Coca-Cola Fights $20 Billion Tax Ruling, Alleging IRS Profit-Shifting Errors

The Coca-Cola Company enters the 11th U.S. Circuit Court of Appeals this week to contest a tax dispute exceeding $20 billion. The IRS alleges the company improperly shifted profits to low-tax international subsidiaries between 2007 and 2009.

The U.S. Tax Court ruled in favor of the IRS in 2020. Coca-Cola maintains it used a tax methodology previously approved by the agency.

A loss could force the company to pay an additional $14 billion. This follows roughly $6 billion already paid by the beverage giant. The ruling could also increase the company's future effective tax rate.

The case may set a legal precedent for how multinational technology and pharmaceutical firms allocate intellectual property profits. A ruling is expected later this year. Further appeals remain possible.