Amgen settles shareholder lawsuit claiming it hid $10.7 billion tax bill
AMGN•Amgen reaches $74 million settlement over tax disclosure lawsuit
Amgen AMGN.O reached a $74 million settlement of a lawsuit accusing the biotechnology company of waiting too long to disclose that it might owe the Internal Revenue Service $10.7 billion for underreporting six years of taxes.
A preliminary settlement of the proposed class action was filed late Monday in Manhattan federal court and requires a judge's approval.
Amgen denied wrongdoing, and on Tuesday said it still believed the claims lacked merit.
IRS dispute centers on transfer pricing and Puerto Rico operations
The IRS accused Amgen of underpaying taxes between 2010 and 2015, mainly for improperly shifting profits to a Puerto Rico unit that made many of its drugs. Puerto Rico is considered a foreign country for corporate tax purposes, despite being a U.S. territory.
The IRS sought $8.7 billion in back taxes plus interest, as well as $2 billion of penalties, stemming from Amgen's so-called transfer pricing practices.
Amgen has said that a decision from the U.S. Tax Court could come this year.
Shareholders led by the Asbestos Workers Philadelphia Pension Fund said Amgen's share price fell 6.5% on August 4, 2021, and 4.3% on April 28, 2022, because the Thousand Oaks, California-based company waited until then to disclose its tax risks.
The settlement covers Amgen shareholders between July 29, 2020, and April 27, 2022.
