This article examines the potential database and examination opportunities that the
IRS now will have in the context of Section 482 transfer pricing as to merger trans-
actions that are already subject to FTC–DOJ review. Robert Feinschreiber and Mar-
garet Kent conducted this study at the request of the IRS. The Treasury and IRS pre-
viously asked Feinschreiber & Associates to further its review of the U.S. transfer
pricing methodologies, databases, and audit techniques.
(b) Background. Statutes require that each person that is subject to Section 7A of
the Clayton Act, section 15 U.S.C. Section 18a, as added by Section 201 of the Hart
Scott Rodino Antitrust Improvements Act of 1976, and rules promulgated thereunder
must file a notification form with the FTC and DOJ. The form is termed Notification
and Report Form for Certain Mergers and Acquisitions (Notification Form). The No-
tification Form is the appendix to 16 C.F.R. Part 803, and is FTC Form C4. The No-
tification Form is 15 pages in length and requires extensive specific attachments.
Much of the information furnished to the FTC and the DOJ is through supplemental
requests that the FTC and DOJ might make. This supplemental information can sig-
nificantly add to information already provided through the Notification Form.
The acquiring party must pay a filing fee to the Federal Trade Commission, which
can range from $45,000 to $280,000. It is our strong suspicion that the acquiring
party, on discovering this fee, will not be complaining about the cost of obtaining an
IRS ruling. We strongly suggest to the IRS that this phase of the transfer pricing in-
formation document request should be used only when the aggregate total amount of
assets and voting stock to be held as a result of the acquisition are $50 million or
more. Robert Feinschreiber and Margaret Kent suggest to the IRS that it additionally
employ a standard transfer pricing information document request that has different
parameters from assets and voting stock, that of U.S.-connected goods or services.
(c) Objectives. Robert Feinschreiber and Margaret Kent suggest to the IRS that it
use a standard transfer pricing information document request form that would tie into
the information provided by FTC Form C4. The international examiner would be the
person at the IRS who would initiate this standard transfer pricing document request.
We visualize that much of the information obtained by the international examiner
would be funneled though to the transfer pricing economists. The transfer pricing
economists would then utilize much of the information to make necessary economic
adjustments as part of this audit review.
Robert Feinschreiber and Margaret Kent then suggest that the IRS employ such a
standard transfer pricing information document request form to achieve this objec-
tive. This suggested standard form is published as part of this analysis. Robert Fein-
schreiber and Margaret Kent presented this analysis at the first instance to interna-
tional examiners, transfer pricing economists, and IRS counsel for the southeast
region on May 10, 2002, in Atlanta.
(d) Examination of the Notification Form. Many tax practitioners, including those
engaged in a mergers and acquisitions tax practice, are unfamiliar with the FTC–DOJ
Notification Form. Fewer merger and acquisitions tax practitioners are familiar with
the transfer pricing implications of the FTC–DOJ filing. This portion of the article
addresses the issues that tie-in antitrust issues to transfer pricing tax issues. The No-
tification Form itself comprises eight detailed items together with some preliminary
29 • 34 TRANSFER PRICING FOR INTERCOMPANY TRANSACTIONS