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.
At the start of a project year, state staff provide Chainbridge with several years of electronic data for all state corporate taxpayers. Upon receipt of electronic tax return information, Chainbridge staff load the information into its patented software system to perform a preliminary analysis, generating a Ranked List of Candidates (RLC).
As part of our ComplianceLinks service offering, we produce state Economist’s Reports for taxpayers that we find to be in violation of the arm’s length standard as specified in Internal Revenue Code (IRC) Section 482 and the associated US Treasury Regulations. The Economist’s Report provides an executive summary of our findings.
IRC Section 482 Regulations
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 IRC Section 482 of the Internal Revenue Code 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.
Throughout the process, we provide continuous auditor support, in any way that the state audit staff might see fit. We are available to support our Internal Revenue Code (IRC) Section 482 analyses throughout the entire audit process, including administrative appeals appeals processes.