Altera Corp. v. Commissioner of Internal Revenue

(United States Ninth Circuit) – Upheld an Internal Revenue Service regulation addressing the tax treatment of employee stock options. In a ruling that has tax implications for multinational companies especially, the Ninth Circuit concluded that the Tax Court erred in striking down a regulation, 26 C.F.R. section 1.482-7A(d)(2), which says that related entities must share the cost of employee stock compensation in order for their cost-sharing arrangements to be classified as qualified cost-sharing arrangements and thus avoid an IRS adjustment. The panel held that the regulation was entitled to Chevron deference.