Contract analysis
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Contract analysis / appeals-conference-presentation.pptx
appeals-conference-presentation.pptx
High · 4
Medium · 0
Standard · 0
1. Case Overview and Procedural History
1. Case Overview and Procedural History
2. Penterra Corporate Structure and IP Architecture
2. Penterra Corporate Structure and IP Architecture
3. IRS Proposed Adjustments — $380.4M Summary
3. IRS Proposed Adjustments — $380.4M Summary
4. PPC's Transfer Pricing Positions — CSA Cost-Sharing Ratios
4. PPC's Transfer Pricing Positions — CSA Cost-Sharing Ratios
5. PPC's Transfer Pricing Positions — Legacy IP Royalty Rate
5. PPC's Transfer Pricing Positions — Legacy IP Royalty Rate
7. PBI Economic Substance and DEMPE Functions
7. PBI Economic Substance and DEMPE Functions
8. Penalty Protection and Contemporaneous Documentation
High
⚑ Penalty / liquidated damages
8. Penalty Protection and Contemporaneous Documentation
9. Hazards of Litigation — Both Sides
9. Hazards of Litigation — Both Sides
10. Proposed Resolution Framework
High
⚑ Penalty / liquidated damages
10. Proposed Resolution Framework [slide 3] Case Overview and Procedural History Examination opened May 16, 2022 (Letter 2205-A) — TY 2017–2020 47 Information Document Requests issued June 2022 – September 2023 PPC cooperated fully; produced comprehensive documentation for all IDRs Notice of Proposed Adjustment (NOPA) issued October 12, 2023 — all four years 30-Day Letter issued November 8, 2023 Formal Protest filed
1. CSA cost-sharing ratios (38.2%–42.7%) reflect arm's-length RAB shares — supported by CP
1. CSA cost-sharing ratios (38.2%–42.7%) reflect arm's-length RAB shares — supported by CPM/TNMM benchmarking against 22 comparables
2. Legacy IP royalty rate of 4.5% is at the median (4.4%) of 14 reliable CUT comparables (
2. Legacy IP royalty rate of 4.5% is at the median (4.4%) of 14 reliable CUT comparables (IQR: 3.1%–6.8%)
3. PCT payment of $312M is within the arm's-length range ($278M–$361M) using an appropriat
3. PCT payment of $312M is within the arm's-length range ($278M–$361M) using an appropriate 9.8% WACC
4. PBI has robust economic substance: 185 employees, 42 board meetings, €47.2M regulatory
4. PBI has robust economic substance: 185 employees, 42 board meetings, €47.2M regulatory spend, 68 markets, independent banking
5. Contemporaneous documentation satisfies penalty protection under IRC § 6662(e)(3)(B)
High
⚑ Penalty / liquidated damages
5. Contemporaneous documentation satisfies penalty protection under IRC § 6662(e)(3)(B)
6. IRS's proposed adjustments ($380.4M) and penalty ($15.98M) are not warranted
High
⚑ Penalty / liquidated damages
6. IRS's proposed adjustments ($380.4M) and penalty ($15.98M) are not warranted
7. A resolution at 10–15% of the proposed adjustment reflects a fair assessment of hazards
7. A resolution at 10–15% of the proposed adjustment reflects a fair assessment of hazards for both parties [slide 22] Appendix — Team and Contact Information Calderwood & Harkness LLP — Outside Tax Counsel Leonard Cross, Responsible Partner — 1735 Market Street, Suite 3100, Philadelphia, PA 19103 Sylvia Hartwell, Billing Partner — 600 Lexington Avenue, New York, NY 10022 Garrett Simmons, Lead Associate | Leila Nazar