On 12 November 2019, the Ninth Circuit denied the taxpayer’s motion for rehearing en banc through issued an order. The order means that the Ninth Circuit will not reconsider its June 7, 2019 decision upholding the validity of the SBC rule in Reg. sec. 1.482- 7A(d)(2).
In the case of Altera Corp. v. Commissioner, in 2015 the Tax Court determined that the regulation requiring related parties to share stock-based compensation in a CSA was invalid. In June 2019, the Ninth Circuit reversed 2015 decision of the Tax Court where the panel issued a majority opinion that the disputed SBC rule was valid both procedurally and substantively. On July 22, 2019, Altera filed a petition for a rehearing en banc in the Ninth Circuit. The taxpayer has 90 days from November 12, 2019 to file a petition for certiorari with the U.S. Supreme Court.
