International Taxation:

Transfer Pricing and Information on Nonpayment of Tax

GGD-95-101: Published: Apr 13, 1995. Publicly Released: May 11, 1995.

Additional Materials:


Office of Public Affairs
(202) 512-4800

Pursuant to a congressional request, GAO provided information regarding transfer pricing issues and foreign-controlled corporations' (FCC) and U.S.-controlled corporations' (USCC) tax compliance, focusing on: (1) the Internal Revenue Service's (IRS) handling of transfer pricing issues through its examinations, appeals, and litigation functions; and (2) IRS use of available regulatory and procedural tools.

GAO found that: (1) recent IRS experiences with transfer pricing cases have been mixed; (2) although there were as many regulatory violations in 1993 and 1994 as in previous years, the value of the 1994 adjustments increased $1.3 billion over 1993 adjustments; (3) a large number of the 1993 and 1994 cases involved pricing methods other than the three methods specifically described in earlier IRS regulations; (4) the outcomes of IRS appeals and legal processes for the 2 years were similar to those in 1987 and 1988, with a sustention rate of about 30 percent of the proposed adjustments' value; (5) IRS has used certain procedural tools, such as simultaneous examinations and arbitration, as effective deterrents to abusive transfer pricing practices; (6) IRS expects to increase its use of advanced pricing agreements; (7) the success of the new transfer pricing regulations remains to be seen; (8) about 75 percent of FCC and 60 percent of USCC paid no U.S. income tax between 1987 and 1991; (9) the corporations that paid U.S. taxes in 1991 held 80 percent of FCC and USCC assets and generated 81 percent of their receipts; (10) the largest nontaxpaying corporations accounted for most FCC and USCC assets and receipts; and (11) factors other than transfer pricing abuse may contribute to the differences in tax amounts paid by FCC and USCC.

Jun 29, 2020

Jun 16, 2020

May 1, 2020

Apr 30, 2020

  • tax icon, source: Eyewire

    Priority Open Recommendations:

    Internal Revenue Service
    GAO-20-548PR: Published: Apr 23, 2020. Publicly Released: Apr 30, 2020.

Apr 1, 2020

Mar 2, 2020

Feb 26, 2020

Feb 25, 2020

Feb 12, 2020

Jan 15, 2020

Looking for more? Browse all our products here