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Repair common Windows errors and clear accumulated junk for a smoother, more stable PC - no reinstall needed.Free scan · no reinstallNeither case settles whether the IRS can reach back and reprice intercompany transactions after they close. What the two disputes show is how that question is actually litigated. In Meta’s case, the U.S. Tax Court valued intellectual property transferred to an Irish subsidiary, and the tax figure still has to be computed. In Perrigo’s case, a federal district court largely ruled for the company on its omeprazole and ANDA issues, and that judgment is now on appeal. Both cases turn on three things: how a price was set when the transaction happened, how much weight later results can carry, and whether a given number is a court’s finding, a company’s reported figure, or a government assertion.
The question behind the headline
Bloomberg Law’s October 9, 2026 article on these cases opens by asking: “Can the IRS reach back and change the value of intracompany transactions years after they’re done?” It describes the relevant mechanism as “periodic adjustments.” This article uses that framing only; the analysis rests on the court opinions and company filings described below. Answering the question requires three rules that operate together.
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- The arm’s-length standard. Section 482 of the Internal Revenue Code allows the IRS to reallocate income and deductions among commonly controlled companies so that they reflect terms unrelated parties would have agreed to. The starting point is the price set when the transaction was made.
- The commensurate-with-income standard. Congress added this requirement to section 482 in 1986 for transfers of intangible property. It requires the payment for an intangible to be commensurate with the income the intangible generates.
- Periodic adjustments. The section 482 regulations let the IRS adjust the price of an intangible transfer in later years, in defined circumstances, so that the payment tracks actual income. The rule carries conditions and exceptions that depend on the transaction and on how the original price was set.
The Perrigo opinion describes these ideas as operating together, not as a stand-alone power to rewrite old prices.
Meta: a valuation first, a tax figure still to come
The 2010 Tax Court case
On May 22, 2025, the Tax Court issued its opinion in Facebook, Inc. & Subsidiaries v. Commissioner, 164 T.C. No. 9. The company now trades as Meta Platforms, Inc., but the case keeps its Facebook caption. It concerns a platform contribution, a transfer of intangibles to a subsidiary, made in connection with a cost-sharing arrangement between the U.S. company and its Irish subsidiary. The opinion analyzes the value of the contributed intangibles and the application of the income method under the cost-sharing regulations, which values a platform contribution by reference to the profits the contributed intangibles are projected to generate.
Meta’s 2025 Form 10-K reports that the court valued the intellectual property transferred to the Irish subsidiary at $7.79 billion, which is $1.48 billion more than the figure Meta had reported. That is a valuation, not a tax bill. According to Meta, the court will review tax computations submitted by both sides and determine the tax due in a later decision, and either party may appeal to the Ninth Circuit after that decision is entered.
The 2017–2019 notice
Meta’s disclosures describe later matters that are separate from the 2010 case. Meta says the largest issue in a notice it received in September 2025 involves the same underlying transaction litigated in the 2010 case. For tax years 2017 through 2019, the IRS asserted $15.89 billion in additional tax, plus interest and penalties. Meta petitioned the Tax Court in December 2025 and says the adjustments are not final and do not reflect specified offsets. The figure is therefore an IRS assertion in a pending case, not an adjudicated liability.
Other Meta years and open periods
Meta’s filing also describes matters for other years. The table uses its descriptions as of the 2025 Form 10-K, filed in 2026.
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| Tax years | Status reported by Meta |
|---|---|
| 2010 (Tax Court case) | Valuation issued May 22, 2025; tax computations and final decision pending |
| 2011–2013 | Notice covering the same transfer-pricing position plus additional transfer-pricing and tax-credit issues; no asserted amount reported |
| 2014–2016 | Unresolved issues before IRS Appeals |
| 2017–2019 | Notice received September 2025; Tax Court petition filed December 2025 |
| 2020 onward (U.S.) | Open to examination |
| 2021 onward (Ireland) | Open to examination by Irish Revenue |
Perrigo: a refund suit over store-brand omeprazole
What Perrigo challenged
Perrigo Co. v. United States, No. 1:17-cv-00737, is a refund action in the U.S. District Court for the Western District of Michigan, not a Tax Court deficiency case. It arises from IRS transfer-pricing adjustments to the U.S. distribution of store-brand over-the-counter products, including omeprazole. The contested arrangements were between related parties and involved contract rights tied to a generic omeprazole product and to an abbreviated new drug application (ANDA), the FDA pathway for approving generic drugs. The opinion also addressed economic-substance arguments and section 482 adjustments alongside the periodic-adjustment question.
What the district court decided
According to Perrigo’s 2025 Form 10-K, filed in 2026, the court’s September 25, 2025 opinion largely sided with the company on the omeprazole and ANDA issues. Perrigo reports that the court entered final, appealable judgment on January 27, 2026.
Two dollar figures attach to the case, and they measure different things. A 2025 Bloomberg Tax analysis describes the district court’s result as producing an approximately $162 million refund. That is a secondary characterization, so confirm the amount against the judgment itself before relying on it. Separately, Perrigo’s filing reports approximately $113.3 million in cumulative deferred charges that the company seeks in its refund litigation. That is what Perrigo is asking for, not an award, and the filing ties the figure to a 5.24% royalty on omeprazole sales, which the company describes as a concession. This article does not reconcile the two figures.
Periodic adjustments and the “still controls” passage
The opinion explains that the Treasury regulations permit certain periodic adjustments for intangible transfers, and that the commensurate-with-income requirement applies alongside the arm’s-length standard. The arm’s-length standard remains controlling. The opinion states: “The latter still controls.” Read in context, “the latter” refers to the arm’s-length standard, which the court treats as controlling alongside the commensurate-with-income requirement. The sentence should be quoted with that antecedent, not as a free-standing holding.
Appeal status
According to Perrigo’s filing, the Department of Justice appealed on March 26, 2026, and Perrigo cross-appealed on April 6, 2026. The filings cited here do not show an appellate decision, so the district court’s ruling is a trial-level result rather than the final word on the omeprazole issues.
Where later results fit, and where the arm’s-length standard stops them
Both cases turn on the same tension. The arm’s-length price is judged from the transaction as the parties could reasonably have seen it when they set it. Later results remain informative, because they can show whether the original projections were sound, and the commensurate-with-income requirement is written to tie an intangible’s price to the income it actually produces. The regulations manage that tension through periodic adjustments, which are limited and conditional rather than a general license to re-price.
Meta’s valuation is a determination of what the contributed intangibles were worth under the income method, a method built on projections made at the time of the contribution. Perrigo’s periodic-adjustment discussion sits beside a holding that the arm’s-length standard controls. Because the court largely decided the omeprazole and ANDA issues for Perrigo, that discussion is best read as a statement of the governing framework, not as a broad endorsement of the IRS’s power to reprice past transfers.
Before treating later results as relevant to a particular transfer, check the following:
- Whether the transfer is of an intangible, the category to which the periodic-adjustment rule applies.
- How the original price was set, including the projections behind it.
- Whether actual results depart from those projections by more than the regulations allow.
- Whether one of the regulatory exceptions applies, which can switch the adjustment off.
- Whether the resulting figure is a proposed adjustment, a court valuation, or a final liability.
How the two cases compare
| Axis | Meta (Facebook, Inc. & Subsidiaries v. Commissioner) | Perrigo (Perrigo Co. v. United States) |
|---|---|---|
| Transaction | Platform contribution tied to a cost-sharing arrangement between the U.S. company and its Irish subsidiary | U.S. distribution of store-brand OTC products, including omeprazole; related-party arrangements and ANDA-related contract rights |
| Forum and remedy | Tax Court deficiency proceedings | District court (W.D. Mich.) refund action |
| Core issues | Value of contributed intangibles; income method under the cost-sharing regulations | Economic substance, section 482 adjustments, periodic adjustments, arm’s-length standard |
| Role of later information | Valuation built on projections made at the contribution; later-year computations and notices follow | Periodic adjustments available in defined circumstances; arm’s-length standard still controls |
| Procedural status | Valuation issued May 22, 2025; computations and decision pending; Ninth Circuit appeal possible after decision | Final judgment entered January 27, 2026 (per Perrigo); DOJ appeal March 26, 2026; cross-appeal April 6, 2026; no appellate decision in the filings cited |
| Dollar figures in play | Court valuation; IRS asserted amounts for later years | Refund figure in secondary commentary; amount sought by Perrigo |
Reading the dollar figures
The figures in these cases belong to different categories, and mixing them produces errors.
- Court valuation. What a court determined an asset was worth. Meta’s Tax Court valuation is one; it does not by itself set the tax due.
- Company-reported value. The figure a taxpayer reported, against which a court or the IRS measures a difference.
- IRS asserted amount. A proposed or noticed adjustment, including interest and penalties, that the taxpayer contests. Meta’s 2017–2019 notice is one.
- Refund figure (secondary). A number reported in commentary about a judgment. Verify it against the judgment.
- Amount sought. What a party asks a court to award, such as Perrigo’s deferred-charge claim.
- Final tax due. The amount fixed by a final determination or settlement. The filings cited here do not establish a final tax figure in either case.
What remains open
The company filings used here date from 2026, so later docket activity is not reflected.
- Meta’s 2010 matter: the tax computations, the court’s decision fixing tax due, and any Ninth Circuit appeal.
- Meta’s 2011–2013 and 2017–2019 matters, the 2014–2016 issues before IRS Appeals, and years still open to examination.
- The DOJ appeal and Perrigo’s cross-appeal, the final refund amount, and the carryforward issues and separate examinations described in Perrigo’s filing.
When citing either case, state the case name, the tax year, the transaction, and whether a given figure is a valuation, an IRS assertion, a claim for relief, or a judgment.
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