By Kristen Garry, Mark Lanpher, Robert Rudnick, Nathan Tasso and Richard Gagnon ( August 3, 2018, 6:50 PM EDT) -- On July 24, 2018, in Altera Corp. and Subsidiaries v. Commissioner of Internal Revenue, a divided panel of the U.S. Court of Appeals for the Ninth Circuit upheld the validity of a U.S. Treasury Department regulation that requires a U.S. taxpayer to allocate a portion of stock-based compensation costs to a foreign affiliate that is a participant in a cost-sharing arrangement for the development of intangible assets.[1] In the decision, the court reversed the U.S. Tax Court's prior unanimous decision in favor of Altera, which had held that the Treasury Department failed to engage in "reasoned decisionmaking" in promulgating the regulation, contrary to the requirements set forth by the U.S. Supreme Court in Motor Vehicle Manufacturers Association of the United States v. State Farm Mutual Auto Insurance Co.[2]...