Prof. Kristin Hickman Quoted by Bloomberg Law About Transfer Pricing Ruling

Professor Kristin Hickman, associate dean for research & intellectual life, was quoted by Bloomberg Law about the recent U.S. Court of Appeals for the Eighth Circuit’s decision in 3M Co. v. Commissioner that marks a turning point in transfer pricing disputes. The case centered on whether the IRS could invoke its regulatory authority to disregard foreign legal restrictions. The decision is seen as a significant shift, with courts now forcing a re-examination of Section 482, which grants the IRS broad power to re-allocate corporate income, and potentially leading to a circuit split depending on how other courts rule in similar cases. Prof. Hickman said the courts have new latitude to look at the “open-ended terms” that grant discretion to the IRS, and instances of those are all over the tax code. It may have been different “if Congress had included specific language in Section 482 referencing the authority of the IRS to adopt rules and regulation,” she said. “But they didn’t, and 482 has been around a long time, so we don’t have a different case.”