WSJ : Alphabet Inc Could Be Big Winner In Intel Tax Dispute

(RTTNews) - Alphabet Inc. (GOOGL, GOOG), Google's parent company, could gain at least $3.5 billion in new tax benefits if Intel Corp. (INTC) succeeds in its international tax dispute with the Internal Revenue Service, an amount that exceeds Google's entire 2015 tax cost, the Wall Street Journal reported.

The report noted that the case, which the IRS appealed to the Ninth U.S. Circuit Court of Appeals last week, is being closely watched in the tech industry and elsewhere. At least 20 companies, including Microsoft Corp. and eBay Inc., have disclosed they're monitoring the outcome of the case involving share-based compensation. However, the case's uncertainty has kept them from quantifying the potential benefits.

The Intel dispute has been brewing since 2003, part of a decadeslong tug of war between the IRS and companies over what are known as cost-sharing arrangements between U.S. corporations and their low-taxed foreign subsidiaries.

The biggest disclosed possible effect of the Intel court case is at Alphabet. In its annual report, the company recorded a potential $3.5 billion benefit, citing a lower court's ruling. That was offset by a $3.5 billion deferred tax liability, meaning it didn't result in a major one-time boost to the company's earnings.