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IBM OUTLINES COMMENTS ON TRANSFER-PRICING REGS.

AUG. 12, 1992

IBM OUTLINES COMMENTS ON TRANSFER-PRICING REGS.

DATED AUG. 12, 1992
DOCUMENT ATTRIBUTES
  • Authors
    Mattson, Robert N.
  • Institutional Authors
    International Business Machines Corporation
  • Cross-Reference
    IL-372-88

    IL-401-88
  • Code Sections
  • Subject Area/Tax Topics
  • Index Terms
    related-party allocations
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 92-7840
  • Tax Analysts Electronic Citation
    92 TNT 170-64

 

=============== SUMMARY ===============

 

Robert N. Mattson of International Business Machines Corporation (IBM), Armonk, N.Y., has submitted an outline of comments for the public hearing on the proposed section 482 regulations. IBM's representatives plan to recommend that the regs be revised to further the goals of simplicity, adaptability to the facts and circumstances of each case, and preservation of the U.S. tax base consistent with international norms.

 

=============== FULL TEXT ===============

 

August 12, 1992

 

 

Internal Revenue Service

 

P.O. Box 7604

 

Room 5228

 

Ben Franklin Station

 

Washington, D.C. 20044

 

Attention: CC:CORP:T:R (INTL-0401-88)

 

 

Re: Request to Speak at a Public Hearing on Proposed Section 482

 

Regulations, and Outline of Oral Comments

 

 

Dear Sirs or Madams:

In a letter dated July 24, 1992, International Business Machines Corporation ("IBM") requested the opportunity to appear at a public hearing on the proposed Treasury regulations under Section 482 of the Internal Revenue Code. This letter confirms IBM's request and my discussion with Robert Boyer of your office.

I propose to speak on behalf of IBM. I will be accompanied by Dr. Michael C. Barth, our economic consultant with ICF Incorporated, and Olga Popov, our counsel with Covington & Burling.

An outline of my oral comments is attached.

Respectfully submitted,

 

 

Robert N. Mattson

 

 

Attachment

 

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

Outline of Oral Comments on Proposed Section 482 Regulations

I. The proposed Section 482 regulations should be revised so as to further the following goals:

A. Simplicity.

B. Adaptability to the facts and circumstances of each case.

C. Preservation of the U.S. tax base consistent with international norms.

II. Description of IBM's business.

III. Recommendations:

A. Final regulations should allow the use of reasonable pricing methods other than the CPI test which is rigid, cumbersome and unreliable in complex situations. In particular, profit split methods should be permitted.

B. Final regulations should provide that in assessing a taxpayer's pricing methods, weight may be given to factors indicating the likelihood that a Section 482 adjustment will be appropriate. Field agents should have discretion as to the absence of tax evasion or profit shifting.

C. A U.S. licensor should be allowed to aggregate its transactions with multiple foreign affiliates for purposes of testing its related-party royalty rates in appropriate circumstances.

DOCUMENT ATTRIBUTES
  • Authors
    Mattson, Robert N.
  • Institutional Authors
    International Business Machines Corporation
  • Cross-Reference
    IL-372-88

    IL-401-88
  • Code Sections
  • Subject Area/Tax Topics
  • Index Terms
    related-party allocations
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 92-7840
  • Tax Analysts Electronic Citation
    92 TNT 170-64
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