Eaton Must Supply IRS With Foreign Worker Records for Tax Audit

The IRS may collect the performance evaluations of Eaton Corp.'s foreign employees because the agency demonstrated their value to a transfer pricing audit involving royalty payments to an Irish affiliate, an Ohio federal court said.

Eaton tried to escape the IRS’s demands for its Irish employees’ records in June, arguing that the US District Court for the Northern District of Ohio should alter its judgment because it overlooked European Union data protection rules. The court declined Eaton’s request, sticking by its analysis that the EU rules weren’t fatal to the summons.

The IRS is investigating whether Eaton improperly lowered its ...