Reuters Quotes Tax Partner Elan Keller on Tyco's Challenge of $1 Billion IRS Tax Bill

Aug 12, 2013, 11:12 ET from Caplin & Drysdale

NEW YORK, Aug. 12, 2013 /PRNewswire/ -- Swiss-based Tyco International is challenging a $1 billion tax bill assessed by the IRS based on the Service's view that cash transfers carried out within affiliates of the multinational company were not debt giving rise to deductible interest payments, but instead should have been treated as equity, giving rise to non-deductible dividends, according to U.S. Tax Court documents.  In a Reuters' interview, Caplin & Drysdale's Elan P. Keller remarked, "I have seen the IRS go after these structures very aggressively ... The IRS believes this is really low-hanging fruit. Multinational corporations often structure intercompany capital transfers as debt so they can deduct the interest. The tax community will be watching this case closely as the results could have far-reaching affects on cross-border corporate tax planning and capital structures."   

About Elan P. Keller
Elan P. Keller is a partner in Caplin & Drysdale's Corporate, Business & Transactional Tax, International Tax, Tax Controversies practice groups in the firm's New York office.  Clients seek his advice on matters involving tax due diligence and structuring cross-border and domestic M&A transactions; the U.S. aspects of inbound and outbound operations; transfer pricing; corporate restructurings, reorganizations and distributions; capital markets and structured finance transactions; infrastructure and leasing transactions; and oil, gas, energy, and natural resource transactions.  Mr. Keller can be reached at 212.379.6030 or

About Caplin & Drysdale
For more than 45 years, Caplin & Drysdale has been a leading provider of a full range of tax, tax controversy, and related legal services to companies, organizations, and individuals throughout the United States and around the world. With offices in New York City and Washington, DC, the firm also provides counseling on matters relating to bankruptcy, creditors' rights, exempt organizations, employee benefits, private client services, corporate law, white collar defense, complex litigation, and political activity.  For more information, please visit us at

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