Transfer Pricing: One-Page Outline

Overview

• Introduction; Information Gathering; Section 482 Principles
• Final Section 482 Regulations
• Transfer Pricing Penalties and Penalty Avoidance
• U.S. Competent Authority Assistance and Advance Pricing Agreements

Introduction

• Nature of the Controversy
• Domestic and Foreign Authorities
• Chronology of U.S. Transfer Pricing Developments

Information Gathering

• IRS Requests for Information
• Statutory Authority for IRS Information Gathering

Section 482: General Principles

• Terms and Definitions
• Purpose and Scope
• Arm's Length Standard
• Best Method Rule
• Comparability
• Arm's Length Range
• Collateral Adjustments
• Burden of Proof
• Standard of Judicial Review

Transfer Pricing Methodologies (TPMs) and Cost Sharing

• Loans and Advances
• Performance of Services
• Use of Tangible Property
• Transfers of Tangible Property
• Transfers of Intangible Property
• Comparable Profits Method (CPM)
• Profit Split Method
• Qualified Cost Sharing Arrangements

Transfer Pricing Penalties and Penalty Avoidance

• Section 6662(e) and (h)
• Treas. Regs. Sec. 1.6662-6

Requests for U.S. Competent Authority Assistance

• Income Tax Treaties
• Rev. Proc. 96-13, 1996-1 C.B. 616

Advance Pricing Agreements (APAs)

• Income Tax Treaties
• Rev. Proc. 96-53, 1996-2 C.B. 375 & Rev. Proc. 2004-40, 2004-29 I.R.B. 1

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