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

Pillar two has been clients’ ‘biggest headache’ but also a driver of growth for MHA, which believes it has the edge over its big four rivals
Public country-by-country reporting is exposing multinational tax data to investors, journalists and competitors, creating fresh risks for businesses
Pillar two compliance is creating unprecedented data demands for multinational tax departments, making closer collaboration with FP&A teams essential for accurate reporting and audit readiness
Among the arrivals is Andrew Howell, who leaves scandal-hit PwC Australia after representing PepsiCo in a high-profile TP dispute
ITR's podcast examines whether the big four have overarching cultural issues and assesses the competitive threat of technology-backed transfer pricing firms
The UK advisory firm has seen its global revenues expand by £27.2m following its listing and acquisition of Baker Tilly South-East Europe
Tax-trained John Sams, previously the firm’s CFO and COO, was appointed after a rigorous process, KPMG said
From Mauritius substance rules to Kenyan SEP tax and South African anti-avoidance measures, businesses must navigate growing scrutiny of cross-border IP structures in Africa
ITR spoke to multinationals, advisers and software providers about a June 30 deadline defined by faulty portals, high compliance costs and hard lessons
After years of onerous pillar two prep, businesses will be galled in seeing tax revenues outweighed by compliance costs
Gift this article