Whirlpool Loses $50 Million Tax Fight Over Foreign Income

The IRS correctly increased U.S.-based Whirlpool Financial Corp.'s taxable income by nearly $50 million because the income that Whirlpool’s Swiss subsidiary made selling appliances outside of Switzerland was taxable to the parent company, the U.S. Tax Court ruled.

The case involved an arrangement between Whirlpool and two foreign subsidiaries that qualified as controlled foreign corporations under tax code Section 957(a)—meaning U.S. shareholders owned a majority of the value of the foreign company’s stock or a majority of its voting stock on at least one day in the foreign company’s tax year.

Whirlpool Luxembourg, a Swiss subsidiary, earned the income ...