The IRS's plan to be more selective about which companies apply for advance approval of their transfer pricing transactions could shorten the application process—but practitioners worry it could block some companies that want the agreements from getting them.

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"I don't think there's any company out there that thinks APA programs should be narrowed and be less available," said Elizabeth Stevens, a Member at Caplin and Drysdale in Washington.

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"I'd expect they might be considering the same sorts of factors a taxpayer might consider in evaluating whether to pursue an APA," Stevens said, like transaction volume and audit history.

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Further questions that guidance will answer will be key to understanding how the changes affect companies, practitioners said.

For example, the guidance will have to explain the specific procedures a company would go through at the outset of the APA process, and how the changes differ from the current process—in which a company can also request a pre-filing meeting, Stevens said. She's also looking for the guidance to clarify whether the new procedures will apply to unilateral, bilateral, and multilateral APAs.

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This article is designed to give general information on the developments covered, not to serve as legal advice related to specific situations or as a legal opinion. Counsel should be consulted for legal advice.