2 weeks ago
UnitedHealth Challenges IRS Proposal Over Foreign Subsidiary Taxes
The IRS is checking whether UnitedHealth charged the right prices when its US business dealt with a foreign subsidiary.
These prices can affect which country gets to tax the company’s profits.
The IRS believes UnitedHealth’s taxable income should be higher for the years 2017 through 2020.
UnitedHealth disagrees and says its tax choices are supported.
The company plans to challenge the IRS proposal.
The proposal is not yet a final bill or penalty.
The two sides may continue discussing the matter, and UnitedHealth could appeal or go to court.
The company has not said which subsidiary or transactions are involved or how much additional tax might be owed.
The IRS proposed increasing UnitedHealth Group’s taxable income for tax years 2017 through 2020.
The dispute concerns transfer pricing for transactions involving an unidentified foreign subsidiary.
UnitedHealth says its tax positions are properly supported and plans to vigorously contest the proposed adjustments.
The IRS notices are proposed adjustments, not final tax assessments or penalties, and the potential liability remains undisclosed.
UnitedHealth reported $5.6 billion in gross unrecognised tax benefits at the end of 2025, but said the figure covers all uncertain tax positions.
- Who
- The Internal Revenue Service and UnitedHealth Group.
- What
- A dispute over proposed tax adjustments involving transfer-pricing transactions between UnitedHealth and an unidentified foreign subsidiary.
- Where
- The dispute concerns UnitedHealth’s US tax filings and transactions involving a foreign subsidiary; the subsidiary’s country was not identified.
- When
- The proposed adjustments cover UnitedHealth’s 2017 through 2020 tax years; the company reported its gross unrecognised tax benefits at the end of 2025.
- Why
- The IRS is examining whether the related-party transactions were priced appropriately and whether UnitedHealth’s taxable income should be increased.
IRS position
UnitedHealth position
Taxable income
IRS position
The IRS has proposed adjustments that would increase UnitedHealth’s taxable income for each year from 2017 through 2020.
UnitedHealth position
UnitedHealth disagrees with the proposed adjustments and says its tax positions are adequately supported.
Transfer-pricing treatment
IRS position
The IRS can adjust taxable income under Section 482 if related-party transactions were not priced appropriately.
UnitedHealth position
UnitedHealth maintains that the transactions and resulting tax positions are supported, although it has not disclosed the specific transactions.
Resolution and liability
IRS position
The IRS may pursue similar changes for later tax years, and the matter could proceed through appeals or court if not settled.
UnitedHealth position
UnitedHealth intends to contest the proposal; it says its $5.6 billion in gross unrecognised tax benefits should not be interpreted as the amount associated with this dispute.
Key facts
- Tax years under review
- 2017 through 2020
- Disputed issue
- Transfer pricing involving an unidentified foreign subsidiary
- IRS action
- Proposed adjustments that would increase UnitedHealth’s taxable income
- Final assessment
- No; the notices are proposed adjustments, not final assessments or penalties
- UnitedHealth’s position
- The company says its tax positions are properly supported and will vigorously contest the proposal
- Gross unrecognised tax benefits
- $5.6 billion at the end of 2025, compared with $4.1 billion a year earlier
- Potential liability
- UnitedHealth has not disclosed the amount tied to the proposed adjustments
Quotes
UnitedHealth Group spokesperson
Representative of UnitedHealth Group, speaking on the company’s stance towards the IRS proposal
“"The company has previously disclosed the IRS examination and related tax matters in its public filings and believes its tax positions are properly supported," a UnitedHealth Group spokesperson said.”
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Sources
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