Competent Authority and Double Taxation

Share this Article
Facebook Icon LinkedIn Icon Twitter Icon
Jason B. Freeman

Jason B. Freeman

Managing Member


Mr. Freeman is the founding member of Freeman Law, PLLC. He is a dual-credentialed attorney-CPA, author, law professor, and trial attorney.

Mr. Freeman has been named by Chambers & Partners as among the leading tax and litigation attorneys in the United States and to U.S. News and World Report’s Best Lawyers in America list. He is a former recipient of the American Bar Association’s “On the Rise – Top 40 Young Lawyers” in America award. Mr. Freeman was named the “Leading Tax Controversy Litigation Attorney of the Year” for the State of Texas for 2019 and 2020 by AI.

Mr. Freeman has been recognized multiple times by D Magazine, a D Magazine Partner service, as one of the Best Lawyers in Dallas, and as a Super Lawyer by Super Lawyers, a Thomson Reuters service. He has previously been recognized by Super Lawyers as a Top 100 Up-And-Coming Attorney in Texas.

Mr. Freeman currently serves as the chairman of the Texas Society of CPAs (TXCPA). He is a former chairman of the Dallas Society of CPAs (TXCPA-Dallas). Mr. Freeman also served multiple terms as the President of the North Texas chapter of the American Academy of Attorney-CPAs. He has been previously recognized as the Young CPA of the Year in the State of Texas (an award given to only one CPA in the state of Texas under 40).

A taxpayer who is a U.S. resident for purposes of a U.S. income tax treaty is generally entitled to request assistance from the U.S. “competent authority” where the actions of a treaty country or the United States would (i) cause double taxation or (ii) taxation that is inconsistent with the treaty.  Competent authority assistance is only available with respect to countries that have an applicable tax treaty with the United States.  Our Treaty Resource Page provides an overview of every U.S. tax treaty and the tax system of each such country.

A taxpayer seeking assistance from the U.S. competent authority should always first consult any applicable treaty articles, including the Mutual Agreement Procedure (MAP) article, before requesting assistance.  In addition to filing a request for assistance with competent authority, the taxpayer should consider (i) filing a timely protective claim for credit or refund; and (ii) take any required actions that are necessary under the procedures of the foreign country to avoid losing the right to appeal or obtain competent authority review under that country’s income tax laws.

Note that some tax treaties provide specific timing requirements that govern competent authority requests and a taxpayer must comply with the applicable pre-filing procedures.  In addition, some agreements with the IRS can limit a taxpayer’s ability to utilize the competent authority process.

What is Competent Authority?

The “Competent Authority” is responsible for applying and interpreting the tax treaty between the United States and a treaty partner and resolving disputes and issues related to such treaties.

The MAP articles of U.S. tax treaties provide taxpayers with the right to request the assistance of the competent authority when a taxpayer believes that the actions of the United States or the applicable U.S. treaty partner will result in the taxpayer being subject to taxation that is inconsistent with the treaty.

The U.S. competent authority is authorized to apply the provisions of U.S. tax treaties and has authority to interpret the provisions of U.S. tax treaties with the concurrence of the IRS Associate Chief Counsel (International). Otherwise, the U.S. competent authority has exclusive jurisdiction and control over the issue in a valid competent authority request.

Who is the Competent Authority?

U.S. tax treaties designate the Secretary of the Treasury or a delegate of the Secretary is designated as the competent authority with respect to the United States.

That authority, however, has been delegated through the IRS Commissioner to the Deputy Commissioner (International), LB&I.

The authority to act as the U.S. competent authority on behalf of the Deputy Commissioner (International), LB&I has been further delegated to the Assistant Deputy Commissioner (International), LB&I.

And authority to act as the U.S. competent authority with respect to certain competent authority issues has been delegated still further to the directors of Transfer Pricing Operations (which reports to the Deputy Commissioner (International), LB&I) and the Advance Pricing and Mutual Agreement Program (a representative office of the U.S. competent authority and one of the divisions of TPO).

Thus, the office of the U.S. competent authority is technically within the IRS’s Large Business and International (LB&I) Division.

The Advance Pricing and Mutual Agreement Program and the Treaty Assistance and Interpretation Team

The U.S. competent authority conducts the competent authority process through two offices: The Advance Pricing and Mutual Agreement Program (“APMA”) and the Treaty Assistance and Interpretation Team (“TAIT”).

The APMA has primary responsibility for cases arising under the business profits and associated enterprises articles of U.S. tax treaties.  For example, if an allocation made by the IRS pursuant to section 482 of the Internal Revenue Code would result in double taxation, the APMA has primary jurisdiction.

TAIT, on the other hand, has primary responsibility for cases arising under all other articles of U.S. tax treaties as well as cases arising under U.S. tax treaties with respect to estate and gift taxes.

Both APMA and TAIT are authorized to consider cases arising under the permanent establishment articles of U.S. tax treaties.


Freeman Law Tax Attorneys

Freeman Law aggressively represents clients in tax litigation at both the state and federal levels. When the stakes are high, clients rely on our experience, knowledge, and talent to help them navigate all levels of the tax dispute lifecycle—from audits and examinations to the courtroom and all levels of appeals. Schedule a consultation or call (214) 984-3000 to discuss your tax needs.