Categories
Federal Income Tax

Valuation of Management Fees Paid by Related Parties

Related party transactions can raise difficult tax questions. This is especially true for management fees paid by one legal entity to another legal entity that has the same or similar owners or that are controlled by the same owners. As noted in the recent Wycoff v. Commissioner, T.C. Memo. 2017-203 case, related-party management fees often […]

Categories
International Tax

Intercompany Receivable Results in Section 956 Inclusion for U.S. Corp.

The Subpart F rules can result in foreign profits being subject to tax in the U.S.  In the recent Crestek v. Commissioner, 49 T.C. 5 (2017), the court addresses unpaid advances a controlled foreign corporation made to its U.S. parent.  The case shows how easy it is for a U.S. corporation that has an outbound transactions to […]

Categories
International Tax

Court Decides Transfer Pricing Buy-in Payment Case

The transfer pricing disputes often involve transfers of property offshore. Taxpayers make these transfers so that the post-transfer profits earned from the offshored property are not subject to tax in the U.S. or, in many cases, not subject to tax in the foreign countries either. The U.S. Tax Court recently decided Amazon Inc. v. Commissioner, […]

Categories
International Tax

TIGTA Suggests IRS Follow Transfer Pricing Roadmap

Transfer pricing is and has been the most significant and difficult issue the IRS audits. The audits are typically closed with the IRS agents proposing unreasonably large adjustments and IRS appeals sustaining a very low percentage of the adjustments. The IRS has not been very successful in litigating transfer pricing cases either. As a result, […]