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ARTICLE · 07 JUNE 2021

Document Preservation For Transfer Pricing Litigation: What You Need To Know

Mayer Brown
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Assume the Internal Revenue Service ("IRS") is auditing your company's transfer pricing.

United StatesTax
Jenny A. Austin
Jenny A. Austin
Anthony D. Pastore
Anthony D. Pastore
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Assume the Internal Revenue Service ("IRS") is auditing your company's transfer pricing. The administrative process is starting to break down, and it looks as if the IRS might assert a sizeable income adjustment. What is your duty to save documents for a potential upcoming court case?

 Basic Duty. When you "reasonably anticipate" litigation with the IRS, you must start preserving the documents that are "potentially relevant" to the dispute. This duty is as old as our legal system: The premise is that no litigant should be allowed to destroy evidence needed by the court or the opposing party to advance the case. Destroying relevant documents may lead to severe consequences, such as sanctions or a presumption that the evidence would have undercut your position.

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This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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