US vs. Sundstrand Corp, Feb. 1991, United States Tax Court

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Sunstrand licenced technology to its Singapore-based subsidiary, SunPac.

The United States Tax Court ruled that the amounts paid by Sunstrand to SunPac did not constitute and arm’s-length consideration under Section 482, but also that the IRS overstepped its authority in calculating taxable net income.

The Court also eliminated interest penalties imposed by the IRS.



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