IRS Seeks to Clean Up Historic Issues With Transfer Pricing Push

The IRS’s focus on foreign-owned distributors of goods in the US shows that the agency wants to use its new funding to clean up areas like transfer pricing that have historically posed compliance problems, according to practitioners.

It could also be a sign the US government is trying to be in step with other countries that have ramped up scrutiny of US-owned distributors in their jurisdictions, they said.

“Taxing authorities respond to what their counterpart taxing authorities do,” said Tom Linguanti, a partner at Morgan, Lewis & Bockius LLP’s Chicago practice.

The IRS says these companies “engineer” ...