Coca-Cola Owes 33 Billion In Back Taxes IRS

ATLANTA -- Coca-Cola Co. said it was notified by the Internal Revenue Service that it owes $3.3 billion more in federal taxes, and interest, for 2007 to 2009.

The Atlanta-based beverage giant reported in a Sept. 18 regulatory filing that it believes the assessments are without merit and plans to pursue "all administrative and judicial remedies necessary to resolve the matter."

The disagreement, Coke said, involves how much of the money it makes from licensing its products overseas should be considered taxable income in the U.S. The company said it has been following the same methodology for determining its taxable U.S. income for some 30 years.

"The IRS now seeks to depart from this longstanding practice in order to increase substantially the amount of tax," the company said in a statement. "We are among hundreds of other companies currently facing these types of adjustments involving payments."

Coca-Cola said it was notified that a recommendation has been made to the IRS's chief counsel that the matter be designated for litigation. The company plans to start disputing the matter by filing a petition in U.S. Tax Court. Coke said the IRS made the determination on owed taxes after a five-year audit.