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Overzealous state auditors cautioned

May 14, 2009

A decision by the Massachusetts Appellate Tax Board (ATB) has sent a warning to state tax auditors not to overreach in assessments related to inter-company pricing of services and products provided between companies and their out-of-state affiliates.

Federal governments often examine transactions related to services, products and intangibles provided between domestic companies and their overseas affiliates to ensure that arm’s-length prices are charged, but in the economic downturn, regional authorities are also stepping up their efforts.

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