Tax Notes Quotes Clark Armitage on Transfer Pricing Penalties

U.S. guidance on transfer pricing penalties, featured prominently in recent litigation, will be even more critical under the amount B transfer pricing approach under pillar 1 of the OECD’s global tax reform plan, practitioners warn.

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J. Clark Armitage of Caplin & Drysdale questioned whether a transfer pricing method change resulting in a large adjustment — particular in the realm of intellectual property transfers — should trigger penalties more or less automatically despite taxpayer-provided documentation. Recent litigation appears to indicate that this is the direction the IRS has taken lately, he said.

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