Opinion
6944-11
05-23-2023
MEDTRONIC, INC. & CONSOLIDATED SUBSIDIARIES, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER
Kathleen Kerrigan Chief Judge
On February 13, 2023, respondent filed a Computation for Entry of Decision. On February 24, 2023, the Court ordered petitioner to file an objection by March 24, 2023, and ordered respondent to file a response by April 21, 2023. The Court also ordered that any reply by petitioner would be due by May 12, 2023. On March 24, 2023, petitioner filed an Objection to Computation for Entry of Decision. On April 21, 2023, respondent filed a Response to petitioner's Objection. On May 12, 2023, petitioner filed a Reply to respondent's Response.
In the Objection petitioner agrees with respondent's computations but requests that the Court's decision include certain language reserving its right to claim future foreign tax credits for tax years 2005 and 2006. Pursuant to the Court's decision in Medtronic, Inc. v. Commissioner, T.C. Memo. 2022-84, Medtronic PR is required to pay additional royalties to Medtronic U.S. for 2005 and 2006. These additional royalties will give rise to additional foreign tax credits.
Respondent argues that including the proposed language in the decision amounts to an impermissible advisory opinion. Respondent also argues that petitioner's request exceeds the bounds of Rule 155. We disagree.
All Rule references are to the Tax Court Rules of Practice and Procedure.
Petitioner's proposed language provides that the computed deficiency does not consider future foreign tax credits from the 2005 and 2006 tax years which depend on transfer pricing adjustments related to the final outcome of this litigation and that petitioner will not be precluded from seeking refunds or credits based on those foreign tax credits. Because the proposed language does not determine that petitioner is actually entitled to the foreign tax credits, its inclusion will not render the Court's decision an impermissible advisory opinion. See United States v. Richardson, 418 U.S. 166, 171 (1974). Neither does petitioner's request violate Rule 155(c), which confines argument to "consideration of the correct computation of the amount to be included in the decision." Petitioner does not seek to argue new issues, only to address the effect of certain future foreign tax credits which could impact the amount to be included in the decision.
Upon due consideration, it is
ORDERED that the parties file a stipulated decision on or before June 13, 2023, which reflects the Court's conclusions in this Order.