Valerie Amerkhail

Valerie Amerkhail joined Economic Consulting Services, LLC in 1998, after almost twelve years of transfer pricing experience in Big 6 accounting firms, most recently as a partner at Coopers & Lybrand L.L.P.

Ms Amerkhail has worked closely on transfer pricing issues with international tax attorneys from many of the leading U.S. law firms. She has participated in negotiations involving all stages of IRS field examinations, appeals, and Advanced Pricing Agreement (“APA”) procedures. Her economic reports have been used for all stages of transfer pricing planning and documentation, for the defense of transfer prices during examinations by both IRS and foreign tax authorities, and for dispute resolution, including appeals, competent authority, and APA negotiations.

Transfer pricing documentation reports produced under Ms Amerkhail’s supervision have covered both inbound and outbound distributors of a wide range of consumer and industrial products, providers of many different types of services, and transfers of a variety of intangibles. Ms Amerkhail successfully defended the first of these reports to come under examination by persuading the IRS field team to accept the report's definition of the scope of the controlled transactions, selection of the best method, choice of comparables, and adjustments to comparables, leaving only a small adjustment for the client's allocation of expenses between the controlled and uncontrolled transactions. A documentation report for another client was the substantive basis for an IRS economist’s “no change” recommendation, despite a history of contentious audits and large proposed adjustments in previous examination cycles.

In several cases, Ms Amerkhail’s reports have provided the basis for the successful defense of transfer prices in examinations by the IRS or non-U.S. tax authorities. For instance, the Japanese NTA recently accepted her annual report determining the arm’s length range of operating margins for non-U.S. distribution subsidiaries of the U.S. multinational as the appropriate test of transfer prices for the Japanese subsidiary. In other cases, Ms Amerkhail’s reports contributed to successful competent authority proceedings. For instance, in one case she prepared an economic report rebutting the IRS economist's analysis of the arm's length margin for a controlled distributor operating in a concentrated industry, and identified and analyzed CUP and profit split data that were used to convince the IRS that the taxpayer should be distinguished from other controlled distributors in its industry. The successful competent authority settlement significantly reduced the tax adjustment imposed by the IRS, and resulted in a full refund of the additional tax from the foreign tax authority.

In preparing APA requests, Ms Amerkhail has worked closely with clients and their attorneys to develop transfer pricing methodologies that will be appropriate from a business perspective as well as acceptable to tax authorities. In negotiations with the IRS, whether for APAs or at the examination or appeals levels, she has been involved in all stages of the negotiations, either cooperating with the IRS economist to reach conclusions acceptable to both sides, or demonstrating the unreasonableness of the IRS economist’s positions for the benefit of the rest of the IRS team.

Before specializing in transfer pricing, Ms Amerkhail served as a Principal Analyst for the Congressional Budget Office. In that role, she forecast corporate tax receipts for CBO's official budget projections during the 1982-86 period, when both economic conditions and tax law were unusually volatile.

Ms Amerkhail performed the first economic analysis of the potential impact of the 1981 individual income tax reductions on the distribution of after-tax income, and the tax burden by income class, as a consultant to the Joint Economic Committee. The conclusions were subsequently confirmed by after-the-fact studies.

As a Senior Economist at Chase Econometrics, she was responsible for Chase’s monthly forecasts of government income and outlays, and produced frequent reports on the economic impacts of government policies. As an Economic Analyst at the Congressional Research Service of the Library of Congress, she used the major econometric models to analyze the potential impacts of proposed legislation, and produced reports for Congress on economic issues.

Ms Amerkhail is a former president of the Society of Government Economists, and of the National Economists Club. She is also a member of the National Tax Association, the American Economic Association, and of two informal Washington D.C. groups: the Tax Economists Forum, and the International Tax and Finance Forum.

Practice Examples

Getting to Yes

This company, the U.S. subsidiary of a specialized trading company, had a long history of very contentious examinations and large proposed adjustments. For the first year for which contemporaneous documentation was required, Ms Amerkhail's report included a very thorough description of the wide variety of products and customers with which the company dealt, as well as the limited functions and risks associated with its transactions, and a comparison of the company's financial results with those of independent distributors, after appropriate adjustments.

As part of a new effort to calm relations with the IRS, this report was provided to the IRS early in the next examination cycle, even though the year it specifically covered was not yet under examination. As a result, the examination quickly focused on confirming the documentation and the selection of comparables, rather than exploring new theories and issuing information document requests, as in the previous examinations. Ms Amerkhail provided additional calculations and participated in meetings to respond to each concern raised by the IRS economist. The result, after considerably less time and expense than had been required in previous examinations, was a "no change" recommendation for the company's transfer prices.

Winning in Competent Authority

This company was an inbound distributor in a concentrated industry dominated by other controlled distributors, all of which were being targeted by the IRS. The IRS economist's report had used academic research on industrial concentration as the basis for a claim that all companies in this industry should earn significantly higher profits than companies in less concentrated industries. Ms Amerkhail's report made use of other academic research (based on FTC Line of Business data that had been collected for only a few years) which concluded that only the leading firm in a concentrated industry earned above normal profits. She also identified and analyzed CUP and profit split data that were used to convince the IRS that her client should be distinguished from the other controlled distributors in its industry. The successful competent authority settlement significantly reduced the tax adjustment initially proposed by the IRS, and resulted in a full refund of the additional tax from the foreign tax authority.

Defending a Royalty

This non-U.S. company had built a very successful business using intangibles licensed from a U.S. company. Eventually it rescued the U.S. licensor from financial difficulties by buying it, thus becoming the licensee of its own U.S. subsidiary. Several years later, the non-U.S. tax authority questioned whether the very successful parent should still be paying royalties to its less successful subsidiary. During interviews with personnel of the parent company, Ms Amerkhail identified aspects of the transferred intangibles that, while they had definitely been developed by the U.S. company, were more perfectly suited to the parent's culture, and thus were more valuable in the parent's home market than in the U.S. Ms Amerkhail's report explaining this relationship, and also describing the many ways in which the U.S. subsidiary was continuing to maintain and enhance the value of the intangibles, was used to persuade the non-U.S. tax authority that no change should be made to the long-established royalty.

Transfer Pricing Publications

OECD, International Seminar for Tax Judges. "Transfer Pricing Methods and Reports" Paris, May 12, 2009

American Conference Institute, 3rd Annual Cross-Industry Forum on Global Transfer Pricing. Panel Discussion of Transfer Pricing Documentation Requirements. New York, May 16, 2007

U.S. Council Foundation, Inc. & BNA Tax Management Transfer Pricing Report, Business Restructurings and Transfer Pricing Developments in China, Europe and India. Panel Discussion on Business Restructuring. New York, December 4, 2006

Federal Bar Association, 30th Annual Tax Law Conference, International Tax Program - International Tax Panel on Transfer Pricing Regulations and APA Development. Washington, DC. March 3, 2006

National Tax Association 97th Annual Conference on Taxation. Panel Discussion: "Replacing Arm's Length Pricing with Formulary Apportionment in the EU - Does the EU Know What It Is Doing?"

Federal Bar Association, 28th Annual Tax Law Conferenece, International Tax Program - International Tax Panel. Washington, DC. March 26, 2004

Boston University School of Law, Graduate Tax Program, Conference Trends in International Taxation - Panel Discussion: Current Developments in Transfer Pricing, Boston October 20, 2003

Federal Bar Association, 27th Annual Tax Law Conference, International Tax Program - Panel on Section 482 Amendments; Cot Sharing and Services Regulations, Washington, DC. March 11, 2003

"Transfer Pricing Documentation: Caveat Emptor" with Jerrie Varrone Mirga Tax Management Transfer Pricing Report. August 11, 1999. Tax Management, Inc. a subsidiary of The Bureau of National Affairs. pp. 359-365.

"Arm's Length or Formulary Apportionment? Sometimes the Best Choice is Both" Tax Management Transfer Pricing Report. June 2, 1999. Tax Management Inc. pp. 94-104.

"Finding the Best Method: A Tax Executive's Approach to Transfer Pricing" Tax Management Transfer Pricing Report. July 19, 1995. Tax Management, Inc. pp. 181--191 [Reprinted in Representing the Corporation: Strategies for Legal Counsel. Ed. Richard H. Weise. 1996 Aspen Law & Business]

"R&D Cost Sharing Under the U.S. Proposed Regulations" Tax Management Transfer Pricing Report. April 27, 1994. Tax Management Inc. pp. 844-850

"German Court Issues Important Decision in Transfer Pricing Case" with Klaus Sieker and David Benson. Tax Notes International. September 13, 1993. pp. 671-673.

"Use of Averages and Other Statistical Techniques Under IRC ß482" Tax Management Transfer Pricing Special Report. August 4, 1993. Tax Management Inc. 26 p.

"Taxes Paid by Foreign-Owned Companies: We Need More Information To Determine Whether They Are Too Low" Tax Notes International. July 5, 1993. pp. 45-50.

"The Role of Economic Analysis in Transfer Pricing Compliance, Audits, and Litigation" U.S. Taxation of International Operations Warren Gorham Lamont, Research Institute of America, Inc. 1992. [Updated March 12, 1997.]

"An Economic Approach to Transfer Pricing Policies" in Transfer Pricing: The International Tax Concern of the '90s Cym H. Lowell, Philip D. Morrison, H. David Rosenbloom, and Karla W. Simon, Eds. Prentice Hall Law & Business. Fall 1991. pp. 7-24.

"A Practical Approach to the Tax Treatment of Reinsurance" with C. Clinton Stretch, Value Enhancement Strategies for Mid-Sized Life Insurance Companies Institute for International Research. October 1990.

"Bausch & Lomb Provides Insight Into Tax Court's Sec. 482 Analysis" with Catherine Fleischmann, The Tax Advisor December 1989. pp. 815-816

Other Publications

The Fall and Rise of the U.S. Corporate Tax Burden" with Gillian Spooner and Emil Sunley, National Tax Journal September 1988. pp. 273-284.

"The CBO Corporate Tax Revenue Estimating Procedure" CBO Draft Working Paper, December 1986.

"Analysis of Long-Term Revenue Impacts of Corporate and General Business Provisions in the House and Senate Finance Committee Tax Reform Bills" CBO Staff Working Paper, June 1986.

"Background Analysis of Corporate Minimum Tax Issues" CBO Staff Working Paper, July 1985.

"Analysis of Long-Term Revenue Impacts of the President's Tax Reform Plan" with Robert Lucke, CBO Staff Working Paper. June 1985. (reprinted in Tax Notes, July 1, 1985, pp. 83-92)

"Revenue Estimation and Comprehensive Tax Reform" with Robert Lucke and Rosemary Marcuss, National Tax Journal. September 1985. pp. 373-394.

"The Effect of Recent Corporate Tax Changes on Aggregate Investment and Real Growth" Paper presented at the Allied Social Science Associations Annual Meeting, San Francisco, Dec. 28, 1983.

"Impact of the 1981 Personal Income Tax Reductions on Income Distribution; A Study Prepared for the Use of the Joint Economic Committee, Congress of the United States" December 23, 1981.

Chase Econometrics Publications

U.S. Economic Outlook [the monthly macro forecast document]

"Federal Tax Policy and the User Cost of Capital" April 23, 1981. pp. A-1 to A-20.

"The Federal Budget for FY 1982" January 26, 1981. pp. A-22 to A-42.

"The Potential Impact of Ronald Reagan's Economic Program" September 23, 1980. pp. A-25 to A-43.

"State and Local Fiscal Behavior in the Context of the General Economy" with Harold A. Hovey, July 23, 1980. pp. A-13 to A-25.

"Stimulating Investment Through Tax Cuts: A Comparison of Three Alternative Proposals" with Leon W. Taub, April 25, 1980. pp. A-16 to A-23.

Inflation and the U.S. Economy, A Chase Econometric Ten Year Forecast. Volume I, October, 1980:

"The Impact of Inflation on the Federal Budget" Section IX.

Congressional Research Service Reports

"Economic Forecasts: Background information on econometric models of the U.S. economy" published in: Studies in Taxation, Public Finance, and Related Subjects - A Compendium. Vol. I. Fund for Public Policy Research. Washington, D.C. 1977. pp. 543-550.

"Analysis of the economic impact of HR8333 [Kemp-Roth 33% individual tax rate reduction proposal] using the Wharton annual model" June 27, 1978.

"Analysis of the economic impact of HR8333 [using the Data Resources Inc. model]" March 22, 1978.

"Issues in black employment and unemployment" Feb. 9, 1978.

"Analysis (using the DRI model) of the possible impact on the U.S. economy of a 10% OPEC price increase" June 1, 1978.

"The economic impact of a Federal program to achieve 3 percent unemployment by the second quarter of 1977 using public service jobs paying the minimum wage" July 12, 1976.

"A consumer price index for the elderly" Nov. 7, 1975.

"The GNP deflator and related measures of price change" Nov. 29, 1975.

"Economic Indicators" [issue brief, designed for access through computer timesharing. Defined major series on production and prices, and discussed latest values.] Originated April 23, 1975 and updated one to three times per month until March 1979.

"Suggestions concerning the calculation of an imputed value for homemakers' production" April 28, 1975.

"The gasoline shortage - Rationing versus a higher tax" November 27, 1973. Printed in The Congressional Record, Jan. 21, 1974.


Tax Management Advisory Board Meeting - Joint presentation with Jerrie Varrone Mirga, "Transfer Pricing Documentation--Future Challenges" (New York, July 22, 1999)

D.C. Bar Taxation Section, International Tax Committee – Panel Discussion with Alan Granwell and Henry Zapruder, "Role of Economists in Transfer Pricing Matters" Washington, DC, October 1, 1998.

U.S. Treasury Dept. - Conference on Formula Apportionment (Washington, DC, December 12, 1996)

Defining a Unitary Business (Combination of traditional and formulary as best method for the modern MNC)

University of Southern California Law Center - Institute on Federal Taxation (Los Angeles, 1995)

American Conference Institute - Transfer Pricing: A Practical Application of the New Temporary and Proposed Regulations (New York, 1993) - Transfer Pricing: A Practical Application of the Rules (Chicago, New York & San Francisco, 1994) - International Technology Transfer (New York, 1995)

The Canadian Institute - Transfer Pricing: Developing Strategies for the New Rules (Toronto, 1994)

Fordham University Tax Roundtable - Transfer Pricing of Intangibles (New York, 1994)

Institute for International Research - 5th Annual Transfer Pricing Conference (Toronto, 1994)

"Alternative Methods of Achieving a Profitable and Defendable Transfer Price"

CPA Associates International - 1993 International Business Seminar (Washington, DC, 1993)

World Trade Institute - Tax Aspects of Doing Business in Mexico (Chicago, 1993, 1994)

"Transfer Pricing - U.S. and Mexico"

Kaye, Scholer, Fierman, Hays & Handler - Transfer Pricing: Where Are We and Where Are We Going? (New York, 1993)

Internationales Fachinstitut f¸r Steuer- und Wirtschaftsrecht e.V. - Besteuerungsprobleme im Verh”ltnis USA-Deutschland (Frankfurt, 1993)

"Case Studies on Transfer Pricing"

The American Tax Institute in Europe - The New US Transfer Pricing Regulations (Paris, 1993)

IBFD International Tax Academy - US International Taxation (Amsterdam, 1993)

One-Day Seminar on the New US Transfer Pricing Regulations

Two-Day Training Course on US International Taxation (intermediate level) - Transfer Pricing Section

The Federation of Netherlands Industries (VNO) - The New US Transfer Pricing Regulations (The Hague, 1993)

The Brazilian-American Chamber of Commerce - The New Transfer Pricing Regulations and Their Impact On Your Business (New York, 1993)

Prentice Hall Law & Business - Understanding the New Proposed Section 482 Regulations (New York, 1992)

"Economic Content of the Proposed Section 482 regulations"

Prentice Hall Law & Business - Transfer Pricing: The International Tax Concern of the '90s

"The Role of an Economist in Transfer Pricing Audits and Litigation" (New York, 1991)

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