ARTICLE
16 April 2024

Elizabeth Stevens Comments On Increase Staff At The IRS Covering APAs In Bloomberg

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Caplin & Drysdale

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More hiring and putting the Covid-19 pandemic in the rear-view mirror are paying off for the IRS unit that handles companies' advance tax deals on intercompany transactions.
United States Tax
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More hiring and putting the Covid-19 pandemic in the rear-view mirror are paying off for the IRS unit that handles companies' advance tax deals on intercompany transactions.

Completed advance pricing agreements, or APAs, more than doubled last year, according to newly released IRS data. The agency also got APAs completed a little more quickly and trimmed its backlog of pending agreements, as the staff that works on them jumped by 17% and was able to return to in-person negotiations on the agreements post-pandemic, practitioners said.

. . .

The IRS is doing at least a little better at speeding the APA process along for companies that are seeking more certainty on their future deals with foreign affiliates, though practitioners say they want to see more improvements.

"I think it's really a success story," said Elizabeth Stevens, a tax attorney and member at Caplin & Drysdale who specializes in transfer pricing and APAs.

. . .

More staffing also helped. The number of APMA employees handling APA cases increased in 2023 to 114, from 97 the previous year. "I think the bigger staff and very experienced staff may be contributing to this greater number of closures," Stevens said.

Long-Term Trends

New APA applications declined to 167 in 2023, from 183 in 2022. But 167 is still relatively high by recent years' standards, and the IRS says that number doesn't include 22 other cases in which applicants have filed user fees but haven't yet submitted complete APA applications.

"I don't think this is reflective of any long-term decline," Stevens said.

For the full article, please visit Bloomberg Law's website (subscription required).

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.

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