McKesson’s Transfer Pricing Suit Seeks to Bring Back Tax Breaks

McKesson Corp.'s case against the IRS and its cost-sharing regulations is the latest salvo against the agency’s rulemaking power—and one that could have financial implications for companies around the country.

The pharmaceutical company sued the agency over a $9.6 million tax bill that it says it shouldn’t have to pay. The company argued that the rules requiring inclusion of stock-based compensation in cost-sharing agreements among its subsidiaries are invalid because they violate transfer pricing rules and the Administrative Procedure Act.

Companies in the past incurred millions in tax expenses after the IRS beat a similar ...