19 February 2006
The key feature of the new MOU is the establishment of an independent review process whereby a factual disagreement in a MAP case must be referred to an Appeals Review Panel (ARP) for resolution. The ARP will be comprised of officials chosen by the IRS Chief of Appeals and the CRA Assistant Commissioner of Appeals. The MOU sets out the time frame for referring a case to the independent review process, the procedure for making and acknowledging the referral, the process for selecting the members of the ARP, rules regarding ex parte contacts, rules regarding meetings of the ARP, the time frame for completing work and rendering a decision, and the requirement of a written report if the ARP members agree on a resolution of the factual dispute or a written explanation in the event the members are unable to agree.
The MOU also defines the types of factual disputes that will be subject to the new process, but states that the new process will not apply (i) to MAP cases involving the interpretation of treaty provisions or (ii) to MAP cases involving taxpayers who fail to cooperate with either of the competent authorities unless the competent authorities agree otherwise. The MOU also states that a decision by the ARP will not be considered as precedent for resolving other MAP cases.
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