Comments Requested on Proposed Revision to APA Template

The IRS has requested comments on a proposed revision to the template used in drafting Advance Pricing Agreements (APAs). The template will be used for APAs requested under Rev. Proc. 2015-41, I.R.B. 2015-35, 263. Moreover, the template contains certain modifications to conform to Rev. Proc. 2015-41. The proposed template is longer than previous templates because it is more comprehensive. The template will also assist taxpayers by providing an APA drafting roadmap.

Proposed Revisions

The revision is intended to: (1) enable quicker and more accurate drafting of APAs; (2) provide additional guidance to taxpayers in preparing the proposed draft APA that is required as part of an APA Request; (3) help Advance Pricing and Mutual Agreement Program’s (APMA’s) review of draft APAs; and (3) aid the Mutual Agreement process for bilateral and multilateral APAs. In order to achieve these goals, the template provides menus of options for selection. These options include a variety of situations, to minimize the need for custom drafting and negotiation over the text of the APA.

Further, the template also includes: (1) a large table of defined terms; (2) more detail on certain topics such as financial statements, conforming adjustments and the early termination of an APA; and (3) certain select options that will require special justification by a taxpayer that proposes to use them. Moreover, Appendix A of the template, that addresses covered issues, covered methods, income reporting and conforming adjustments and Appendix B, which addresses critical assumptions, are written to be easily adapted for use in a competent authority Mutual Agreement if a treaty partner is willing to use them.

In addition, Microsoft Word and Adobe PDF files for both the template and the filled-in example can be requested by sending an email to lbi.ttpo.apma.feedback@irs.gov . The subject line should read “request.”

Comments Requested

Comments should be submitted by October 31, 2017, and sent to lbi.ttpo.apma.feedback@irs.gov with the subject line “comments.” Narrative form rather than markup should be used. Particular page references to the template or example are required to follow the pagination of the Adobe PDF files.

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