No one is safe from the IRS this tax season – and the multibillion-dollar company Walgreens just received a major government audit.
According to a document filed with the U.S. Securities and Exchange Commission on Feb. 29, Walgreens Boots Alliance was hit with a $2.7 billion bill from the IRS after audits conducted by the agency reportedly found Walgreens transfer pricing issues between 2014 and 2017.
“The Company intends to vigorously defend its position on the transfer pricing issue through the IRS Office of Administrative Appeals and, if necessary, judicial proceedings and is confident in its ability to prevail on the merits,” reads the SEC filing for Walgreens account.
Walgreens Boots Alliance oversees Walgreens in the United States and Boots pharmacies in the United Kingdom
“We believe that at the conclusion of the audit we will prevail,” a Walgreens spokesperson said Chicago Tribune.
Related: Walgreens unveils new CEO and $1 billion cost-cutting plan
Second Investipediatransfer pricing is defined as an “accounting practice that represents the price that one division of a company charges another division for goods and services provided”, which is often used to help reduce the parent company’s “overall tax burden “.
The IRS is seeking additional tax, interest and penalty payments in its total compensation from Walgreens.
According to the report, the audit can take two to seven years to complete Bloomberg.
Related: Walgreens Boots Alliance Executive Vice President: Raise my taxes
Walgreens Boots Alliance joins other large companies, including Meta, Apple and Microsoft, that are also facing IRS scrutiny over transfer pricing issues.
Last fall, Walgreens unveiled a plan to cut costs by $1 billion after reporting a weak fiscal 2023, which resulted in operating losses of $6.9 billion for the year due to lawsuits related to opioids and other legal issues.
Amid the losses, Walgreens is now unveiling an aggressive cost-cutting plan, including closing 60 of its clinics, Axios reported.