By Chloe Hilles, Lake County News-Sun, Lake County, Ill. (TNS)
The IRS is seeking $2.7 billion from Walgreens Boots Alliance for unpaid taxes due to alleged issues over transfer pricing, after several years of audits.
The pharmacy chain, headquartered in Deerfield, IL, said it disagrees with the audit and plans to “vigorously defend” its position in appeals, according to a company filing to the Securities and Exchange Commission on Feb. 29.
According to the quarterly 10-Q filing, the IRS issued a Revenue Agent’s Report (RAR) to the company for the 2014-2017 tax years. The agency found issues with transfer pricing—prices charged between units within companies—and is seeking $2.7 billion in additional tax payments, plus penalties and interest.
Walgreens disagrees with the RAR and will appeal disputed issues, the filing stated.
“The Company intends to vigorously defend its position on the transfer pricing matter through the IRS’s administrative appeals office and, if necessary, judicial proceedings and is confident in its ability to prevail on the merits,” the SEC filing stated.
The audit comes as the company looks to sell one-third of its Deerfield corporate campus to the Pulte Group for residential development.
A spokesperson for Walgreens said the company valued certain purchase options by applying the same valuation method for the asset for the U.S. Generally Accepted Accounting Principles and federal income tax.
Walgreens contends the “IRS has incorrectly valued” the purchase options, the spokesperson said in an email, and that the company’s valuation method has been reviewed by external experts.
“We believe that we will prevail at the conclusion of the audit,” the spokesperson wrote.
Walgreens joins the ranks of other major companies that have faced, or currently face, transfer pricing challenges and tax bills from the IRS, including Meta, Apple and Microsoft.
The pharmacy company doesn’t expect a resolution to this matter within the next year, and the conclusion of the audit may be in two to seven years, according to the spokesperson.
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©2024 Lake County News-Sun (Lake County, Ill.). Visit at chicagotribune.com/suburbs/lake-county-news-sun. Distributed by Tribune Content Agency LLC.
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Tags: Income Tax, IRS, Taxes
