Coca-Cola Co. said Friday it will pay $6 billion in back taxes and interest to the Internal Revenue Service while it appeals a final federal tax court ruling in a case that dates back 17 years.
The Atlanta beverage giant said it will continue to fight and believes it will win the legal dispute stemming from taxes and interest the IRS claims the company owes from 2007, 2008 and 2009.
“The company looks forward to the opportunity to begin the appeals process and will, as part of that process, pay the agreed liability and interest,” it said in a statement. Coca-Cola spokesman Scott Leith declined further comment to The Associated Press.
U.S. Tax Court Judge Albert Lauber on Friday issued a two-judge ruling and an order ending his review of the case. The dispute reached court in December 2015, shortly after the company said it notified the IRS it owed $3.3 billion more in federal taxes and interest for those three years.
In its statement Friday, Coca-Cola accused the IRS of changing how it allows the company to calculate U.S. income based on profits totaling more than $9 billion from foreign licensees and subsidiaries.
An IRS spokesperson did not immediately respond Friday to a phone message from the AP about the case.
In a 2015 Securities and Exchange Commission filing, Coca-Cola said it had followed the same method for calculating its taxable U.S. income from foreign subsidiaries for nearly 30 years.
In a company quarterly report filed with the SEC on Monday, which included guidance to investors, the company said it believes the IRS and Lauber “misinterpreted and applied the applicable rules in the reallocation of income earned by the company’s foreign licensees.”
The publicly traded company said it expected “some or all (of the $6 billion), plus accrued interest, to be repaid” if Coca-Cola wins its appeal. It has 90 days to file appeal documents.
Last week, the company raised its full-year sales guidance after reporting a stronger than expected second quarterboosted by product price increases.