The IRS considers several factors in assessing the suitability of a U.S. multinational enterprise (MNE) for the International Compliance Assurance Program (ICAP). These factors include:
- Footprint in the United States: The IRS evaluates the extent of the MNE group's presence and operations within the United States.
- Type and Materiality of Covered Transactions: The IRS examines the nature and significance of the MNE group's transactions in jurisdictions participating in ICAP. This includes assessing the complexity and materiality of these transactions.
- History of Transparent and Cooperative Engagement: The MNE group's past interactions with the IRS are considered, particularly their history of transparency and cooperation.
- Transfer Pricing Examination History: The IRS reviews the MNE group's history of transfer pricing examinations with both the IRS and other tax administrations participating in ICAP.
- Availability of IRS Resources: The IRS assesses whether it has the necessary personnel and resources to act as the lead tax administration for the MNE group.
- Current IRS Examination Status: While being under IRS examination does not automatically disqualify an MNE from participating in ICAP, it is a relevant factor in the decision-making process, particularly concerning the tax years and issues under examination.
These factors are evaluated on a case-by-case basis to determine the MNE group's suitability for ICAP. The IRS aims to ensure that the MNE group is a good fit for the program and that the necessary resources are available to conduct a thorough risk assessment.
Sources:
IRM Part 4. Examining Process. Chapter 60. International Procedures. Section 11. International Compliance Assurance Program
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