THEVOZ Attorneys will be your advocate before the tax authorities.
THEVOZ Attorneys is an international tax law firm with offices in Austin, Texas and Switzerland. Our clients range from large corporations to individuals. In addition to help with litigation, examinations, and collections, we assist clients with transfer pricing, voluntary disclosure, and, in some cases, obtaining private letter rulings.
US citizens, permanent residents (green card holders), and people with a substantial presence in the US, defined as having lived in the US more than 183 days in the past calendar year, must pay US taxes on all income, even income earned overseas. For those taxpayers who failed to pay taxes, there are voluntary disclosure procedures both in the domestic and the international context. While voluntary disclosure requires substantial amounts of paperwork, doing them correctly will mean that a taxpayer may avoid significant penalties and possible criminal exposure. THEVOZ Attorneys can help you gather together all the required paperwork, including proper tax returns for a period of time specified by the IRS, review that information for accuracy and assist with the filing of important forms like the Report of Foreign Bank and Financial Accounts (FBAR) and the Form 8938, Statement of Specified Foreign Financial Assets. We understand how to deal with the IRS and we will not be intimidated.
For US persons for tax purposes who are deemed willfully non-compliant, but who wish to settle their debt with the IRS and possibly avoid criminal penalties, there is the voluntary disclosure program. This program requires pre-clearance by IRS Criminal Investigation (CI). It also requires timely disclosure of all tax liabilities. The program is rigorous and exacting and because of its technical complexities it requires the services of a capable tax attorney like THEVOZ Attorneys. Complete accurate disclosures and payment of outstanding liabilities can help a taxpayer to avoid more serious criminal penalties and possibly even jail time.
Transfer Pricing Ruling
Transfer pricing is an important issue right now because the of OEDC’s anti-base erosion and profit shifting initiative. The initiative has highlighted the ways multinational enterprises (MNEs) can reduce their tax liability by making it appear as if high-value-added activities are performed, and taxed, in low-tax countries. Transfer pricing is one of the practices cited by the OEDC as a method of tax avoidance used by MNEs. Multinationals have entities in multiple countries that produce goods used as commodities or components of products finished by other entities. The MNEs, when they ship the commodities or components across borders to other entities in the group, are supposed to price those goods as if they were purchased from entities outside the group, as if it were an “arm’s-length” transaction. By manipulating pricing data so that it appears the activity with the highest added value occurred in a country with low tax rates, MNEs effectively shift profits and avoid taxes away from countries with relatively high tax rates.
However, increased enforcement aimed at curbing transfer pricing abuse has many MNEs concerned that they will find themselves being double taxed by authorities in the countries in which they operate. Defending themselves in a climate of suspicion and mistrust is problematic. What can MNEs do to protect themselves from being unfairly accused of tax avoidance?
THEVOZ Attorneys works with client MNEs to develop a Transfer Pricing Ruling. We develop pricing rules to fairly capture the relative added value of each step of the production process, for each product and/or service, then we prepare a document with these rules for every product and/or service sold by the MNE. We sit down with the taxing authority of each country in which the MNE operates and negotiate an agreement for each transfer pricing rule in the document. Once agreed to by all of the relevant countries, this Transfer Pricing Ruling becomes the basis of a defense for any accusation of tax avoidance through transfer pricing. If the MNE is double taxed, we will represent them in front of taxing authorities and argue their case. We will also review the Transfer Pricing Ruling periodically to make changes due to new technology, distribution channels, marketing initiatives or any new business practice that affects the MNE’s offerings.
IRS Private Letter Ruling
An IRS Private Letter Ruling, or PLR, is a written “determination issued to a taxpayer by an Associate office in response to the taxpayer’s written inquiry, filed prior to the filing of returns or reports that are required by the tax laws, about its status for tax purposes or the tax effects of its acts or transactions. A letter ruling interprets the tax laws and applies them to the taxpayer’s specific set of facts. A letter ruling is issued when appropriate in the interest of sound tax administration.” A PLR can cost anywhere from $250 to $50,000 in just administrative fees depending on the complexity and type of request. In addition, there are also significant legal fees associated with getting these rulings. However, in certain cases, for instance multi-million dollar transactions where certainty is required, these are not only advisable but necessary. At [law-firm] we can assist you in obtaining a PLR.
These dispute resolution services are just some of the ways THEVOZ Attorneys can help taxpayers stay on the right side of the law, both here in the US and in Europe. We can help you navigate tax requirements from offshore businesses and help you understand the larger tax picture for a company or individual. We can get you out of trouble, and keep you out of trouble, with the relevant tax authorities in the US and in Europe.