The New Cost-Sharing Restrictions

CD of Live 90-Minute Telephone Conference with an Interactive Q&A Session Conducted on October 13, 2005 Now available on CD

If your corporation is one of the many that uses a cost-sharing approach to split product development and research cost among related entities, the IRS’ proposed new regulations may be cause for concern.

As the IRS continues its general crackdown on transactions that it no longer considers arms-length, the agency would limit companies’ ability to make adjustments in cost-sharing.

That approach would force U.S. companies into some very important decisions.

How will your tax staff become conversant with the new central tax registration database where your company can register and re-register to collect sales and use taxes in all participating SSTP states?

--In suggesting an “investor model” for assessing each entity’s permitted contribution and costs, is the IRS in effect pushing U.S. companies to shift R&D to foreign affiliates?

--Would the way the government wants to value buy-in payments from affiliates penalize domestic entities to the point where it no longer becomes affordable to invest?

Listen as our panel of veteran tax advisors helps answer those key questions as they analyze in detail the IRS’ proposed regulation on cost-sharing and transfer pricing. Our panelists include:

They’ll walk you through the proposal point-by-point, and, importantly, give you valuable guidance on getting to bottom lines such as:

• What the IRS will now regard as a bona fide cost-sharing arrangement under Sect. 482.
• What the new arm’s length standard will be for external contributions, under the “investor model”.
• How much work is entailed in evaluating “realistic alternatives” for how your company would use external contributions.
• The impact of the “non-overlapping territorial interests” standard for companies sharing costs of intangibles.
• Vitally, new corporate structures your company should consider, here and abroad, to work and thrive within the IRS’ new guidelines.

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TELECONFERENCE CD