US IRS seeks feedback on transfer pricing documentation regs

The US IRS, in a February 26 notice, has solicited feedback on whether taxpayer burdens imposed by tax regulations governing transfer pricing documentation can be reduced.

The US tax code does not affirmatively require taxpayers to prepare transfer pricing documentation; instead, the US requires that the documentation is prepared in accordance with the Section 6662(e) regulations to avoid penalties should the IRS make a transfer pricing adjustment.

The IRS thus asks for feedback on final regulations [TD 8656] which provide guidance on the imposition of the accuracy-related penalty under section 6662(e) for net section 482 transfer price adjustments. These tax regulations became final in 1996.

Comments are invited on:

  • Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility;
  • the accuracy of the agency’s estimate of the burden of the collection of information;
  • ways to enhance the quality, utility, and clarity of the information to be collected;
  • ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology; and
  • estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.

The comment period will remain open until April 29.

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