The U.S. Internal Revenue Service hit Boston Scientific Corp. (NYSE:BSX) with a $154 million tax bill after taking a look at the medical device maker’s books for 2006 and 2007.
The federal tax bureau sent a “Notice of Deficiency” to Natick, Mass.-based Boston Scientific Sept. 7, detailing the addition net taxes it says the company owes – plus interest – after an audit of its tax filings for those two years.
BSX said it plans to “file a timely petition to the U.S. Tax Court contesting this assessment,” according to a press release.
It’s not the first time Boston Scientific has wrangled with the U.S. tax agency over tax assessments stemming from its misguided $27 billion acquisition acquisition of Guidant Corp. in 2006. Last December the IRS dunned BSX for more than half a billion dollars – again plus interest – to settle Guidant’s tax bill from 2001, 2002 and 2003.
Boston Scientific said then and reiterated in a regulatory filing that it disputes the agency’s tally of transfer pricing between domestic and foreign Guidant subsidiaries.
“We do not agree with the transfer pricing methodologies applied by the IRS or its resulting assessment,” BSX wrote in the most recent filing. “No payments on the assessment would be required until the dispute is definitively resolved, which, based on experiences of other companies, could take several years.”
The company said it expects to be able to cover any expenses and tax liabilities from the case with its income tax reserves, meaning if the bill does come due it’s not likely to have a material impact on the company’s operations.