In a significant taxpayer victory, the Tax Court, in a memorandum decision, has ruled in Eaton Corp. & Subsidiaries v. Commissioner that the IRS’s decision to cancel Eaton Corporation’s two advance pricing agreements (APAs) was an abuse of discretion. The first APA covered Eaton’s 2001–2005 tax years pursuant to Rev. Proc. 96-53 (APA I), and the second covered Eaton’s 2006–2010 tax years pursuant to Rev. Proc. 2004-40 (APA II). Previously, the IRS had only canceled nine APAs out of 1,597 granted to date, and a cancellation had never before been subject to public and judicial scrutiny.