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Press Release

Eighth Circuit Casts Doubt on Medtronic’s Transfer Pricing Method

For Immediate Release
Office of Public Affairs

The Court of Appeals for the Eighth Circuit issued an opinion yesterday reversing a Tax Court decision that had rejected the Commissioner’s valuation method in a closely watched transfer-pricing case, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman and Deputy Assistant Attorney General Travis A. Greaves of the Justice Department’s Tax Division. 

In Medtronic, Inc. & Consolidated Subsidiaries v. Commissioner, No. 17-1866, the Eighth Circuit held that the Tax Court had rejected the Commissioner’s transfer-pricing method, and adopted that of the taxpayer, without first engaging in the analysis required under Treasury’s transfer-pricing regulations.  Because the Tax Court failed to make the necessary factual findings under those regulations, the Eighth Circuit was unable to determine whether the court “applied the best transfer pricing method for calculating an arm’s length result or whether it made proper adjustments under its chosen method.”  Accordingly, it vacated the Tax Court’s order and remanded the case for further consideration by the Tax Court. 

Principal Deputy Assistant Attorney General Zuckerman thanked Tax Division attorneys Richard Farber and Judith Hagley, who handled the case on appeal for the government.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

Updated February 5, 2025

Attachment
Opinion [PDF, ]
Topic
Tax
Component
Press Release Number: 18-1066