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 2026

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 levies extended beyond the president’s ‘legitimate reach’, the Supreme Court ruled
While Brazil’s consumption tax overhaul led to a short-term spike in tax advisory demand, we are now in a period of ‘normalisation’ marked by decreased recruitment
The expanded firm will comprise roughly 8,500 employees, including 550 partners; in other news, Paul Hastings and Macfarlanes made senior tax hires
Meanwhile, one expert highlights the importance of separating Venezuela’s tax authority from direct political control after ‘lost decades and isolation’
With PMK 108, Indonesia has upgraded its tax transparency regime for the digital era, focusing on data quality, governance, and cross border exchange rather than expanding regulatory reach
In a popular LinkedIn post, Jeremie Beitel encouraged firms to invest in junior talent even if it doesn’t lead to their loyalty, though recruiters offered ITR a mixed assessment
Advisers who do not register for the new regime in time could be prevented from interacting with HMRC, the tax authority said
Valid pillar two objectives are still intact after the side-by-side agreement, but whether the framework is now settled is ‘a $64,000 question’, Morrison Foerster’s tax chair told ITR
Ian Halligan previously led Baker Tilly’s international tax services in the US
Exclusive ITR data emphasises that DEI does not affect in-house buying decisions – and it’s nothing to do with the US president
Gift this article