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By PBN Staff
PROVIDENCE – The U.S. Supreme Court on Monday declined to hear Textron Inc.’s appeal of a closely watched tax case, upholding a lower court decision ordering the company to comply with an Internal Revenue Service request for tax-shelter documents.
Last August, the 1st U.S. Circuit Court of Appeals in Boston reversed an earlier decision by a three-judge panel that said Textron did not need to give the IRS the documents, known as tax accrual work papers, as part of the agency’s investigation into Textron’s use of nine tax shelters. The IRS had first requested the documents in 2001.
The case was followed closely by corporate tax officials, lawyers and auditors, who said it would have major implications for the way companies discuss tax matters internally.
“It’s a landmark decision that will cause tax directors of public companies to toss and turn in their sleep and will encourage the IRS to be more aggressive in seeking tax accrual work papers,” Larry Hill, an attorney with Dewey & LeBoeuf, told The Wall Street Journal on Monday.
Solicitor General Elena Kagan, whom President Obama has nominated to become a Supreme Court justice, filed a brief supporting the IRS’ position in the case, according to Accounting Today.