Coca-Cola appeals IRS $20B tax dispute over foreign profit reporting from 2007-2009.

Coca-Cola is taking its dispute with the IRS to a federal appeals court over a $20 billion tax liability related to how it reported profits from 2007 to 2009 using transfer pricing. The case centers on a 1996 agreement about reporting foreign profits, which Coca-Cola says it followed using a "10-50-50" method approved by the IRS. The IRS argues the agreement only applied retroactively and did not protect Coca-Cola from penalties for later years. A 2020 Tax Court ruling favored the IRS, resulting in Coca-Cola paying $6 billion, but the company continues to use the same accounting method. If Coca-Cola loses the appeal, it could owe up to $20 billion in taxes and interest, potentially requiring borrowing despite claims of sufficient liquidity.