Goodwill, Business Valuation, And the Next Round of Transfer Pricing Litigation

 The author says the U.S. Court of Federal Claims' treatment of goodwill inDeseret Management Corp. v. U.S., a domestic case between unrelated parties, highlights the challenges of isolating goodwill, a residual amount, from a group of other business assets. He also suggests that in cost sharing cases under pre-2007 regulations, foreign goodwill and going concern value may offer a way to close the “valuation gap” between the IRS and the taxpayer.

 John Breen is counsel with Skadden, Arps, Slate, Meagher & Flom LLP in Washington, D.C.