TREASURY, IRS ANNOUNCE PROPOSED COST-SHARING REGS: The U.S. Treasury Department and the Internal Revenue Service announced proposed regulations that provide further guidance to Section 482, which determines taxable income in connection with cost-sharing arrangements affecting intellectual property.The changes could mean a big difference to the bottom lines of companies in the pharmaceutical and software industries, whose main asset is their intellectual property.

According to a release from the agencies, the section has occasionally been abused since Congress amended the regulations in 1986. At that time, Congress indicated that it did not intend to prevent the use of actual research and development cost-sharing arrangements, but expected the results of those arrangements to be consistent with the matching income standard.

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