Steve Dixon Comments on CUT Method in Law360

"Tax Court Hewed Too Closely To CUT In Medtronic, Atty Says"

Law360

07.18.2019

Steve Dixon commented on the Eighth Circuit's decision to vacate a U.S. Tax Court's ruling in a Medtronic transfer pricing case last year in which the Eighth Circuit interpreted the requirements of the comparable uncontrolled transaction (CUT) method. In response to a suggestion that too many adjustments to a CUT impermissibly weakens its reliability, Dixon said that a transactional method with adjustments is preferable to methods that are not anchored in real transactions. "Transactional evidence is the sine qua non of the arm's-length standard. If you have some transactional evidence and it requires some manipulation in order to enhance comparability, then that still might be closer to the right arm's-length answer than another method detached entirely from transactional evidence," Dixon said.