Putting TRAC to Work
  Legal and Scholarly
University of Saskatchewan
May 2011

How does transfer pricing risk affect premia in cross-border mergers and acquisitions?
By Devan Mescall

When comparing IRS audit rates, as a measure of corporate tax enforcement, and transfer pricing risk in the context of the United States there does not appear to be a great degree of covariance. The rank measure of transfer pricing risk for the United States increased from a rank of 11.5 in 1992 to a peak of 26 in 1996 before falling to a rank of 23 in 2003 and 2004. During this same period where the TP_RANK in the United States increased, IRS audit rates actually decreased from a rate of 54.63% in 1992 to a low of 28.98% in 2003 before increasing to 38.66% in 2004 (TRAC 2009)

Transactional Records Access Clearinghouse, Syracuse University
Copyright 2011
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