More Facts Resolve Tax Risks –

Repricing Agreements –

A REPRICING AGREEMENT can be in the form of a separate agreement, a clause, or an addendum; but it essentially provides for circumstances which occur or manifest later into the transaction and which impacts on the financial model of the structure, which may not have been contemplated.

Circumstances may include the introduction of and changes to any law, rule, regulation, directive, or banking practice applicable to the transaction, the rate and practice of levying tax, damages, and other costs which may become payable due to a breach. Of course there are innumerable scenarios which are not necessarily envisaged by the financial institution from the outset.

The effect of this is that such circumstance will be incorporated in the financial model which will then affect the payments made by the taxpayer under the agreements (e.g., rentals, interest, loan repayments, or any other form of payment). Taxpayers must be vigilant when they enter into settlements with the IRS because they will invariably result in an adjustment to the model in accordance with the repricing agreement.

In accordance with Circular 230 Disclosure