U.S. Tax Court Rules in Favor of Symantec
MOUNTAIN VIEW, Calif. Symantec Corp. (Nasdaq:SYMC) today announced that the U.S. Tax Court issued its ruling in favor of the company regarding the Veritas Software tax assessment for 2000 and 2001. While the U.S. Tax Court agreed with the company’s transfer pricing valuation methodology, the ruling made some adjustments in the application of the methodology and provided guidance as to how the resulting incremental Veritas tax liability should be computed.
Although Symantec is still evaluating the ruling, the company believes its previous accounting accrual related to this matter exceeds the estimated assessment of incremental tax. As such, Symantec expects to realize a one-time GAAP benefit to net income and earnings per share in the December 2009 quarter. Symantec expects to exclude a substantial portion of the one-time benefit from its non-GAAP results. Symantec does not expect to make any additional cash payments to the Internal Revenue Service (IRS) relating to this matter.
The incremental tax liability will be finalized through the remaining court proceedings, which could take up to a year to complete.
Symantec disclosed on April 17, 2006, that the company received a Notice of Deficiency from the IRS claiming the company owed additional taxes, plus interest and penalties, primarily relating to transfer pricing in connection with a technology license agreement between Veritas and its foreign subsidiaries in Ireland.
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