Bulletin No. 2026–16
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HIGHLIGHTS
OF THIS ISSUE
Bulletin No. 2026–16
April 13, 2026
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
ADMINISTRATIVE
INCOME TAX
Announcement 2026-8, page 813.
Rev. Rul. 2026-8, page 812.
This Announcement is issued pursuant to § 521(b) of Pub. L.
106-170, the Ticket to Work and Work Incentives Improvement
Act of 1999, which requires the Secretary of the Treasury to
report annually to the public concerning Advance Pricing Agreements (APAs) and the Advance Pricing and Mutual Agreement
Program (APMA Program), formerly known as the Advance
Pricing Agreement Program (APA Program). This twenty-seventh report describes the experience, structure, and activities
of the APMA Program during calendar year 2025.
Finding Lists begin on page ii.
Fringe benefits aircraft valuation formula. For purposes of
section 1.61-21(g) of the Income Tax Regulations, relating to
the rule for valuing non-commercial flights on employer-provided aircraft, the Standard Industry Fare Level (SIFL) centsper-mile rates and terminal charge in effect for the first half
of 2026 are set forth.
The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and
enforce the law with integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument
of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service
and for publishing Treasury Decisions, Executive Orders, Tax
Conventions, legislation, court decisions, and other items of
general interest. It is published weekly.
It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management are not published; however, statements of
internal practices and procedures that affect the rights and
duties of taxpayers are published.
Revenue rulings represent the conclusions of the Service
on the application of the law to the pivotal facts stated in
the revenue ruling. In those based on positions taken in rulings to taxpayers or technical advice to Service field offices,
identifying details and information of a confidential nature are
deleted to prevent unwarranted invasions of privacy and to
comply with statutory requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions
of the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B,
Legislation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative
Rulings. Bank Secrecy Act Administrative Rulings are issued
by the Department of the Treasury’s Office of the Assistant
Secretary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbarment and suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
April 13, 2026
Bulletin No. 2026–16
Part I
Section 61. Gross Income
Defined
26 CFR 1.61-21: Taxation of Fringe Benefits
Rev. Rul. 2026-8
For purposes of the taxation of fringe
benefits under section 61 of the Internal
for the period during which the flight was
taken by the appropriate aircraft multiple
provided in section 1.61-21(g)(7) and then
adding the applicable terminal charge. The
SIFL cents-per-mile rates in the formula
and the terminal charge are calculated by
the Department of Transportation (DOT)
and are reviewed semi-annually.
The following chart sets forth the terminal charge and SIFL mileage rates:
Period During Which
Terminal
the Flight Is Taken
Charge
1/1/26 - 6/30/26
$54.48
SIFL Mileage
Rates
Up to 500 miles
= $.2980 per mile
501-1500 miles
= $.2272 per mile
Over 1500 miles
= $.2184 per mile
DRAFTING INFORMATION
The principal author of this revenue ruling is Kathleen Edmondson of the Office
April 13, 2026
Revenue Code, section 1.61-21(g) of the
Income Tax Regulations provides a rule
for valuing noncommercial flights on
employer-provided aircraft. Section 1.6121(g)(5) provides an aircraft valuation
formula to determine the value of such
flights. The value of a flight is determined
under the base aircraft valuation formula
(also known as the Standard Industry Fare
Level formula or SIFL) by multiplying
the SIFL cents-per-mile rates applicable
of Associate Chief Counsel (Employee
Benefits, Exempt Organizations and
Employment Taxes). For further information regarding this revenue ruling, contact
812
Ms. Edmondson at (202) 317-6798 (not a
toll-free call).
Bulletin No. 2026–16
Part III
Announcement and Report Concerning Advance Pricing Agreements
Announcement 2026-8
This Announcement is issued pursuant to § 521(b) of Pub. L. 106-170, the Ticket to Work and Work Incentives Improvement Act of
1999, which requires the Secretary of the Treasury to report annually to the public concerning advance pricing agreements (APAs)
and the Advance Pricing and Mutual Agreement Program (APMA Program), formerly known as the Advance Pricing Agreement
Program (APA Program). The first report covered calendar years 1991 through 1999. Subsequent reports covered each calendar year
2000 through 2024 separately. This twenty-seventh report describes the experience, structure, and activities of the APMA Program
during calendar year 2025. It does not provide guidance regarding the application of the arm’s length standard.
Part I of this report includes information on the structure, composition, and operation of the APMA Program; Part II presents statistical data; and Part III includes general descriptions of various elements of the APAs executed in 2025, including types of transactions
covered, transfer pricing methods used, and completion time.
Bulletin No. 2026–16
John M. Wall
Director, APMA Program
813
April 13, 2026
Part I. The APMA Program – Structure, Composition, and Operation
[Pub. L. 106-170 § 521(b)(2)(A)]
The Advance Pricing and Mutual Agreement Program (APMA) is part of the U.S. Competent Authority’s Office under Treaty &
Transfer Pricing Operations (TTPO) within the Large Business and International Division of the IRS.
As of December 31, 2025, APMA’s APA cases were handled by a staff of 108, comprising 63 team leaders, 30 economists, 12 managers, and 3 assistant directors.1 Each assistant director oversees four managers who lead teams consisting of both team leaders and
economists. APMA’s main office is in Washington, DC, and it also has offices in northern California, southern California, Florida, and
the Boston, Chicago, Denver, New York City, and Seattle metropolitan areas. A list of primary APMA contacts is available at https://
www.irs.gov/businesses/corporations/apma-contacts.
On August 31, 2015, the current revenue procedure governing APA applications was published in 2015-35 I.R.B. on page 263. Revenue Procedure (Rev. Proc.) 2015-41 provides guidance, information and instructions on APA requests and the administration of
APAs. Rev. Proc. 2015-41 updates and supersedes Rev. Proc. 2006-9, 2006-1 C.B. 278, as modified by Rev. Proc. 2008-31, 2008-1
C.B. 1133, which is also superseded.
The model for APAs covered by Rev. Proc. 2006-9 was updated to serve as the current model APA for APAs covered by Rev. Proc.
2015-41 (instead of the model APA that had been issued with Rev. Proc. 2015-41). The model APA that is included as Appendix 1 to
this report remains unchanged since last year’s report.
In late 2020, TTPO’s Treaty Assistance and Interpretation Team (TAIT) joined APMA, bringing the total number of groups in APMA to four. The three legacy APMA groups have primary
responsibility for cases arising under the business profits and associated enterprises articles of U.S. tax treaties. TAIT endeavors to resolve competent authority issues arising under all other
articles of U.S. tax treaties including issues arising under U.S. tax treaties relating to estate and gift taxes. As such, TAIT is separate from APMA’s APA program, and the total numbers of
team leaders and managers handling APA cases do not include TAIT analysts and managers.
1
April 13, 2026
814
Bulletin No. 2026–16
Part II. APMA Program Statistical Data
[Pub. L. 106-170 § 521(b)(2)(C)(i-viii)]
Table 1: APA Applications Filed
§ 521(b)(2)(C)(i)
Part II. APMA Program Statistical Data
[Pub. L. 106-170 § 521(b)(2)(C)(i-viii)]
Table 1: APA Applications Filed Unilateral
§ 521(b)(2)(C)(i)
Filed 1991-19992
Unilateral
Filed 2000-2024
713
2
Filed 1991-1999
Filed in 2025
23
Filed 2000-2024
713
Total Filed 1991-2025
Filed in 2025
23
Total Filed 1991-2025
Bilateral
Bilateral
2,285
153
Multilateral
Multilateral
56
2
2,285
153
56
2
Total
401
Total
3,054
401
178
3,054
3,633
178
3,633
Applications Filed
2016-2025
250
200
150
100
50
0
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
All Other Countries
10%
Switzerland
3%
Bilateral APAs
Filed by Country 2025
India
26%
Denmark
2%
United Kingdom
4%
Mexico
4%
Germany
5%
Korea
7%
Japan
24%
Canada
7%
Italy
8%
The charts above illustrate the number of complete applications filed per year and the percentage
The charts above illustrate the number of complete applications filed per year and the percentage of bilateral requests received in
requests
received
in31,
2025
per
foreign
As31
ofuser
December
APMA
had
2025 of
perbilateral
foreign country.
As of
December
2025,
APMA
had country.
also received
fee filings31,
that2025,
were not
yet accompanied
by a
also received
user
fee filings
that were
not
yet
accompanied
by a substantially complete APA
substantially
complete31
APA
application,
in addition
to the
178
complete
APA applications.
application, in addition to the 178 complete APA applications.
The first APA Statutory Report, which compiled APA data from 1991-1999, did not report the cumulative number
of applications for those years by submission type, so the cumulative totals cannot be reported in that manner.
2
The first APA Statutory Report, which compiled APA data from 1991-1999, did not report the cumulative number of applications for those years by submission type, so the cumulative totals
cannot be reported in that manner.
2
3
Bulletin No. 2026–16
815
April 13, 2026
Table 2: Executed3 and Pending APAs
§ 521(b)(2)(C)(ii-vi)
3
Table 2: Executed and Pending APAs
§ 521(b)(2)(C)(ii-vi)
Unilateral
Unilateral
Total Executed 1991-2024
734
Total Executed 1991-2024
734
Total Executed in 2025
14
Total Executed in 2025
14
Total Executed 1991-2025
748
Total Executed 1991-2025
748
Total Pending as of 12/31/2025
61
Renewals Executed in 2025
Renewals Executed in 2025
Renewals Pending4 as of 12/31/2025
4
13
Total Pending as of 12/31/2025
Renewals Pending as of 12/31/2025
Bilateral
Bilateral
1,798
Multilateral
543
18
61
13
49
49
Multilateral
34
1,798
34
90
6
90
6
1,888
40
1,888
40
543
39
39
256
256
Total
Total 2,566
2,566
110
110
2,676
2,676
622
18
622
3
55
310310
3
5
5
55
APAs Executed
2016-2025
200
150
100
50
0
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Bilateral APAs
Executed
by Country 2025
All Other Countries
10%
United Kingdom
3%
Switzerland
3%
Ireland
3%
Korea
5%
Germany
5%
India
35%
Japan
25%
Canada
11%
In 2025, the percentage of APA renewals executed decreased (50 percent of all APAs executed
in 2025
versus 58
percent
of all
APAsdecreased
executed(50inpercent
2024).ofThe
charts
aboveinillustrate
trends
in theof all APAs
In 2025,
the percentage
of APA
renewals
executed
all APAs
executed
2025 versus
58 percent
number
of
APAs
executed
per
year
and
the
countries
involved
in
the
bilateral
APAs
that
were
executed in 2024). The charts above illustrate trends in the number of APAs executed per year and the countries involved in the bilateral APAs
that were
executed in 2025.
executed
in 2025.
3
4
3
4
“Executed APAs” refers to APAs that were finalized and includes both initial and renewal APAs.
The number of renewals still pending as of year-end is also included in the total number of pending APAs.
“Executed APAs” refers to APAs that were finalized and includes both initial and renewal APAs.
The number of renewals still pending as of year-end is also included in the total number of pending APAs.
April 13, 2026
4
816
Bulletin No. 2026–16
Pending APAs
2016-2025
800
600
400
200
0
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
All Other Countries
16%
United Kingdom
4%
Germany
4%
Italy
5%
Korea
6% Mexico
6%
Pending Bilateral APAs
by Country
Japan
27%
India
21%
Canada
11%
As the top chart illustrates, the number of pending requests increased compared to December 31,
As the2024.
top chart
illustrates,
the number
of pending
requests
increased
to December
31, 2024.
of December 31, 2025,
As of
December
31, 2025,
slightly
less than
half compared
of the pending
bilateral
APAAsrequests
slightly less than half of the pending bilateral APA requests involved either Japan or India.
involved either Japan or India.
Table 3: APAs Revoked or Cancelled and Applications Withdrawn
Table 3: APAs Revoked or Cancelled and Applications Withdrawn
§ 521(b)(2)(C)(vii)
§ 521(b)(2)(C)(vii)
5
5
Revoked
or Cancelled
Revoked
or Cancelled
1991-20001991-2000
Revoked
or Cancelled
Revoked
or Cancelled
2001-20242001-2024
Revoked
or
Cancelled
Revoked or Cancelled in 2025 in 2025
Revoked
or Cancelled
Total Total
Revoked
or Cancelled
1991-2025 1991-2025
Unilateral
Unilateral
8
0
Withdrawn 1991-20006
Withdrawn 1991-20006
Withdrawn 2001-2024
Withdrawn 2001-2024
Withdrawn in 2025
Withdrawn in 2025
Withdrawn
1991-2025
Withdrawn
1991-2025
80
1
8
0
80
1
Bilateral
Bilateral
2
0
2
0
183
9
183
9
Multilateral
Multilateral
0
0
2
0
0
0
Total
Total
11
10
10
00
11
11
2
0
49
265
265
10
10
49
324
324
The first APA Statutory Report, which compiled APA data from 1991-1999, and the second APA Statutory
Report, which compiled APA data for 2000, did not report the cumulative number of applications for those years by
submission type, so the cumulative totals cannot be reported in that manner.
6
See supra note 5.
5
5
5
The first APA Statutory Report, which compiled APA data from 1991-1999, and the second APA Statutory Report, which compiled APA data for 2000, did not report the cumulative number
of applications for those years by submission type, so the cumulative totals cannot be reported in that manner.
6
See supra note 5.
Bulletin No. 2026–16
817
April 13, 2026
Table 4: APAs Executed in 2025 by Industry
§ 521(b)(2)(C)(viii)
Table 4: APAs Executed in 2025 by Industry
§ 521(b)(2)(C)(viii)
Industry
Industry
Wholesale/Retail Trade
Wholesale/Retail Trade
32
Services Table 4: APAs Executed in 2025 by Industry
Services
28
§ 521(b)(2)(C)(viii)
Manufacturing
Manufacturing Industry
22
Management
Management
16
Wholesale/Retail
Trade
32
Finance,
InsuranceInsurance
and Real Estate
Finance,
and
Real
Estate
8
Services
28
All Other
Industries
All Other
Industries
4
Manufacturing
22
Management
Finance, Insurance and Real Estate
All Other Industries
Wholesale/Retail
Trade
29%
32
28
22
16
8
4
16
APAs8Executed
in 2025 4by Industry
APAs Executed
in 2025 by Industry
Manufacturing
20%
Manufacturing
Services
20%
25%
Wholesale/Retail
Trade
29%
All Other
Industries
4%
Services
25%
Finance, Insurance
and Real Estate
All Other Industries
7%
4%
Finance, Insurance
and Real Estate
TableTable
4a: Wholesale/Retail
Trade
APAs
Executed
in 2025
4a: Wholesale/Retail Trade 7%
APAs
Executed in 2025
Management
15%
Management
15%
Type of Wholesale/Retail Trade
Table
4a:Wholesalers,
Trade
APAs Executed in 2025 14
Type
ofWholesale/Retail
Wholesale/Retail
Trade
Merchant
Durable
Goods
Type
of
Wholesale/Retail
Trade
Merchant
Wholesalers,
Durable Goods
14
Merchant
Wholesalers,
Nondurable Goods
6
Merchant
Wholesalers,
Durable
Goods
14
Merchant
Wholesalers,
Nondurable
Goods
6
General
Merchandise
Stores
5
Merchant Wholesalers, Nondurable Goods
6
GeneralAll
Merchandise
Stores
5
Other
GeneralWholesalers
Merchandise Stores
57
All Other Wholesalers
7
All Other Wholesalers
7
Type of Wholesale/Retail Trade APAs
Executed in 2025
Type of Wholesale/Retail
Trade APAs
Executed in 2025
All Other
Wholesalers
All Other
Wholesalers
22%
Merchant
Merchant Durable
Wholesalers,
Wholesalers,
Durable
Goods
Goods
44%
22%
44%
Merchant
General
Merchandise
General Merchandise
Stores
Stores
15%15%
Merchant
Wholesalers,
Wholesalers,
Nondurable
Goods
Nondurable Goods
19%
19%
6
April 13, 2026
818
Bulletin No. 2026–16
Part III. General Descriptions of APAs Executed in 2025
[Pub. L. 106-170 § 521(b)(2)(D) and (E)]
Part III. General Descriptions of APAs Executed in 2025
Part
III. General
Descriptions
of APAs Executed
Nature of the Relationships
[Pub.
L. 106-170
§ 521(b)(2)(D)
and (E)]in 2025
[Pub.
L.
106-170
§
521(b)(2)(D)
and
(E)]
§ 521(b)(2)(D)(i)
Nature
of the Relationships
Nature
of the Relationships
§
521(b)(2)(D)(i)
Relationships between Controlled Parties
§ 521(b)(2)(D)(i)
U.S. Parent &
Non-U.S.
Relationships between Controlled
Parties
Subsidiary
U.S. Parent &
45%
Non-U.S.
Subsidiary
45%
Sister Companies
10%
Sister Companies
10%
Non-U.S. Parent &
U.S. Subsidiary
45%
Non-U.S.
Parent &
U.S. Subsidiary
45%years, when more than half of the APAs executed involved
In a change from previous
transactions between non-U.S. parents and U.S. subsidiaries7 (for example, 56 percent in 2024),
In a change
from
previous
when
more
half
of the
APAs
executed
involved
In a change
from
previous
whenyears,
more
than
halfinvolved
of the than
APAs
executed
involved
transactions
between
non-U.S.
parents and U.S.
2025
had as
manyyears,
executed
APAs
that
transactions
between
U.S. parents
and
non-U.S.
7
7APAs that involved transactions between U.S. parents
subsidiaries
(for
example,
56
percent
in
2024),
2025
had
as
many
executed
(for example, 56 percent in 2024),
transactions as
between
non-U.S.non-U.S.
parents and
U.S.and
subsidiaries
subsidiaries
those between
parents
U.S. subsidiaries.
and non-U.S.
subsidiaries
those between
non-U.S.
parents and
U.S. subsidiaries.
2025 had
as manyasexecuted
APAs
that involved
transactions
between U.S. parents and non-U.S.
subsidiaries
as those between
non-U.S.
subsidiaries.
Covered
Transactions,
Functions
andparents
Risks, and
andU.S.
Tested
Parties
Covered Transactions, Functions and Risks, and Tested Parties
§
521(b)(2)(D)(ii-iii)
§ 521(b)(2)(D)(ii-iii)
Covered Transactions, Functions and Risks, and Tested Parties
§ 521(b)(2)(D)(ii-iii)
Types of Covered Transactions
All Other Types of
Transactions
Types of Covered Transactions Provision of Services
by a Non-U.S. Entity
Use of Intangible Property by
2%
a Non-U.S. Entity All Other Types of
Provision30%
of Services
Transactions
7%
by
a
Non-U.S.
Entity
Use of Intangible Property by
2%
30%
a Non-U.S. Entity
Sale of Tangible Property
7%
from the U.S.
8% Property
Provision of Services
Sale of Tangible
by a U.S. Entity
from the U.S.
Use of Intangible
Property
by
a
8%
Provision23%
of Services
U.S. Entity
by a U.S. Entity
10% Property bySale
Use of Intangible
a of Tangible Property into the U.S.
23%
20%
U.S. Entity
Sale of Tangible Property into the U.S.
10%
20%
8
8
in APAs
executed
involve
the provision of services.
of the transactions
Most Most
of the transactions
covered incovered
APAs executed
in 2025
involve in
the2025
provision
of services.
8
in APAs
in 2025functions
involve and
the risks.
provision
of services.
of of
the
transactions
In the Most
majority
APAs,
the coveredcovered
transactions
involveexecuted
numerous business
For instance,
with respect to functions, APAs involving manufactured products typically involve a controlled group that conducts research and development (R&D),
engages in product design and engineering, manufactures the product, markets and distributes the product, and performs support
7
functions
legal, finance, where
and human
resources.
Regarding
controlled
groupsubsidiaries.
may assume a variety of risks, including
Thesuch
termas“subsidiaries,”
used in
this report,
refers torisks,
both the
direct
and indirect
8 risks, R&D risks, financial risks, credit and collection risks, product liability risks, and general business risks. In the APA
market
APAs often cover more than one type of transaction.
7
evaluation
a significantwhere
amount
of time
and
effortrefers
is devoted
understanding
how
functions and risks are allocated among
Theprocess,
term “subsidiaries,”
used
in this
report,
to bothtodirect
and indirect
subsidiaries.
8
7
APAs often
more thanthat
oneare
type
of transaction.
the controlled
groupcover
of companies
party
to the covered transactions.
For methods requiring the selection of a tested party, the
tested party chosen generally will be the least complex of the controlled taxpayers.
7
7
8
The term “subsidiaries,” where used in this report, refers to both direct and indirect subsidiaries.
APAs often cover more than one type of transaction.
Bulletin No. 2026–16
819
April 13, 2026
process, a significant amount of time and effort is devoted to understanding how functions and
risks are allocated among the controlled group of companies that are party to the covered
transactions. For methods requiring the selection of a tested party, the tested party chosen
generally will be the least complex of the controlled taxpayers.
Types of Tested Parties
Non-U.S. Service
Provider
41%
U.S. Distributor
23%
All Other Types of
Tested Parties
2%
U.S. Manufacturer
9%
Non-U.S. Distributor
9%
U.S. Service Provider
16%
In a change from previous years, U.S. distributors, U.S. manufacturers, and U.S. service
9
In a change
fromcombined,
previous years,
U.S. distributors,
U.S.
manufacturers,
andparties
U.S. service
combined,
i.e., providers
48 percent
(down comprised
from 59 less than
providers
comprised
less than
half
of the tested
half of the tested parties9 i.e., 48 percent (down from 59 percent in 2024), with non-U.S. service providers comprising 41 percent (up
percent in 2024), with non-U.S. service providers comprising 41 percent (up from 31 percent in
from 31 percent in 2024).
2024).
Transfer Pricing Methods Used
Transfer Pricing Methods Used
§ 521(b)(2)(D)(iv)
§ 521(b)(2)(D)(iv)
In 2025, the most used transfer pricing method (TPM) for both the sale of tangible property and the use of intangible property continued toInbe2025,
the comparable
ts method/transactional
net margin
method
was used
for 86 percent
the mostprofi
used
transfer pricing method
(TPM)
for(CPM/TNMM).
both the saleThe
of CPM/TNMM
tangible property
and
of these types of transactions.
the use of intangible property continued to be the comparable profits method/transactional net
method
(CPM/TNMM).
CPM/TNMM
was
used for
86 percent
of these
types of the operating
As inmargin
recent years,
for covered
transactionsThe
involving
tangible and
intangible
property
that used
the CPM/TNMM,
transactions.
margin (OM) is still the most common profit level indicator (PLI) used to benchmark results. It was used 57 percent of the time.
Other PLIs, such as the Berry Ratio and return on sales, made up another 20 percent. As used here, “OM” is defined as the ratio of
10
11
and
Ratio”
is defined as the
ratio of gross
profitand
to operating
expenses.
Most
services
operating
profi
t to sales,
As in
recent
years,
for“Berry
covered
transactions
involving
tangible
intangible
property
that
usedtransactions
(83 percent)
also
used
the
CPM/TNMM
with
the
OM
and
operating
profi
t-to-operating
expense
ratio
being
the
most
the CPM/TNMM, the operating margin (OM) is still the most common profit level indicator common PLIs
(used 66 percent of the time).
(PLI) used to benchmark results. It was used 57 percent of the time. Other PLIs, such as the
Berry
Ratio and return
on sales,Selection
made up
another
20Nature
percent.
As used here,
“OM” is defined
as Party Data
Sources
of Comparables,
Comparables
Criteria,
and
of Adjustments
to Comparables
or Tested
§ 521(b)(2)(D)(v-vii)
For the
APAs executed in 2025 that involved the CPM/TNMM with a North American tested party, the most widely used data source
9
Not all thewas
executed
APAs
a tested party. Whether
an APA Diff
involves
tested party
would
on the
for comparables
Standard
andinvolve
Poor’s Compustat/Capital
IQ database.
erent asources
were used
independ
other cases
(e.g., where the
transfer pricing method used.
tested party was not a North American entity or where transaction-based methods were applied). Other commonly used databases are
listed in the table below.
Table 5: Sources of Comparable Data
8
Bureau van Dijk (BvD) Orbis
Capitaline TP
Global Vantage
RoyaltySource
ktMINE
RoyaltyStat
Ace TP
In making comparability adjustments as identified in Treas. Reg. §§ 1.482-1(d)(2) and 1.482-5(c)(2)(iv), typical balance sheet adjustments were made in most cases, including, where appropriate, adjustments for payables, receivables, inventory, and fixed assets.
Not all the executed APAs involve a tested party. Whether an APA involves a tested party would depend on the transfer pricing method used.
See Treas. Reg. § 1.482-5(b)(4)(ii)(A).
11
See Treas. Reg. § 1.482-5(b)(4)(ii)(B).
9
10
April 13, 2026
820
Bulletin No. 2026–16
In addition, where appropriate, adjustments for different accounting practices were made to convert from LIFO to FIFO inventory
accounting, and a small number of cases involved the accounting reclassification of expenses, e.g., from COGS to operating expenses.
Ranges and Adjustment Mechanisms
§ 521(b)(2)(D)(viii-ix)
Most transactions covered by APAs target an interquartile range as described in Treas. Reg. § 1.482-1(e)(2)(iii)(C), a point within the
interquartile range, or another targeted arm’s length range. Where the transaction involves a royalty payment for the use of intangible
property, both specific royalty rates and ranges have been used. Where the covered transaction is the license of intangible property,
and the payment for such transfer could be a royalty based solely on external comparable uncontrolled transactions, a secondary or
confirming method, e.g., a test of the post-royalty operating margin or cost-plus mark-up, has sometimes also been used. The testing
periods of the APAs executed in 2025 were either a single year, the term of the APA only, or the term of the APA plus rollback years.
APAs executed in 2025 included several mechanisms for adjusting the tested party’s results when the results fall outside the agreed
range or do not match the point required by the APA. Examples of the mechanisms used include an adjustment bringing the tested
party’s results for a single year to either the closer edge of the range or the median of the range, an adjustment to bring the results
over the APA term to the closer edge of the range or the median of the range, or an adjustment to bring the results to a specified point
or royalty rate.
Critical Assumptions
§ 521(b)(2)(D)(v)
The model APA used by the IRS (included as Appendix 1 of this report) includes standard critical assumptions that there will be no
material changes to the taxpayer’s business or to its tax or financial accounting practices during the APA term. Some bilateral cases
have also included critical assumptions tied to the taxpayer’s profitability in a certain year or over the term of the APA. Pursuant to
§ 7.06(3) of Rev. Proc. 2015-41, APMA will cancel an APA in the event of a failure of a critical assumption unless the parties agree
to revise the APA.
Term Lengths of APAs Executed in 2025
§ 521(b)(2)(D)(x)
Table 6: Term Lengths of APAs Executed in 2025
Term Length (years)
1
2
3
4
5
6
7
8
9
10
11
15
Average
Number of APAs
2
3
4
4
41
20
15
7
4
2
2
3
6
As described in § 3.03 of Rev. Proc. 2015-41, taxpayers should request an APA term that will cover at least five prospective taxable
years and may also request that the APA be “rolled back” to cover one or more earlier taxable years, although the appropriate APA
term is decided on a case-by-case basis. Of the APAs executed in 2025, 23 percent included rollback years. A substantial number of
APAs with terms of greater than five years were initially submitted as a request for a five-year term, and the additional years were
Bulletin No. 2026–16
821
April 13, 2026
agreed to between the taxpayer and the IRS (or, in the case of a bilateral APA, between the IRS and the foreign government upon the
taxpayer’s request) to ensure a reasonable amount of prospectivity in the APA term.
Amount of Time Taken to Complete New and Renewal APAs
§ 521(b)(2)(E)
Amount of Time Taken to Complete New and Renewal APAs
Table§7:521(b)(2)(E)
Months to Complete New and Renewal APAs Executed in 2025
Table 7: Months to Complete
Unilateral New and Renewal
Bilateral APAs Executed
Unilateralin&2025
Bilateral
Unilateral
Average
Median
Average
Median
Average
Median &
Unilateral
Bilateral
Bilateral
New
39.6
39.6
50.0
46.4
49.8
45.9
Average
Median
Average
Median
Average
Median
Renewal
40.4
34.8
37.5
39.8
38.2
38.4
39.6
39.6
50.0
46.4
49.8
45.9
New &New
Renewal
40.3
37.2
44.7
41.8
44.1
41.6
Renewal
40.4
34.8
37.5
39.8
38.2
38.4
Renewal APAs
in 2025
New & Renewal Months
40.3to Complete
37.2New and44.7
41.8Executed44.1
41.6
Months to Complete New and Renewal APAs Executed in 2025
Months to Complete
50.0
New
40.0
30.0
Renewal
20.0
New &
Renewal
10.0
0.0
Average
Median
Average
Unilateral
Median
Bilateral
Type of APA
Average
Median
Unilateral &
Bilateral
Efforts to Ensure Compliance with APAs
Efforts
to Ensure Compliance with APAs
§ 521(b)(2)(F)
§ 521(b)(2)(F)
As described in § 7.02(1) of Rev. Proc. 2015-41, taxpayers are required to file annual reports to
As described in § 7.02(1) of Rev. Proc. 2015-41, taxpayers are required to file annual reports to demonstrate compliance with the
the and
terms
andofconditions
theirare
APAs.
of
termsdemonstrate
and conditions compliance
of their APAs. with
The filing
review
these annualof
reports
criticalThe
partsfiling
of the and
APA review
process. Through
annual
annual
reports
are critical
of the
APA process.
Through
annual report
review,
reportthese
review,
the APMA
Program
monitorsparts
taxpayer
compliance
with APAs
on a contemporaneous
basis.
Annualthe
report review also
provides
current
information
on the success
or problems
associated
the various
TPMs adopted in thebasis.
APA process.
APMA
Program
monitors
taxpayer
compliance
withwith
APAs
on a contemporaneous
Annual
report review also provides current information on the success or problems associated with the
Nature
of Documentation
Required
in APA
Annual
Report
various
TPMs adopted
in the
process.
§ 521(b)(2)(D)(xi)
APAs require taxpayers to file timely and complete annual reports describing their operations and demonstrating compliance with
the APA’s terms and conditions. Not every annual report will include each of the items listed in Appendix C of the Model APA; items
are required to be included where the facts demonstrate a need for such documentation. The requirements for the information to be
included in a specific APA annual report is included in Appendix C of the executed APA.
Approaches for Sharing of Currency or Other Risks
§ 521(b)(2)(D)(xii)
In appropriate cases, APAs may provide specific approaches for dealing with risks, including currency risk, such as adjustment mechanisms and/or critical assumptions.
April 13, 2026
11
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APPENDIX 1– Model APA
ADVANCE PRICING AGREEMENT
between
[Insert Taxpayer’s Name]
and
THE INTERNAL REVENUE SERVICE
PARTIES
The Parties to this Advance Pricing Agreement (APA) are the Internal Revenue Service (IRS) and [Insert Taxpayer’s Name], EIN
________.
RECITALS
[Insert Taxpayer Name] is the common parent of an affiliated group filing consolidated U.S. tax returns (collectively referred to as
“Taxpayer”) and is entering into this APA on behalf of itself and other members of its consolidated group.
Taxpayer’s principal place of business is [City, State]. [Insert general description of Taxpayer and other relevant parties].
This APA contains the Parties’ agreement on the best method for determining arm’s-length prices of the Covered Issues under
I.R.C. section 482, the Treasury Regulations thereunder, and any applicable tax treaties.
{If renewal, add} [Taxpayer and IRS previously entered into an APA covering taxable years ending _____ to ______, executed on
________.]
AGREEMENT
The Parties agree as follows:
1.
Covered Issues. This APA applies to the Covered Issues, as defined in Appendix A.
2.
Covered Methods. Appendix A sets forth the Covered Methods for the Covered Issues.
3.
Term. This APA applies to the APA Term, as defined in Appendix A.
4.
Operation.
5.
a.
Revenue Procedure 2015-41 governs the interpretation, legal effect, and administration of this APA.
b.
Nonfactual oral and written representations, within the meaning of sections 6.04 and 6.05 of Revenue Procedure 2015-41
(including any proposals to use particular TPMs), made in conjunction with the APA Request constitute statements made in
compromise negotiations within the meaning of Rule 408 of the Federal Rules of Evidence.
Compliance.
a.
Taxpayer must report its taxable income in an amount that is consistent with Appendix A and all other requirements of this
APA on its timely filed U.S. Return. However, if Taxpayer’s timely filed U.S. Return for any taxable year covered by this
APA (APA Year) is filed prior to, or no later than 60 days after, the effective date of this APA, then Taxpayer must report its
taxable income for that APA Year in an amount that is consistent with Appendix A and all other requirements of this APA:
(i) on a timely-filed U.S. Return, (ii) on an amended U.S. Return filed no later than 120 days after the effective date of this
APA, or (iii) by an alternative means (for example, by agreed adjustments with the IRS office with examination jurisdiction
over the taxpayer for any APA year currently under examination).
Bulletin No. 2026–16
823
April 13, 2026
b.
{Use or edit the following when U.S. Group or Foreign Group contains more than one member.} [This APA addresses the
arm’s-length nature of prices charged or received in the aggregate between Taxpayer and Foreign Participants with respect
to the Covered Issues. Except as explicitly provided, this APA does not address and does not bind the IRS with respect to
prices charged or received, or the relative amounts of income or loss realized, by particular legal entities that are members
of U.S. Group or that are members of Foreign Group.]
c.
The IRS will not reconsider any Covered Method but will instead limit any examination of Taxpayer’s treatment of Covered Issues in their U.S. Return for any APA Year to, and may require that Taxpayer establish, the following: (i) Taxpayer’s
compliance with the terms and conditions of this APA, (ii) the accuracy of material representations included in APA annual
reports submitted pursuant to this APA, and (iii) the correctness of the supporting data and computations used to apply the
Covered Method. The IRS may audit and propose adjustments to Taxpayer’s results as determined under this APA’s Covered Method without affecting the APA’s validity or applicability. Taxpayer may agree with the proposed adjustments in the
same manner as any other adjustment, in which case the IRS will assess any resulting additional tax or refund any resulting
overpayment of tax accordingly. If it does not agree with the proposed adjustment, Taxpayer may contest it through available
administrative and judicial procedures. Taxpayer must include the audit adjustments as finally determined for the purpose of
applying the Covered Method and must then make any resulting APA primary adjustments.
d.
If Taxpayer does not comply with the terms and conditions of this APA, then the IRS may:
i.
enforce the terms and conditions of this APA and make or propose allocations or adjustments under I.R.C. section 482
consistent with this APA;
ii. cancel or revoke this APA under section 7.06 of Revenue Procedure 2015-41; or
iii. revise this APA, if the Parties agree.
6.
e.
Taxpayer must timely file an Annual Report that includes a signed “penalties of perjury” declaration for each APA Year in
accordance with Appendix C and section 7.02 of Revenue Procedure 2015-41. The Annual Report may be submitted only
by electronic transmission pursuant to paragraph 15 and must include an image of an original signature or a digital signature
that uses encryption techniques to provide proof of original and unmodified documentation. Taxpayer must file the Annual
Report for all APA Years through the APA Year ending [insert year] by [insert date]. Taxpayer must file the Annual Report
for each subsequent APA Year by [insert month and day] immediately following the close of that APA Year. (If any date falls
on a weekend or holiday, the Annual Report shall be due on the next date that is not a weekend or holiday.) The IRS may
request additional information reasonably necessary to clarify or complete the Annual Report. Taxpayer will provide such
requested information within 30 days. Additional time may be allowed for good cause.
f.
The IRS will determine whether Taxpayer has complied with this APA based on Taxpayer’s U.S. Returns, the Financial
Statements, and other APA Records, for the APA Term and any other year necessary to verify compliance. For Taxpayer
to comply with this APA, {use the following or an alternative} an independent certified public accountant must render an
opinion that Taxpayer’s Financial Statements present fairly, in all material respects, Taxpayer’s financial position under
applicable generally accepted accounting standards.
g.
In accordance with section 7.04 of Revenue Procedure 2015-41, Taxpayer will (1) maintain the APA Records, and (2) make
them available to the IRS in connection with an examination under section 7.03. Compliance with this subparagraph constitutes compliance with the record-maintenance provisions of I.R.C. sections 6038A and 6038C for the Covered Issues for
any taxable year during the APA Term.
h.
The True Taxable Income within the meaning of Treasury Regulations sections 1.482-1(a)(1) and (i)(9) of a member of an
affiliated group filing a U.S. consolidated return will be determined under the I.R.C. section 1502 Treasury Regulations.
i.
{Optional for US Parent Signatories} To the extent that Taxpayer’s compliance with this APA depends on certain acts of
Foreign Group members, Taxpayer will ensure that each Foreign Group member will perform such acts.
Critical Assumptions. This APA’s critical assumptions, within the meaning of Revenue Procedure 2015-41, section 1.04, appear
in Appendix B. If any critical assumption has not been met, then Revenue Procedure 2015-41, section 7.06, governs.
April 13, 2026
824
Bulletin No. 2026–16
7.
Disclosure. An APA, any background information relating to the APA, and the taxpayer’s APA request and any supplementary
materials submitted in conjunction with the APA request are subject to various sections of the I.R.C. and U.S. competent authority treaty obligations as more fully explained in section 9 of Rev. Proc. 2015-41.
8.
Disputes. If a dispute arises concerning the interpretation of this APA, the Parties will seek a resolution by the IRS’s Director,
Treaty and Transfer Pricing Operations, to the extent reasonably practicable, before seeking alternative remedies.
9.
Materiality. In this APA the terms “material” and “materially” will be interpreted consistently with the definition of “material
facts” in Revenue Procedure 2015-41, section 7.06(4).
10. Section Captions. This APA’s section captions, which appear in italics, are for convenience and reference only. The captions do
not affect in any way the interpretation or application of this APA.
11. Terms and Definitions. Unless otherwise specified, terms in the plural include the singular and vice versa. Appendix D contains
definitions for capitalized terms not elsewhere defined in this APA.
12. Entire Agreement and Severability. This APA is the complete statement of the Parties’ agreement. The Parties will sever, delete,
or reform any invalid or unenforceable provision in this APA to approximate the Parties’ intent as nearly as possible.
13. Successor in Interest. This APA binds, and inures to the benefit of, any successor in interest to Taxpayer.
14. Notice. Any notices required by this APA or Revenue Procedure 2015-41 must be in writing. Taxpayer will send notices to the
IRS at:
Commissioner, Large Business and International Division
Internal Revenue Service
1111 Constitution Avenue, NW
SE:LB:TTPO:APMA:K:APMA Director
Washington, DC 20224
(Attention: APMA)
The IRS will send notices to the taxpayer at:
Taxpayer Corporation
Attn: Jane Doe, Sr. Vice President (Taxes)
1000 Any Road
Any City, USA 10000
(phone: __________)
15. Submission by electronic transmission. The form of electronic document transmittal will be one of the three alternatives described
below. Regardless of the transmittal mode, Taxpayer must contact APMA by email at lbi.ttpo.apma.feedback@irs.gov to initiate
the mode.
a.
Taxpayer-Licensed Secure Portal. APMA prefers to send and receive documents to/from taxpayers through a taxpayer-licensed secure portal as this provides the highest degree of protection.
b.
Email with encrypted attachments. When secure portal mode is not selected, Taxpayer may send and receive documents to
and from APMA by email. Before employing this document transmittal mode, an APMA employee will authenticate that
Taxpayer initiated the mode at the email noted above. After authentication, Taxpayer must then submit consent to transmit
encrypted documents by email in the following form:
“I consent to receive encrypted documents by email from APMA employees for the duration of this APA/MAP request.”
c.
Unencrypted email. Communication by unencrypted email is not secure, and therefore not encouraged. However, if Taxpayer chooses this mode, Taxpayer should:
i.
Exclude sensitive information, including portions of Taxpayer’s TIN or name, from the subject line and body of emails.
Bulletin No. 2026–16
825
April 13, 2026
ii. Transmit any potentially sensitive information, including personally identifiable information, only via encrypted, password-protected attachments.
The User Guide at Sign and Send Documents Electronically | Internal Revenue Service (irs.gov) contains additional information
about encrypting files and sending documents to IRS by email.
16. Effective Date and Counterparts. This APA is effective starting on the date, or later date of the dates, upon which all Parties
execute this APA. The Parties may execute this APA in counterparts, with each counterpart constituting an original.
WITNESS,
The Parties have executed this APA on the dates below.
[Taxpayer Name in all caps]
By: ___________________________
Jane Doe
Sr. Vice President (Taxes)
Date: ___________________, 202___
IRS
By: ___________________________
John M. Wall
Acting Director, APMA Program
April 13, 2026
Date: ___________________, 202___
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Bulletin No. 2026–16
APPENDIX A
COVERED ISSUES AND COVERED METHOD
1.
Covered Issues.
[Define the Covered Issues.]
2.
APA Term.
This APA applies to Taxpayer’s taxable years ending __________ through ________ (APA Term).
3.
Covered Methods.
{Note: If appropriate, adapt language from the following examples.}
[The Tested Party is __________.]
CUP Method
The covered method is the comparable uncontrolled price (CUP) method. The Arm’s Length Range of the price charged for
_________ is between _______ and ___________ per unit.
CUT Method
The covered method is the CUT Method. The Arm’s Length Range of the royalty charged for the license of ______is
between ____% and ___ % of [Taxpayer’s, Foreign Participants’, or other specified party’s] Net Sales Revenue. [Insert
definition of net sales revenue or other royalty base.]
Resale Price Method (RPM)
The covered method is the resale price method (RPM). The Tested Party’s Gross Margin for any APA Year is defined as follows: the Tested Party’s gross profit divided by its sales revenue (as those terms are defined in Treasury Regulations sections
1.482-5(d)(1) and (2)) for that APA Year. The Arm’s Length Range is between ____% and ___ %, and the Median of the
Arm’s Length Range is ___%.
Cost Plus Method
The covered method is the cost plus method. The Tested Party’s Cost Plus Markup is defined as follows for any APA Year:
the Tested Party’s ratio of gross profit to production costs (as those terms are defined in Treasury Regulations sections
1.482-3(d)(1) and (2)) for that APA Year. The Arm’s Length Range is between ___% and___%, and the Median of the Arm’s
Length Range is___%.
CPM with Berry Ratio PLI
The covered method is the comparable profits method (CPM). The profit level indicator is a Berry Ratio. The Tested Party’s
Berry Ratio is defined as follows for any APA Year: the Tested Party’s gross profit divided by its operating expenses (as
those terms are defined in Treasury Regulations sections 1.482-5(d)(2) and (3)) for that APA Year. The Arm’s Length Range
is between ___ % and ___%, and the Median of the Arm’s Length Range is ___%
CPM using an Operating Margin PLI
The covered method is the comparable profits method (CPM). The profit level indicator is an operating margin. The Tested
Party’s Operating Margin is defined as follows for any APA Year: the Tested Party’s operating profit divided by its sales revenue (as those terms are defined in Treasury Regulations section 1.482-5(d)(1) and (4)) for that APA Year. The Arm’s Length
Range is between ____% and ___ %, and the Median of the Arm’s Length Range is ___.
CPM using a Three-year Rolling Average Operating Margin PLI
Bulletin No. 2026–16
827
April 13, 2026
The covered method is the comparable profits method (CPM). The profit level indicator is an operating margin. The Tested
Party’s Three-Year Rolling Average operating margin is defined as follows for any APA Year: the sum of the Tested Party’s
operating profit (within the meaning of Treasury Regulations section 1.482-5(d)(4) for that APA Year and the two preceding
years, divided by the sum of its sales revenue (within the meaning of Treasury Regulations section 1.482-5(d)(1)) for that
APA Year and the two preceding years. The Arm’s Length Range is between ____% and ____%, and the Median of the
Arm’s Length Range is ___%.
Residual Profit Split Method
The covered method is the residual profit split method. [Insert description of routine profit level determinations and residual
profit-split mechanism].
[Insert additional provisions as needed.]
4.
Application of Covered Method.
For any APA Year, if the results of Taxpayer’s actual transactions produce a [price per unit, royalty rate for the Covered
Issues] [or] [Gross Margin, Cost Plus Markup, Berry Ratio, Operating Margin, Three-Year Rolling Average Operating Margin for the Tested Party] within the Arm’s Length Range, then the amounts reported on Taxpayer’s U.S. Return must clearly
reflect such results.
For any APA year, if the results of Taxpayer’s actual transactions produce a [price per unit, royalty rate] [or] [Gross Margin,
Cost Plus Markup, Berry Ratio, Operating Margin, Three-Year Rolling Average Operating Margin for the Tested Party]
outside the Arm’s Length Range, then amounts reported on Taxpayer’s U.S. Return must clearly reflect an adjustment that
brings the [price per unit, royalty rate] [or] [Tested Party’s Gross Margin, Cost Plus Markup, Berry Ratio, Operating Margin,
Three-Year Rolling Average Operating Margin] to the Median.
For purposes of this Appendix A, the “results of Taxpayer’s actual transactions” means the results reflected in Taxpayer’s
and Tested Party’s books and records as computed under applicable generally accepted accounting standards [insert another
relevant accounting standard if applicable], with the following adjustments:
(a) [The fair value of stock-based compensation as disclosed in the Tested Party’s audited Financial Statements shall be
treated as an operating expense]; and
(b) To the extent that the results in any prior APA Year are relevant (for example, to compute a multi-year average), such
results shall be adjusted to reflect the amount of any adjustment made for that prior APA Year under this Appendix A.
5.
Conforming Adjustments
If Taxpayer makes an adjustment under paragraph 4 of this Appendix A (an “APA primary adjustment”, see Revenue Procedure 2015-41, section 7.01(1)), a conforming adjustment will be required as specified in Revenue Procedure 2015-41, section 7.01(2)(a). For this purpose, if there are multiple APA primary adjustments for an APA Year, those adjustments will first
be netted to derive a net APA primary adjustment, for which a conforming adjustment will be required. In some cases, the
conforming adjustment can be accomplished by a repatriation of funds as specified in Revenue Procedure 2015-41, section
7.01(2). Except as specified in this APA, conforming adjustments (including any repatriation of funds) are governed by the
applicable rules under the I.R.C., including Rev. Proc. 99-32, 1992-2 C.B. 296, or successor guidance.
[Per Revenue Procedure 2015-41, section 7.01(2)(d), the APA “will specify the terms of conforming adjustments, including, but not limited to, the terms of any repatriation of funds.” Also, any deviation from the treatment under the Code (e.g.,
no interest on repatriation payments) must be specified in the APA and must be pursuant to a competent authority resolution
(see Revenue Procedure 2015-41, section 7.01(2)(b)).]
April 13, 2026
828
Bulletin No. 2026–16
APPENDIX B
CRITICAL ASSUMPTIONS
This APA’s critical assumptions are:
1.
The business activities, functions performed, risks assumed, assets employed, and financial and tax accounting methods and classifications [and methods of estimation] of Taxpayer in relation to the Covered Issues will remain materially the same as described
or used in Taxpayer’s APA Request. A mere change in business results will not be a material change.
[Insert additional provisions as needed.]
Bulletin No. 2026–16
829
April 13, 2026
APPENDIX C
APA RECORDS AND ANNUAL REPORT
APA Records
The APA Records will consist of all documents listed below for inclusion in the Annual Report, as well as all documents, notes, work
papers, records, or other writings that support the information provided in such documents.
Annual Report
The Annual Report will include:
1.
A properly completed APA Annual Report Summary in the form of Appendix E to this APA;
2.
A table of contents, organized as follows; and
3.
Statements that fully identify, describe, analyze, and explain:
a.
All material differences between the U.S. Group’s business operations (including functions, risks assumed, markets, contractual terms, economic conditions, property, services, and assets employed) during the APA Year from the business operations
described in the APA Request. If there have been no material differences, the Annual Report will include a statement to that
effect.
b.
All material differences between the U.S. Group’s accounting methods and classifications, and methods of estimation used
during the APA Year, from those described or used in the APA Request. If any change was made to conform to changes in
applicable generally accepted accounting standards (or other relevant accounting standards) Taxpayer will specifically identify the change. If there has been no material change in accounting methods and classifications or methods of estimation, the
Annual Report will include a statement to that effect.
c.
Any change to the Taxpayer notice information in paragraph 14 of this APA.
d.
Any failure to meet any critical assumption. If there has been no failure, the Annual Report will include a statement to that
effect.
e.
Whether or not material information submitted while the APA Request was pending is discovered to be false, incorrect, or
incomplete.
f.
Any change to any entity classification for federal income tax purposes (including any change that causes an entity to be
disregarded for federal income tax purposes) of any Worldwide Group member that is a party to the Covered Issues or is
otherwise relevant to the covered method.
g.
The following regarding any APA primary adjustments made under Appendix A for the APA Year:
i.
The amounts of any APA primary adjustments;
ii. The circumstances that led to such APA primary adjustments being necessary;
iii. A calculation of the net APA primary adjustment as defined in Appendix A;
iv. A complete description of the means by which the conforming adjustment (see Appendix A) is accomplished, including:
A. a description of any accounts payable established in connection with a repatriation of funds pursuant to paragraph
5 of Appendix A and section 7.01(2) of Revenue Procedure 2015-41, including the entities involved and when the
payables are established;
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B. a description of any amounts paid or deemed paid (including amounts paid in satisfaction of such accounts payable), that specifies the entities involved, when the amounts are paid or deemed paid, and by what means any
amounts are actually paid;
C. the character (such as capital, ordinary, income, expense, dividend, contribution to capital) and country source of
any payments and deemed payments, and the specific affected line item(s) of any affected U.S. Return.
h.
The amounts, description, reason for, and financial analysis of any book-tax difference relevant to the covered method for
the APA Year, as reflected on Schedule M-1 or Schedule M-3 of the U.S. Return for the APA Year.
i.
Whether Taxpayer contemplates requesting, or has requested, to renew, modify, or cancel the APA.
4.
The Financial Statements, and any necessary account detail to show compliance with the covered method, including consolidating financial statements, segmented financial data, records from the general ledger, or similar information if the assets, liabilities,
income, or expenses relevant to showing compliance with the covered method are a subset of the assets, liabilities, income, or
expenses presented in the Financial Statements.
5.
{Use the following or the alternative prescribed by paragraph 5(f) of this APA:} A copy of the independent certified public
accountant’s opinion required by paragraph 5(f) of this APA.
6.
A financial analysis that reflects Taxpayer’s covered method calculations for the APA Year. The calculations must reconcile with
and reference the information required under item 4 above in sufficient account detail to allow the IRS to determine whether
Taxpayer has complied with the covered method.
7.
An organizational chart for the Worldwide Group, revised annually to reflect all ownership or structural changes of entities that
are parties to the Covered Issues or are otherwise relevant to the covered method.
8.
A copy of the APA and any amendment.
9.
A penalty of perjury statement, executed in accordance with Revenue Procedure 2015-41, section 7.02(8) and (9).
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APPENDIX D
DEFINITIONS
The following definitions control for all purposes of this APA. The definitions appear alphabetically below:
Term
Annual Report
APA
APA Records
APA Request
APA Year
Applicable generally accepted
accounting standards
Covered Issue(s)
Covered Method(s)
Financial Statements
Foreign Group
Foreign Participants
I.R.C.
Pub. L. 106-170
Revenue Procedure 2015-41
Transfer Pricing Method (TPM)
U.S. GAAP
U.S. Group
U.S. Return
Worldwide Group
April 13, 2026
Definition
An APA annual report within the meaning of Revenue Procedure 2015-41, sections 1.04 and
7.02.
This Advance Pricing Agreement, which is an “advance pricing agreement” within the
meaning of Revenue Procedure 2015-41, section 1.04.
The records specified in Revenue Procedure 2015-41, section 7.04 and Appendix C of this
APA.
Taxpayer’s request for this APA dated _________, including any amendments or
supplemental or additional information thereto.
This term is defined in Appendix A of this APA.
As the context requires, United States Generally Accepted Accounting Principles,
International Financial Accounting Standards, or similar pronouncements to which reporting
enterprises are obliged to conform in preparing financial statements for investors, creditors,
and governmental agencies.
This term is defined in Appendix A of this APA.
Transfer Pricing Method described in Appendix A of this APA.
As the context requires, those financial statements prepared in accordance with applicable
generally accepted accounting standards, and any necessary account detail to show
compliance with the covered method, including consolidating financial statements,
segmented financial data, records from the general ledger, or similar information if the
assets, liabilities, income, or expenses relevant to showing compliance with the covered
method are a subset of the assets, liabilities, income, or expenses presented in the Financial
Statements.
Worldwide Group members that are not U.S. persons.
[name the foreign entities involved in Covered Issues].
The Internal Revenue Code of 1986, 26 U.S.C., as amended.
The Ticket to Work and Work Incentives Improvement Act of 1999.
Rev. Proc. 2015-41, 2015-35 IRB 263.
A transfer pricing method within the meaning of Treasury Regulations section 1.482-1(b).
U.S. generally accepted accounting principles.
Worldwide Group members that are U.S. persons.
For each taxable year, the “returns with respect to income taxes under subtitle A” that
Taxpayer must “make” in accordance with I.R.C. section 6012. {Or substitute for
partnership: For each taxable year, the “return” that Taxpayer must “make” in accordance
with I.R.C. section 6031.}
Taxpayer and all organizations, trades, businesses, entities, or branches (whether or not
incorporated, organized in the United States, or affiliated) owned or controlled directly or
indirectly by the same interests.
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APPENDIX E
APA ANNUAL REPORT SUMMARY FORM
The APA Annual Report Summary on the next page is a required APA Record. The APA Team Leader supplies some of the information requested on the form. Taxpayer is to supply the remaining information requested by the form and submit the form as part of
its Annual Report.
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Internal Revenue Service
Large Business and International Division
Treaty & Transfer Pricing Operations
Advance Pricing Mutual Agreement Program
APMA Case No.
Reviewer
Team Leader
Economist
Other APA Team Members
APA Information
U.S. Taxpayer’s Name
U.S. Taxpayer’s EIN
U.S. Taxpayer’s NAICS
Unilateral/Bilateral/Multilateral
Original or Renewal
APA Common Name, if any
APA Request Filing Date
Date APA Executed
APA Term (date-to-date, inclusive)
Foreign Country(ies) Involved
Annual Report Due Dates for years ending on or before [date]:
Annual Report Due Dates for other years: [last month of tax year] 15 following close of year
Covered Methods Summary Description
(e.g., CPM, operating margin 2%-5%)
Taxpayer’s Principal Representative
APA Annual Report Information
Year(s) covered by this Annual Report
Issues for APMA’s special attention (or “None”)
Taxpayer Notice Person
If necessary, include a
current Form 2848 for the
Notice Person
Current Representative, if any
Include a current Form 2848
for the representative
Name
Title
Address
City/State/Zip
Phone/Fax
Name
Title
Address
City/State/Zip
Phone/Fax
Date Annual Report Filed (to be filled in by APMA):
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Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplified describes a situation where
no change is being made in a prior published position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus,
if an earlier ruling held that a principle
applied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).
Clarified is used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confusion. It is not used where a position in a
prior ruling is being changed.
Distinguished describes a situation
where a ruling mentions a previously published ruling and points out an essential
difference between them.
Modified is used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
with amplified and clarified, above).
Obsoleted describes a previously published ruling that is not considered determinative with respect to future transactions.
This term is most commonly used in a ruling
that lists previously published rulings that
are obsoleted because of changes in laws or
regulations. A ruling may also be obsoleted
because the substance has been included in
regulations subsequently adopted.
Revoked describes situations where the
position in the previously published ruling
is not correct and the correct position is
being stated in a new ruling.
Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a
period of time in separate rulings. If the
new ruling does more than restate the substance of a prior ruling, a combination of
terms is used. For example, modified and
superseded describes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.
Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rulings in the series.
Suspended is used in rare situations
to show that the previous published rulings will not be applied pending some
future action such as the issuance of new
or amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.
Abbreviations
The following abbreviations in current
use and formerly used will appear in
material published in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
Bulletin No. 2026–16
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
i
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.
April 13, 2026
Numerical Finding List1
Revenue Procedures:—Continued
2026-1, 2026-04 I.R.B. 402
2026-2, 2026-05 I.R.B. 447
2026-3, 2026-06 I.R.B. 518
2026-4, 2026-06 I.R.B. 533
2026-5, 2026-07 I.R.B. 540
2026-6, 2026-10 I.R.B. 634
2026-7, 2026-11 I.R.B. 697
2026-8, 2026-16 I.R.B. 813
2026-5, 2026-01 I.R.B. 258
2026-6, 2026-02 I.R.B. 314
2026-7, 2026-02 I.R.B. 316
2026-8, 2026-04 I.R.B. 380
2026-9, 2026-04 I.R.B. 393
2026-10, 2026-04 I.R.B. 394
2026-12, 2026-07 I.R.B. 535
2026-13, 2026-09 I.R.B. 563
2026-11, 2026-12 I.R.B. 707
2026-15, 2026-13 I.R.B. 729
2026-16, 2026-13 I.R.B. 733
2026-17, 2026-15 I.R.B. 805
Notices:
Revenue Rulings:
2026-2, 2026-02 I.R.B. 304
2026-3, 2026-02 I.R.B. 307
2026-5, 2026-02 I.R.B. 309
2026-6, 2026-02 I.R.B. 313
2026-1, 2026-04 I.R.B. 365
2026-8, 2026-04 I.R.B. 368
2026-10, 2026-04 I.R.B. 378
2026-11, 2026-06 I.R.B. 491
2026-12, 2026-06 I.R.B. 496
2026-13, 2026-06 I.R.B. 499
2026-9, 2026-07 I.R.B. 534
2026-7, 2026-11 I.R.B. 637
2026-14, 2026-11 I.R.B. 654
2026-15, 2026-11 I.R.B. 658
2026-16, 2026-11 I.R.B. 685
2026-17, 2026-12 I.R.B. 698
2026-4, 2026-13 I.R.B. \726
2026-19, 2026-15 I.R.B. \797
2026-20, 2026-15 I.R.B. \800
2026-22, 2026-15 I.R.B. \802
2026-23, 2026-15 I.R.B. \804
2026-1, 2026-02 I.R.B. 299
2026-2, 2026-03 I.R.B. 342
2026-3, 2026-06 I.R.B. 485
2026-4, 2026-06 I.R.B. 487
2026-5, 2026-08 I.R.B. 542
2026-6, 2026-11 I.R.B. 635
2026-7, 2026-15 I.R.B. 791
2026-8, 2026-16 I.R.B. 812
Bulletin 2026–16
Announcements:
Treasury Decisions:
10042, 2026-03 I.R.B. 320
10041, 2026-04 I.R.B. 360
10039, 2026-05 I.R.B. 403
10040, 2026-05 I.R.B. 416
10043, 2026-15 I.R.B. 793
Proposed Regulations:
REG-101952-24, 2026-03 I.R.B. 345
REG-110519-25, 2026-03 I.R.B. 353
REG-132251-11; REG-134219-08,
2026-03 I.R.B. 358
REG-103430-24, 2026-05 I.R.B. 447
REG-112829-25, 2026-05 I.R.B. 452
REG-113515-25, 2026-05 I.R.B. 455
REG-121244-23, 2026-09 I.R.B. 579
REG-105064-25, 2026-13 I.R.B. 735
REG-108921-25, 2026-13 I.R.B. 756
REG-117002-25, 2026-13 I.R.B. 761
REG-117270-25, 2026-13 I.R.B. 772
REG-117298-21, 2026-14 I.R.B. 784
Revenue Procedures:
2026-1, 2026-01 I.R.B. 1
2026-2, 2026-01 I.R.B. 119
2026-3, 2026-01 I.R.B. 143
2026-4, 2026-01 I.R.B. 160
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2025–27 through 2025–52 is in Internal Revenue Bulletin
2024–52, dated December 22, 2024.
1
April 13, 2026
ii
Bulletin No. 2026–16
Finding List of Current Actions on
Previously Published Items1
Bulletin 2026–16
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2025–27 through 2025–52 is in Internal Revenue Bulletin
2024–52, dated December 22, 2024.
1
Bulletin No. 2026–16
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April 13, 2026
Internal Revenue Service
Washington, DC 20224
Official Business
Penalty for Private Use, $300
INTERNAL REVENUE BULLETIN
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