Bristol-Myers Sets $160 Million Tax Reserve for Transfer Pricing
Scalar comment:
This article also shows why transfer pricing disputes continue to be one of the leading international tax issues, and why a taxpayer must focus on documenting and complying with transfer pricing regulations internationally.
Bristol-Myers Squibb Increases Tax Reserves Amid IRS Transfer Pricing Dispute
Issue:
Bristol-Myers Squibb (BMS) is contesting several IRS proposed adjustments related to transfer pricing and other tax matters for the 2008–2012 tax years. The dispute has been under appeal since 2022, reflecting long-standing scrutiny of multinational pharmaceutical companies’ intercompany pricing.
Present Result:
- BMS set aside $160 million in additional tax reserves in Q3 2025 for these transfer pricing matters.
- The company indicated that over the next 12 months, it may need to reduce unrecognized tax benefits by $260–300 million due to settlements of certain audits or related events.
- No detailed IRS claim amounts were disclosed.
- This proactive reserving contrasts with many taxpayers, who either underestimate transfer pricing exposure or fail to set aside sufficient reserves.
To-Dos / Expectations / Next Steps:
Strong documentation and early planning remain key to managing transfer pricing audit risk and potential penalties.
BMS will continue contesting the IRS adjustments through ongoing administrative and potential litigation channels.
Taxpayers with similar disputes should assess reserve adequacy carefully to avoid surprises in financial reporting.
