Merck Agrees To Pay IRS $2.3 Billion To Settle Tax Disputes
Wednesday, February 14th 2007, 10:39 am
By: News On 6
WASHINGTON (AP) _ Merck & Co. Inc. agreed Wednesday to pay $2.3 billion to resolve several tax disputes, the Internal Revenue Service said.
The drug company's payment includes taxes, interest and penalties stemming from the disputes, which cover the tax years 1993-2001, the IRS said. The IRS said the disputes arose in part from Merck's use of minority equity interest financing transactions.
``This settlement resolves all of the issues that were in dispute,'' the Whitehouse Station, N.J. company said in a statement.
The company said the settlement is not expected to have an effect on its 2007 earnings because it previously reserved funds to cover the payment.
Merck disclosed in November that it faced liabilities from tax disputes in both the U.S. and Canada. It cited a total of $5.58 billion in potential liabilities at the time.
Merck said the IRS settlement was in the company's best interests given the uncertainty and cost of potential litigation.
Another drug company, GlaxoSmithKline PLC, agreed in September to pay the IRS $3.4 billion in what was the largest tax settlement ever.