance with the APA terms and conditions.

(2) APMA may cancel an APA due to the taxpayer's misrepresentation, mistake with respect to a material fact, failure to state a material fact, failure to file a timely annual report, or lack of good faith compliance with the APA terms and conditions.

(3) Unless the parties agree to revise the APA, APMA will cancel an APA in the event of a failure of a critical assumption or a material change in governing case law, statute, regulation, or applicable treaty.

(4) For purposes of this section 7.06(1) and (2), APMA will consider facts material if, for example, knowledge of the facts could reasonably have resulted in an APA with significantly different terms and conditions. With respect to annual reports, APMA will consider facts material if, for example, knowledge of the facts would have resulted in (a) a materially different allocation of income, deductions, or credits than those reported in the annual report, or (b) the failure to meet a critical assumption.

(5) APMA may waive cancellation if the taxpayer can show good faith and reasonable cause and agrees to make all adjustments proposed to correct for the misrepresentation, mistake regarding a material fact, failure to state a material fact, or noncompliance.

(6) If APMA revokes an APA, the revocation relates back to the first day of the first APA year. The IRS may (a) determine deficiencies in income taxes and additions thereto; (b) deny relief under Rev. Proc. 99-32; (c) allow the taxpayer relief under Rev. Proc. 99-32, but determine the interest on any account receivable established under section 4.01 of Rev. Proc. 99-32 without mutual agreement or correlative relief; (d) revoke the APA as an "egregious case" under Rev. Rul. 80-231, 1980-2 C.B. 219, to deny the taxpayer a foreign tax credit; and (e) deny a request for relief submitted under Rev. Proc. 2014-XX. APMA will seek to coordinate these or any other action concerning revocation of a bilateral or multilateral APA with the foreign competent authority(ies).

(7) APMA's cancellation of an APA generally is effective as of the beginning of the taxable year in which the critical assumption failed or the beginning of the year to which the misrepresentation, mistake regarding a material fact, failure to state a material fact, or noncompliance relates. If, however, the cancellation results from a change in case law, statute, regulation, U.S. income tax treaty, or coordination agreement, the cancellation generally is effective at the beginning of the year that contains the effective date of the change in case law, statute, regulation, U.S. income tax treaty, or coordination agreement.

(8) For periods following the effective date of the cancellation, the APA has no further force and effect with respect to the IRS and the taxpayer for U.S. income tax purposes. APMA will seek to coordinate any action concerning the cancellation of a bilateral or multilateral APA with the foreign competent authority(ies).

.07 Change in Case Law, Statute, Regulation, or Treaty. If applicable U.S. case law, statutes, regulations, or treaties change the federal income tax treatment of any matter covered by the APA, the new case law, statute, regulation, or treaty provision supersedes any inconsistent terms and conditions of the APA.

SECTION 8: RENEWING THE APA

.01 General. A request to renew a current APA may be made either by filing a complete APA request or by filing an abbreviated APA request. A taxpayer must file a complete APA request unless it has obtained APMA's permission to file an abbreviated APA request. APMA will grant permission to file an abbreviated APA request only if (i) the taxpayer satisfies the pre-filing requirements set forth in section 3 and detailed in this section 8, and (ii) the applicable law, facts and circumstances, economic conditions, and other relevant factors surrounding the covered issue(s), covered method(s), and terms and conditions of the current APA are reasonably expected to be substantially the same as those in the proposed renewal APA years. If either of these requirements is not satisfied, the taxpayer must file a complete APA request and otherwise comply with all other provisions of this revenue procedure.

.02 Timing. Taxpayers are encouraged to file a request to renew a current APA nine months before the expiration of the final APA year.

.03 Pre-filing Memorandum Requirement for Abbreviated APA Requests. As noted in section 3.02(4), a taxpayer that seeks to file an abbreviated APA request to renew an APA must submit a pre-filing memorandum. Among the other required items, the pre-filing memorandum must (i) present the taxpayer's arguments that the applicable law, facts and circumstances, economic conditions, and other factors surrounding its proposed covered issue(s) and method(s) for the proposed APA years are substantially the same as those surrounding the current APA, (ii) specify any information, documents, or other materials the taxpayer proposes to omit from its submission, and (iii) discuss the taxpayer's arguments that the information, documents, or other materials the taxpayer proposes to omit from its APA request are not necessary for APMA's evaluation of the APA request.

.04 Actions Taken on APA Renewal Requests. In accordance with section 3.02(8), APMA will determine whether to hold a pre-filing conference after reviewing the pre-filing memorandum. APMA may determine that no pre-filing conference is required and that an abbreviated APA request will be acceptable. In that event, APMA will provide the taxpayer with instructions on preparing the abbreviated APA request. If APMA determines that a pre-filing conference is required, the taxpayer will be expected to discuss the arguments presented in its pre-filing memorandum. If after the pre-filing conference APMA decides that an abbreviated APA request is acceptable, it will provide the taxpayer with instructions on preparing the request. If APMA decides that it will not accept an abbreviated APA request, the taxpayer will be instructed to file a complete APA request.

SECTION 9: DISCLOSURE

.01 Confidentiality. An APA, any background information relating to an APA, and the taxpayer's APA request and any supplementary materials submitted in conjunction with the APA request are return information and are confidential. See sections 6103, 6105, 894, and 7852(d) of the Code.

.02 Not "Written Determinations". An APA, background information related to the APA, an APA request, and supplementary materials submitted in conjunction with the APA request are not "written determinations" and are not open to public inspection. See section 6110 of the Code.

.03 Statutory Report. The Secretary must prepare an annual report for public disclosure. See section 521(b) of the Ticket to Work and Work Incentives Improvement Act of 1999, Pub. L. 106-170, 113 Stat. 1860, 1925. That report includes specifically designated information concerning all APAs, in a form that does not identify taxpayers, their trade secrets, or proprietary or confidential business or financial information.

.04 Exchange of Information. APAs, annual reports, and factual information contained in APA requests are subject to exchange of information under U.S. income tax treaties or U.S. income tax information exchange agreements in accordance with the terms of such treaties and agreements (including terms regarding relevancy, confidentiality and the protection of trade secrets). In cases in which the exchange of information would be discretionary, information may be exchanged to the extent consistent with sound tax administration and the practices of the relevant foreign competent authority.

SECTION 10: EFFECT ON OTHER DOCUMENTS

Rev. Procs. 2006-09, 2006-1 C.B. 278, and 2008-31, 2008-1C.B. 1133, are modified and superseded by this revenue procedure. Rev. Proc. 2014-XX is amplified.

SECTION 11: EFFECTIVE DATE

This revenue procedure will apply to all APA requests, including requests for renewal, received on or after [DATE]. By agreement, this revenue procedure may apply to any APA resulting from an APA request pending on [DATE].

SECTION 12: PAPERWORK REDUCTION ACT

The collection of information contained in this revenue procedure has been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act (44 U.S.C. 3507) under control number 1545 - 1503.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number.

The collection of information in this revenue procedure is in sections 3.02, 3.04, 3.10, 3.11, 5.01, 7.01, 7.04, 8.01 and 8.03 and in the appendix. This information is required, and will be used, to provide the IRS sufficient information to evaluate and process the APA request or to determine whether the taxpayer is in compliance with the terms and conditions of an APA. APMA will use this information to evaluate the proposed covered method(s) and the taxpayer's compliance with the terms and conditions of any APA to which it is a party. The collection of information is required to obtain an APA. The likely respondents are business or other for-profit institutions.

The estimated total annual reporting and/or recordkeeping burden is 10900 hours.

The estimated average burden for an APA pre-filing conference is 10 hours; the estimated average burden for an APA request is 60 hours; and the estimated average burden for preparation of an annual report by a party to an APA is 15 hours. The estimated number of respondents and/or recordkeepers is 390.

The estimated annual frequency of responses is one request or report per year per applicant or party to an APA, except that a taxpayer requesting an APA may also submit a pre-filing memorandum.

Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally tax returns and tax return information are confidential, as required by section 6103 of the Code.

DRAFTING INFORMATION

The principal authors of this document are John Hughes and Rebecca Kalmus of the Office of the Deputy Commissioner (International), LB&I; and Angela Holland of the Office of the Associate Chief Counsel (International). For further information regarding this revenue procedure, please contact Ms. Kalmus at (202) 515-4746 or Ms. Holland at (202) 927-0436 (not toll free numbers).

A complete APA request will provide the information specified below and all other information reasonably necessary to permit the APA team to evaluate fully the proposed covered method(s). The level of detail required will depend on the facts and circumstances of each case and will be governed by relevancy and materiality considerations (keeping in mind that the APA request should provide enough information to allow the reader to concur that a matter is not relevant or material). The information in the APA request should be tailored to the facts relating to the proposed covered group, the proposed covered issue(s) (including information supporting the inclusion of any proposed APA rollback years), and relevant legal authority. It should also take into account discussions with APMA in any pre-filing memorandum or pre-filing conference.

Section 1 of this appendix addresses the required content of APA requests. Section 2 sets forth instructions on submitting printed and electronic copies of APA requests. Section 3 presents instructions on paying user fees for APA requests. Section 4 provides addresses and contact information.

SECTION 1. CONTENT OF APA REQUESTS

.01 General. An APA request must include a cover letter followed by the exhibits presented in the order as listed in this section. An original of the cover letter, signed and dated by the taxpayer or the taxpayer's authorized representative, must be included in one of the three required printed copies of the APA request (see section 2 of this appendix). If the taxpayer's authorized representative signs the original of the cover letter, the taxpayer and authorized representative must satisfy the relevant instructions on signatures in Rev. Proc. 2005-1, 2005-1 I.R.B. 1 (or its successor). The cover letter and the exhibits must contain or respond to the required statements, descriptions, explanations, and other requested information. If the requested information is not applicable to the APA request, a suitable explanation must be provided.

.02 Cover Letter. The cover letter to the APA request must be presented according to the instructions and structure set forth below.

Part 1. Executive Summary

 1.1          Identifying information: List the name, address, and

 2.1          Authorization: List the names of and contact

 3.1          Pre-filing information: Provide the following

 4.1          Selection of proposed covered method(s): Discuss the

 5.1          Review of Proposed APA: Provide a detailed discussion

 Exhibit 1    Contents of exhibits: Provide a table or similar

.01 General. The taxpayer must provide four copies of its APA request as follows: one (1) original, bound printed submission containing signed originals of the cover letter and "penalties of perjury" declaration and, as applicable, of the authorization forms, consent to disclosure, and e-mail authorization, together with copies of all other required printed information; two (2) bound photocopies of the contents of the original printed submission; and one (1) electronic copy of the contents of the original printed submission, together with the required electronic-only attachments, on CD or flash drive or similar acceptable electronic storage medium. All four copies of the APA request must be filed with APMA at the address set forth in section 4 of this appendix.

.02 Contents and Format of Printed Submissions. Each printed copy of the APA request must contain (i) the cover letter to the APA request, and (ii) Exhibits 1 through 11. If possible, each printed copy should contain all such content in a single, bound volume. The exhibits must be tabbed or separated and identified and ordered as presented in section 1 of this appendix. If an exhibit is not applicable to the APA request, a statement to this effect must be included in the relevant tabbed section.

.03 Contents and Format of Electronic Copy.

(1) The electronic copy of the APA request must contain (i) the cover letter to the APA request, and (ii) Exhibits 1 through 22. The exhibits should consist of separate electronic files named in a manner that corresponds to the exhibit numbers presented in section 1 of this appendix. If an exhibit is not applicable to the APA request, a statement to this effect must be included in the electronic file.

(2) The electronic copy of the APA request must include the cover letter to the APA request in both Microsoft Word ("Word") and in Adobe Portable Document (".pdf") formats. Exhibit 21 must be provided in Word format. All other exhibits readily available in Word or Microsoft Excel ("Excel") format should be provided in those forms, as applicable, instead of, or in addition to, .pdf format.

(3) All electronic documents provided in conjunction with an APA request and throughout the APA process must be searchable, unless the file is not readily available in searchable form (e.g., a photocopy of an intercompany agreement).

(4) All documents presented in Excel format must be provided with formulas and linkages intact.

SECTION 3. USER FEES

.01 General. User fees must be paid through the Pay.gov website. Instructions on making user fee payments are available on the IRS website at http://www.irs.gov/Individuals/International-Taxpayers/ChangestoAPAandLOBUserFeeFilingProcedures. APMA will not consider an APA request complete, and will hold the APA request in suspense, until the correct user fee is paid through the Pay.gov website.

.02 Separate Fees. Subject to the provisions of this section, a separate user fee is required for each unilateral, bilateral, or multilateral APA request.

.03 Amounts. The user fee amounts are as follows:

(1) $50,000 for each unilateral, bilateral, or multilateral APA request;

(2) $35,000 for each renewal APA request;

(3) $22,500 for each APA request eligible for the small case APA user fee; and

(4) $10,000 for each amendment to a current unilateral, bilateral, or multilateral APA

.04 Small Case APA User Fee Eligibility. An APA request is eligible for the small case APA user fee only if all of the following apply: (i) the controlled group has sales revenues, within the meaning of Treas. Reg. § 1.482-5(d)(1), of less than $500 million in each of its most recent three pre-APA years; (ii) the aggregate value of the proposed covered issue(s) is not expected to exceed $50 million in any given year of the proposed APA years; (iii) the aggregate value of any transfer of rights in, or rights to use, intangibles is not expected to exceed $10 million in any given year of the proposed APA years; and (iv) no proposed covered issue involves intangible property arising from, or otherwise related to, an intangible development arrangement.

.05 Fees for Amendments. For purposes of section 3.03 of this appendix, an amendment includes coverage of additional issues or other determinations and material changes to a proposed covered method. APMA will not impose this amendment fee if APMA or a foreign competent authority initiates the request to amend the proposed covered issue(s) or method(s).

SECTION 4. ADDRESSES AND CONTACT INFORMATION Phone number: TBD