Transfer Pricing Global Considerations: I.R.C. Section 482 Allocations

Summary

This practice note explores how the Secretary of the Treasury, Janet Yellen, and her delegates, including Internal Revenue Service (IRS) Commissioner Daniel Werfel, use the transfer pricing (TP) rules under Internal Revenue Code (IRC) Section 482 and its accompanying regulations to allocate income and deductions to ensure taxpayers who operate globally, using related companies, clearly reflect income attributable to controlled transactions to prevent tax avoidance schemes. The IRS has broad powers under the TP rules, and whether the IRS Commissioner has inappropriately allocated items under I.R.C. Section 482 is generally a question of fact.