Canceled APA Was Abuse of Discretion: Tax Court's Eaton Decision

Canceled APA Was Abuse of Discretion: Tax Court's Eaton Decision

Information not disclosed by Eaton Corp. during advance pricing agreement negotiations and errors in implementing the agreed-upon transfer pricing method did not justify the IRS's cancellation of the APA, according to the U.S. Tax Court.
 
The court's July 26 decision in Eaton Corp. v. Commissioner, T.C. Memo. 2017-147, which reverses its 2013 decision (Doc 2013-15562) granting the IRS summary judgment on the appropriate standard for APA cancellation, deals yet another blow to the IRS's litigation efforts in section 482 cases.