US: IRS annual APA report shows dramatic increase in productivity, record number of APAs concluded

Tax Insights ()

On March 26, 2013, the IRS, through the Office of the Advance Pricing and Mutual Agreement (APMA) Program, issued its 14th Annual Statutory Report (Announcement 2013-17) (the report) concerning Advance Pricing Agreements (APAs). The report is the first issued by the IRS since the formation of the newly organized Advance Pricing and Mutual Agreement (APMA) Program, which has combined responsibility for APAs and Mutual Agreement requests. The report, shortened to remove reference materials available elsewhere and made more readable, describes the experience, structure, and activities of the APMA Program with respect to APAs.

The report indicates that the productivity of the IRS in processing APA requests improved dramatically in 2012. In particular, the report reveals that the APMA Program executed a record high 140 APAs during 2012, after only 43 APAs were concluded the year before. The average time to complete APAs also decreased. The dramatic increase in the number of APA completions is attributable to several factors: (a) the increased staffing of the APA function, (b) a more streamlined APA process under the new APMA structure, and (c) a strong emphasis by APMA leadership on efficient analysis and negotiation of APA requests.