BMC Software Inc. v. Commissioner
United States Tax Court
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.
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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 accounts receivable under Rev. Proc. 99-32, 1999-2 C.B. 296, rather than treat the secondary adjustments as deemed capital contributions. P had previously…
1Opinion of the Court
Kroupa, Judge:
Respondent determined a $13 million 1 deficiency in petitioner’s Federal income tax resulting from his interpretation of section 965, 2 a one-time dividends received deduction for a U.S. corporation. The amount qualifying for the dividends received deduction is reduced by increased related party indebtedness under section 965(b)(3) (sometimes, related party debt rule). We must decide for the first time whether an account receivable established under Rev. Proc. 99-32, 1999-2 C.B. 296, may constitute increased related party indebtedness for purposes of the related party debt rule.…
2Cases cited13 opinions
- United States v. Ron Pair Enterprises, Inc.Supreme Court of the United States · 1989
- Robinson v. Shell Oil Co.Supreme Court of the United States · 1997
- United States v. American Trucking AssociationsSupreme Court of the United States · 1940
- Dolan v. United States Postal ServiceSupreme Court of the United States · 2006
- Burlington Northern Railroad v. Oklahoma Tax CommissionSupreme Court of the United States · 1987
8 more not listed; retrieve them via the Exa API.
3Cited by3 opinions
- Analog Devices v. Comm'rUnited States Tax Court · 2016
- BMC Software Inc. v. CommissionerUnited States Tax Court · 2013
- The Coca-Cola Company and Subsidiaries v. CommissionerUnited States Tax Court · 2020