US vs Seagate Technology, December 2000, United States Tax Court

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The IRS ruled that Seagate should have included the cost of employee stock options in the net revenue calculation associated with its cost-sharing agreement with its foreign subsidiaries. Seagate appealed the ruling on the grounds that the IRS was not aware of actual arm’s length circumstances relating to the employee stock option compensation. In this case, the United States Tax Court found in favor of the IRS.

 

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