Intel Corporation announced it was appealing an Internal Revenue Service tax adjustment related to export sales. The company has calculated that its federal income tax for 1999 through 2005 would increase by about $2.2 billion plus interest if it loses its appeal against the IRS. The number one chip maker noted that if it loses the appeal there is a "possibility of a material adverse impact on the results of operations" for the period when the matter is resolved, but added that management does not believe the outcome will affect its financial position, cash flow or results of operations. The IRS would also likely make a similar claim for 2006, potentially increasing Intel's tax due by about $200 million, plus interest. The company mentioned that the IRS formally assessed the adjustment in its regular examination of Intel's tax returns.
News source: ExtremeTech