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Date: 09/11/2006 (Date of Announcement)
Misconduct Type: Tax
Enforcement Agency: Treasury – IRS
Contracting Party: None
Court Type: Civil
Synopsis: GlaxoSmithKline agreed to pay approximately $3.4 billion to settle charges by the IRS that the company under-reported profits to avoid paying U.S. taxes. The Internal Revenue Service accused GSK of a practice called "transfer pricing," by which a company claims most of its earnings belong in a country where taxes are low. The transactions at issue, which concerned the way GSK priced drugs for sale through its U.S. subsidiary, occurred between the years 1989 and 2005.