The IRS countered that Amazon's dealings were not all done at "arm's length," or else improperly lowered its domestic tax bill. "This is good for everybody, not just Amazon," said Michael Pachter, a Wedbush Securities analyst who has practiced tax law. "It reaffirms that the tax law permits wholly-owned subsidiaries can license intellectual property" as Amazon did. "Totally legal, totally legal." Amazon has said it may face additional tax bills in Europe if authorities in Brussels conclude that prior rulings by Luxembourg tax officials amounted to improper "state aid" that gave it an unfair advantage over rivals. A formal probe into those rulings began in October 2014, Amazon has said. (Reporting by Dena Aubin and Jonathan Stempel in New York, and Jeffrey Dastin in San Francisco; Editing by Richard Chang)