Varian’s Benefit From Prior Dividend Ruling Limited, IRS Argues

Varian Medical Systems can’t claim significant tax benefits from controlled foreign corporations despite a loophole in the tax code that allows both a tax credit and a deduction based on the same revenues, the IRS told the US Tax Court.

The Palo Alto, Calif.-based company “mischaracterizes (and then fails to address on the merits)” several of the agency’s arguments, and wrongly claims the IRS is trying to adopt new arguments after the Tax Court partially ruled in the company’s favor, the agency said. Instead, the tax code limits the refund Varian is entitled to under that decision, the IRS said. ...