USA: Guidant LLC v. Commissionner 146 T.C. No. 5Par Robert Robillard - 17 mars 2016
This blogpost originally appeared on rbrt.ca.
In Guidant LLC (P) v. Commissionner (R) 146 T.C. No. 5:
« P assert that R’s adjustments are arbitrary, capricious, and unreasonable as a matter of law because (1) R did not determine the “true separate taxable income” of each controlled taxpayer within the meaning of sec. 1.482-1(f)(1)(iv), Income Tax Regs., and (2) R did not make specific adjustments with respect to each transaction involving an intangible, a purchase and sale of property, or a provision of services. »
The court held that:
« Neither I.R.C. sec. 482 nor the regulations thereunder require that R, when exercising his authority under I.R.C. sec. 482, always determine the true separate taxable income of each controlled taxpayer in a consolidated group contemporaneously with the making of the resulting adjustments. »
It further held that:
« I.R.C. sec. 482 and the regulations thereunder allow R, when exercising his authority under I.R.C. sec. 482, to aggregate one or more related transactions instead of making specific adjustments with respect to each type of transaction. »
It should be noted that these interpretations of the Court are also aligned with the guidance included in the OECD Transfer Pricing Guidelines and, in Canada, with CRA’s administrative positions on these matters.
The complete case is available here.
The library on Transfer Pricing in the United States is available here.
The convergence of RBRT’s tax, accounting and economics expertise makes a difference. The information in this blog post is general information only. Data and information come from sources believed to be reliable but complete accuracy cannot be guaranteed. RBRT Inc. or the author are not responsible or liable for any error, omission or inaccuracy in such information. The opinions expressed in this blogpost are those of the author. Readers should seek advice and counsel from RBRT Inc. as required.