Barnes Dennig Transfer Pricing After Tax Reform and COVID-19 120920 - BD | Page 14
IRS DISAGREES WITH TRANSFER PRICING , BUT WITH CONTEMPORANEOUS DOCUMENTATION
Assume a total taxable income adjustment of $ 10m Additional income tax owed : $ 10m x 35 %* = $ 3.5m Plus non-deductible penalties of 20 % $ 700,000
$ 3.5M + interest + US state taxes + potential double tax
• Draft prepared by tax return filing date for penalty protection
• Not a guarantee that tax authorities will agree with you
* Open tax years at pre-tax reform 35 % rate