Transfer Pricing

In Nov 8,2010, the IRS raised the white flag and surrendered in VERITAS Software Corp. Two days later, the IRS announced that while it had decided not to appeal VERITAS, it nonetheless disagreed with both the Tax Court's factual findings and legal reasoning in VERITAS and would continue to pursue the VERITAS issues in other cases. This article explores the IRS's decision not to appeal VERITAS, the lessons learned from VERITAS, and the implications of the case upon other buy-in disputes. Although the IRS talks tough in the AOD, its decision not to appeal VERITAS speaks louder than its words. As a result of the IRS passing on appeal of this case, VERITAS will continue to stand as a precedential opinion in the Tax Court, a forum of national jurisdiction open to all taxpayers. One also can expect Appeals to take the IRS decision not the appeal VERITAS into account in evaluating the hazards of litigation and settling VERITAS buy-in issues.