IRS tightens APA intake standards, raising the bar for KPMG clients

The IRS has made advance pricing agreement intake a harder front-end screen, and KPMG transfer pricing teams now have to build a stronger case before a client ever reaches APMA. By folding interim acceptance guidance into the Internal Revenue Manual on June 26, 2026, the agency gave APMA a more explicit mandate to weigh dispute likelihood, the materiality of the covered issues, and whether ICAP, a joint audit or mutual agreement procedure would be the better route.

For KPMG practitioners, that shifts work earlier in the cycle. Economists, controversy specialists and legal teams will need to decide whether the facts are mature enough for APMA scrutiny, which transactions deserve the time and cost of an APA, and which should be sent down a different channel. The practical test is no longer just whether an APA can be done, but whether it is worth filing at all. That raises the premium on cleaner benchmarking, tighter documentation and a sharper narrative about why a case belongs in the APA queue.

The move also fits a program that has spent years becoming more selective before it even opens a file. IRS guidance first issued on April 25, 2023, and reissued on April 22, 2025, directed APMA employees to review pre-filing memoranda and APA requests before deciding whether to accept a case. The 2025 version was set to expire on October 22, 2025, and industry commentary in 2023 said the interim framework formalized APMA’s discretion to reject requests and brought non-APMA transfer pricing personnel into the screening process. In other words, the gate was already narrowing before the June 2026 IRM update locked that approach into administrative practice.

The broader APMA structure helps explain why the change matters. The IRS merged the APA Program with the U.S. Competent Authority function in early 2012 to create APMA, and the Treaty Assistance and Interpretation Team joined in late 2020. That gave the organization both prospective agreement work and controversy resolution capacity, but it also means a request now sits alongside other cross-border dispute tools from the start.

The pipeline is already heavy. The IRS’s 2024 APMA annual report said taxpayers filed 169 APA requests and the agency completed 142 APAs that year. The 2025 report said APMA executed 110 APAs and ended the year with 622 pending cases. User fees were last updated in January 2024, adding another cost layer for taxpayers that may now face a tougher screening process before any substantive negotiation begins.