Symantec hit with $1 billion tax bill
The U.S. Internal Revenue Service has hit Symantec Corp. with a $1 billion tax bill for allegedly under-reporting the value of intellectual property that the software vendor transferred to two Irish subsidiaries.
Symantec was notified of the issue by the IRS in late March, the company said in a regulatory filing, dated Monday.
The IRS claims that both Symantec and Veritas Software Corp. under-priced intellectual property the two companies licensed to their Irish subsidiaries, said Symantec spokeswoman Genevieve Haldeman. Both Symantec and Veritas, which was purchased by Symantec in 2005, set up the Irish subsidiaries for the purpose of doing business outside of the U.S., she said.
The IRS believes that Symantec owes about $900 million, excluding penalties and interest, in connection with the Veritas claim, which covers the 2000 and 2001 Veritas tax returns. Another $100 million is due in connection with Symantec’s fiscal 2003 and 2004 reports.
Symantec does not agree with the IRS’s position and plans to appeal the tax assessment, Haldeman said.
Symantec’s stock (SYMC) dropped more than 4 percent following the news, trading at $15.73 in after-hours trading on Nasdaq Stock Market Inc.’s INET exchange.