BMC Software Inc. v. Commissioner

141 T.C. No. 5

UNITED STATES TAX COURT BMC SOFTWARE INC. Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 15675-11. Filed September 18, 2013. R determined that royalty payments from P to its controlled foreign corporation (CFC) were not arm’s length under I.R.C. sec. 482. P and R then entered into a closing agreement under I.R.C. sec. 7121 making primary adjustments regarding the royalty payments. The primary adjustments increased P’s income and required P to conform its accounts with secondary adjustments. P accomplished the secondary adjustments by electing to establish…