The U.S. Court of Appeals for the Ninth Circuit today announced the withdrawal of a decision filed 24 July 2018 in a case concerning the validity of the U.S. Treasury regulations with respect to employee stock compensation and cost-sharing arrangements “to allow time for the reconstituted panel to confer on this appeal.”
Read today’s order [PDF 45 KB]
The Ninth Circuit on 24 July 2018 reversed a 2015 decision of the U.S. Tax Court that had found the Treasury regulations were invalid. The regulations—Reg. section 1.482-7A(d)(2)—require related entities to share the cost of employee stock compensation in order for their cost-sharing arrangements to be classified as “qualified cost-sharing arrangements” and to avoid an IRS adjustment.
The decision was issued in: Altera Corp. v. Commissioner, Nos. 16-70496, 16-70497 (9th Cir. 24 July 2018).
The Ninth Circuit found that the regulations “withstand scrutiny under general administrative law principles” and thus reversed the Tax Court. Read TaxNewsFlash
Judge Reinhardt fully participated in the July 2018 decision and formally concurred in the majority opinion prior to his death. Today’s order replaces him with Judge Graber.
© 2020 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.KPMG International Cooperative (“KPMG International”) is a Swiss entity.
Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.