Archives: Transfer Pricing Resource

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A 360-Degree View: July and August 2017

Wrapping up July—and Looking Forward to August Tax Controversy Activities in August: August 7, 2017: Elizabeth Erickson and Kristen Hazel will be representing McDermott Will & Emery at the 2017 US Captive Awards in Burlington, Vermont. McDermott has been shortlisted in the Law Firm category. August 8, 2017: Tom Jones is presenting an update on … Continue Reading

Tax Court Hands Eaton a Complete Victory on the Cancellation of its Advance Pricing Agreements

On July 26, 2017, the United States Tax Court (Tax Court) handed a complete victory to Eaton Corporation (Eaton) relating to the Internal Revenue Service’s (IRS) cancellation of two Advance Pricing Agreements (APA). Eaton Corporation v. Commissioner, TC Memo 2017-147. The Tax Court held that the IRS had abused its discretion in cancelling the two successive … Continue Reading

New IRS CbC Resource

We have reported several times about the new Country-by-Country (CBC) reporting regime. Taxpayers and the tax bar have been desperate for clarity about the requirements for CbC reporting.  In response, today the Internal Revenue Service (IRS) announced the launch of its CbC resource on its www.IRS.gov website. The new information is designed to provide background … Continue Reading

Are You Required to Disclose Supporting Legal Authorities During Discovery?

Discovery in tax litigation can take many different forms, including informal discovery requests (in the US Tax Court), request for admissions, interrogatories and depositions. In addition to obtaining facts, litigants frequently want to know the legal authorities on which the other side intends to rely. Over the years, we have seen numerous requests, both during … Continue Reading

The View from Here: LB&I’s Cross-Border Activities Campaigns Webinar

On Tuesday, May 23, 2017, the Internal Revenue Service (IRS) Large Business and International Division (LB&I) hosted its sixth in a series of eight webinars regarding LB&I Campaigns. Our previous coverage of LB&I Campaigns can be found here. The webinar focused on two cross-border activities campaigns: (1) the Repatriation Campaign and (2) the Form 1120-F … Continue Reading

Canadian Tax Court Holds that Agreements Reached Under the Mutual Agreement Procedure are Binding on the Canada Revenue Agency

On March 10, 2017, the Tax Court of Canada held that agreements reached under the Mutual Agreement Procedure (MAP) precluded the Canada Revenue Agency (CRA) from redetermining the transfer prices of rock salt sold by Sifto Canada Corp. (Sifto Canada) to a related party in the United States. In 2006, Sifto Canada reevaluated the transfer … Continue Reading

Taxpayer Rights Around the World (Follow-Up)

We previously wrote two blog posts about the 2nd International Conference on Taxpayer Rights held in Vienna, Austria in March 2017 here and here. Videos of each panel discussion are now available for viewing here. Planning is currently underway for the 3rd International Conference on Taxpayer Rights, which will be held in The Netherlands on … Continue Reading

Taxpayer Rights Around the World (Part 2)

We previously posted on Day One of the 2nd International Conference on Taxpayer Rights in Vienna, Austria. Below, we summarize the panels and issues discussed on Day Two. Four panels were held on March 14: (1) Penalties and General Anti-Avoidance Rules; (2) The Role of Intergovernmental Actors in Furthering and Protecting Taxpayer Rights: A Conversation; … Continue Reading

Taxpayer Rights Around the World (Part 1)

On March 13 and 14, the 2nd International Conference on Taxpayer Rights was held in Vienna, Austria. More than 150 individuals from more than 40 countries attended the conference, which connects government official, scholars and practitioners from around the world to explore how taxpayer rights globally serve as the foundation for effective tax administration. This … Continue Reading

Fourth Circuit Clarifies the Role of the Collection Due Process Hearing

In Iames v. Commissioner, No. 16-1154, the US Court of Appeals for the Fourth Circuit upheld the US Tax Court’s ruling that once a taxpayer has unsuccessfully challenged his tax liability in a preassessment hearing before the Internal Revenue Service (IRS) Office of Appeals, he is precluded from challenging his tax liability in a collection … Continue Reading

Revenue Procedure 2017-23: IRS Releases Guidance on Form 8975 and Country by Country Reporting

As a follow-up to regulations issued last June, the Internal Revenue Service (IRS) has issued Revenue Procedure 2017-23, which sets forth the process for filing Form 8975, Country-by-Country (CbC) Report, and accompanying Schedules A, Tax Jurisdiction and Constituent Entity Information (collectively, Form 8975), by ultimate parent entities of US multinational enterprise (MNE) groups for reporting … Continue Reading

IRS Issues IPU on Summons of Foreign Owned US Businesses

On January 30, 2017, the Internal Revenue Service (IRS) released an International Practice Unit (IPU) on the use of a summons under IRC Section 6038A (IRC Section 6038A Summons) when a US corporation is 25-percent owned by a foreign shareholder.  See IPU here. The IPU describes the steps that the IRS should take when issuing … Continue Reading

Globalism vs. Populism in the International Tax World

Adoption of the base erosion and profit shifting (BEPS) action items in specific countries can be expected to alter traditional multi-national enterprises (MNE) tax strategy processes. In this regard, it is appropriate to note that tax authorities and the Organization for Economic Co-operation and Development (OECD) often seem to overlook, or conveniently ignore, that MNE … Continue Reading

Court Opinions – A Year In Review

Several notable court opinions were issued 2016 dealing with a variety of substantive and procedural matters. In our previous post – Tax Controversy 360 Year in Review: Court Procedure and Privilege – we discussed some of these matters. This post addresses some additional cases decided by the court during the year and highlights some other … Continue Reading

BEPS Multilateral Agreement

The most recent element of the ongoing global dispute resolution process is the late November 2016 release of the so-called multilateral instrument (MLI), a cornerstone of the base erosion and profit shifting (BEPS) project. It is an ambitious effort of the Organization for Economic Cooperation and Development (OECD) to impose its will on as many … Continue Reading

Transfer Pricing Compensating Adjustments: Another IRS Loss

Following the resolution of a transfer pricing adjustment, there are inevitable compensating adjustment issues to be addressed. Revenue Procedure 99-32 provides the guidelines. A frequent issue concerns whether the “account” that can be elected constitutes “related-party indebtedness” for other purposes of the Internal Revenue Code. One issue has related to the long-since expired provisions of Section … Continue Reading

‘Medtronic v. Commissioner’: A Taxpayer Win on Transfer Pricing, Commensurate with Income, and Section 367 Issues

On June 9, 2016, the US Tax Court released its opinion in Medtronic, Inc. and Consolidated Subsidiaries v. Commissioner. The Internal Revenue Service had taken issue with the transfer pricing of transactions between Medtronic, Inc. and its Puerto Rican manufacturing arm under §482 of the Internal Revenue Code. Finding the IRS’s application of the comparable profits … Continue Reading

UTP Filings Continue to Rise

The IRS has released statistics for the 2010 to 2014 tax years relating to Schedule UTP (Uncertain Tax Position) filings, showing that there were 6,320 uncertain tax positions reported in 2014. The statistics show a steady increase in the reported positions, which totaled 4,740 in 2010, although this may also be attributed to the fact … Continue Reading

Altera Corporation Files Answering Brief in Commissioner’s Ninth Circuit Appeal of Altera

In Altera Corp. v. Commissioner, 145 T.C. No. 3 (July 27, 2015), the Tax Court, in a unanimous reviewed opinion, held that regulations under Section 482 requiring parties to a qualified cost-sharing agreement (“QCSA”) to include stock-based compensation costs in the cost pool to comply with the arm’s-length standard were procedurally invalid because Treasury and … Continue Reading

3M Company, IRS File Reply Briefs in “Blocked Income” Case; Tax Court Orders Oral Argument

As discussed in an earlier post, 3M Co. v. Commissioner, T.C. Dkt. No. 5816-13, involves 3M Company’s (3M) challenge to the Internal Revenue Service’s (IRS) determination that Brazilian legal restrictions on the payment of royalties from a subsidiary in that country to its US parent should not be taken into account in determining the arm’s-length … Continue Reading

Introduction to the New World of Global Tax Planning

Domestic implementation of the recommendations set out in the BEPS final reports from 2015 have the potential to significantly impact effective tax rate planning. The immediate issue flows from the new country-by-country transfer pricing documentation regime (CbC). The critical consequence of the CbC regime, as well as many of the other BEPS initiatives, will be … Continue Reading
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