Preparing for a Transfer Pricing Audit
A transfer pricing audit may provide for substantial risk and disputes, and proper preparation is a key in managing the risks and obtaining successful results.
In order to best manage the audit process and potential exposure, it is essential to understand that this involves not only the actual transfer pricing audit proceedings, but also the time before and after the actual audit takes place. Some best practices to follow in the preparing and participating in a transfer pricing audit include the following:
- Prepare well in advance;
- Review your documentation and ensure it meets the IRS standards;
- Involve your Transfer Pricing Advisor as early as possible to discuss strategies in preparation for the audit;
- Establish structured communications with the Tax Auditor; and
- Ensure all intercompany agreements are current.
Who should take action?
With the use of audits growing by many of the G20 nations and the OECD creating more policy in the handling of international business, please contact your a member of Withum’s International Services Team at [email protected] to help you with your transfer pricing strategy.
Even if you do not have a transfer pricing audit currently going on, it might be a good idea to have someone come in and review your transfer pricing strategy, and advise you on any possible deficiencies that could arise under an audit should one come about.
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Scott D. Davis, CPA, JD, MST (609) 520 1188 [email protected]  |
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To ensure compliance with U.S. Treasury rules, unless expressly stated otherwise, any U.S. tax advice contained in this communication is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.
