Skip to Main Content
 

Bloomberg Quotes Elizbeth Stevens on Fee Reimbursement

August 16, 2021, Bloomberg Law

The U.S. entity of a pharmaceutical company must consider several factors to determine how much it is responsible for tax on a reimbursement payment for a fee, including how much it benefits from paying the fee, the IRS said.

. . .

The IRS said the joint and several liability agreement among the drug company’s entities doesn’t mean the payment is necessarily excluded from the U.S. entity’s income. Companies need to analyze how much the branded prescription drug fee payment benefits each party to determine how the expense of the payment should be shared, said Elizabeth Stevens, a Member at Caplin & Drysdale.

The answer can be on a “spectrum” from fully the foreign manufacturer’s expense, to fully the U.S. distributor’s expense, or anywhere between, Stevens said.

. . . 

And though it’s not meant to serve as guidance, the memo still gives valuable insight into the way the IRS is thinking about big questions like which entity income or expenses belong to, Stevens said.

Questions about the tax treatment of income or expenses in a situation where parties have joint and several liability arise in other contexts, such as in a settlement following litigation, she said.

For the full article, please visit Bloomberg Law’s website (subscription required).

________________________________________________

About Caplin & Drysdale
Celebrating our 55th Anniversary in 2019, Caplin & Drysdale continues to be a leading provider of legal services to corporations, individuals, and nonprofits throughout the United States and around the world. We are also privileged to serve as legal advisors to accounting firms, financial institutions, law firms, and other professional services organizations.

The firm's reputation over the years has earned us the trust and respect of clients, industry peers, and government agencies. Moreover, clients rely on our broad knowledge of the law and our keen insights into their business concerns and personal interests. Our lawyers' strong tactical and problem-solving skills -- combined with substantial experience handling a variety of complex, high stakes, matters in a boutique environment -- make us one the nation's most distinctive law firms.

With offices in New York City and Washington, D.C., Caplin & Drysdale's core practice areas include:
For more information, please visit us at www.caplindrysdale.com.
Washington, DC Office:
One Thomas Circle NW
Suite 1100
Washington, DC 20005
202.862.5000
New York, NY Office:
600 Lexington Avenue
21st Floor
New York, NY 10022
212.379.6000

___________________________

Disclaimer
This communication does not provide legal advice, nor does it create an attorney-client relationship with you or any other reader. If you require legal guidance in any specific situation, you should engage a qualified lawyer for that purpose. Prior results do not guarantee a similar outcome.

Attorney Advertising
It is possible that under the laws, rules, or regulations of certain jurisdictions, this may be construed as an advertisement or solicitation.
©2021 Caplin & Drysdale, Chartered
All Rights Reserved.

Related Professionals

Related Practice Area(s)