Rocco Femia was quoted regarding the IRS's new transfer pricing audit road map. Femia discussed the road map, and the IRS's transfer pricing enforcement efforts more generally, with Michael Danilack, Deputy Commissioner (International) of IRS LB&I, as part of a panel at the May meeting of the ABA Tax Section. Among the items discussed was the division of decision-making authority between the IRS's examination function and its transfer pricing practice. "There is a lot of loose language in the road map about the field consulting with the Transfer Pricing Practice, and the Transfer Pricing Practice providing an advisory role in examinations," Femia said, adding that his experience with the field "has been all over the map."

Femia also noted that a common concern taxpayers have in the transfer pricing area is that examiners can become wedded to a theory and devote resources to it. "And there is no way to know or demonstrate this is a poor use of resources without going through a fact-intensive examination," he said. "How do you allocate resources when it may not be apparent after a few [information document requests] whether there is something here or not?" Danilack replied that if the taxpayer makes a showing that the issue is not worthwhile, the government "should be more willing to say 'You are right, this is not a good use of our resources; we should move on to something else.'"