The Resource Altera Corp v. Commissioner : keeping the IRS at arm's length under Sec. 482 and the Administrative Procedure Act

Altera Corp v. Commissioner : keeping the IRS at arm's length under Sec. 482 and the Administrative Procedure Act

Label
Altera Corp v. Commissioner : keeping the IRS at arm's length under Sec. 482 and the Administrative Procedure Act
Title
Altera Corp v. Commissioner : keeping the IRS at arm's length under Sec. 482 and the Administrative Procedure Act
Creator
Subject
Language
eng
Summary
In Altera Corp. v. Commissioner, 145 T.C. No. 3 (2015) the U.S. Tax Court held that Reg. Sec. 1.482-7( d), requiring parties to include stockbased compensation in the cost pool to be shared under a cost sharing arrangement, is invalid. Under Altera, taxpayers would not be required to share stockbased compensation in costsharing arrangements. The Internal Revenue Service has appealed the Altera decision to the Ninth Circuit, which in 2010 upheld the Tax Court's decision, in Xilinx, that stockbased compensation is not in fact shared at arm's length and need not be shared under an earlier iteration of the cost sharing regulations. In this case, the Tax Court clarified two legal principles that will have longterm effects on the tax laws and tax litigation. First, the court reiterated its position, previously articulated in Xilinx and other cases, that the arm's length standard of Reg.Sec. 1.482-1( b)(1) requires an empirical analysis of what unrelated parties would do under comparable circumstances, rejecting Treasury's theoretical approach to Sec. 482. Second, the court's analysis of Reg. Sec. 1.482-7( d) under the Administrative Procedure Act followed the Supreme Court's directive to hold Treasury and the IRS to the same reasoned decision-making standard as any other agency, a welcome counterweight to the Chevron deference (Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984)) now applicable to tax regulations
Citation source
In: Tax management international journal. - Arlington. - Vol. 45 (2016),
http://library.link/vocab/creatorName
  • Blair, D.B
  • Fischer, D.J
Geographic coverage
North America
Language note
English
http://library.link/vocab/subjectName
  • arm's length principle
  • cost sharing arrangement
  • case law
  • transfer pricing
Label
Altera Corp v. Commissioner : keeping the IRS at arm's length under Sec. 482 and the Administrative Procedure Act
Instantiates
Publication
Label
Altera Corp v. Commissioner : keeping the IRS at arm's length under Sec. 482 and the Administrative Procedure Act
Publication

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