Source: https://www.brattle.com/practice/tax-controversy-transfer-pricing
Timestamp: 2019-04-19 01:07:41+00:00

Document:
The Brattle Group has been retained by taxpayers and tax authorities worldwide to provide expert testimony and consulting services for the last 25 years.
Our principals and a broad network of academic and industry experts have testified and/or submitted expert reports in over one hundred tax matters, both in the U.S. and abroad. Our economic analyses and opinions are often cited extensively and favorably in landmark legal decisions.
Dozens of Fortune 500 companies and governments have retained us as consulting and testifying experts in tax disputes. Our clients include the tax controversy groups at leading law firms, taxing authorities, and corporations worldwide.
Brattle has assisted clients at all stages of tax disputes including audit, appeals, settlements, and trial. We supply financial and economic analyses applicable to key judicial doctrines, such as the economic substance, step transaction, and business purpose doctrines, and the arm’s-length principle. In addition, we assist our clients with tax planning, including advance pricing agreements analysis and documentation. We have also advised clients on tax policy issues that have been presented to the White House, the Joint Committee on Taxation, and various governmental agencies.
Our approach is to integrate with client teams and work closely throughout case development. We provide financial, economic, accounting, and industry expertise tailored to the needs of the case. We have extensive experience in hosting, managing, and working with large document sets and big data. Ultimately, we recognize that what matters most are clear communication, credibility, creativity, and responsiveness.
We have applied sophisticated financial, statistical, and economic analysis techniques across a variety of industries to provide independent valuations of tangible assets, companies, intellectual property, contingent liabilities, and other claims. In tax disputes, we have been retained by both tax authorities and taxpayers to provide expert advice and testimony on the valuation of various assets such as subsidiaries of multinational companies, complex financial derivatives, financial services firms, intercompany loans, hook stock, non-performing debt, crude oil reserves, mineral leases, and professional services firms.
Brattle experts have provided expert testimony and/or consulting services around the world on a wide range of industries such as pharmaceutical and biotech, commodities, e-commerce, energy, financial services, manufacturing, and consumer products. Our work not only includes the standard transfer pricing questions like the proper application of the best method but also economic analyses of the industry, its value drivers (technology, marketing, manufacturing, etc.) and entry barriers, and system profits. We have been involved in some of the most high-profile litigation cases in the last decade. We have also worked behind the scenes in resolutions and presentations with appeals, competent authority, and audit. In addition to litigation, our transfer pricing services also span transaction planning, M&A, valuation, and bankruptcies.
In re: Nortel Networks, Inc., et al. (09-10138-KG) and Nortel Networks Corporation (RE), (2015 ONSC 2987).
Eaton Corp. v. Commissioner, T.C., No. 5576-12.
AstraZeneca UK Limited, et al. v. Commissioners for HRMC.
GlaxoSmithKline Holdings (Americas) Inc. & Subsidiaries v. Commissioner, T.C., Nos. 5750-04 and 6959-05.
We have analyzed a range of state and federal government tax policies, such as renewable energy production/investment tax credits, research tax credits, and taxes on reinsurance premiums, and their implications for corporations, taxpayers, and consumers. This work has included analyses of prospective tax policies to inform the selection and specification of alternative tax policy options and their potential economic effects, as well as analyses of the incentive, investment, and wealth effects of existing tax policies.
Tax laws require state taxation of corporate income to accurately and fairly reflect a taxpayer’s income-generating activities in the taxing state. Brattle has performed detailed analyses to determine whether state apportionment formulas proportionately attribute income and weigh economic factors related to a taxpayer’s in-state business activity. We have also recommended alternative apportionment approaches that would be economically appropriate given case-specific facts. We have conducted unitary analyses and transfer pricing analyses in this context.
Provided support for a client for its subsidiary capital structure in Massachusetts and performed a unitary-type analysis.
Performed apportionment analysis for a client on its business in twenty states based on personnel, payroll, and other factors.
Presented to state tax authorities.
The tax treatment of derivatives, securities, and trading strategies is constantly evolving and often the subject of tax disputes. Brattle has been retained to apply economic principles to analyze the tax treatment and economic substance of various derivative and securities positions.
Assisted monoline insurer in its tax dispute with the IRS regarding tax refund during the recent financial crisis. The dispute involved the appropriate taxation of credit derivatives, currently an unsettled area in tax policies and regulation.
Analyzed multiple trading portfolios in a Financial Crisis bankruptcy.
In a dispute over the proper implementation of § 1.446-4, advised a client on the application of economic principles that would provide an economic matching of income, deductions, gains, and losses between the complex derivatives used as hedges and the hedged items.
Advised a client on whether a portfolio of credit default swaps belatedly identified as hedging transactions under § 1.1221 would have been an economically rational hedge for the taxpayer’s credit market exposures.
Characterization of capital and financing leases.
Complex transactions with associated tax benefits are often challenged under key judicial doctrines such as the economic substance, step transaction, and business purpose doctrines. Brattle has been retained by both tax authorities and taxpayers to provide advice, economic analysis, and expert testimony on economic and financial issues related to these judicial doctrines. We have analyzed the potential for economic profit and evaluated non-tax business purposes associated with a wide variety of transactions including asset sales and purchases, leasing, financing, tracking stock, hedging, derivatives, corporate restructuring and divestitures, and insurance products. We have analyzed transactions conducted by individuals, partnerships and corporate entities.
Bank of N.Y. Mellon as Successor in Interest to the Bank of New York Co. Inc., v. Commissioner, T.C. No. 26683-09, (No. 14-704 in U.S. Court of Appeals for the Second Circuit).
Salem Fin., Inc. v. US, Court of Federal Claims, No. 10-192T (No. 15-380 in the U.S. Supreme Court).
Long Term Capital Holdings, et al. v. US, District of Connecticut Civil, Nos. 3:01CV1290, etc.
Jade Trading, LLC et al. v. US, Court of Federal Claims, No. 03-2164T.
United States v. Woods, Western District of Texas, No. SA-05-CA-216, SA-05-CA-217 (No. 12-562 in the U.S. Supreme Court).
Coltec Industries, Inc. v. US, Court of Federal Claims, No. 01-072D.
Brattle secures favorable ruling for the United States government in dispute over a distressed asset/debt transaction.
Stewart C. Myers and James A. Read, Jr.
Brattle Principal Bin Zhou recently co-authored an article published in Tax Notes about how the Tax Cuts and Jobs Act (TCJA) will affect a company’s capital structure and the after-tax weighted average cost of capital (COC).
A new study co-authored by Brattle economists examines the impact that a Border Adjustment Tax (BAT) could have had on the U.S. insurance market.
Trump's infrastructure tax credits—Lasting legacy or private sector giveaway?
Elaine Buckberg poses some critical questions to help assess whether the Trump tax credits will leave a legacy of economically important projects or subsidize private investments with little public benefit.
This is an excerpt from the report titled “The Impact of Offshore Affiliate Reinsurance Tax Proposals on the U.S. Insurance Market,” originally published on January 23, 2017. This excerpt is focused the economic impact of the border adjustment provision contained in the Republican’s Blueprint tax reform proposal.
The authors examine the differences between transfer prices used for tax and for management purposes, emphasizing the need to explain the differences to tax authorities who may question the company’s motives.
Brattle Senior Associate Christine Polek will speak on a panel at the Canadian Tax Foundation's (CTF) Transfer Pricing conference, to be held March 27 in Toronto.
Brattle Principal Bin Zhou will participate in The Knowledge Group’s webinar, “Fraudulent Transfers: Cases, Trends, and Updates in the 2019 Minefield,” taking place January 16 from 3:00-5:00 pm (ET).
Brattle Principal Bin Zhou will speak at the National Association for Business Economics (NABE) Transfer Pricing Symposium to be held July 17-19, 2018, in Washington, D.C.
In a forthcoming paper in Critical Finance Review, Brattle Principals Stewart Myers and James Read derive a procedure for calculating after-tax values of real options, including the value of interest tax shields on debt supported or displaced by the options.
Brattle Senior Associate Jehan deFonseka will participate in The Knowledge Group’s webinar, “The Changing Landscape of Transfer Pricing in the U.S. Explored,” taking place April 10, 2018 from 12:00-1:30 pm (ET).
Brattle Principal Evan Cohen and Senior Associate David Hutchings will participate in The Knowledge Group’s webinar, “Recent Trends and Developments on the Organization for Economic Cooperation and Development’s (OECD) Transfer Pricing Guidelines: What You Need to Know,” taking place February 15, 2018 from 12-2 pm (EST).
The Brattle Group is pleased to introduce the seven exceptional experts who became Brattle principals over the past year.
Brattle Senior Associates Christine Polek and David Hutchings will present on The Knowledge Group’s webinar, “Global Transfer Pricing Litigation: Trends and Developments Explored,” taking place August 17, 2017 from 12-2 pm EST.
Brattle Senior Associate Matthew Aharonian will present on The Knowledge Group’s webinar, “Understanding the Impact and Implications of the New Debt-Equity Regulations,” taking place August 4, 2017 from 3-4 pm EST.
In two recently-concluded U.S. Tax Court cases the judge cited the testimony of Brattle Principal Emeritus A. Lawrence Kolbe in his opinion, ruling in favor of the Internal Revenue Service (IRS).
The Brattle Group is pleased to announce that Chris Polson, a valuation and commercial damages expert, has joined the firm’s Toronto office as a principal.
Brattle Principal Michael Cragg will present at the 7th Annual National Association for Business Economics (NABE) Transfer Pricing Symposium, taking place July 18-20, 2017 in Washington, DC.
In a recent ruling from Judge Halpern of the United States Tax Court, a deduction claimed by RERI Holdings I, LLC for a 2003 donation to the University of Michigan was denied, with the Court upholding penalties for a gross valuation misstatement.
Brattle Principal Elaine Buckberg Authors Op-Ed: "Trump's Infrastructure Tax Credits—Lasting Legacy or Private Sector Giveaway?"
In his inaugural address, President Trump committed to “transform America’s crumbling infrastructure.” But his infrastructure plan, which would provide significant tax credits to companies that invest in the country’s infrastructure, provides few details.
A report co-authored by economists at global consulting firm The Brattle Group finds that newly-proposed tax legislation aiming to defer the recognition of affiliated offshore reinsurance for U.S. tax purposes will negatively impact businesses and consumers in the United States.
Brattle Principal and Chairman Michael Cragg will present in the upcoming Knowledge Group webinar, “Transfer Pricing Audits in the Realm of Regulatory Tsunamis: How Prepared Are You?” The live webinar will take place on August 10, 2016 from 12:00 – 2:00 pm EST.
Brattle Principal Michael Cragg will present at the 6th Annual National Association for Business Economics (NABE) Transfer Pricing Symposium, taking place July 19-21, 2016 in Washington, DC.
Brattle Principals Stewart Myers and James Read, along with Ohio State Professor Isil Erel, published an article on risk capital in the December 2015 issue of the Journal of Financial Economics.
Brattle principal Michael Cragg and associate David Hutchings recently published an article in Tax Notes discussing an economic framework for determining the tested party under the standard comparable profit method (CPM) for transfer pricing. Their proposed framework is consistent with the guidance under both the OECD guidelines and U.S. tax law.
Brattle principal Philip Hanser will present on the topic of distributed power during a webinar hosted by Dorsey & Whitney on September 9, 2015.
Brattle principals Michael Cragg and Evan Cohen, associate Jehan deFonseka, and research analyst Ryan Tholanikunnel recently authored the article, “Corporate Inversion Transactions: Valuation Considerations,” featured in the July edition of Tax Notes International.
Brattle principal Michael Cragg and associate Rand Ghayad recently co-authored a research paper in The Economists’ Voice Journal, “Growing Apart: The Evolution of Income vs. Wealth Inequality,” addressing the negative impact of tax inequality on the economy and society.
Brattle principal Michael Cragg will present at the Fifth Annual NABE Transfer Pricing Symposium, taking place on July 21-23, 2015 in Washington, DC.
Brattle principal Bin Zhou recently co-authored an article published in Bloomberg BNA, “The Implications of Transfer Pricing in Bankruptcy,” in which the authors discuss the lessons learned from transfer pricing arrangements featured in the allocation of liquidation proceeds in Nortel’s bankruptcy trials.
Brattle principal Bin Zhou will be a panelist at the University of San Diego School of Law’s Third Annual Transfer Pricing Symposium, taking place April 23-24, 2015 in San Diego, CA.
Brattle economists Lisa Cameron and Steven Herscovici recently assisted in preparing an amici curiae brief in support of the defendants-appellants Actavis PLC and its subsidiary, Forest Laboratories LLC, in an antitrust case in the United States Court of Appeals for the Second Circuit.
Brattle will co-present the upcoming seminar, “The New London Court of International Arbitration (LCIA) Arbitration Rules,” which will take place on September 29, 2014 in Washington DC.
Dr. Shaun Ledgerwood and Mr. Darrell Chodorow published an article in the September 2014 issue of Tax Notes in response to a recent summary judgment order in Geosyntec Consultants Inc. v. United States, presenting an alternative approach based on the economics of risk and reward allocation for contracts.
Principal Dr. Lawrence Kolbe provided testimony on behalf of the U.S. Internal Revenue Service that aided in upholding a favorable decision in an Offshore Portfolio Investment Strategy (OPIS) tax dispute.

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