Did DHL Win or Lose?
Attempting to put the best spin on the case, DHL announced through a spokesperson that DHL “is pleased that approximately four-fifths of the adjustments proposed in IRS’s statutory notice have been rejected,” but added that it was disappointed with “certain aspects” of the court’s ruling and “is considering all of its options with respect to those portions” of the opinion. See Moses, Practitioners Say DHL Case First Where 40 Percent Penalty Upheld Author, 03 DTR G-1 (1/6/99). Of course, the company externally will want to put the best spin on the matter, and internally the Tax Director (or other person shaping the course of the audit and litigation) will want to put the best spin on the matter. But, is this a fair spin? What the report suggests is that the taxpayer may have lost the court battle, but won the war. Sophisticated taxpayers will recognize that a “victory” of the proportions suggested by DHL s pronouncement may not be a victory at all. IRS transfer pricing determinations ar
