$6 Billion Back Tax Bill: Coca-Cola Vows to Fight IRS Ruling, Seeks Refund in Ongoing Legal Battle!

Coca-Cola to Pay $6 Billion in Back Taxes but Plans to Appeal Ruling

Company Disputes IRS Income Reallocation in Long-Running Tax Dispute

According to Yahoo! Finance, Coca-Cola has announced it will pay $6 billion in back taxes to the IRS after a federal court ruled in favor of the agency’s claims. The IRS is demanding this large sum for taxes and interest from 2007 to 2009. Even though Coca-Cola is making this payment the company plans to keep fighting the decision. They argue that both the IRS and the Tax Court misunderstood and incorrectly applied the tax rules. Coca-Cola believes that the IRS’s reallocation of income was wrong and hopes to get back some or all of the $6 billion plus interest if its appeal is successful.

The issue first arose in 2015 when the IRS informed Coca-Cola that it owed an additional $3.3 billion in taxes and interest for the years in question. Coca-Cola has used the same method to calculate taxable income from its foreign affiliates for nearly 30 years, and they argue that this method is correct. The company’s dispute centers on how the IRS reallocated income earned by its foreign licensees. Coca-Cola maintains that this reallocation was done incorrectly, which is at the heart of its legal challenge against the IRS’s demands.

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$6 Billion Back Tax Bill: Coca-Cola Vows to Fight IRS Ruling, Seeks Refund in Ongoing Legal Battle! (PHOTO: EconoTimes)

Coca-Cola Hopes for Refund and Raises Sales Forecast Amid Ongoing Tax Appeal

In a recent report to the Securities and Exchange Commission (SEC) Coca-Cola indicated that it might receive a refund if the appeal overturns the current ruling. The company also updated its financial outlook increasing its sales forecast for the year after a strong second quarter partly due to price hikes. Coca-Cola now has 90 days to file its appeal documents. The company is determined to overturn the decision and recover the substantial amount it has been ordered to pay.

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