Drug Giant GlaxoSmithKline P.L.C. to Pay $3.4 Billion in Biggest Tax Settlement in U.S. History.Legal Visual Specialists from Z-Axis Assisted the IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. in the Case NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of & DENVER -- GlaxoSmithKline, based in London with a U.S. headquarters in Philadelphia, settled with the IRS for $3.4 billion in a suit involving "transfer pricing," in which multinational firms ascribe revenue from intangible products like patents and development rights to subsidiaries in low-tax countries, and allocate expenses to high-tax countries, as a way of minimizing taxes. Because of the complexity of the information, the IRS hired Z-Axis as visual experts to develop a visual strategy for their presentation at trial. Z-Axis also designed and produced all the demonstrative evidence Evidence other than testimony that is presented during the course of a civil or criminal trial. Demonstrative evidence includes actual evidence (e.g., a set of bloody gloves from a murder scene) and illustrative evidence (e.g., photographs and charts). for the case. The demonstrative evidence was focused on illuminating complex international financial transactions and their tax implications to the court. Z-Axis worked for more than a year developing sophisticated exhibits, using different media, to assist the trial team in explaining the events that led up to the lawsuit. The Case GlaxoSmithKline admitted no wrongdoing wrong·do·er n. One who does wrong, especially morally or ethically. wrong  do in the settlement, and insisted it allocated its revenues and expenses fairly among its U.S. and British subsidiaries. Glaxo said the settlement, while large, saved it from a possible tax bill as high as $15 billion if it had lost the dispute, which was scheduled for trial in February 2007. Glaxo settled to avoid a bigger potential hit from allegations that it undervalued UndervaluedA stock or other security that is trading below its true value. Notes: The difficulty is knowing what the "true" value actually is. Analysts will usually recommend an undervalued stock with a strong buy rating. its U.S. profit on nine products - between 1989 and 2005. The products at issue, in addition to Zantac and Advair, were Flonase and Serevent for allergies, Zofran for nausea, Imitrex for migraines, Ventolin and Flovent for asthma, and the antibiotic Ceftin. The settlement centered on tax years 1989 through 2000 for Glaxo Wellcome P.L.C., a predecessor company that merged with SmithKline Beecham in 2000. Profits on Advair, made by GlaxoSmithKline, were at issue from 2000 to 2005. In the case of Zantac, the company had been ascribing much of its revenues to the United Kingdom, where the product was developed, even while much of the sales and expenses were generated in the U.S. With the IRS settlement, GlaxoSmithKline said it essentially will be taxed twice - once in Britain and again in the United States - and will seek a refund in Britain on taxes already paid there. The Outcome The settlement was a victory for the IRS in its battle against "transfer pricing." As part of the settlement, Glaxo dropped its counterclaim A claim by a defendant opposing the claim of the plaintiff and seeking some relief from the plaintiff for the defendant. A counterclaim contains assertions that the defendant could have made by starting a lawsuit if the plaintiff had not already begun the action. against the IRS for a $1.8 billion refund of overpaid o·ver·pay v. o·ver·paid , o·ver·pay·ing, o·ver·pays v.tr. 1. To pay (a party) too much. 2. To pay an amount in excess of (a sum due). v.intr. To pay too much. income taxes. Said Alan Treibitz, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. and founder of Z-Axis,"I was proud of the creativity of our team in coming up with innovative ways to depict financial transactions." It is predicted that more multinationals will follow GlaxoSmithKline and negotiate with the IRS on how profits are allocated. About Z-Axis: Z-Axis integrates research, strategic planning, graphic production, and technology to create convincing, winning litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. presentations. For more than twenty years TWENTY YEARS. The lapse of twenty years raises a presumption of certain facts, and after such a time, the party against whom the presumption has been raised, will be required to prove a negative to establish his rights. 2. , Z-Axis has proven itself to be an industry pioneer and leader in courtroom technology, as well as an innovator in courtroom animation. Combining a veteran's eye for strategy with the latest technological advancements, the Z-Axis team of professionals has a reputation for creating visual communications tools that are second to none, as evidenced in its patented VuPoint[TM] system. Z-Axis services and supports its national and international clients from its international headquarters in Denver, as well as its Chicago, New York, Washington, DC, California and London offices. For more information on Z-Axis, visit www.zaxis.com or call 303-713-0200. |
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