Stuart Harden, a Hemming Morse Partner, testified as one of several government witnesses in a tax dispute over the determination of royalty income claimed by The Coca-Cola Company from foreign affiliates. The tax court determined, as indicated in the attached opinion, that the US Internal Revenue Service was correct when it “determined that [Coca Cola’s] methodology did not reflect arm’s-length norms because it overcompensated the supply points and undercompensated [Coca Cola] for the use of its IP.” As a result of the determination, the IRS “reallocated income between [Coca Cola] and the supply points employing a comparable profits method (CPM) that used {Coca Cola’s] unrelated bottlers as comparable parties,” resulting in $3.3 billion in additional US taxes for the three years at issue, which was treatment was upheld by the court. 

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