Taxpayers making advance pricing agreement (APA) submissions may be asked to use the new “functional cost diagnostic model"—a taxpayer information data analytics tool.
The IRS’s Advance Pricing and Mutual Agreement Program (APMA) released instructions (in a memo) that explain how the functional cost diagnostic model will be used to better understand “...the respective contributions each controlled taxpayer makes to exercise control over the economically significant risks surrounding proposed covered transactions.” Read TaxNewsFlash
Nevertheless, the functional cost diagnostic memo leaves many questions unanswered.
Read an April 2019 report [PDF 82 KB] prepared by KPMG LLP: What's News in Tax: FCD Model: A New Tool for APA Submissions
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