Monolithic Power settles with U.S. Internal Revenue Service
Clients Monolithic Power Systems, Inc.
Jones Day represented Monolithic Power Systems, Inc. in negotiating a settlement with the IRS Appeals Office of a dispute arising from the government's audit of the client's cost-sharing arrangement with its foreign subsidiary. The IRS challenged the amount of the "buy-in" the subsidiary paid for access to existing IP, thereby increasing income reported on tax returns for 2005 through 2008.
In the settlement, MPS agreed to an upward adjustment in its taxable income for the years in question that was approximately 10 percent of the amount proposed by the IRS in its initial Notice of Proposed Adjustment. In connection with the settlement, the IRS agreed that it would cease to challenge the amount of the buy-in, and the company would be able to repatriate back to the U.S. overseas cash held by the company's foreign subsidiaries without payment of further taxes.