Murray Hill, N.J. (Sept. 7, 2004) - Telecommunications equipment maker Lucent Technologies Inc. said that it could get an $816 million tax refund from the Internal Revenue Service, pending congressional approval.
Lucent pointed out in a filing with the Securities and Exchange Commission that U.S. tax officials have approved the refund, which settles an IRS dispute dating back to 1996, when Lucent was still part of AT&T Corp.
Last year, the company filed a claim related to the carry-back of its fiscal year 2001 federal net operating loss to 1996. Under tax sharing agreements it had with AT&T, Lucent said, any refund AT&T received from the IRS as a result of that carry-back would be payable by AT&T to Lucent. In June, the IRS allowed $139 million of the refund claim but disallowed the balance.
Lucent said it reached a tentative agreement with the IRS last week that allows a net operating loss carry-back that will result in the $816 million refund, including the $139 million previously allowed. The refund is subject to the completion of the IRS's audit of Lucent’s fiscal year 2001 federal income tax return. The agreement must also be reviewed and approved by the Congressional Joint Committee on Taxation.
If approved, Lucent said the claim would be recognized as a tax benefit. If approved by the Joint Committee, Lucent noted that the refund could be received during the 2005 fiscal year.
-- WebCPA staff
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