Managing transFer pricing part 2

The new Circular 230 requirements will significantly alter transfer pricing documentation and related transfer pricing advice matters, certainly in terms of due diligence and penalty protection, from what appears to be normative activity in the past. In rendering tax advice that does not constitute...

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Bibliographic Details
Published in:Journal of International Taxation 2006-09, Vol.17 (9), p.30
Main Authors: Lowell, Cym H, Martin, Mark R, Donohue, Michael J
Format: Article
Language:English
Subjects:
Accountants
Accounting
Advisors
Compliance
Documentation
Due diligence
International taxation
Multinational corporations
Revisions
Tax avoidance
Tax services
Tax shelters
Transfer pricing
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Summary:The new Circular 230 requirements will significantly alter transfer pricing documentation and related transfer pricing advice matters, certainly in terms of due diligence and penalty protection, from what appears to be normative activity in the past. In rendering tax advice that does not constitute a covered opinion, the advisor must consider all relevant facts and circumstances, including the scope of the engagement and the type and specificity of the advice sought by the client, in determining whether he has complied with this standard. The 3 categories of written tax advice are listed transactions, principal purpose transactions, and significant purpose transactions. Preparation of opinions for transfer pricing advice or documentation, like other tax opinions, by responsible professional practitioners should involve all of the due diligence steps in Circular 230, as well as the reasonable documentation exclusion. Such due diligence should also produce an opinion that would pass muster under SOX section 404.
ISSN:1049-6378