Taxpayers requesting an APA are required to provide a draft APA and a “redline” comparison of the draft APA against the model APA, or template. The assigned APMA team will review the terms proposed in the draft APA and if the team accepts the proposed terms, the text of the draft APA, edited as needed, will be adopted as the text of a finally executed APA.
The proposed template uses an options-based format. Taxpayers will select from different standardized options at the relevant points in the template. Those options are preceded by brackets (“[ ]”) and the taxpayer will enter an “x” in the bracket of the selected option. The template also includes various placeholders, which the taxpayer will replace with the relevant country, currency, etc. The options to which APMA and the taxpayer ultimately agree for the final APA will be indicated with the presence or absence of an “x”. The term associated with the “x” will be given operative effect in the executed APA.
By helping to minimize editing considerably, the proposed template should be a useful step in streamlining the APA process. The IRS has requested comments on the proposed template by October 31, 2017.