The parties have reached a possible settlement of the lawsuit based on CVS’ income derived from its domestic production activities, according to a joint motion to stay the case filed Thursday in the US District Court for the District of Rhode Island. CVS argues the IRS mistakenly disallowed deductions claimed by CVS Health on domestic production related to photos, prescription drugs, weekly advertising circulars, packaging, and software.
- CVS alleges it’s entitled to refunds for overpayment of its 2014 federal income taxes by $57.95 million, its 2015 taxes by $103 million, its 2016 taxes by $111 million, and its 2017 taxes by $129 million
- CVS submitted a formal offer to settle the lawsuit Tuesday, and the Justice Department trial team has indicated it will recommend that the government accept the deal, the motion said
- The settlement is also subject to approval by the IRS chief counsel and the Congressional Joint Committee on Taxation, it said
Whelan Corrente & Flanders LLP represent CVS.
The case is CVS Health Corp. v. US, D.R.I., No 1:23-cv-00492, motion 4/9/26.
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