Taxation and State Taxation -- 2020
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Altera Corp. et al. v. Commissioner of Internal Revenue
(U.S. Supreme Court)
IRS rule change threatens double taxation on cross border transactions
The NAM filed an amicus brief in support of Altera Corporations' petition for certiorari to reverse the Ninth Circuit and uphold the Internal Revenue Service’s (IRS) “arm’s-length transaction standard.” The Commissioner of the IRS departed from this longstanding approach in a policy shift, thus destroying the established precedent and reducing its effectiveness. Under the arm’s-length standard, a transaction was judged by looking at how the parties priced it as if they were two independent entities, not parts of the same group of related entities. The Ninth Circuit held that the Commissioner did not exceed his rule-making authority and that his rule was entitled to deference. On March 6, 2020, the NAM filed a coalition amicus brief in support of Altera's writ petition arguing that the decision below raises unsettling questions about the tax treatment of countless international transactions.Unfortunately, on June 22, 2020, the Supreme Court denied cert.
Related Documents:
NAM brief (March 6, 2020)
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