The IRS today publicly released a redacted field advice memorandum* addressing the treatment of a taxpayer’s transfer of rights in a loss corporation intangible property to a foreign subsidiary under sections 382 and 482. 20151701F (dated February 20, 2015)
The field advice memo [PDF 142 KB] notes that:
The conclusions provided in today’s IRS field advice memo disagree with the taxpayer’s contentions. The memo disagrees that any license of property should be treated as a sale under section 382; and finds that considering only the written terms of the contract and the cost sharing arrangement, the transaction was an economic disposition of the IP rights.
The IRS memo further states that an adjustment under section 482 may be appropriate with respect to the loss corporation’s IP transferred, depending on the facts and circumstances.
The IRS also today publicly released an earlier field advice memo in this matter. Read 20151702F[PDF 166 KB] (dated November 3, 2014). The second memo (20151701F) summarized briefly above, includes a statement that the November 2014 memo is to be ignored and replaced with 20151701F (dated February 20, 2015) because “the first version did not receive appropriate review.”
*Field advice memo documents are prepared by IRS field attorneys in the Office of Chief Counsel, are reviewed by an Associate Office, and are subsequently issued to IRS field or service center employees. The memo cannot be used or cited as precedent.
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