July 08, 2020

US Supreme Court discards Bob Richards rule holds Federal Common Law does not govern intercompany distribution of tax refunds

In its February 25, 2020, decision in Rodriguez v. FDIC, the US Supreme Court unanimously rejected the “Bob Richards rule” (so named for a 1973 Ninth Circuit decision) and held that federal common law does not govern the allocation of tax refunds within a consolidated corporate group in the absence of a tax allocation agreement to the contrary. The decision is likely to have significant implications with respect to inter-corporate disputes over the proper allocation of tax refunds.

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