New FIN 48 Demands on Transfer Pricing Strategies

The influence of FASB's Interpretation No. 48, better known as FIN 48, doesn't stop at everyday federal and state corporate income tax positions. Companies using transfer pricing in cross-border transactions also must deal with FIN 48's tougher analysis and documentation standards.

FIN 48 specifically includes "the allocation of income between jurisdictions" among the uncertain tax positions that fall under its purview. Corporations with tax obligations in the U.S. now must evaluate whether a tax position "more likely than not" will hold up under audit, and then measure the various outcomes and probabilities.

This represents a more rigorous and frequent process than companies are accustomed to in evaluating and documenting their transfer pricing strategies, both in the U.S. and other countries. Have taxpayers truly grasped the U.S.' new demands on them in this arena?

Listen as our panel of savvy tax attorneys and transfer pricing experts explains all of FIN 48's material implications for transfer pricing. After their review of FIN 48 and suggestions of practical responses for companies, you'll be ready to:

• Measure the potential outcomes for settling with tax authorities over a particular transfer pricing position.
• Increase the scope and quality of documentation of transfer pricing positions.
• Determine an appropriate level of aggregation or disaggregation of cross-border transactions.
• Decide how to react to the IRS' emphasis on whether companies are transferring intangibles along with services.

Our panel includes:

Bill Spiller is a Houston-based executive director in the transfer pricing specialty group of Grant Thornton.

Jim Wisniewski is an executive director and leader of a specialty group on FIN 48 and transfer pricing at Ernst & Young. He’s based in the firm’s Chicago office.

Brian Andreoli is a partner with DLA Piper in New York and focuses his practice on state tax, transfer pricing and international tax matters. He’s been a tax attorney for more than 25 years and is also a CPA, and has experience in public, corporate tax law, and litigation.

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