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Coca-Cola Can’t Beat the Feeling That Its Taxes Are Just Fine

Posted on by Caleb Newquist

Coca-Cola Co. is learning that the IRS side of life includes a challenge to its transfer pricing method:

Coca-Cola Co. said it has been notified by the Internal Revenue Service that it owes $3.3 billion in federal income taxes, plus interest, after an audit found the company’s reported income from 2007 to 2009 should have been higher.

Coke said the dispute relates to transfer pricing, or how it reports income from foreign licensing of manufacturing, distribution, sale, marketing and promotion of products in overseas markets.

And they will not have a smile over this:

Coke said the IRS also has recommended the matter for litigation. The company said it plans to file a petition in U.S. Tax Court challenging the notice.

“We firmly believe the IRS’ proposed income tax assessments of our company are without merit, and we plan to pursue all administrative and judicial remedies necessary to resolve this matter,” Coke said in a statement. “The company has followed the same methodology for determining our U.S. taxable income from certain foreign company operations for nearly 30 years.”

Enjoy, Coca-Cola.

[WSJ]

Image: Summi from German Wikipedia/Wikimedia Commons

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The IRS, Not Too Hung Up on Priorities, Demands Delinquent Taxes of Four Cents

In this morning’s roundup we gave a couple of examples of why you should consider giving the IRS a break and remember that they’re civil servants just doing their jobs. All the violence, jokes and resentment are a little self-serving so maybe we should all just back off.

And then we heard about a couple of jackbooted agents (armed to the teeth, presumably) heading over to Herv’s Metro Car Wash in Sacramento to demand some delinquent taxes from the owner Aaron Zeff.

“They were deadly serious, very aggressive, very condescending,” says Harv’s owner, Aaron Zeff…

“It’s hilarious,” he says, “that two people hopped in a car and came down here for just 4 cents. I think (the IRS) may have a problem with priorities.”

How on Earth could two agents be ‘deadly serious, very aggressive, very condescending’ over four f—ing cents? How serious are they required to take their jobs? In the job description does it explain “the collection of delinquent taxes are to be vigorously pursued, regardless of the sum”?

Plus, the letter states $202.31 of penalties and interest are supposedly due on the delinquent portion. Has the IRS gotten so desperate for funds that it has delved into loan sharking? What’s more, Zeff has a letter from October 2009 stating that he ‘has filed all required returns and addressed any balances due,’ which now makes us think that the Service is pulling names out of hat and saying “who is our delinquent taxpayer of the day?”

It’s hard to believe that with just a few days prior to the first corporate filing deadline of 2010, that these two agents didn’t have anything better to do. Someone could have sent them to a sorting facility or, God forbid, have them review some returns. Jesus, put them on loan to the Utah branch if nothing else. They need all the help they can get over there.

IRS visits Sacramento carwash in pursuit of 4 cents [Sacramento Bee via TaxProf]