Competent authority process should be faster, provide for more taxpayer input, TEI tells IRS.

• Position: Cross-border disputes; Tax Executives Institute

Speedier resolution of cross-border disputes is a must in today's economy, Tax Executives Institute recently told the Internal Revenue Service. In a letter on the proposed revision of Rev. Proc. 96-13, relating to the IRS's Competent Authority function, TEI President Charles W. Shewbridge, III urged the IRS to set a goal of one year in which to settle international controversies. (Currently, the process now lasts longer than 700 days on average.) The July 19 letter elaborated on comments TEI representatives made during a March meeting with the IRS.

More taxpayer involvement in the process is also needed, Mr. Shewbridge stated. Otherwise, taxpayers may view the process "as a black hole where cases enter the system and never leave." Noting that Institute members report that taxpayers are becoming more and more involved in the processing of the cases, TEI urged the IRS to continue the trend, which will facilitate the negotiation of a settlement.

The organization also urged the IRS to institute an arbitration procedure to put additional pressure on treaty partners to negotiate in good faith and present reasonable positions. The Institute suggested that the United States adopt a consensual arbitration...