Though the Internal Revenue Service has enforced IRC Section 6662(e), on substantial valuation misstatements, and Section 6662(h), on gross valuation misstatements for certain transfer pricing adjustments, for more than 30 years, that enforcement was not consistently applied. However, in the past few years, the IRS has announced it will apply Section 6662 penalties more frequently and more rigorously.
In light of this increased IRS focus, taxpayers with significant transfer pricing reporting obligations should make efforts to determine and document them. In an article originally published in Bloomberg Tax, Grant Thornton National Transfer Pricing Technical Leader Steven Wrappe and Manager Nina Nelson write about the 10 specific rules described in regulations governing U.S. transfer pricing documentation, and best practices for preparing transfer pricing documentation to address them.
Read the Bloomberg Tax article here.
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