US Sixth Circuit rules in favor of Eaton in appeal from Tax Court regarding APA cancellation

On 25 August 2022, the Sixth Circuit issued its decision in Eaton Corp. v. Commissioner, ruling in favor of Eaton Corporation.

The Sixth Circuit held that the Internal Revenue Service (IRS) had the burden of proving that it had grounds to cancel the Advance Pricing Agreements (APAs) under contract-law principles and failed to do so.

The Sixth Circuit ruled that the IRS forfeited its penalties claim by basing its post-trial claim on a new assessment.