Altera charged $27 million by US IRS for employee cost transfer pricing

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Altera charged $27 million by US IRS for employee cost transfer pricing

The IRS is demanding $27 million from tech company Altera because it says the company wrongly booked employee stock-based compensation in the US where it is tax deductible.

altera150.jpg

Wrapped-up in the dispute is the company’s use of its Cayman Islands unit, where the IRS argues the company should have split its employee costs between 2004 and 2007, rather than booking them all in the US and claiming the full tax deduction.

Altera is challenging the IRS rules penned in 2003 that say stock-based compensation should be shared between a US parent company and a subsidiary because the rulings are impossible for companies to follow. The company is seeking for the court to rule the 2003 rules invalid.

more across site & shared bottom lb ros

More from across our site

The climbdowns pave the way for a side-by-side deal to be concluded this week, as per the US Treasury secretary’s expectation; in other news, Taft added a 10-partner tax team
A vote to be held in 2026 could create Hogan Lovells Cadwalader, a $3.6bn giant with 3,100 lawyers across the Americas, EMEA and Asia Pacific
Foreign companies operating in Libya face source-based taxation even without a local presence. Multinationals must understand compliance obligations, withholding risks, and treaty relief to avoid costly surprises
Hotel La Tour had argued that VAT should be recoverable as a result of proceeds being used for a taxable business activity
Tax professionals are still going to be needed, but AI will make it easier than starting from zero, EY’s global tax disputes leader Luis Coronado tells ITR
AI and assisting clients with navigating global tax reform contributed to the uptick in turnover, the firm said
In a post on X, Scott Bessent urged dissenting countries to the US/OECD side-by-side arrangement to ‘join the consensus’ to get a deal over the line
A new transatlantic firm under the name of Winston Taylor is expected to go live in May 2026 with more than 1,400 lawyers and 20 offices
As ITR’s exclusive data uncovers in-house dissatisfaction with case management, advisers cite Italy’s arcane tax rules
The new guidance is not meant to reflect a substantial change to UK law, but the requirement that tax advice is ‘likely to be correct’ imposes unrealistic expectations
Gift this article