Three of the Big Four accounting firms, as well as two major trade organizations, filed amici curiae briefs with the 11th U.S. Circuit Court of Appeals in support of Coca-Cola in the company’s transfer pricing dispute with the IRS.
Background.
The IRS audited Coca-Cola’s federal returns for tax years 2007, 2008, and 2009. At the close of the examination, the IRS made Code Sec. 482 transfer pricing adjustments to Coca-Cola’s aggregate taxable income based on royalty income from foreign manufacturing affiliates referred to as “supply points.” Coca-Cola licensed its intellectual property these supply points, which then sold concentrate for its beverages to “bottlers” that completed the production process.
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