Abbott Seeks $417 Million Refund in Royalty Dispute (Correct)

Global healthcare giant Abbott Laboratories challenged a nearly $417 million federal income tax deficiency over the company’s licensing agreements with its foreign manufacturing affiliates in US Tax Court.

The IRS wrongfully adjusted Abbott’s royalty income for tax year 2019 from licenses for nutritional and diabetes care products because the payments it received from its affiliates were negotiated at arm’s length, the company’s petition said. The additional $900 million in imputed royalties, plus other adjustments, resulted in a $417 million tax bill for the medical device maker, the Dec. 22 petition said.

IRC Section 482 empowers the IRS to determine the ...