ATLANTA (dpa-AFX) - The Coca-Cola Company (KO) said, on September 17, it received a Statutory Notice of Deficiency from the Internal Revenue Service, or IRS, for the tax years 2007 - 2009. The IRS claims that the company's U.S. taxable income should be increased by an amount that creates a potential additional federal income tax liability of approximately $3.3 billion for the period, plus interest. No penalties were asserted.
The Coca-Cola Company said the disputed amounts largely relate to a transfer pricing matter involving the appropriate amount of taxable income the company should report in the U.S. in connection with its licensing of intangible property to certain related foreign licensees regarding the manufacturing, distribution, sale, marketing and promotion of products in overseas markets.
Coca-Cola has also been notified by the IRS that a recommendation has been made to the Chief Counsel of the IRS that the matter be designated for litigation. The company has requested a meeting with the Chief Counsel. The company expects to file a petition in the United States Tax Court challenging the Notice.
Coca-Cola said it believes the final adjudication of the matter will not have a material impact on its consolidated financial position.
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