Western Union Co. says it will pay the IRS and various state tax authorities about $220 million to settle a tax dispute stemming from its restructuring of international operations in 2003.
The payment is in addition to $250 million Douglas County-based Western Union made to the IRS in 2010 in the case.
The company said in a statement released Thursday that the agreement covers its tax treatment for imputed intangibles income, trademark buy-in royalties and other items.
Western Union said it will eliminate its related tax contingency reserve, and expects to record a one-time tax benefit of approximately $200 million in 2011. The actions reflect the impact of the resolution reached in the agreement with the IRS for the 2003-2004 tax years as well as the application of the agreed treatment to the subsequent years through 2011, the company said.
Based on the resolution of the tax treatment of imputed intangibles income, trademark buy-in royalties, and other items, Western Union said it anticipates 2012 and future year effective tax rates to be reduced by approximately seven percentage points.
