Symantec's $1B Tax Bill

An audit of its Veritas acquisition goes from bad to worse.


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It's true. Blockbuster mergers can sometimes come back to bite the buyer.

Security software giant Symantec said in a Securities and Exchange filing that it owes the government $1 billion in unpaid taxes, mostly relating to an audit of its purchase of Veritas Software.

Symantec, which has watched its shares drop since it purchased Veritas for $10.5 billion last summer, said the IRS is claiming that the company owes more taxes, plus interest and penalties, for 2000 and 2001.

Symantec said its tax liability with regard to the Veritas claim would be $900 million, excluding penalties and interest.

The Cupertino, Calif., company also said the IRS claim relates to transfer pricing in connection with a technology license agreement between Veritas and a foreign subsidiary.

Symantec said that the IRS informed the company that an unrelated audit of Symantec for fiscal years 2003 and 2004 could cost the company another $100 million in taxes, excluding penalties and interest.

These proposed adjustments also relate to transfer pricing between Symantec and a foreign subsidiary.

If the combined audits are borne out, Symantec would owe the government at least $1 billion.

This article was first published on InternetNews.com. To read the full article, click here.

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