DC Tax Flash: IRS Improves Processing Time for APAs

Tax Alert
03.31.2021

The Internal Revenue Service (IRS) has issued an annual review of its Advance Pricing and Mutual Agreement Program (APMA) that "describes the experience, structure, and activities of the APMA Program during calendar year 2020."

The report shows few major shifts in the number and types of APAs processed last year despite disruptions from the COVID-19 pandemic affecting both the agency and corporate participants. The processing time for APAs, however, dropped significantly last year.

The number of APA applications filed in 2020 was 121, or about the same number filed in 2019. The IRS executed 127 APAs in 2020, which was 7 more than in 2019. The median processing time for APAs in 2020 was reduced by 6 months to 32.7 months, down from 38.8 months in 2019.

​The IRS explains that the APMA report for 2020 includes the following information divided into three main sections:

  • Part I includes information on the structure, composition, and operation of the APMA Program
  • Part II presents statistical data
  • Part III includes general descriptions of various elements of the APAs executed in 2020, including types of transactions covered, transfer pricing methods used, and completion time

The 69-page text of the APMA report is posted here.


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