Retaining an economist in a tax or transfer pricing dispute means fixing the transactions, the years, the entities, and the forum before the analysis begins, because each changes the record the economist needs and the form the report must take. The conflict check runs across the group's affiliates and the opposing parties, the records request starts with the intercompany agreements and the documentation, and the schedule is set by the forum: the examination or appeals timetable, the Tax Court's pretrial order, or the civil court's disclosure deadlines.
Checklist
Run the conflict check across the group's affiliates, the opposing parties, and any earlier work on the group's documentation
Define the controlled transactions, the years, and the entities the analysis covers
Decide whether the engagement is consulting work, a disclosed report, or both
Send the intercompany agreements, the documentation, and the legal-entity financial statements with the engagement letter
Agree on the report deadline from the forum's schedule
Questions to ask the economist
Have you or your firm prepared documentation for this group or any of its affiliates?
Which records do you need for the functional analysis beyond the documents already produced?
Which sources of company financial data and license agreements will the comparables search draw on?
How will you coordinate with any valuation or damages expert whose figures depend on your result?
Timeline
About two weeks for retention and the first records transfer. The functional analysis and the comparables work follow once the agreements, the documentation, and the ledger detail are in hand.
Required documents
Intercompany agreements and amendments, with the transfer pricing documentation for each year
Legal-entity and segmented financial statements and general ledger detail
Tax returns and information returns reporting related-party transactions
Organization charts and the names of the people who ran each function, for interviews
Common pitfalls
Retaining the firm that prepared the documentation as the testifying expert without weighing what it will have to defend
Leaving the transactions and years in scope undefined, so the records request and the cost estimate drift
Producing the documentation without the agreements and the ledger detail, without which the delineation cannot be built
How is the scope of a transfer pricing engagement set?
By the transactions, years, entities, and forum at issue. A single transaction type tested over a few years with sound documentation is the narrowest scope; several transaction types, contested intangibles, a comparables search built from the ground up, or parallel tax and civil proceedings widen it. The engagement letter states the scope and the fee basis for each phase so counsel can see what each part costs.
What does the conflict check cover in a transfer pricing matter?
Every company in the group, the opposing parties, and any affiliate whose results the analysis will touch, together with any earlier work on the group's documentation or its advance pricing agreements. Because a multinational group can have many affiliates, the check is run on the entity list counsel provides before any records are exchanged.
Can consulting work become a disclosed report later?
Yes. Many engagements begin as consulting work that tests the documentation and the opposing position, and become a disclosed report once counsel decides the economic analysis will be presented. The scope and the form of the work product are set at retention and can be changed as the case develops, subject to the forum's disclosure rules.
References
Treas. Reg. sec. 1.482-1 (allocation of income and deductions among taxpayers). ecfr.gov
Internal Revenue Service. (n.d.). Transfer pricing documentation best practices frequently asked questions (FAQs). U.S. Department of the Treasury. Retrieved October 5, 2026. irs.gov