The Internal Revenue Service (IRS) is fighting major biotech firm, Amgen, over a $10.7 billion tax bill the company hasn’t paid after improperly shifting assets to a subsidiary based in Puerto Rico.
The IRS alleges that the biotech giant transferred approximately $24 billion in profits between 2010 and 2015, leaving them with $10.7 billion in back taxes.
The Wall Street Journal recently reported on the ongoing legal battle between the government agency and the drug corporation:
Amgen’s dispute with the IRS is the latest example of heightened government scrutiny of the international tax practices of pharmaceutical, technology and other companies.
For Amgen, the dispute has pressured its share price and raised the risk that its tax rate could rise significantly going forward if the IRS prevails.
Amgen has long had one of the lowest tax rates in the pharmaceutical industry, reporting a median 12.5% effective tax rate over the past decade, compared with an 18% median rate across the 10 largest U.S. drug companies, according to FactSet data.
An Amgen spokeswoman shared a statement with WSJ, specifically saying, “Our tax returns have always been compliant with the law and reflect our position that the appropriate allocation [taking into account the “equity value of our Puerto Rico subsidiary”] has not changed.”
The IRS, in keeping with its standard protocol, has not commented on the litigation. It is known, however, that the tax agency is currently auditing Amgen’s returns from 2016 through 2018, so additional tax penalties may be coming for the Big Pharma firm.
Amgen bills itself as a “worldwide pioneer in biotechnology,” and is known for manufacturing medications like migraine prevention injection Aimovig and arthritis treatment Enbrel.
Amgen focuses on areas of high unmet medical need and leverages its expertise to strive for solutions that improve health outcomes and dramatically improve people’s lives. A biotechnology innovator since 1980, Amgen has grown to be one of the world’s leading independent biotechnology companies, has reached millions of patients around the world and is developing a pipeline of medicines with breakaway potential. You can watch a video detailing Amgen’s “Biology First” approach below:
Why Taxes? Why Now?
"We opened up shop here in the Wylie, Sachse, Murphy area in 2018 with a passion to help start-ups and small businesses get on top of their bookkeeping,” Allen explains.
“What we found was a lot of folks just don’t get the tax game. And now that there are new laws and regulations, many are starting to panic; but trust me, small businesses have everything to gain with the new Section 179 Deductions.
“After filing a few late returns, in that first year, we learned that there is a real need for some tax expertise. We spent a good part of 2018 getting up to speed on tax law, and now I am an Enrolled Agent, federally licensed to practice before the IRS on behalf of my clients and anyone else who may be facing the daunting ‘IRS boogie man.’
“During tax season, we are prepared to handle it all.
For individuals we have helped folks with past-due tax returns and work with the IRS to eliminate all penalties... sometimes we given get rid of the tax debt itself.
For companies the biggest problem businesses of all sizes have is filing and paying their payroll taxes - both state and federal - on time. The rules for 940s and 941s are extremely confusing so we have helped a lot of companies catch up.
If they like our work, they sometimes retain us for bookkeeping and payroll.
To sign up for our free weekly newsletter go to our homepage www.ExecutiveTaxSolution.com to sign up for our free monthly newsletter and receive year-round tax tips.
(469) 262-6525 email@example.com www.executivetaxsolution.com