Transfer Pricing Impact

Transfer pricing is a significant area of concern for the IRS. Assess the concerns the IRS may have and construct a scenario to address those concerns. The IRS requires that transfer pricing transactions are done at arm’s length. Propose a strategy for managing transfer pricing transactions that would prevent or mitigate the chance of an IRS challenge.

“Transfer Pricing Abuse” Please respond to the following:

You have been bribed by a multinational company that wants to pay a minimal amount of taxes. Create a scheme as to how you would use transfer pricing to achieve that objective for the company. Imagine you are an IRS auditor. Propose a strategy to detect transfer pricing abuse.