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IRS Charges $113,500 Fee To Review Your Transfer Pricing Methodology Prior To Filing Corporate Tax Return



IRS Charges $113,500 To Review Your Transfer Pricing Methodology

We found this important information on the IRS site…while most multinational corporate tax executives are aware of this fee, there are many company executives who are unaware of the costs of transfer pricing when they hire a transfer pricing consultant. Contact us for referrals to TaxConnections Members who are experts in transfer pricing: https://www.taxconnections.com/contact 

Consider if…
Prior to filing a return, you seek tax certainty and the avoidance of a transfer pricing dispute with the IRS and one or more treaty partner administrations by securing an agreement on a transfer pricing methodology. In an APA, the IRS and one or more foreign tax administrations come to an agreement with the taxpayer on: (1) the factual nature of the inter-company transaction to which the APA applies; (2) an appropriate transfer pricing method (“TPM”) to be applied to any allocation of income, deductions credits or allowances among two or more controlled organizations; and (3) an expected range of results from applying the TPM to the transactions. This program is designed to promptly and fairly resolve APA requests based on principled and cooperative negotiations between the IRS, treaty partner tax administrations, and the taxpayer.

User Fee
$113,500 for most requests; $54,000 for an APA renewal request (in cases where the subject matter is substantially the same as in a previous APA request by the taxpayer); $23,000 to amend a current unilateral, bilateral or multilateral APA, including coverage of additional issues, material changes to a proposed covered method, and any other material additions or changes to the terms and conditions of the APA.

Go to IRS link: https://www.irs.gov/businesses/dispute-resolution 

Learn More
Rev. Proc. 2015-41 PDF

Advance Pricing and Mutual Agreement Program webpage on IRS.gov

IRS

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