Transfer Pricing Disputes: Big, Getting Bigger

The amounts in transfer pricing disputes have always been larger than those in other tax disputes. As early as the 1980s, the Tax Court coined the term “jumbo cases” just to refer to transfer pricing cases where the amounts in issue and court efforts were outsized compared to other tax cases. Although transfer pricing cases represented less than one percent of Tax Court cases, they accounted for approximately one-third of all deficiencies. The amounts involved in those so-called “jumbo” cases from the 1980s pale in comparison to amounts in recent §482 disputes.

In 1993, Tax Management found that taxpayers were ...