Ilitch School father-daughter team to be published in Tax Notes Federal and Tax Notes International

Mike Ilitch School of Business Professor of Accounting B. Anthony Billings and graduate student Brooke Billings have co-authored an article, titled “The Determination of Fees for Intragroup Financial Loan Guarantees,” that will be published in Tax Notes Federal and Tax Notes International. The paper is intended to update Certified Public Accountants and other financial professionals about the changes and effects of loan guarantee fees between U.S. multinational firms and their international affiliates. The complete abstract is below.

Tax Notes is a portfolio of publications offered by Tax Analysts, a nonprofit tax publisher. It provides comprehensive and impartial coverage of tax news, while its commentary contributes important voices to the discussion and understanding of tax policy.

The Billings’ other co-author is Kyungjin Kim, a two-time Ilitch School graduate.

Abstract: This article updates Certified Public Accountants (CPAs) and other financial professionals about changes pertaining to determining international loan guarantee fees between U.S. multinational firms and their international affiliates. The article argues that internationally, courts appear to consider an entity’s relationship with its parent company in the analysis of loan fees. A common misconception by taxpayers is that the pricing of an international intercompany loan guarantee fee is a regular event. However, foreign tax authorities expect taxpayers to exercise a high level of sophistication and thoroughness in a transfer pricing analysis in determining the appropriate interest rates or loan fees for intercompany financial transactions.