IRS’s Adjustments Were Unreasonable; Arm’s-Length Royalty Rates Same as MOU (Medtronic, Inc., TCM)

A taxpayer’s comparable uncontrolled transactions (CUT) method was the best method for determining the arm’s-length royalty rate to be paid by a Puerto Rican subsidiary to its U.S. parent. With various adjustments, made to reflect the facts and expert testimony, the rates determined were close to those previously negotiated by the parties, which were memorialized […]