Tax Shareholder John Warner Talks IRS Crackdown on Transfer Pricing with Corporate Counsel Magazine

Transfer pricing and other techniques used by companies to limit their U.S. tax liability are coming under increasing scrutiny, Buchanan Ingersoll & Rooney Tax Shareholder John Warner told Corporate Counsel magazine.

“There’s no question, there’s been an increased focus on these strategies,” Warner explained. “Regulators, legislators and foreign governments are all taking interest.”

The practice of transfer pricing, which involves allocating income and expenses among worldwide subsidiaries, has long been allowed by the U.S. tax code, and is considered a common practice in the corporate world.

Read the full article – “Over There,” (Corporate Counsel – March 2013)

According to Warner and others in the industry, the IRS’s renewed focus on these techniques is attributable in part to Sam Maruca, the agency’s transfer pricing director.

“Maruca came in and hired a cadre of people from the private sector – people who knew where the vulnerabilities were,” said Warner. “People in the tax advising community believe that Sam will start bringing cases that ought to be brought – cases in which there is real evidence that a company has underpaid its taxes.”