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Amgen’s Q1 Overshadowed By Tax Dispute That May Cost $7.1bn To Resolve

IRS Identifies $5.1bn Shortfall, Proposes $2bn Penalty

 
• By Mandy Jackson

First quarter revenue of $6.2bn and product sales of $5.7bn were up 6% and 2%, respectively, year over year. However, a looming – and potentially growing – tax liability is a multibillion-dollar overhang. 

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The gains Amgen, Inc. reported for the first quarter were overshadowed by the company’s disclosure that a US Internal Revenue Service audit identified a $5.1bn tax deficiency between 2013 and 2015, with the IRS proposing a $2bn penalty tied to the shortfall.

In addition, Amgen’s tax and penalty liability could mount as the company said an IRS audit of taxes it paid in 2016-2018 is under way. While it generates billions of dollars in free cash flow from quarter to quarter – $2bn in the first quarter versus $1

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