Elizabeth Stevens Weighs in on the IRS Finalizing a Record Number of APAs in Law360

Law360 Tax Authority

The IRS finalized a record number of advance pricing agreements in 2023, signaling the agency's increased effectiveness at completing accords at a time when its approach to transfer pricing litigation could fuel corporate taxpayers' urgency for seeking APAs.

. . .

Because APAs generally last for five years, the closures in 2023 probably include some renewals of India APAs that were initially sought after the APMA announcement, according to Elizabeth Stevens, a member of Caplin & Drysdale. It's positive to see that the program has made such progress with a tough treaty partner, she said.

"That they were able to close so many cases with a pretty tough partner across the table really says something about the success of the program in the last year," Stevens said.

. . .

In a similar vein, Stevens said the success the IRS has had with litigation could drive more companies to seek APAs — particularly unilateral ones, where the risk is perceived to be in the U.S. The big successes that the IRS has had are with respect to U.S.-parented multinational corporations, she said.

For Stevens, an increase in unilateral APA applications "would signal concern with risk in the United States."

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