David Rosenbloom and Elizabeth Stevens Submit Amicus Brief to Uphold Decision Favoring Amazon in IRS Transfer Pricing Dispute


Two law professors have urged the Ninth Circuit to uphold a U.S. Tax Court decision in favor of Amazon.com Inc. in a transfer pricing dispute with the Internal Revenue Service, saying the agency was relying on an incorrect reading of cost-sharing regulations. The amicus brief was authored by New York University School of Law professors H. David Rosenbloom and John P. Steines Jr., and submitted by Elizabeth Stevens on Friday. Stevens is an associate and Rosenbloom a member of Caplin & Drysdale, Chtd.

The IRS’ interpretation that residual business assets such as goodwill and going concern value be compensated under cost-sharing agreements did not apply in 2005 when Amazon made an agreement that granted its European affiliate certain asset rights, said the professors in the amicus brief. Instead, the professors said, the agency is trying to retroactively apply changes made to the cost-sharing rules in 2009.

“In 2009, after the transactions at issue, the commissioner made sweeping changes to the applicable rules,” the brief said. “He now contends, in effect, that the new and dramatically expanded rules covered Amazon’s CSA. Regulatory and legislative history confirm they did not.”

For the full article, please visit Law360’s website (subscription required).

Excerpt taken from the article “NYU Professors Urge 9th Circ. To Uphold Amazon Tax Win” by Yvonne Juris for Law360.

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