The Internal Revenue Service announced a record settlement for a long-running a transfer pricing dispute with pharmaceutical giant Glaxo SmithKline Holdings Inc. and the company's subsidiaries.

This case, which is pending in the U.S. Tax Court, is the largest tax dispute in the history of the agency. Under the agreement, GSK will pay the IRS approximately $3.4 billion (including interest), while the government will abandon its claim seeking a refund of $1.8 billion in overpaid income taxes, as part of a deal to resolve the parties' long-running transfer pricing dispute for the tax years between 1989 through 2005.

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