KW Economics prepares the economic analysis in tax and transfer pricing disputes involving businesses in American Samoa: the controlled transactions at issue, the functional analysis and comparables that test their prices, and a report written for the forum that decides the dispute, whether a federal tax forum, a state tax appeal, or a court in American Samoa, for either side.
A tax or transfer pricing dispute asks whether the prices one company in a group charged another for goods, services, intangibles, or loans match what unrelated parties would have agreed to, and how much income moves if they do not, answered from the intercompany agreements, the companies' conduct, and comparable transactions. Read the full tax and transfer pricing dispute analysis guide.
Federal tax forums test expert testimony under the federal rules of evidence, which the Tax Court applies by statute: whether the expert is qualified, whether the testimony rests on sufficient facts or data and on reliable methods, and whether those methods were reliably applied to the facts of the case. The commercial, shareholder, and matrimonial claims heard in American Samoa's courts are tested under its own standard, and a state tax appeal follows the rules of the forum that hears it. The High Court of American Samoa applies rules of evidence modeled on the federal rules, so expert testimony is examined for the witness's qualification, the reliability of the method, and its application to the facts of the case, with the details of the inquiry for counsel to confirm. A transfer pricing report meets each of these inquiries by stating every method choice and naming the data behind every comparable.
Highest court: High Court of American Samoa, Appellate Division.
American Samoa has no separate supreme court and no local U.S. district court; the High Court exercises limited federal jurisdiction, and other federal matters are generally heard in the U.S. District Courts for the District of Hawaii or the District of Columbia.
A federal transfer pricing dispute applies the same statute and regulations wherever the business is based, but where it is based decides which appellate decisions govern: an appeal from the Tax Court ordinarily goes to the federal court of appeals for the circuit where a corporation has its principal place of business, whose precedent the Tax Court follows, and a refund suit is filed in the federal district where the business is based or in the Court of Federal Claims. Whether American Samoa reallocates income between related companies under its own tax, requires royalties or interest paid to an affiliate to be added back, or combines affiliates in one return, and whether a commercial, shareholder, or matrimonial claim in American Samoa adopts an arm's length benchmark, are questions counsel confirms; the report presents the analysis so it can be applied under either party's position.
The same four steps apply to a tax or transfer pricing dispute involving American Samoa; the forum that hears the dispute and the rule of decision it applies decide how the result is used.
Federal income tax disputes over related-party prices are heard in the United States Tax Court or, on a refund claim, in a federal district court or the Court of Federal Claims; appeals from the Tax Court and the district courts ordinarily go to the federal court of appeals for the circuit where the business is based, and appeals from the Court of Federal Claims to the Federal Circuit. A dispute over American Samoa's own tax follows its administrative and appeal process. Commercial and shareholder claims in American Samoa that turn on an intercompany price are heard in the High Court of American Samoa (Trial Division) (Principal general jurisdiction trial court for local civil and criminal matters), with final appeals to the High Court of American Samoa, Appellate Division, and a divorce in which one bears on income or the value of a business is heard in the court that hears divorce in American Samoa. American Samoa has no separate supreme court and no local U.S. district court; the High Court exercises limited federal jurisdiction, and other federal matters are generally heard in the U.S. District Courts for the District of Hawaii or the District of Columbia.
A federal transfer pricing dispute applies the same statute and regulations wherever the business is based, but where it is based decides which appellate decisions govern: an appeal from the Tax Court ordinarily goes to the federal court of appeals for the circuit where a corporation has its principal place of business, whose precedent the Tax Court follows, and a refund suit is filed in the federal district where the business is based or in the Court of Federal Claims. Whether American Samoa reallocates income between related companies under its own tax, requires royalties or interest paid to an affiliate to be added back, or combines affiliates in one return, and whether a commercial, shareholder, or matrimonial claim in American Samoa adopts an arm's length benchmark, are questions counsel confirms; the report presents the analysis so it can be applied under either party's position. Federal tax forums test expert testimony under the federal rules of evidence, which the Tax Court applies by statute: whether the expert is qualified, whether the testimony rests on sufficient facts or data and on reliable methods, and whether those methods were reliably applied to the facts of the case. The commercial, shareholder, and matrimonial claims heard in American Samoa's courts are tested under its own standard, and a state tax appeal follows the rules of the forum that hears it. The High Court of American Samoa applies rules of evidence modeled on the federal rules, so expert testimony is examined for the witness's qualification, the reliability of the method, and its application to the facts of the case, with the details of the inquiry for counsel to confirm. A transfer pricing report meets each of these inquiries by stating every method choice and naming the data behind every comparable.
Request a consultation on tax and transfer pricing dispute cases in American Samoa or call (201) 343-0700. Plaintiff and defense counsel.