The IRS transfer pricing team wants our documentation in 30 days. Can we build it now, or have we already lost the contemporaneous-documentation advantage?
We have intercompany service fees between a U.S. corporation and a related foreign affiliate, and now the IRS has asked for transfer pricing documentation very quickly. Management is talking as if we can just prepare a report now and hand it over, but I am worried that a document created after the IDR lands is not the same thing as true contemporaneous support.
I need a realistic answer about risk, not a motivational speech. If the IRS expects a robust documentation package and can demand it quickly, then the better question may be how much penalty protection we already lost by waiting until the audit stage.
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