USA: Guidant LLC v. Commissionner 146 T.C. No. 5

By Robert Robillard - 17 mars 2016

This blogpost originally appeared on

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.

Robert Robillard, Ph.D., CPA, CGA, Adm.A., MBA, M.Sc. Econ., M.A.P.
Senior Partner, RBRT Inc.
514-742-8086; robertrobillard « at »

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