WOONSOCKET – CVS Health Corp. has filed a lawsuit against the U.S. seeking a refund of federal income taxes to the tune of more than $400 million.
The Woonsocket-based company filed the suit Nov. 21 in Rhode Island’s federal court claiming that the U.S. Internal Revenue Service ‘erroneously’ denied its Domestic Production Activities Deductions for the tax years ended 2014 through 2017.
Understanding Stroke: Essential Information for Immediate Action
Stroke is a leading cause of death and long-term disability in the United States, impacting…
Learn More
According to court records obtained by Providence Business News, CVS paid the resulting income tax deficiencies and had filed claims for refunds. More specifically, CVS stated that it had filed amended income tax returns for the years ended 2014 to 2017 beginning in 2021. In each of these amended income tax returns, CVS had reported its Domestic Production Activities Deductions and claimed tax refunds totaling more than $402 million.
However, court records show the IRS denied all of CVS’ claims for refunds stating the company did not qualify for the deduction.
The Domestic Production Activities Deduction was established in 2004 and was intended to provide tax relief for businesses that produce their goods inside the U.S. But the deduction has not been available since December 2017 when the Tax Cuts and Jobs Act of 2017 was enacted.
In its complaint, CVS stated that it had properly claimed the deduction for its production of photography products, certain prescription drugs, its weekly advertising circular, certain packaging known as “Blister Packs” as well as computer software products. The company claimed that each of these products were qualified production property that was “produced in whole or significant part within the U.S.” or by CVS. Also, CVS stated it had derived qualifying gross receipts for each of these product categories between 2014 to 2017.
Mike DeAngelis, executive director CVS Corporate Communications, responded referring questions to the court documents.
(Update: Comment from CVS added in 7th paragraph.)
Katie Castellani is a PBN staff writer. You may contact her at Castellani@PBN.com.
