Latest Update to Chainbridge Transfer Pricing Issue in District of Columbia

DALLAS, April 13, 2018 /PRNewswire/ -- The three taxpayers cited in our release dated February 12, 2018 have recently reached a tentative settlement agreement with the District of Columbia Office of Tax and Revenue (OTR). The administrative law judge (ALJ) in these cases strongly urged the parties to settle. In several other cases before a different ALJ, the parties have also come to a tentative settlement agreement with respect to their transfer pricing issues. However, two remaining cases are headed to trial. Those would be the assessments against Pfizer, Inc. and Ahold USA Holdings, Inc. The parties in these cases are expected to provide the ALJs a status report by May 23, 2018. 

In short, the "Chainbridge Method" of transfer pricing involves developing a "Comparable Profits Model" for an industry and then applies this model in a generic fashion to taxpayers in that industry. In 2012, the taxpayer in Microsoft v. OTR¹ was granted an order of summary judgement against the OTR to dismiss an assessment related to a "Chainbridge Method" audit.  The ALJ in that case held that the "Chainbridge Method" was arbitrary, capricious, and unreasonable. 

Fortunately, the District of Columbia is no longer contracting with Chainbridge. However, it appears that several other states, mentioned in our February 28, 2018 release, are still using Chainbridge.

¹ Microsoft Corporation v. Office of Tax and Revenue, District of Columbia Office of Administrative Hearings, No. 2010-OTR-00012, May 1, 2012.

About Ryan
Ryan, an award-winning global tax services and software provider, is the largest Firm in the world dedicated exclusively to business taxes. With global headquarters in Dallas, Texas, the Firm provides an integrated suite of federal, state, local, and international tax services on a multi-jurisdictional basis, including tax recovery, consulting, advocacy, compliance, and technology services. Ryan is a six-time recipient of the International Service Excellence Award from the Customer Service Institute of America (CSIA) for its commitment to world-class client service. Empowered by the dynamic myRyan work environment, which is widely recognized as the most innovative in the tax services industry, Ryan's multi-disciplinary team of more than 2,200 professionals and associates serves over 14,000 clients in more than 45 countries, including many of the world's most prominent Global 5000 companies. More information about Ryan can be found at ryan.com. "Ryan" and "Firm" refer to the global organizational network and may refer to one or more of the member firms of Ryan International, each of which is a separate legal entity.

TECHNICAL INFORMATION CONTACT:

Mark Nachbar
Principal
Ryan
630.515.0477
[email protected]

SOURCE Ryan