TEMPLATE — FOR USE IN ALL IDR RESPONSES, MATTER 1018-00009

TEMPLATE — FOR USE IN ALL IDR RESPONSES, MATTER 1018-00009
CALDERWOOD & HARKNESS LLP
Attorneys at Law
Philadelphia Office 1735 Market Street, Suite 3100 Philadelphia, PA 19103 Telephone: [Telephone] Facsimile: [Facsimile]
Firm Headquarters 600 Lexington Avenue New York, NY 10022
[DATE]
VIA SECURE EMAIL AND FIRST-CLASS MAIL
Revenue Agent Patricia Dunleavy Large Business & International Division Internal Revenue Service Exam Team ID: LB&I-NE-TP-2022-00641 [Insert IRS Office Address]
Re: Response to Information Document Request No. [IDR No.]
Taxpayer: Penterra Pharmaceuticals Corp. Employer Identification Number: 22-3741856 Tax Years Under Examination: 2017, 2018, 2019, 2020 IRS Exam Team ID: LB&I-NE-TP-2022-00641 Calderwood & Harkness LLP Matter Number: 1018-00009
Dear Revenue Agent Dunleavy:
This firm represents Penterra Pharmaceuticals Corp. ("PPC"), a corporation organized and existing under the laws of the State of Delaware, with its principal place of business at 2200 Independence Boulevard, Princeton Junction, New Jersey 08550, Employer Identification Number 22-3741856. As you are aware, IRS Form 2848 (Power of Attorney and Declaration of Representative) was filed with the Internal Revenue Service on June 8, 2022, authorizing Leonard Cross, Sylvia Hartwell, Garrett Simmons, and Leila Nazari of Calderwood & Harkness LLP to represent PPC before the Internal Revenue Service in connection with the above-referenced examination. A copy of the executed Form 2848 remains on file with the examination team. This letter is submitted on behalf of PPC in response to Information Document Request No. [IDR No.], dated [IDR Date], which was received by our office on [Date Received] (the "IDR"), relating to the examination of PPC's federal income tax returns (Forms 1120) for the tax years ending December 31, 2017, December 31, 2018, December 31, 2019, and December 31, 2020.
Enclosed herewith and/or attached via secure file transfer are the documents and information responsive to IDR No. [IDR No.]. An itemized schedule of all documents produced with this response is set forth in the attached Document Production Schedule (Attachment A), which identifies each document or group of documents by Bates number range, provides a brief description of each document, and cross-references each produced document or group of documents to the corresponding item number(s) of the IDR to which the document is responsive. In total, PPC produces with this response [Number] documents, consisting of [Number] pages, Bates-stamped PPC-[XXXXXX] through PPC-[XXXXXX]. All documents are produced in [format — e.g., electronic copies via secure file transfer / hard copy], consistent with the production format agreed upon between counsel for PPC and the examination team during the [date] conference call regarding document production protocols. To the extent any documents are produced in native electronic format, such production is noted in the "Notes / Comments" column of Attachment A.
PPC has conducted a diligent and reasonable search of its files, records, and electronically stored information and has produced all non-privileged documents responsive to IDR No. [IDR No.] that are within PPC's possession, custody, or control. Notwithstanding the foregoing, PPC withholds from production certain documents on the basis of the attorney-client privilege, the work-product doctrine (as codified in Fed. R. Civ. P. 26(b)(3) and its federal tax analog), and/or the tax practitioner privilege under Internal Revenue Code Section 7525. Each document withheld from production on the basis of privilege is identified on the accompanying Privilege Log (Attachment B), which sets forth the date of each withheld document, the author(s), the recipient(s) or addressee(s), the type of document, a general description of the subject matter of the document (without revealing privileged content), and the specific privilege(s) or protection(s) asserted as the basis for withholding. PPC reserves the right to supplement and amend the privilege log as additional responsive documents are identified during the continuing course of PPC's document review and the ongoing examination. The production of any document in connection with this response is not intended to waive, and does not constitute a waiver of, any applicable privilege, protection, or objection, including but not limited to the attorney-client privilege, the work-product doctrine, the tax practitioner privilege under IRC § 7525, or any other applicable privilege, protection, right, or objection, whether or not specifically enumerated herein. Any inadvertent production of a privileged or protected document shall not constitute a waiver of any privilege or protection with respect to that document or any other document, and PPC reserves the right to demand the return or destruction of any inadvertently produced privileged or protected document in accordance with applicable law and IRS examination procedures.
[Include the following paragraph only if PPC objects to the scope of any item in the IDR or provides a partial response. Delete this paragraph in its entirety if no objections are raised.]
PPC objects to Item(s) [Item No.(s)] of IDR No. [IDR No.] on the grounds that [describe objection — e.g., the request is overly broad and unduly burdensome in that it seeks all documents of a particular type without temporal or subject-matter limitation; the request is not reasonably calculated to lead to the discovery of information relevant to the determination of PPC's tax liability for the tax years under examination; the request improperly seeks documents or information relating to tax years not under examination; the request seeks information protected by the attorney-client privilege, the work-product doctrine, or the tax practitioner privilege under IRC § 7525; or the request seeks third-party proprietary or confidential commercial information the disclosure of which would cause competitive harm to PPC or to the third party]. Without waiving these objections, and subject to and expressly reserving all such objections, PPC provides the following documents and/or information on a good-faith basis in an effort to cooperate with the examination and to narrow any areas of disagreement regarding the scope of the IDR: [describe partial production, including Bates number range and description of documents produced, as well as the basis on which the partial production is made].
PPC is committed to cooperating with the Internal Revenue Service's examination of its federal income tax returns for the tax years at issue in a timely, complete, and good-faith manner, consistent with PPC's rights and obligations under applicable law and IRS examination procedures, including the provisions of IRM 4.46.4 (Information Document Requests) and IRM 4.46.2 (LB&I Examination Process). PPC remains available to discuss any questions that the examination team may have regarding the documents produced with this response, to clarify the scope of any responsive items, or to address any concerns about the completeness or format of PPC's production. We understand that this examination is conducted under the supervisory authority of Supervisory Revenue Agent Gerald Meskill, Team Manager, and we are pleased to arrange telephone conferences or in-person meetings with Revenue Agent Dunleavy, SRA Meskill, or other members of the examination team at mutually convenient times to address any matters arising from this response or from the examination more generally.
PPC expressly reserves all rights, including but not limited to the right to supplement, amend, or correct this response and the documents produced herewith; to raise additional objections to the IDR or to any subsequent information document requests; and to assert all defenses, protections, privileges, and objections available to PPC under the Internal Revenue Code, the Treasury Regulations, applicable case law, and IRS administrative procedures. Nothing in this response, in the documents produced herewith, or in any accompanying schedule, log, or communication constitutes or is intended to constitute an admission by PPC regarding any factual or legal issue in the examination, including but not limited to issues relating to PPC's income, deductions, credits, tax liability, or reporting positions for any tax year. PPC's production of documents in response to this IDR is without prejudice to any position PPC may assert regarding the transfer pricing methodologies at issue in this examination, including but not limited to the arm's-length character and economic substance of the cost-sharing arrangement between PPC and Penterra Biopharma International DAC ("PBI"), a Designated Activity Company organized under the laws of Ireland, the intercompany royalty rate applicable to legacy intellectual property licensed by PPC to PBI, and the valuation of the platform contribution transaction entered into in connection with the formation of the cost-sharing arrangement.
Should you have any questions regarding this response, please do not hesitate to contact the undersigned at [phone] or [email], or Garrett Simmons at [phone] or [email]. We appreciate the examination team's consideration and look forward to continuing to work with you cooperatively in connection with this examination.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Leonard Cross Partner, Tax Department 1735 Market Street, Suite 3100 Philadelphia, PA 19103 Telephone: [Telephone]
Email: [Email]
Enclosures:
Attachment A — Document Production Schedule for IDR No. [IDR No.]
Attachment B — Privilege Log for IDR No. [IDR No.] [if applicable — delete this line if no documents are withheld on the basis of privilege]
cc:
Marcus Whitfield, Vice President, Global Tax, Penterra Pharmaceuticals Corp.
Deborah Staines, General Counsel, Penterra Pharmaceuticals Corp.
Supervisory Revenue Agent Gerald Meskill, Team Manager, Internal Revenue Service, Large Business & International Division, Exam Team LB&I-NE-TP-2022-00641
Sylvia Hartwell, Partner, Calderwood & Harkness LLP
Garrett Simmons, Associate, Calderwood & Harkness LLP
Leila Nazari, Associate, Calderwood & Harkness LLP
ATTACHMENT A
DOCUMENT PRODUCTION SCHEDULE
IDR No. [IDR No.]
Penterra Pharmaceuticals Corp. (EIN: 22-3741856)
Tax Years Under Examination: 2017, 2018, 2019, 2020
Calderwood & Harkness LLP Matter No. 1018-00009
The following schedule identifies each document or group of documents produced by Penterra Pharmaceuticals Corp. ("PPC") in response to Information Document Request No. [IDR No.], dated [IDR Date]. Documents are listed by IDR item number and are identified by Bates number range. All Bates numbers bear the prefix "PPC-" followed by a six-digit sequential number.
[Add additional rows as needed. Each IDR item should have at least one corresponding row. Where a single IDR item generates multiple groups of documents with non-contiguous Bates number ranges, use separate rows for each group and note the cross-reference in the "Notes / Comments" column.]
Total Documents Produced: [Number] documents Total Pages Produced: [Number] pages Bates Number Range: PPC-[XXXXXX] through PPC-[XXXXXX]
PPC reserves all rights and objections not expressly waived herein. The production of documents identified in this schedule does not constitute a waiver of any privilege, protection, or objection, and PPC reserves the right to supplement this schedule as additional responsive documents are identified.
ATTACHMENT B
PRIVILEGE LOG
IDR No. [IDR No.]
Penterra Pharmaceuticals Corp. (EIN: 22-3741856)
Tax Years Under Examination: 2017, 2018, 2019, 2020
Calderwood & Harkness LLP Matter No. 1018-00009
The following privilege log identifies each document withheld from production by Penterra Pharmaceuticals Corp. ("PPC") in response to Information Document Request No. [IDR No.], dated [IDR Date], on the basis of attorney-client privilege, the work-product doctrine, and/or the tax practitioner privilege under Internal Revenue Code Section 7525. This log is provided pursuant to PPC's obligations under applicable IRS examination procedures, including the provisions of IRM 4.46.4. Descriptions of subject matter are provided in general terms so as not to disclose the substance of privileged communications or attorney work product.
[Add additional rows as needed. Each withheld document should be listed as a separate log entry. For email chains containing multiple privileged communications, each substantive communication within the chain may be listed as a separate entry or, where the chain involves the same participants and the same subject matter, may be logged as a single entry with the date range and number of communications noted.]
Total Documents Withheld: [Number]
This privilege log is provided pursuant to PPC's obligations under applicable IRS examination procedures. PPC reserves the right to supplement, amend, and correct this privilege log as additional responsive documents are identified, reviewed, and determined to be subject to a claim of privilege or protection. Inclusion of any document on this privilege log does not constitute a waiver of any applicable privilege or protection with respect to any document, whether or not identified on this log. PPC's identification of documents on this log is without prejudice to PPC's right to assert additional or alternative bases for withholding any document from production. Nothing in this log or in the descriptions provided herein is intended to, or should be construed to, disclose the substance of any privileged communication or attorney work product.
INTERNAL USAGE INSTRUCTIONS
CALDERWOOD & HARKNESS LLP — FOR TEAM USE ONLY
DO NOT TRANSMIT TO THE IRS OR TO THE CLIENT WITHOUT REMOVAL OF THIS PAGE
Matter: 1018-00009 — Penterra Pharmaceuticals Corp. IRS Examination Defense, Tax Years 2017–2020
Template: IDR Response Cover Letter Template
Effective Date: [Date template was last updated]
Prepared by: Garrett Simmons, Associate, Tax Department
Approved by: Leonard Cross, Responsible Partner, Tax Department
General Instructions.  This template is to be used for all responses to Information Document Requests issued by the Internal Revenue Service in connection with the examination of Penterra Pharmaceuticals Corp. ("PPC") for tax years 2017, 2018, 2019, and 2020, Calderwood & Harkness LLP Matter No. 1018-00009. Consistent use of this template is essential to ensure uniformity of format, completeness of required disclosures and reservations, and compliance with the firm's quality control procedures for IRS examination matters.
Completion Requirements.  
1.  All bracketed fields (indicated by square brackets, e.g., "[IDR No.]," "[Date]," "[Number]") must be completed with the applicable information before the response letter is finalized and transmitted to the IRS examination team. No letter should be issued with any bracketed placeholder remaining in the text.
2.  The scope limitations and objections paragraph (the fourth substantive paragraph of the letter) should be included only when PPC objects to the scope of one or more items in the IDR or provides a partial response. If PPC is providing a complete response to all items in the IDR without objection, delete this paragraph in its entirety from the final version of the letter. Do not leave the template language or bracketed instructions in the final letter.
3.  The Privilege Log (Attachment B) should be included only when documents are withheld from production on the basis of privilege. If no documents are withheld, delete the reference to Attachment B from the "Enclosures" section of the letter and do not include Attachment B with the response. Update the text of the privilege reservation paragraph accordingly to note that no documents were identified as privileged responsive to the particular IDR, while preserving the general reservation of privileges and protections.
Review and Approval Requirements
Every IDR response letter must be reviewed and approved by at least one of the following individuals before it is transmitted to the IRS or to the client for signature:
•  Leonard Cross, Responsible Partner, Tax Department
•  Sylvia Hartwell, Billing Partner, Tax Department
No IDR response may be issued without the express written approval (which may be provided via email) of one of the above-named partners. The reviewing partner should confirm that (a) all bracketed fields have been completed; (b) the substance of the response is accurate and complete; (c) the privilege log, if included, has been reviewed and is consistent with the master privilege log; (d) the document production schedule accurately reflects the documents being produced; and (e) the Bates number ranges are correct and do not overlap with ranges used in prior productions.
Filing and Record-Keeping Requirements
Upon execution and transmission of each IDR response letter, the following filing and record-keeping steps must be completed:
1.  A copy of the signed response letter (in PDF format) must be saved to the matter file on the firm's document management system under the folder path: Matter 1018-00009 > IDR Responses > IDR [No.] Response.
2.  The details of the response — including IDR number, date of response, Bates number ranges, number of documents and pages produced, and any objections or privilege assertions — must be entered into the master IDR tracker (idr-tracker-master.xlsx), which is maintained on the shared drive at: \\SCLLPShare\Tax\Matters\1018-00009\Trackers\idr-tracker-master.xlsx.
3.  The Bates number ranges and document descriptions must be entered into the document production index (document-production-index.xlsx), maintained at: \\SCLLPShare\Tax\Matters\1018-00009\Trackers\document-production-index.xlsx.
4.  All privilege log entries must be cross-referenced with and entered into the master privilege log (idr-privilege-log.xlsx), maintained at: \\SCLLPShare\Tax\Matters\1018-00009\Trackers\idr-privilege-log.xlsx. Care must be taken to ensure that privilege log entries are consistent across all IDR responses and that no document is logged on a privilege basis for one IDR and produced in response to another without deliberate review and approval.
5.  A hard copy of each signed response letter, together with hard copies of Attachment A and Attachment B (if applicable), must be printed and placed in the physical Matter 1018-00009 file maintained at the Philadelphia office.
Communications Protocol.  All communications with Revenue Agent Patricia Dunleavy, Supervisory Revenue Agent Gerald Meskill, and any other member of the IRS examination team must be coordinated through Leonard Cross or Garrett Simmons. No team member — including associates, paralegals, or staff — should communicate directly with the IRS examination team by telephone, email, letter, or any other medium without the prior express authorization of Leonard Cross or, in his absence, Sylvia Hartwell. This protocol applies to all substantive and procedural communications, including scheduling of meetings, requests for extensions of IDR response deadlines, and informal discussions regarding the scope of information requests.
All incoming communications from the IRS examination team should be promptly forwarded to Leonard Cross and Garrett Simmons and logged in the master IDR tracker.
CONFIDENTIAL — ATTORNEY WORK PRODUCT — DO NOT DISTRIBUTE OUTSIDE OF CALDERWOOD & HARKNESS LLP MATTER 1018-00009 TEAM
Item No. | IDR Item Description | Bates Number Range | Document Description | Number of Pages / Files | Format | Notes / Comments
[Item No.] | [Brief description of the IDR item request as stated in the IDR] | PPC-[XXXXXX] through PPC-[XXXXXX] | [Brief description of the documents produced responsive to this item, e.g., "Board of Directors minutes for fiscal years 2017–2020 relating to transfer pricing policies"] | [Number] pages / [Number] files | [Electronic / Hard Copy] | [E.g., "Produced in native format (Excel)"; "Produced as PDF"; "Redacted — third-party confidential information pursuant to confidentiality agreement dated [date]"; "Responsive documents also cross-referenced to IDR No. [prior IDR No.], Item [No.]"; or "None"]
[Item No.] | [Brief description of the IDR item request] | PPC-[XXXXXX] through PPC-[XXXXXX] | [Brief description of the documents produced] | [Number] pages / [Number] files | [Electronic / Hard Copy] | [Notes / Comments]
[Item No.] | [Brief description of the IDR item request] | PPC-[XXXXXX] through PPC-[XXXXXX] | [Brief description of the documents produced] | [Number] pages / [Number] files | [Electronic / Hard Copy] | [Notes / Comments]
[Item No.] | [Brief description of the IDR item request] | PPC-[XXXXXX] through PPC-[XXXXXX] | [Brief description of the documents produced] | [Number] pages / [Number] files | [Electronic / Hard Copy] | [Notes / Comments]
[Item No.] | [Brief description of the IDR item request] | PPC-[XXXXXX] through PPC-[XXXXXX] | [Brief description of the documents produced] | [Number] pages / [Number] files | [Electronic / Hard Copy] | [Notes / Comments]
[Item No.] | [Brief description of the IDR item request] | PPC-[XXXXXX] through PPC-[XXXXXX] | [Brief description of the documents produced] | [Number] pages / [Number] files | [Electronic / Hard Copy] | [Notes / Comments]
[Item No.] | [Brief description of the IDR item request] | PPC-[XXXXXX] through PPC-[XXXXXX] | [Brief description of the documents produced] | [Number] pages / [Number] files | [Electronic / Hard Copy] | [Notes / Comments]
[Item No.] | [Brief description of the IDR item request] | PPC-[XXXXXX] through PPC-[XXXXXX] | [Brief description of the documents produced] | [Number] pages / [Number] files | [Electronic / Hard Copy] | [Notes / Comments]
Log Entry No. | Date of Document | Author(s) | Recipient(s) / Addressee(s) | Document Type | General Description of Subject Matter | Privilege(s) Asserted | Basis for Privilege
[1] | [Date] | [Name(s) and title(s) / role(s)] | [Name(s) and title(s) / role(s)] | [E.g., email, memorandum, letter, handwritten notes, presentation] | [General description of the subject matter without revealing privileged content, e.g., "Communication regarding legal analysis of transfer pricing documentation requirements"] | [Attorney-Client Privilege / Work Product Doctrine / IRC § 7525 Tax Practitioner Privilege] | [E.g., "Confidential communication between PPC in-house counsel and outside counsel at Calderwood & Harkness LLP for the purpose of obtaining legal advice regarding transfer pricing examination defense"]
[2] | [Date] | [Name(s) and title(s) / role(s)] | [Name(s) and title(s) / role(s)] | [Document Type] | [General description of subject matter] | [Privilege(s) Asserted] | [Basis for Privilege]
[3] | [Date] | [Name(s) and title(s) / role(s)] | [Name(s) and title(s) / role(s)] | [Document Type] | [General description of subject matter] | [Privilege(s) Asserted] | [Basis for Privilege]
[4] | [Date] | [Name(s) and title(s) / role(s)] | [Name(s) and title(s) / role(s)] | [Document Type] | [General description of subject matter] | [Privilege(s) Asserted] | [Basis for Privilege]
[5] | [Date] | [Name(s) and title(s) / role(s)] | [Name(s) and title(s) / role(s)] | [Document Type] | [General description of subject matter] | [Privilege(s) Asserted] | [Basis for Privilege]