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Income Shifting: Common Ownership or Control Under Code §482 in an Inbound Transaction

Volume 5 No 1    /   Read Article

By Stanley C. Ruchelman

The Large Business and International Division of the I.R.S. (“LB&I”) periodically develops international practice units (“I.P.U.’s”) that serve as training material for international examiners. In November 2017, an I.P.U. entitled “Common Ownership or Control Under IRC 482 – Inbound” was published. On the same date, the I.R.S. issued a sister I.P.U. for outbound transactions, “Common Ownership or Control Under IRC 482 – Outbound.” Together, they serve as a primer for determining whether sufficient control exists between two parties to bring the arm’s length transfer pricing rules of Code §482 into play. Stanley C. Ruchelman explains how the I.R.S. trains its examiners when determining whether a transfer pricing adjustment is appropriate.  See more →