Staff Time Devoted to Startup of APMA Program Likely Caused Low Completions in 2011, IRS Officials Say


 The Internal Revenue Service’s annual statutory report on advance pricing agreements for 2011, released April 2, shows a drop in both completed APAs and new cases filed, with completions down to 43 from 69 from 2010 and applications down to 96 from an all-time high of 144 the previous year. IRS Transfer Pricing Director Samuel Maruca and Acting Advance Pricing and Mutual Agreement (APMA) Program Director John Hinding attribute the decline in case closures to the amount of staff time directed towards creating the new APMA Program, a merger of the former APA Program with the portion of the Office of U.S. Competent Authority that resolves transfer pricing cases under U.S. treaty mutual agreement procedures.

Maruca and Hinding say the slower processing times likely contributed to the drop in applications as well, but Hinding says he is optimistic that cases will begin to move more quickly now that APMA has launched.

Current and former U.S. APA officials will address the APA-Competent Authority merger during a panel on June 7, day two of the Bloomberg BNA-Baker & McKenzie conference. Panelists will include the new APMA director, still to be named, and former APA directors Craig Sharon and Matthew Frank.

Molly Moses
Managing Editor, Transfer Pricing Report