Grassley Praises IRS’ Public Hearings on Advance Pricing Agreement Program

M E M O R A N D U M

To: Reporters and Editors
Fr: Jill Gerber for Chairman Grassley, 202/224-6522
Re: Advance Pricing Agreement program
Da: Friday, Dec. 10, 2004

Sen. Chuck Grassley, chairman of the Committee on Finance, has been conducting a committee review of the Advance Pricing Agreement program. He made the following comment on today’s IRS announcement of public hearings on the program.

“I’m pleased that the IRS is seeking public comment on ways to improve the APA program. It’s become more and more clear as the Finance Committee has been engaged in its bipartisan reviewof the APA program that we need to seriously consider reforms. We need to make sure that the APAprogram works for everyone – protecting the public fisc for all taxpayers; allowing companies tohave certainty in their tax liabilities; and assisting the IRS in tax code administration.”The text of the IRS announcement follows.

A public hearing with Chief Counsel Donald L. Korb and Associate Chief Counsel(International) Hal Hicks will be held from 1:00pm to 4:00pm on Tuesday, February 1, 2005and again from 1:00pm to 4:00pm on Tuesday, February 22, 2005 in the auditorium (room7129) on the 7th floor of the IRS main building at 1111 Constitution Avenue, NW,Washington DC. 
The purpose of the hearing is to solicit comments regarding the operationof the Advance Pricing Agreement program within the Office of Associate Chief Counsel(International) and suggestions for strengthening the program’s performance as part ofChief Counsel’s commitment to promoting IRS audit currency.

Speakers may address their comments to any aspect of the APA program. Writtencomments in advance or in lieu of attendance at the hearing also are welcome. In an effortto provide some structure to the discussion, the first day’s session will focus on commentson the general administration and operation of the program. The second day’s sessionwill continue the first day’s discussion and also will focus on comments on technical issuesrelated to APAs.

Without limiting the areas for comment, comments are specifically invited on the followingtopics:

Day 1 – February 1, 2005

- the state of, and ideas for improving, the accessibility of the APA program to taxpayers;
-the state of, and ideas for improving, timeliness and efficiency in handling APA matters;
- the state of, and ideas for improving, handling of APA cases in particular industries; and
-the state of, and ideas for improving, the effectiveness of the APA program generallyin furthering the interests of sound tax administration.

Day 2 – February 22, 2005

- continuation of Day 1 discussion;
- the state of, and ideas for improving, the critical assumption language and/or otherfeatures of the standard APA contract;
- the appropriateness/feasibility of updating an agreed arm’s length range or point toreflect events occurring during the APA term (e.g., by tying the range or point to an externalor internal benchmark); and
- the appropriateness/feasibility of reflecting in the legal and economic analysesunderlying an APA the impact that the execution of the APA may have on the relationshipbetween the APA taxpayer and its related party.
Any person wishing to reserve time to speak at the hearing should contact BrendaRobinson by telephone at (202) 435-5220 (not a toll-free number) or by fax at (202) 435-5238 and indicate his or her affiliation, if any, and how long he or she requests to speak.

Persons reserving time should also submit an outline of topics to be discussed, sent to thefax number or mailing address below for receipt at least two business days before thehearing. Persons who have not reserved time will have an opportunity to speak at the endof the hearing, time permitting. Persons wishing to comment in writing should send writtencomments to Brenda Robinson by fax at (202) 435-5238 or by mail at 1111 ConstitutionAvenue, NW, CC:INTL:APA, MA2-266, Washington DC 20224.

Due to building security procedures, persons attending the public hearing must enter at theConstitution Avenue entrance. In addition, all visitors must present photo identification toenter the building. Because of access restrictions, visitors will not be admitted beyond theimmediate entrance area more than 30 minutes before the hearing starts. To have yourname placed on the building access list to attend the hearing, contact Brenda Robinsonat (202) 435-5220 (not a toll free number) or by fax at (202) 435-5238.

The principal author of this announcement is Matthew Frank of the Office of AssociateChief Counsel (International). For further information regarding this announcement contactMatthew Frank at (202) 435-5222 (not a toll-free call).

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