171866P.pdf   08/16/2018  Medtronic, Inc. & Consolidated  v.  CIR
   U.S. Court of Appeals Case No:  17-1866
   The United States Tax Court   
   [PUBLISHED] [Wollman, Author, with Shepherd and Erickson, Circuit Judges] 
   Tax Appeal. Following a determination that Medtronic erred in allocating 
   the profit earned from its devises and leads between its businesses 
   located in the United States and its device manufacturer in Puerto Rico, 
   the IRS used the comparable profits method, rather than the comparable 
   uncontrolled transaction (CUT) transfer pricing method to determine than 
   arm's length price for Medtronic's intercompany licensing agreements to 
   determine income tax deficiencies for 2005 and 2006. Medtronic appealed to 
   the Tax Court. The Tax Court applied its own valuation analysis and 
   concluded the Pacesetter agreement as the best CUT to calculate the arm's 
   length result for intangible property. The Commissioner appeals. The Tax 
   Court's factual findings are insufficient to enable this court to conduct 
   an evaluation of Tax Court's determination; specifically, it failed to 
   address whether the circumstances of the Pacesetter settlement was 
   comparable to the licensing agreements in this case, the degree of 
   comparability of the contractual terms between the two situations, how the 
   different treatment of intangibles affected the two agreements and the 
   amount of risk and product liability expenses that should be allocated. 
   Thus, the case is remanded for further consideration. Judge Shepherd 
   concurs.