Synopses & Reviews
This book analyzes the disparities both between federal statutes and regulations, and regulations and administrative practices, in two highly controversial areas of corporate tax policy: intra-company transfer pricing and intangible asset valuations. It addresses issues that can mean hundreds of millions of dollars to individual corporations, and a significant fraction of the federal government's revenue base. Tax practitioners and consultants who are understandably frustrated in their efforts to divine the IRS's reasoning in transfer pricing and valuation issues will find the book very useful. It will also find an audience among elected representatives, other public officials, and tax lobbyists in the process of evaluating existing corporate tax policy or formulating alternative tax policies. In addition, the book is a useful reference for academics studying international taxation, public finance, and treaty compliance.
Synopsis
Transfer Pricing and Valuation in Corporate Taxation analyzes the disparities between both federal statutes and regulations, and r- ulations and administrative practice, in a highly controversial area of corporate tax policy: intra-company transfer pricing for tax p- poses. It addresses issues that often mean millions of dollars to in- vidual corporations, and a significant fraction of the federal gove- ment s revenue base. These disparities between law, regulations, and administrative practice are concerning on a number of grounds. First, they - pose considerable economic costs by inducing corporations to engage in a variety of rent-seeking activities designed to reduce their - pected tax liabilities, and by requiring the IRS to devote still more to enforcement efforts that are very often futile. Second, they are in-; herently undemocratic. Administrative practice is currently ad hoc by relying on dispute resolution procedures that can and do yield very different settlements on disputed tax issues from one case to another, the IRS often ends up treating similarly situated cor- rations very differently. Moreover, to the extent that the disp- ity between statute and implementation reflects the IRS s failure to carry out Congress will, the laws passed by duly elected officials are effectively being superseded by administrative procedure, developed incrementally by individuals who are not answerable to an electorate."
Table of Contents
Preface.
I: Legislation and Regulations. 1. Introduction.
2. Transfer Pricing and Valuation Regulations.
II: Transfer Pricing and Valuation Regulations in Practice. 3. The Cost-Plus Method.
4. The Resale Price Method.
5. Cost-Sharing Agreements.
6. Intra-Company Royalty Agreements.
7. Valuation of Intangible Assets: Section 338.
8. Conclusions and Policy Recommendations. Index.