No one is safe from the IRS this tax season — and multi-billion dollar corporation Walgreens just received a hefty audit from the government.
According to a filing with the U.S. Securities and Exchange Commission on February 29, Walgreens Boots Alliance was hit with a $2.7 billion bill by the IRS after audits the agency conducted allegedly found problems with Walgreens’ transfer pricing between 2014 and 2017.
“The Company intends to vigorously defend its position on the transfer pricing matter through the IRS’s administrative appeals office and, if necessary, judicial proceedings and is confident in its ability to prevail on the merits,” the SEC filing said on behalf of Walgreens.
Walgreens Boots Alliance oversees Walgreens in the U.S. and Boots drugstores in the U.K.
“We believe that we will prevail at the conclusion of the audit,” a spokesperson for Walgreens told the Chicago Tribune.
Related: Walgreens Unveils New CEO, $1 Billion Cost-Cutting Plan
According to Investopedia, transfer pricing is defined as an “accounting practice that represents the price that one division in a company charges another division for goods and services provided,” which is often used to help lower the overall “tax burden of the parent company.”
The IRS is seeking additional tax payments, interest, and penalties in its total compensation from Walgreens.
The audit can take between two to seven years to complete, according to Bloomberg.
Related: Walgreens Boots Alliance Exec Vice President: Raise My Taxes
Walgreens Boots Alliance joins other large corporations, including Meta, Apple, and Microsoft that are also facing IRS audits over transfer pricing issues.
Last fall, Walgreens unveiled a plan to reduce costs by $1 billion after reporting a weak fiscal 2023, which resulted in operating losses of $6.9 billion for the year due to opioid-related lawsuits and other litigation issues.
Amid the losses, Walgreens is now unveiling an aggressive cost-cutting plan, including closing 60 of its clinics, Axios reported.