Jim Gadwood Quoted on Recent Cases Impacting Validity of Regulations in Tax Notes Today
"Recent Tax Court Case May Confine Altera to Transfer Pricing"
Tax Notes Today
Jim Gadwood's comments on two recent cases, presented at the Federal Bar Association's annual tax conference, were covered by Tax Notes Today. As part of a panel, "APA Challenges to Treasury Regulations: Partly Cloudy With a Chance of Success," Gadwood noted that in deciding Altera Corp. v. Commissioner, the Tax Court applied administrative-law principles from Motor Vehicle Manufacturers Association v. State Farm Mutual Automobile Insurance Co. to invalidate a Treasury regulation in the transfer-pricing context. Gadwood then contrasted the Tax Court’s recent decision in SIH Partners LLLP v. Commissioner, where the Tax Court refused to apply the administrative-law principles from State Farm and upheld a Treasury regulation outside the transfer-pricing context. Thus, SIH Partners could be interpreted to "cabin Altera to the context of transfer pricing regulations," Gadwood said.