Executive summaryAs part of the Internal Revenue Service (IRS) Large Business and International Division’s (LB&I’s) knowledge management efforts, on 30 September 2020, the IRS released a new practice unit titled “Cost Sharing Arrangements with Stock Based Compensation” (DCN INT-T-226). The practice unit focuses on the inclusion of stock-based compensation (SBC) as an intangible development cost (IDC) under a cost sharing arrangement (CSA) subject to Treas. Reg. Section 1.482-7 and provides guidance for tax audits together with relevant resources (the SBC practice unit).As explained below, the SBC practice unit is the most recent IRS guidance regarding the inclusion of SBC as...