Database Analysis / Data Mining

Modern accounting systems maintain detailed transactional databases, providing rich sources of information that can be used to document prices and support or challenge the results of profit-based analyses in tax and trade litigation matters. ECS routinely prepares analyses of such data that are subject to audit by government agencies.

Transfer Pricing Analyses

Transactional databases can be used to compare prices received or paid for items sold to or purchased from both related and unrelated parties, to compare margins for transactions involving related parties with margins for similar transactions involving only unrelated parties, and to explore the implications of alternative ways of grouping transactions.

  • ECS was retained by a taxpayer in anticipation of an IRS audit. ECS used the taxpayer’s detailed transactional records to derive arm’s length prices for each item sold, and compared those prices with the actual transfer price paid for each item to determine appropriate adjustments. Backed by this detailed transactional analysis, the adjusted transfer prices successfully passed the IRS examination.

Relevant ECS Professionals:

Jerrie Mirga [bio ][email]
Valerie Amerkhail [bio ][email]

Antidumping Practice

ECS assists firms in preparing detailed databases, ranging from a few thousand to millions of transactions, for submission to the U.S. Department of Commerce ("DOC") as part of antidumping investigations. ECS is responsible for ensuring that the databases and analysis survive audit by DOC personnel.

Relevant ECS Professionals:

John Derrick [bio ][email]
Maarten van de Geijn [bio ][email]

Data Mining / Strategic Pricing

ECS’ data mining analysis uses a client’s own data in conjunction with powerful software tools to enhance profit-making potential by identifying anomalies that can be resolved or exploited to maximize profit.  Working with the client to understand their specific market context, ECS can identify patterns in pricing and profitability across market segments, regions, product categories, and customers and any other factors tracked by a client’s internal recordkeeping systems.

This type of analysis is most powerful for businesses with a large, fragmented customer base and/or an extensive product list. The more detailed and multi-dimensional the data, the more potential there is for identifying profit-enhancing opportunities.

Relevant ECS Professionals:

Jim Dougan [bio ][email]

IC DISC Allocations

Transaction-by-transaction reporting or marginal costing can increase the benefit of using a Interest Charge Domestic International Sales Corporation (IC DISC) for qualified export sales. ECS works closely with clients and Counsel to create transactional databases, optimal allocations, and the requisite audit trail. Using customized software applications, ECS identifies the option that maximizes each client’s IC DISC benefits.

  • ECS worked with a major multinational firm to develop a transactional database, calculate the commission attributable to each transaction, generate reports quantifying and supporting the claimed commission, and to demonstrate that all information could be reconciled back to the company’s financial statements and tax returns. The result doubled the client’s tax savings.

Relevant ECS Professionals:

John Derrick [bio][email]