Intercompany Receivables

The parties recently completed briefing on an IRS motion for partial summary judgment in Western Digital Corporation v. Commissioner. The motion asks the US Tax Court to hold that a safe harbor in the Section 482 regulations is not relevant to whether intercompany receivable terms are “ordinary and necessary” under a provision in Subpart F. In our view, the motion is an unusual attempt to bar the taxpayer from making a well-founded legal argument in a case that is over a year away from trial.
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