Coca-Cola to pay $6 billion in IRS back taxes case, appeal ruling

Coca-Cola Company (NYSE:KO) to pay $6 billion in back taxes and interest to the Internal Revenue Service, and appeal a final federal tax court decision regarding an ongoing dispute that started back in 2015, it said on Friday.

The soft drinks maker said that the U.S. Tax Court entered this decision on August 2, and it reflects a liability of approximately $2.7 billion. With applicable interest, the total amount is anticipated to be approximately $6 billion.

“Coca-Cola strongly believes the IRS and the Tax Court misinterpreted and misapplied the applicable regulations involved in the case and will vigorously defend its position on appeal,” the company said.

The company has 90 days to file a notice of appeal to the U.S. Court of Appeals for the Eleventh Circuit, and will pay the agreed-upon liability and interest to the IRS, the company said in a statement.

Coca-Cola (KO) said, on Sept. 17, 2015, the company received a notice from the IRS seeking about $3.3 billion of additional federal income tax for years 2007 through 2009. “In the notice, the IRS stated its intent to reallocate over $9 billion of income to the U.S. parent company from certain of its foreign affiliates retroactively, rejecting a previously agreed upon methodology without prior notice to the company.”

Coca-Cola (KO) sailed past organic sales estimates with its Q4 earnings report and set strong guidance last month.