Tyco Denies Report of Talks With IRS Over TaxesDec 5, 2002 | Wall Street Journal Tyco International Ltd. (TYC) denied a published report that it is in talks with the Internal Revenue Service to pay as much as $1.7 billion in back taxes.
"It's not true we are in any such negotiations," Gary Holmes, a Tyco spokesman, told The Wall Street Journal Thursday.
An article that appeared earlier on TheStreet.com Web site said Tyco may have to pay as much as $1.7 billion to the IRS to settle an investigation focusing on allegations the company failed to pay sufficient taxes. The report cited a person familiar with negotiations between the IRS and Tyco.
The article said IRS and Tyco have not yet agreed on an exact sum Tyco should pay, but said the IRS, while seeking more than $1.7 billion, is prepared to settle for close to that figure.
Tyco, a sprawling conglomerate that shifted its domicile to Bermuda from New Hampshire in 1997, has faced criticism for its aggressive efforts to reduce its corporate taxes. Early this year, it said it had reduced its overall tax rate to about 18.5%, but its tax rate has since climbed under new management.
The Street.com article said Tyco would commit to moving its domicile back to the U.S. under any IRS settlement, citing the same person familiar with the talks.
Mr. Holmes, the Tyco spokesman, said he couldn't immediately comment on whether the IRS had told Tyco that it owed large sums in back taxes, but said he was unaware of any major tax court case against Tyco.
Walter Montgomery, another Tyco spokesman, issued an even stronger denial, saying "There's absolutely no foundation for this report, period."
David Morrow, editor-in-chief of TheStreet.com, said "we 100% stand behind" the story. Asked about Tyco's denials, Mr. Morrow added: "I expect them to deny it."