IRS Objects to GlaxoSmithKline Request for APAs
GlaxoSmithKline Holdings (Americas), Inc. et al. v. Commissioner
- Case NameGLAXOSMITHKLINE HOLDINGS (AMERICAS), INC. & SUBSIDIARIES, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent.
- CourtUnited States Tax Court
- DocketNos. 5750-04, 6959-05
- AuthorsKletnick, Theodore J.Kline, Alan S.Rubin, Curt M.
- Institutional AuthorsInternal Revenue Service
- Cross-ReferenceFor a prior Tax Court order in GlaxoSmithKline Holdings
- Code Sections
- Subject Area/Tax Topics
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 2006-4994
- Tax Analysts Electronic Citation2006 TNT 51-22
GlaxoSmithKline Holdings (Americas), Inc. et al. v. Commissioner
UNITED STATES TAX COURT
Judge Cohen
RESPONDENT'S NOTICE OF OBJECTION TO PETITIONER'S
MOTION TO COMPEL DISCOVERY AND TO REVIEW RESPONSES TO REQUESTS
FOR ADMISSIONS REGARDING ADVANCE PRICING AGREEMENTS
THE RESPONDENT OBJECTS to the granting of Petitioner's Motion to Compel Discovery and to Review Responses to Requests for Admissions Regarding Advance Pricing Agreements.
IN SUPPORT THEREOF, Respondent respectfully shows unto the Court:
1. On January 24, 2006, Petitioner submitted to the Court a document entitled "Petitioner's Motion to Compel Discovery regarding Advance Pricing Agreements."
2. The Court on February 3, 2006 issued an Order stating "Petitioner's motion erroneously combined what should be three separate motions, one of which deals with requests for admissions and not discovery . . ." Despite the procedural defect, the Court filed the motion retitled as "Petitioners Motion to Compel Discovery and to Review Responses to Requests for Admissions Regarding Advance Pricing Agreements" (Pet'r. Motion to Compel). (Court Order, February 3, 2006).
3. Petitioner's motion seeks to compel Respondent to fully respond to Petitioner's First Request for Production of Documents (Pet'r. Motion to Compel, Ex. 28), Petitioner's First and Second Sets of Interrogatories (Pet'r. Motion to Compel, Exs. 13 and 21), and to answer fully Petitioner's First Request for Admissions (Pet'r. Motion to Compel, Ex. 27).
4. The Court issued an Order on February 3, 2006, inter alia, setting Petitioner's motion for hearing on March 22, 2006 in New York, New York.
5. The Court's Order further directed that, on or before March 1, 2006, Respondent file a written response to Petitioner's Motion to Compel Discovery and to Review Responses to Requests for Admissions Regarding Advance Pricing Agreements.
6. The Court's Order further directed that, on or before March 1, 2006, Respondent show cause why an appropriate sanction for Respondent's refusal to provide the information sought by Petitioner's Motion to Compel Discovery and to Review Responses to Requests for Admissions Regarding Advance Pricing Agreements should not be a deemed admission, for purposes of these case, of the matters set forth in Petitioner's first set of request for admissions.
7. As is addressed more completely in the accompanying Memorandum of Law in Support of this Notice of Objection, Respondent objects to Petitioner's Discovery on various grounds:
a. Petitioner's discovery requests would cause Respondent to violate I.R.C. § 6103, which protects APAs and related information sought by Petitioner.
b. Congress' intent to protect bilateral APAs and related background files sought by Petitioner is shown by Congress' enactment of section 6105. Bilateral APA agreements incorporate competent authority agreements and related background files contain such agreements and correspondence with foreign governments, which are protected tax convention information.
c. APAs sought in Petitioner's discovery requests are not written determinations under section 6110, and, therefore, are not subject to disclosure under that provision.
8. Congress' intent to protect APAs and related background files from disclosure is shown by the careful drafting of The Ticket To Work And Work Incentives Improvement Act of 1999, § 521(b) of Pub. L. 106-170 (1999), which provides the public with information concerning the APA program in the form of an Annual Report while protecting APAs and related background information from disclosure.
9. The deliberative process privilege prevents Respondent from responding to Petitioner's discovery where such responses would disclose information that is predecisional and deliberative and which would significantly impede or nullify governmental agency action in carrying out a government responsibility or function if disclosed.
10. Almost all of Petitioner's discovery requests are not reasonably calculated to lead to the discovery of admissible evidence and, therefore, not relevant.
11. Granting Petitioner's Motion to Compel Discovery, allowing for the disclosure of third party APAs and APA background files, would have a severe and harmful impact on the administration of taxes. Affected taxpayers would have their confidential financial information and potentially, their trade secrets and identities revealed to competitors. Section 482 would no longer be resolved on case specific facts and, instead, would be based on the resolution of other cases.
12. Respondent is concurrently filing with this document a detailed Memorandum of Law in support of this notice of objection.
WHEREFORE, it is prayed that Petitioner's Motion to Compel Discovery Regarding Advance Pricing Agreements and to Review Responses to Requests for Admissions Regarding Advance Pricing Agreements be denied.
Chief Counsel
Internal Revenue Service
International Special Trial
Attorney (SL) (Manhattan)
(Large & Mid-Size Business)
T.C. Bar No. KT0038
33 Maiden Lane
12th Floor
New York, NY 10038
Tel. No. 917-421-4631
Alan S. Kline
Special Trial Attorney (SL)
(Large & Mid-Size Business)
T.C. Bar No. Ka0329
33 Maiden Lane
12th Floor
New York, NY 10038
Tel. No. 917-421-4627
Curt M. Rubin
Special Trial Attorney (SL)
(Large & Mid-Size Business)
T.C. Bar No. RC0327
33 Maiden Lane
12th Floor
New York, NY 10038
Tel. No. 917-421-4655
This is to certify that a copy of the foregoing RESPONDENT'S NOTICE OF OBJECTION TO PETITIONER'S MOTION TO COMPEL DISCOVERY AND TO REVIEW RESPONSES TO REQUESTS FOR ADMISSIONS REGARDING ADVANCE PRICING AGREEMENTS was served on Counsel for the Petitioner by delivering the same by UPS on March 1, 2006 addressed as follows:
John B. Magee, Esq.
McKee Nelson LLP
1919 M Street, N.W.
Suite 800
Washington, D.C. 20036
Special Trial Attorney (SL)
(Large & Mid-Size Business)
T.C. Bar No. RC0327
33 Maiden Lane
12th Floor
New York, NY 10038
Tel. No. 917-421-4655
- Case NameGLAXOSMITHKLINE HOLDINGS (AMERICAS), INC. & SUBSIDIARIES, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent.
- CourtUnited States Tax Court
- DocketNos. 5750-04, 6959-05
- AuthorsKletnick, Theodore J.Kline, Alan S.Rubin, Curt M.
- Institutional AuthorsInternal Revenue Service
- Cross-ReferenceFor a prior Tax Court order in GlaxoSmithKline Holdings
- Code Sections
- Subject Area/Tax Topics
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 2006-4994
- Tax Analysts Electronic Citation2006 TNT 51-22