ComplianceLinks is a suite of services designed to provide Internal Revenue Code (IRC) § 482 economic auditing power to state clients. The modules of the ComplianceLinks section, as well as associated services Chainbridge provides are detailed below. Click on any of the module titles below to see how Chainbridge helps you enforce IRC Section 482.
What is Transfer Pricing?
Explaining transfer pricing can be a daunting prospect, but we’ve made it easy for you to learn what it’s all about here at chainbridge.com
If there is going to be a corporate income tax, it’s only fair that everyone pays it. Chainbridge helps states uncover corporations who haven’t paid theirs. Learn how here.
After a comprehensive analysis of your state’s corporate data, Chainbridge will produce an expert economist report including a complete functional analysis, and a relevant income adjustment for a given taxpayer. Chainbridge takes the complication out of 482 compliance with our revolutionary ComplianceLinks software, and our unparalleled transfer pricing expertise.
IRC §482 Regulations
Our approach in determining a final income adjustment for a particular taxpayer relies on section 482 of the U.S. Internal Revenue Code. It’s a method that’s been employed on the international level for decades, and our patented software along with our unrivaled experience in transfer pricing assures our clients that our analysis is both accurate and authoritative.
Should you choose to couple with Chainbridge, you’ll receive an extraordinary customer experience. We ensure that you’ll have our support every step of the way to the very end. Our analysts have served as experts in numerous court cases, and would be more than willing to offer the same services to your state.
Chainbridge IRC Section 482 Approach
Determining whether corporations have improperly allocated income and expenses for tax purposes through the use of intercompany transactions can be a difficult task for state revenue departments. In some cases, these intercompany transactions may be conducted in a manner that results in lost corporate tax revenue.
Our approach has been employed at the international level for decades. Specifically, we rely upon the Section 482 of the U.S. Internal Revenue Code (IRC) and associated U.S. Treasury Regulations to guide our analyses of the arm’s length nature of a taxpayer’s intercompany transactions. Our tested party is the state taxpayer.
We begin by performing a Preliminary Analysis for all of a state’s corporate taxpayers. The process and the software that we employ to perform the Preliminary Analysis is a patented process. The result of the process is a Ranked List of Candidates that is presented to the State for review and possible candidate selection. State audit staff select taxpayers for further analysis.
For each possible candidate, a Functional Analysis Assumption Questionnaire (FAAQ) is prepared that is specific to that taxpayer. The FAAQ is similar to the example questionnaire found at the IRS website. We provide the state with draft language for a cover letter for the FAAQ. The taxpayer is provided with a standard length of time to respond to the FAAQ; otherwise, we assume that our functional assumptions are correct and proceed with the analysis.
Once the functional analysis process is complete, we proceed with the quantitative analysis. Using the guidance provided by the Best Method Rule of the Regulations, we select a pricing method consistent with the Regulations, and an evaluation of the arm’s length nature of the taxpayer’s intercompany transactions is performed. If we determine that an income adjustment is indeed warranted, a state Economist’s Report and an Explanation of Income and Tax Adjustments document are prepared for that taxpayer. If we determine that an income adjustment is not warranted, the taxpayer is dropped from further consideration.
Who We Are
Chainbridge’s exceptional team of consultants and software developers have been in the business of tax for more than half a century collectively. Learn more about the brains behind Chainbridge’s unprecedented tax software by clicking the icon above.
Chainbridge has been providing tax models, and transfer pricing insight to numerous state clients across the country. Navigate our experience map to find out which of your neighboring states has partnered with Chainbridge to establish an effective tax program.