Rocco Femia Quoted in Tax Analysts Regarding Xilinx Ninth Circuit Transfer Pricing Decision

“Ninth Circuit's Reversal of Tax Court in Xilinx a Major Government Victory, Practitioners Say”
Tax Analysts
05.28.09Rocco Femia discusses the Ninth Circuit’s reversal of the Tax Court’s decision in Xilinx et al. v. Commissioner, in which the Circuit ruled that related companies in a cost-sharing agreement must share all costs in a joint venture. Femia called the decision "a major victory for the government." The decision "suggests the IRS could by regulation take positions definitively at odds with the arm's-length standard," Femia said. "The court characterizes the arm's-length standard as a regulatory gloss on the statute rather than a fundamental principle," he said. According to Femia, the court's analysis has additional ramifications for the temporary section 482 cost-sharing regs that were published in January, because the regs are "highly rules based and prescriptive in nature.”
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