The ongoing tax fight between IRS and Intel Corporation (NASDAQ:INTC) is gaining a lot of attention in Silicon Valley for obvious reasons. As per the reports, the lawsuit between IRS and Intel over the issue of stock compensation paid to the US employees working in various multinational companies can benefit many companies, Google in particular. If the result goes in Intel’s favor, authorities may have to return back the entire tax paid by Google in 2015.

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The Wall Street Journal claims that if things go in Intel’s favor, Google may receive a potential benefit of up to $3.5 billion, which is slightly more than $3.3 billion income tax that it paid in 2015.

The tax issue is related to a dispute between IRS and the offshore subsidiaries of US companies over the cost-sharing agreement. Most of the times, US companies’ overseas subsidiaries, located in low tax countries try to help the domestic enterprises in saving taxes. According to IRS, the foreign subsidiaries should shoulder the costs related to corporate employees to ensure that the US company can’t claim all the tax benefits alone.

The Intel’s dispute with IRS is in connection with the inclusion of share-based compensation in cost sharing agreement. Initially, IRS claimed that it must be in 15-0 ruling; however, The United States Court didn’t approve this regulation.

As of now the idea that two companies, not related to each other, shouldn’t share the expenses related to stock paid to employees as incentives, favors Intel’s argument. However, IRS in its appeal has claimed that US companies establish these foreign subsidiaries and fund them to get tax benefits.

At present, US companies aren’t entitled to pay tax on income generated outside the US borders, until that money is brought back into the country and used in various corporate activities like dividend payments, acquisitions, and investments. Both Intel and Google are waiting for the decision of this dispute to come out as soon as possible.