There is a borderline between permissible speculations to that of intolerable guesswork. A damages calculation need not prove that all elements are certain. The question is: do “uncertain” profits differ from “certain” profits?
Despite the OECD’s efforts to present a set of guidelines about transfer pricing aspects of business restructuring, taxpayers are still not always clear about their options, especially when trying to avoid disputes.
How much are a company’s oil and gas reserves actually worth on a fair market value basis? Fair market values of petroleum reserves and E&P companies are based on expected future prices, expected future costs, after-tax cash flows, and risk-adjusted discount rates considering market rates and company capital structures.
The Office of Inspector General (OIG) has released an alert declaring physician compensation agreements that exceed fair market value may violate federal fraud statutes. This is an issue the OIG is not taking lightly and has gained funding in order to investigate and prosecute potential violators. It is imperative that both existing and future compensation agreements be reviewed for compliance.
The Issue: Valuescope’s clients owned a family business that they wanted to divest in a manner that would not only allow them to retire comfortably, but would also be significant enough to conduct multi-generational wealth transfer planning. With only a single realistic buyer for the business, 4% EBITDA margins, and less than $1 million in annual net profit, the owners had little hope of achieving their financial goals.