Recent high-value disputes demonstrate the significant financial impact that transfer pricing adjustments can have on multinational companies. Let’s take a look at some of them, which are as follows:
In the case of Coca-Cola, the IRS argued that its foreign affiliates were not paying enough to the U.S. parent for the use of its valuable trademarks, brands, and secret formulas. The IRS therefore sought to move more income from Coca-Cola’s foreign affiliates to the U.S. for tax purposes.
The dispute involves tax years 2007–2009 and has resulted in billions of dollars of additional tax being disputed. The U.S. Tax Court ruled largely in favor of the IRS. Coca-Cola appealed the decision to the Eleventh Circuit Court of Appeals. The appeal was argued in June 2026, and a decision is still pending, as of August 2026.
The case shows how the valuation and pricing of valuable IP can create major transfer pricing disputes.
Meta’s dispute with the IRS involves the transfer and use of valuable intellectual property by its foreign subsidiaries.
The IRS argued that Meta did not properly value the IP involved in its cost-sharing arrangement with its foreign subsidiary. In May 2025, the U.S. Tax Court valued the transferred IP at approximately $7.79 billion, higher than the amount reported by Meta.
Meta is also facing a separate IRS dispute for tax years 2017–2019. In September 2025, the IRS issued a Notice of Deficiency asserting approximately $15.89 billion in additional tax, plus interest and penalties. This primarily relates to transfer pricing and other international tax issues. Meta challenged the notice in U.S. Tax Court. The case is still pending with the U.S. Tax Court, as of August 2026.
This case shows that transfer pricing disputes involving IP and cost-sharing arrangements can continue for many years and may involve very large tax amounts.
Microsoft received Notices of Proposed Adjustment (NOPAs) from the IRS for tax years 2004–2013. The main issue involved how Microsoft allocated profits between its U.S. business and foreign operations under its transfer pricing and cost-sharing arrangements.
The IRS proposed approximately $28.9 billion in additional tax, plus penalties and interest. Microsoft disagreed with the proposed adjustments and said it would challenge them through the IRS appeals process, which may take several years. There is no resolution as of August 2026.
This case shows a transfer pricing audit can examine transactions and arrangements that are many years old and can result in extremely large, proposed adjustments. Next, let’s understand in brief how long the IRS can audit transfer pricing-related cases in the United States.
How Long Can the IRS Audit Transfer Pricing?
Normally, the IRS has three years from the date a tax return is filed to assess additional tax. This is the general rule under IRC Section 6501(a).
However, transfer pricing audits can take much longer than three years. This is because the taxpayer and the IRS may agree to extend the three-year deadline by signing a consent form, such as Form 872 or Form 872-A. This gives the IRS additional time to complete a lengthy transfer pricing audit, an IRS Appeals process, or negotiations under the Mutual Agreement Procedure (MAP).
In some situations, the IRS may have even more time. For example, the assessment period can generally extend to 6 years if a taxpayer omits more than 25% of the gross income reported on the return.
The time limit can also be affected when a taxpayer does not provide certain foreign-related-party records requested by the IRS. In serious cases, such as fraud or a return that was never filed, there may be no time limit for the IRS to assess tax.
In simple terms, although the normal IRS assessment period is three years, transfer pricing issues can remain open for much longer. This is why a transfer pricing audit may examine transactions from several years ago.
These cases demonstrate that transfer pricing is not simply about choosing a price between related companies. It is about explaining and supporting why that price is consistent with the arm’s-length principle.
So far, we have discussed that transfer pricing disputes can be resolved in multiple ways in the United States. Next, let’s examine how taxpayers may choose the right method to resolve the dispute based on their circumstances.