{"id":5530,"date":"2026-08-19T07:10:36","date_gmt":"2026-08-19T07:10:36","guid":{"rendered":"https:\/\/crosscountrymovingteams.com\/?p=5530"},"modified":"2026-08-19T07:10:36","modified_gmt":"2026-08-19T07:10:36","slug":"the-irs-is-scrutinizing-how-unitedhealth-moved-money-through-foreign-subsidiaries-and-whether-it-underpaid-taxes","status":"publish","type":"post","link":"https:\/\/crosscountrymovingteams.com\/?p=5530","title":{"rendered":"The IRS is scrutinizing how UnitedHealth moved money through foreign subsidiaries\u2014and whether it underpaid taxes"},"content":{"rendered":"
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The notices cover transactions between UnitedHealth and a foreign subsidiary from the 2017 through 2020 tax years, according to the May filing. The IRS is seeking to \u201csignificantly increase taxable income\u201d for each of those years, and could seek similar adjustments for later years.<\/p>\n

Read more OpenAI says it paused AI training for two weeks and announces new security protocols following Hugging Face hack<\/a><\/p>\n

UnitedHealth is not conceding. In its August filing, the company said it believes its tax positions are properly supported and plans to \u201cvigorously contest\u201d the IRS\u2019s proposed adjustments.<\/p>\n

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This dispute comes amid a broader push from the IRS that began more than a decade ago to scrutinize how American multinational corporations allocate profits between their U.S. operations and foreign subsidiaries.<\/p>\n

\u201cThis is quite common because the IRS has, since the Obama administration, increased its scrutiny of transfer pricing by U.S. based multinationals who are trying to shift profits out of the U.S. to their foreign subsidiaries,\u201d Reuven S. Avi-Yonah, the Irwin I. Cohn Professor of Law at the University of Michigan Law School, told Fortune<\/em>.<\/p>\n

The agency has fought similar battles with some of corporate America\u2019s biggest names, including Coca-Cola, Meta and Medtronic. Those cases have produced very different outcomes.<\/p>\n

\u201cThe IRS has won some of these cases and lost others and the sums involved are usually in the billions,\u201d Avi-Yonah said.<\/p>\n

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UnitedHealth emphasized that the dispute remains unresolved.<\/p>\n

\u201cThe company has previously disclosed the IRS examination and related tax matters in its public filings and believes its tax positions are properly supported,\u201d a UnitedHealth Group spokesperson told Fortune<\/em>. The spokesperson said the matters \u201cremain subject to further review and discussions.\u201d<\/p>\n

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Neither filing names the subsidiary, says where it is based, describes the transactions at issue, or attaches a dollar figure to what the IRS is seeking.<\/p>\n

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That makes UnitedHealth\u2019s dispute difficult to size. While other transfer-pricing fights have involved billions of dollars, neither the company nor the IRS has disclosed enough to know what transactions the agency is challenging here or how much money is at stake.<\/p>\n

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A Notice of Proposed Adjustment is issued during an examination. It is a proposal, not a final determination, assessment, or penalty. A company that disagrees can contest it through an administrative process, and unresolved disputes can reach court.<\/p>\n

At issue is the price a company sets on transactions between its own units in different countries. Since those prices can affect how much profit is attributed to each country, they can also affect where taxes are paid.<\/p>\n

Section 482 of the tax code allows the IRS to adjust a company\u2019s taxable income if it believes transactions between related businesses were not fairly priced.\u00a0<\/p>\n

The rule is simple to state but notoriously hard to apply because there is often no unrelated third party doing the same deal to compare against. Two sides can examine the same intercompany transactions and reach different conclusions, leading to disputes that can take years to resolve.<\/p>\n

Read more Meet the venture capital and crypto billionaires quietly bankrolling the fight against California\u2019s wealth tax<\/a><\/p>\n

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But UnitedHealth\u2019s disclosure does not reveal what kind of transaction triggered the proposed adjustment.<\/p>\n

Many major transfer pricing disputes have centered on intellectual property transferred to foreign subsidiaries, Avi-Yonah said. But he cautioned he does not know enough about UnitedHealth specifically to say what the agency is examining.<\/p>\n

Coca-Cola shows how large a transfer-pricing disagreement can become.<\/p>\n

The beverage giant\u2019s dispute could ultimately involve roughly $20 billion in tax and interest. Coca-Cola has already paid the IRS $6 billion covering tax years 2007 through 2009 while it appeals, and estimates it could face roughly $14 billion in additional tax and interest for 2010 through 2025 if the IRS adjustments upheld by the Tax Court ultimately stand. Its reserve stood at $529 million as of July 3, 2026.\u00a0<\/p>\n

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Meta is also contesting an IRS notice asserting $15.89 billion in additional tax, plus interest and penalties, for its 2017 through 2019 tax years, primarily related to transfer pricing with foreign subsidiaries and other international tax adjustments. The company petitioned the Tax Court in December 2025.<\/p>\n

These disputes can outlive multiple corporate and presidential administrations. Coca-Cola\u2019s fight concerns tax years 2007 through 2009, while Medtronic\u2019s began with its 2005 and 2006 tax years and just entered settlement talks this March after two trips to a federal appeals court. Avi-Yonah has written that the Medtronic case will likely take more than 20 years to resolve.<\/p>\n

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None of these cases predicts where UnitedHealth\u2019s dispute will land. However, they do show how large and how protracted transfer pricing fights can become once they escalate.<\/p>\n

If the dispute is not resolved during the examination, UnitedHealth can pursue the IRS administrative appeals process and potentially litigate the matter.<\/p>\n

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One number in UnitedHealth\u2019s filings offers little help in determining the company\u2019s potential exposure. Its gross unrecognized tax benefits rose to $5.6 billion at the end of 2025 from $4.1 billion a year earlier, but the company cautioned against connecting that figure to this dispute.<\/p>\n

A UnitedHealth spokesperson said the $5.6 billion reflects reserves across all of the company\u2019s uncertain tax positions and \u201cshould not be interpreted as the amount associated with the NOPAs.\u201d The company declined to say how much of the total, if any, relates to this dispute or to identify the foreign subsidiary involved.<\/p>\n

The IRS did not respond to Fortune<\/em>\u2019s request for comment. The agency is generally barred by federal law from discussing individual taxpayers.<\/p>\n

UnitedHealth said in its August filing it believes its reserves for uncertain tax positions are adequate \u201cbased on current available information,\u201d and it intends to contest the proposed adjustments.<\/p>\n

Read more Exclusive: Accounting AI startup Rillet reaches unicorn status with $1 billion valuation. Its founder says he wants to give CFOs back their weekends<\/a><\/p>\n

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The IRS wants to increase UnitedHealth\u2019s taxable income for 2017 through 2020 over transactions with a foreign subsidiary.<\/p>\n","protected":false},"author":1,"featured_media":5529,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[319],"tags":[],"class_list":["post-5530","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-taxes"],"yoast_head":"\nThe IRS is scrutinizing how UnitedHealth moved money through foreign subsidiaries\u2014and whether it underpaid taxes - Cross Country Moving Team<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/crosscountrymovingteams.com\/?p=5530\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The IRS is scrutinizing how UnitedHealth moved money through foreign subsidiaries\u2014and whether it underpaid taxes - 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