Symantec Rebuts IRS Claims

Security and storage software vendor Symantec isn’t giving up without a fight. Not even when it’s going up against the IRS.

The company filed a 60-page petition with the United States
Tax Court rejecting a claim that it owes Uncle Sam more than $1 billion in
back taxes and penalties.

The IRS is claiming Symantec is liable for back taxes that Veritas owes, a bill the IRS said Symantec incurred when the companies merged
in December 2004.

“This is likely to be a fairly long process,” Genevieve Haldeman, a
spokesperson for Symantec, told internetnews.com.

In the petition, Symantec claims that the IRS erred in several calculations,
including its allocation of taxable income, cost-sharing with regards to
stock-based compensation and other inter-company allocations.

The company argued that the IRS’s calculations “violate the arm’s length
standard, are arbitrary, capricious and unreasonable,” and contrary to
precedent set by the U.S. Tax Court.

Symantec also argued that Veritas U.S. had “reasonably relied on the
documentation prepared by its outside adviser, Ernst & Young, to justify the
amounts Veritas Ireland paid to Veritas U.S.”

Of course, this is by no means over.

Now, said Haldeman, the IRS has 60 days to respond with a petition
of its own. A long process will follow, including mutual discovery — which is
when parties to a suit can ask to see relevant documents that are in the
possession of their opponents — before a trial date is even set.

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