Peter A. Barnes spoke with Tax Notes Today on how the U.S. and other countries could use eminent domain to acquire intellectual property from multinational companies as a way to minimize tax avoidance. For the complete article, please visit Tax Notes Today's website (subscription required).
Excerpt taken from the article "Governments Urged to Use Transfer Pricing Values to Acquire IP" by William Hoke for Tax Notes Today
Peter Barnes of Caplin & Drysdale took issue with Blair-Stanek's proposal because he said it assumes that IP rights are singular and easily identified. "In fact, most IP rights are bundled, even in the pharmaceutical world," Barnes said. "In most cases, some IP is transferred at some point in time, and then additional research builds on that initial IP. The original valuation -- which is often approved by the IRS in an advance pricing agreement -- does not value the later-in-time developments." Barnes said "it is unrealistic to assume there are tax valuations for specific IP that can be used when property is taken by eminent domain."