ECONOMICS

Detailed explanation-1: -Transfer pricing documentation should include records and documents describing: The organizational structure, including an organization chart covering persons involved in a controlled transaction. The nature of the business or industry and market conditions. The controlled transaction.

Detailed explanation-2: -The transfer pricing documentation should be made available within 30 days upon request by the IRB. The expectation is that the transfer pricing documentation is prepared by the time the taxpayer lodges its tax return to support its response in Form C.

Detailed explanation-3: -High-quality transfer pricing documentation allows the examining agent to rely on the taxpayer’s analysis of functions, risks, intangibles, value drivers, etc., saving both the taxpayer and the IRS time examining low-risk transfer pricing issues.

Detailed explanation-4: -Transfer pricing accounting occurs when goods or services are exchanged between divisions of the same company. A transfer price is based on market prices in charging another division, subsidiary, or holding company for services rendered.