Markers and Musings:The Proposed Section 482 Services Regulations

This article was first published in The Tax Executive, November/December 2003

Mrs. Lewis expresses her appreciation to her colleagues Rebecca I. Rosenberg and Roy A. Moss for their assistance in connection with the preparation of this article.

Introduction

In September, the Internal Revenue Service promulgated comprehensive and important revisions to the regulations regarding the treatment of intercompany services under section 482 of the Internal Revenue Code, along with several key changes to the transfer pricing characterization of intangibles.¹ (Issued in proposed firm, these regulations are referred to in his article as "the regulations.") Updating 35-year-old provisions, the regulations both complete the mid-1990s overhaul of the transfer pricing rules and have potential ripple effects. They in part respond to business trends and international developments and in part reflect IRS suspicion regarding offshore "migration" of revenue and intangibles.