IRS Appeals Altera To Ninth Circuit

The government appealed Altera Corp. v. Commissioner, 145 T.C. No. 3 (2015), to the Ninth Circuit Court of Appeals on Feb. 19. The IRS lost the Altera case on July 27, 2015, in the Tax Court, which held that a 2003 Treasury regulation mandating that controlled entities entering into qualified cost- sharing arrangements (QCSAs) must share stock-based compensation (SBC) costs, was invalid. The Tax Court's decision was unanimous and concluded that the regulation was invalid because the IRS and Treasury failed to satisfy the requirements of the Administrative Procedure Act. Both the Ninth Circuit and the Tax Court had previously invalidated the 1995 version of the same regulation in Xilinx Inc. v. Commissioner, 125 T.C. 37 (2005), aff'd, 598 F.3d 1191 (9th Cir. 2010). The Ninth Circuit held in...