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IRS’s Renewed Focus on Cost-Sharing May Prompt New Tax Disputes

Aug. 6, 2019, 10:27 PM

Multinationals face the possibility of tax disputes if they delay sharing stock compensation costs with their offshore units now that the IRS will resume examining such cost-sharing arrangements.

The IRS Large Business and International division withdrew a 2018 directive that told examiners to stop reviewing these cost-sharing structures until a high-profile tax case involving Intel-owned Altera Corp. is fully resolved.

The IRS’s latest move could prompt more audits and big tax hits for companies caught in such arrangements, tax practitioners said.

The withdrawal, posted on the Internal Revenue Service website Aug. 5, follows the U.S. Court of Appeals for ...