Coca-Cola, IRS Face Off in Tax Appeal With Huge Stakes for Both

A lot is on the line in Coca-Cola Co.’s big court battle against the IRS. For the company: as much as $20 billion. For the IRS: how much leeway it will have in pursuing multinational companies.

The beverage giant and the government will square off in oral arguments next week before the US Court of Appeals for the Eleventh Circuit in Miami. Coca-Cola is appealing US Tax Court rulings that side with the IRS over the company’s transfer pricing—how it priced transactions with its own foreign affiliates.

“We’re talking about truly massive dollars, almost unprecedented in the ...