Transfer Pricing and Valuation of a Technology Intangible

Guidant and Boston Scientific – which acquired Guidant in 2006 – were involved in a valuation dispute with the IRS concerning a technology intangible that Boston Scientific acquired from Guidant and immediately sold to Abbott Laboratories. The taxpayers were also involved in a transfer pricing dispute with the IRS regarding certain intercompany transactions among their US, Puerto Rico, and Ireland subsidiaries between 2001 and 2007.

A Brattle Principal was retained by the taxpayers’ counsel to value the technology intangible and to respond to the IRS transfer pricing expert’s best-method analysis. Drawing on extensive internal records on product development and manufacturing, contemporaneous industry reports, M&A transactions involving relevant technologies, and FDA approvals, Brattle conducted an in-depth supply-chain analysis of the taxpayers’ core products and identified key value drivers to respond to the IRS’s transfer pricing analysis.

The case settled before trial in 2016.