Washington, D.C. (April 28, 2025) – In a letter submitted to the U.S. Department of the Treasury and the Internal Revenue Service (IRS), the American Institute of CPAs (AICPA) provided comments in response to Notice 2025-04. This notice announces plans to introduce new rules for transfer pricing under section 482 regulations. The letter requests guidance on certain aspects of applying the simplified and streamlined approach (SSA) of the Organisation for Economic Co-operation and Development (OECD), which is described in the OECD’s report on Pillar One Amount B.
Transfer pricing relates to how prices are set for transactions between related entities. The notice introduces a new transfer pricing method under section 482 regulations for pricing baseline marketing and distribution activities.
The Treasury and the IRS intend the proposed regulations to fully implement the substance of the OECD’s report. U.S. taxpayers can choose to use the SSA method for qualifying and in-scope transactions as a safe harbor application, ensuring their pricing meets the arm’s-length principle (ALP) and is accepted by the IRS for taxable years beginning on or after January 1, 2025.
The AICPA’s recommendations include the following:
Only taxpayers should have the option of electing the SSA and should be solely elective for taxpayers.
The availability of the SSA for U.S. taxpayers should not depend on whether the SSA has been implemented by the counterparty jurisdiction.
The SSA election should apply to all in-scope transactions without further limitation, unless such limitation serves the interests of simplicity or sound tax administration.
We agree with the selection of 30% as the upper bound of the OES ratio.
“Individually and collectively, these recommendations would encourage taxpayers to self-elect the SSA as broadly and as practically possible to maximize the compliance simplification and tax certainty benefits for both taxpayers and the IRS,” says Reema Patel, Senior Manager, AICPA Tax Policy & Advocacy.
About the American Institute of CPAs
The American Institute of CPAs (AICPA) is the world’s largest member association representing the CPA profession, with 400,000 members in the United States and worldwide, and a history of serving the public interest since 1887. AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting. AICPA sets ethical standards for its members and U.S. auditing standards for private companies, not-for-profit organizations, and federal, state and local governments. It develops and grades the Uniform CPA Examination, offers specialized credentials, builds the pipeline of future talent and drives continuing education to advance the vitality, relevance and quality of the profession.
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Contact: Veronica L. Vera
202-434-9215
Veronica.Vera@aicpa-cima.com