UnitedHealth Group is contesting an Internal Revenue Service proposal over UnitedHealth IRS transfer pricing arrangements with a foreign subsidiary, covering tax years 2017 through 2020, the company has disclosed in regulatory filings.
The IRS is seeking to ‘significantly increase taxable income’ for each of those years and could pursue similar adjustments for later years, according to the filings.
UnitedHealth says it will ‘vigorously contest’ the proposed adjustments, adding that it believes its tax positions are ‘properly supported’.
Neither filing names the subsidiary, identifies where it is based, describes the transactions involved, or discloses a dollar figure for what the IRS is seeking.
What UnitedHealth IRS transfer pricing dispute means
Transfer pricing refers to the prices a company sets on transactions between its own units in different countries. Those prices determine how much profit is attributed to each country, and therefore where taxes are paid.
Section 482 of the US tax code allows the IRS to adjust a company’s taxable income if it believes intercompany transactions were not fairly priced. The rule is notoriously hard to apply because there is often no independent third party conducting the same transaction to use as a benchmark.
A Notice of Proposed Adjustment is issued during an examination. It is a proposal, not a final assessment or penalty, and a company can challenge it through an administrative process. Unresolved cases can reach court.
Reuven S. Avi-Yonah, the Irwin I. Cohn Professor of Law at the University of Michigan Law School, said the IRS has ‘since the Obama administration, increased its scrutiny of transfer pricing by US-based multinationals who are trying to shift profits out of the US to their foreign subsidiaries’.
How large these disputes can grow
Comparable cases illustrate the potential scale. Coca-Cola’s transfer pricing dispute could ultimately involve roughly $20 billion in tax and interest. The company has already paid the IRS $6 billion covering tax years 2007 through 2009 while it appeals, and estimates a further roughly $14 billion in additional tax and interest for 2010 through 2025 if the IRS adjustments stand. Its reserve stood at $529 million as of 3 July 2026.
Meta is contesting an IRS notice asserting $15.89 billion in additional tax, plus interest and penalties, for its 2017 through 2019 tax years. The company petitioned the Tax Court in December 2025.
Medtronic’s dispute, which began with its 2005 and 2006 tax years, entered settlement talks this March after two trips to a federal appeals court. Avi-Yonah has written that the case will likely take more than 20 years to resolve.
UnitedHealth’s gross unrecognised tax benefits rose to $5.6 billion at the end of 2025, up from $4.1 billion a year earlier. The company cautioned that figure covers all uncertain tax positions and ‘should not be interpreted as the amount associated with the NOPAs’.
UnitedHealth said in its August filing it believes its reserves are adequate ‘based on current available information’ and intends to contest the proposed adjustments.
