The Coca-Cola Co hits back at US$3.3bn tax increase

The company, which makes Sprite, Powerade, Dasani and other drinks, said that it plans to pursue all judicial remedies necessary to resolve the matter.

“They hardly ever get to court, because neither party wants to experience the hazards of litigation.”

The Coca-Cola Co. said the I.R.S. assessments are without merit.

Coca-Cola is just one of a number of large corporations in the U.S.to become embroiled with the IRS due to profits recorded in foreign countries, which some critics say can shield income unfairly from taxes in the U.S.

From 2008 to 2013, the AJC found, the global giant paid $3.3 billion in federal taxes – less than 5 percent of its $65 billion in global pretax profits during that period.

In a submitting with the Securities and Change Fee, Coca-Cola stated it has been following the identical methodology for figuring out its taxable USA revenue for nearly 30 years.

The closing agreement provides prospective penalty protection as long as the Company follows the prescribed methodology, and the company has continued to abide by its terms for all subsequent years.

“The ultimate outcome of disputes of this nature is uncertain, and if the IRS were to prevail on its assertions, the assessed tax and deficiency interest could have a material adverse impact on the company’s financial position, results of operations or cash flows”, the company said in a statement, according to The Inquisitr.

Coca-Cola is the latest company to be accused by the IRS of not paying enough taxes on its foreign profits, as the IRS is also now entangled with Amazon.com Inc. and Microsoft Corp. over similar allegations.

They are given credits for the taxes they paid to governments in foreign countries.

Coca-Cola seeks to meet with the IRS’s chief counsel and is anticipating challenging the IRS’s notice via a petition in the U.S. Tax Court.