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Coca-Cola to pay $6 billion in back taxes following appeals court ruling

Coca-Cola (AP Photo/Wilfredo Lee)

ATLANTA — Coca-Cola said it will pay $6 billion in back taxes to the IRS following a federal court decision.

The beverage giant said it would continue to fight the decision and believes it will win the legal dispute stemming from taxes and interest the IRS maintains the company owes from 2007, 2008, and 2009.

“Coca-Cola strongly believes the IRS and the Tax Court misinterpreted and misapplied the applicable regulations involved in the case and will vigorously defend its position on appeal,” the company said in a news release.

On Friday, a federal appeals court judge issued a two-sentence decision in the case.

The case started in 2015 after the company said it was notified by the IRS that is owed $3.3 billion more in taxes and interests for three years.

In a Securities and Exchange Commission filing in 2015, Coca-Cola said it had been following the same method to calculate its taxable U.S. income from foreign affiliates for nearly 30 years.

In a company quarterly report filed with the SEC on Monday, which included guidance to investors, the company said it believes the IRS and Lauber “misinterpreted and misapplied the applicable regulations in reallocating income earned by the company’s foreign licensees.”

The publicly traded company said it expected that “some or all of (the $6 billion), plus accrued interest, would be refunded” if Coca-Cola wins its appeal.

The company has 90 days to file appeal documents.

Last week, the company raised its full-year sales guidance after reporting a stronger-than-expected second quarter, boosted by product price increases.

The Associated Press contributed to this article.

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