January 25, 2022

Volume XII, Number 25

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January 24, 2022

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Louisiana Announces a New “Transfer Pricing Managed Audit Program”

The Louisiana Department of Revenue (the “Department”) released Revenue Information Bulletin No. 21-029 announcing the “Louisiana Transfer Pricing Managed Audit Program.”  Beginning November 1, 2021, eligible corporations may request to participate in the program in order to resolve intercompany transfer pricing issues with the Department. Newly registered taxpayers, existing taxpayers, and taxpayers currently under audit by the Department may participate in the program. Taxpayers may request to participate in the program until April 30, 2022, and all managed audits must be closed by June 30, 2022.

A taxpayer must meet the following qualifications in order to participate in the program:

  • Established history of voluntary tax compliance with the Department, if previously registered with the Department

  • Certification that the taxpayer has available time and resources to dedicate as a participant in the program

  • Available and suitable records concerning the intercompany transactions

  • Reasonable expectation of ability to pay an expected liability

Periods available for resolution include all open periods that have not prescribed, including those held open by a prescription waiver, as well as the 2021 tax year for both calendar and fiscal year filers, and up to four future tax periods.

If a taxpayer is approved and participates in the program, the taxpayer will be authorized to conduct a managed audit with respect to intercompany transactions. The taxpayer will be expected to provide all requested documentation to the Department within thirty days of signing a Managed Audit Agreement. Once the Department reviews the taxpayer’s information, the Department will issue a written determination as to whether the Department agrees with the taxpayer’s position. The taxpayer will then have thirty days to accept the determination or offer modifications or adjustments.

If the Department ultimately disagrees with the taxpayer, the Department may proceed with assessment and collection procedures.  However, no penalty will be assessed on any tax due relating to the managed audit findings. Any delinquency interest that accrued during the managed audit period will be abated, up to 180 days. The Department has defined the managed audit period from the date of the Department’s notice of acceptance into the program through the date of the Department’s notice of tax due.

Those taxpayers who already have transfer pricing matters under audit, or in the audit review, protest or litigation phase, are eligible to apply to participate in the program.

© 2022 Jones Walker LLPNational Law Review, Volume XI, Number 302
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About this Author

Cami J. Fergus Associate Jones Walker New Orleans Tax State Local Tax
Associate

Cami Fergus is an associate in the Tax Practice Group. Prior to joining Jones Walker, Cami served as an extern for the Internal Revenue Service Chief Counsel and was a tax preparer for the Voluntary Income Tax Assistance Program. She also worked for the Honorable Robin M. Giarrusso of the Orleans Parish Civil District Court.

Cami also previously studied at the Karl Franzens Universität in Graz, Austria.

504-582-8135
Andre Burvant, Tax, Estate Practice Group, Jones Walker Law FIrm, CPA
Partner

Andre Burvant is a partner in the firm's Tax & Estates Practice Group. He is a Certified Public Accountant in addition to being licensed to practice law in Louisiana. His practice includes state and local tax planning, audit defense, tax refunds and credits, and tax controversy work against the Louisiana Department of Revenue and local parish taxing agencies. Mr. Burvant has represented clients in tax controversies before the Louisiana Board of Tax Appeals and in state and federal courts.

 

504.582.8466
Bill Backstrom, Tax, estates Attorney, Louisiana, Jones Walker Law FIrm
Partner

Bill Backstrom leads the firm's Tax & Estates Practice Group. His practice, for more than 30 years, has focused primarily on state and local tax matters in Louisiana and on a multistate basis. These matters include tax and business planning, utilization of tax and business incentives, audits, government relations, administrative appeals, judicial appeals, and legislative matters.

Mr. Backstrom is a Board Certified Tax Specialist as certified by the Louisiana Board of Legal Specialization. He is a frequent lecturer and author on a variety of tax topics, including all...

504.582.8228
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