Supporting Transfer Pricing Positions and Preparing for MTC's Arms-Length Adjustment Service

Defending Multi-State Intra-Company Transactions from Transfer Pricing Challenges under ALAS

Recording of a 110-minute CPE webinar with Q&A

Conducted on Wednesday, August 26, 2015

Recorded event now available

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Program Materials

This webinar will provide tax professionals with the tools to navigate the current landscape of state policies regarding transfer pricing in a multi-state environment. The panel will discuss the latest developments in key states’ transfer pricing audit practices, detail the implementation schedule for the Multistate Tax Commission’s (MTCs) Arm's-Length Adjustment Service (ALAS) project, and describe best practices for planning, documenting and defending your company’s transfer pricing policies.

Description

As states continue to seek revenue without actually raising taxes (or tax rates), various state revenue departments are becoming much more aggressive in auditing corporations that report a lot of intra-company transactions and revenue to make sure the companies are not using transfer pricing schemes to artificially lower their overall effective state tax rate. A number of states are seeking power to make adjustments to income apportionment on the grounds that those adjustments more accurately reflect the taxpayer’s activities.

Several states, recognizing the relative lack of experience within their revenue departments to make adjustments that withstand court scrutiny, took the approach of using contract auditors to challenge related-party transactions. However, spurred on by the MTC, numerous states are working toward implementing a coordinated transfer pricing audit approach. Referred to as ALAS, the MTC project will almost certainly result in more state audits of related-party transactions. Corporate tax professionals need to be prepared to handle the increase in both the number and scope of state transfer pricing audits.

Listen as our experienced panel provides detailed guidance on best practices for documenting, supporting and defending related-party transactions from state transfer pricing audits.

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Outline

  1. Current landscape of state transfer pricing audits and examinations
  2. Use of outside auditors/experts by state revenue departments in transfer pricing examinations
  3. Multistate Tax Commission’s Arms-Length Adjustment Service Program
  4. Other state efforts to coordinate transfer pricing policies
  5. Best practices for documenting and supporting related-party transactions

Benefits

The panel will review these and other key issues:

  • Which states are most aggressive in auditing and making adjustments based on transfer pricing challenges?
  • What will be the immediate impact of the Multistate Tax Commission's ALAS program on transfer pricing audits?
  • What are best practices for supporting and defending intra-company transactions from transfer pricing challenges?

Faculty

Patrick McColgan
Patrick McColgan
Director
Duff & Phelps

Mr. McColgan advises clients' senior management on a variety of transfer pricing, economic, and valuation issues....  |  Read More

Robert E. Weyman
Robert E. Weyman
Reed Smith

Mr. Weyman counsels clients with income, sales, and gross receipts tax issues around the country. His practice...  |  Read More

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