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IRVING, Texas -- Exxon Mobil Corporation announced it has reached agreement on a long-running tax dispute with the Internal Revenue Service over tax deductions the company claimed on the sale of natural gas, primarily in Texas from 1974 to 1990, according to reports.
ExxonMobil has gone to trial on this issue three times since 1989 and has prevailed in all three cases. In 1996 and 2001, ExxonMobil received favorable federal court decisions regarding these deductions for the tax years 1974 and 1975, and was reimbursed by the government for the taxes it previously paid, the reports stated.
ExxonMobil received a third federal court ruling in its favor in early 2003. The IRS and Justice Department later agreed the company was entitled to these deductions for its tax years 1976-90. The decision to finally settle the case was reviewed by the congressional Joint Committee on Taxation.
Refunds for any taxes previously paid for 1976-90, including taxable interest at rates set by the Internal Revenue Code, ExxonMobil will receive as these years are closed. The cumulative after-tax earnings impact of the settlement will be approximately $2.2 billion and will be reported in fourth quarter 2003 results, according to reports.