Symantec faces US$1b tax demand

Symantec has filed a petition with the U.S tax court over an IRS demand for the security software vendor to pay US$1.06b ofr back taxes and penalties related to Veritas Software.

The Internal Revenue Service (IRS) is seeking about US$758m in back taxes owed by Veritas Software , which Symantec acquired in 2005, and $303 million in penalties, according to the petition filed on Monday.

"We believe we have done everything to cooperate with the IRS to resolve this issue in good faith and we will continue to make efforts to resolve our disputes on an acceptable basis," Symantec said in a statement.

"We do not agree with the IRS position and will work with the courts to seek a definitive resolution."

The company said the dispute is over the formula for calculating "transfer pricing," which determines how companies set prices, fees and cost-allocation arrangements between their operations in different jurisdictions.

The IRS said Veritas and its Irish subsidiary did not properly allocate their respective incomes, according to Symantec's petition.

In early June, Symantec said it had reached an agreement with the IRS to settle an outstanding tax claim for US$36 million over the audit of its 2003 and 2004 fiscal years.