Business transactions between related parties are subject to the international “arms-length” pricing standard enforced by governmental authorities and taxing jurisdictions worldwide. In the United States, the arms-length standard applies for both federal, and increasingly, state income tax purposes. It is embodied in Sections 482 and 6662 of the Internal Revenue Code (IRC), as well as the regulations issued there under, related IRC Sections and applicable case law. Our services in this area include preparation of documentation for penalty protection, economic analysis for advanced pricing agreements (APA), transfer pricing planning, and tax controversy support.
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