Volume 7 No 5    /    Read Article

By Michael Peggs

Earlier this year, the I.R.S. updated its Transfer Pricing Documentation Best Practices F.A.Q. list with a response to Q. 4. What are some areas the I.R.S. has identified in transfer pricing documentation reports that could benefit from improvement? It seemed to be a reaction to two events on the global tax stage. First, the I.R.S. regularly encounters too many suboptimal reports that provide unreliable data leading to a prolonged examination. Second, recent activity in the European Union and the O.E.C.D. suggest that U.S. taxpayers face claims of local value-creation by foreign tax authorities, resulting in increased foreign income allocations. Such allocations reduce the U.S. tax base. Michael Peggs discusses do’s and don’ts explained by the I.R.S., and the benefits that are obtained from a robust transfer pricing report, both within budget-related considerations of a global company.   See more →