The U.S. Internal Revenue Service has won $100 million over two years in corporate tax arbitration cases against Canada, winning all three cases, Reuters reports.
Patrick Temple-West writes the process is known as baseball arbitration, where revenue agents from both countries put toward the figure they believe should be collected in corporate taxes and who should collect.
The arbitrator chooses the number closes to the right answer, the report said.
Brian Trauman, a principal at KPMG, said one position wins the case and the other loses.
Multinational companies can request countries go to arbitration if they do not settle the tax disputes within two years.
According to Reuters, the U.S. is including an arbitration clause in tax treaties with other countries such as Hungary, Luxembourg and Switzerland.
Citing tax experts, Temple-West reports future treaties with the U.K. and Japan may have the clause as well.