Controversy & defense
Information requests, proposed adjustments, appeals, MAP, and APAs — and the decisions made early in an examination that determine how it ends
Controversy is where every other part of transfer pricing is tested at once. The method, the functional analysis, the benchmark, the documentation — an examination pulls on all of them, usually against a deadline, and often years after the people who made the original decisions have moved on.
This cluster covers transfer pricing controversy in working detail — how to respond to an audit without conceding the position, how to answer an information request, when to take a case to appeals or competent authority, whether an APA is worth the cost, and how to defend against penalties. Written for the tax teams who live through audits and the advisors who stand beside them.
How to respond to a transfer pricing audit without conceding the position.
Most transfer pricing audits are lost in the first sixty days, before anyone argues the merits — through rushed responses, inconsistent explanations, and documents that contradict each other. This is a mistake. How to manage an examination from the first request to resolution, and the seven mistakes that turn a defensible position into a settlement.
Read the full article →In this article
- The first-sixty-days problem
- Before the audit: is the file ready to be read?
- The information request: scope, timing, and consistency
- Interviews and site visits: who speaks, and what they say
- The proposed adjustment: reading the examiner’s theory
- Appeals, MAP, or litigation: choosing the forum
- Settlement: what you trade, and what you keep
- Seven mistakes that turn a position into a concession
Five pieces, each on one part of the work.
The pillar above is the comprehensive starting point. The articles below go deeper on individual elements — information requests, the appeals process, mutual agreement procedures, advance pricing agreements, and penalty defense.
Responding to an IDR: the first document an examiner reads twice
Every answer to an information document request becomes part of the record. How to scope, sequence, and write responses that are complete without volunteering a new theory of the case.
The IRS Independent Office of Appeals: what changes when the case leaves exam
Appeals weighs the hazards of litigation, not the examiner’s reading of the facts. How the process works, what belongs in the protest, and why the case you present there should differ from the one you made in exam.
Mutual agreement procedures: relieving double taxation after an adjustment
An adjustment in one country does not automatically produce relief in the other. How MAP works under the treaty, the timing traps that close the door, and what BEPS Action 14 changed for taxpayers.
Advance pricing agreements: when certainty is worth the cost
Unilateral, bilateral, or none at all. What an APA actually buys, the time and disclosure it demands, and the fact patterns where it pays for itself many times over.
Penalty defense: documentation, reasonable cause, and the §6662(e) standard
Losing on the adjustment does not have to mean paying the penalty. How contemporaneous documentation and the reasonable cause standard decide what the penalty exposure really is.