DOJ Urges Appellate Court to Reevaluate 3M Transfer Pricing Win

The US Department of Justice asked the Eighth Circuit to reconsider its transfer pricing decision rejecting an IRS’s “arm’s length” adjustment to 3M Co.‘s taxes because the decision misinterpreted Section 482 of the tax code and could significantly erode the US tax base.

The dispute centers on the IRS’s 2006 adjustment to 3M’s taxes related to royalties from its Brazilian subsidiary. In October 2025, the US Court of Appeals for the Eighth Circuit panel reversed a US Tax Court decision for the IRS, finding that the government couldn’t reallocate income to 3M because Brazilian law restricted royalty payments.

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