2022-2023 Priority Guidance Plan: What You Need to Know

On November 4, the Department of the Treasury and the Internal Revenue Service released the 2022-2023 Priority Guidance Plan. The Priority Guidance Plan is published to highlight what is most important for taxpayers and the tax administration. This year’s Priority Guidance Plan contains 205 guidance projects that are priorities for allocating Treasury Department and IRS resources during the 12-month period from July 1, 2022 through June 30, 2023 (the plan year).

Like the 2021-2022 plan, the Treasury and IRS again included a transfer pricing project in the 2022-2023 plan. The guidance plan listed regulations under IRC Sections 367 and 482. Specifically, the guidance plan highlights the transfer pricing items listed below:

• Regulations addressing the changes to Section 367(d).
• Regulations addressing the changes to Section 482 on aggregation, realistic alternatives, and the definition of intangible property.
• Regulations under Section 482 clarifying certain aspects of the arm’s length standard, including periodic adjustments.
• Regulations under Section 482 clarifying the effects of group membership (e.g., passive association) in determining arm’s length pricing, including specifically with respect to financial transactions.

Given the inclusion of the above transfer pricing items in the 2022-2023 Guidance Plan, taxpayers should expect further clarification on the above in the form of regulations, revenue rulings, revenue procedures, notices, and other published administrative guidance. Further, the inclusion of these transfer pricing items, coupled with the increased IRS funding, should be viewed as a further progression of the IRS’ transfer pricing enforcement activity. In light of this, it is imperative that taxpayers be proactive and assess their transfer pricing position to ensure they can withstand the increased IRS transfer pricing scrutiny.

If you have any questions about the 2022-2023 Priority Guidance Plan, or need guidance on staying up to date on international tax compliance and reporting, contact our Global Business Services team.