‘It never rains but it pours,’ wails the old adage. To which Interpublic Group can but cry ‘Amen’!
The latest crop of woe to hit the beleaguered agency holding company – the world’s second largest after WPP – is a federal audit of its tax returns.
In a filing Tuesday with the Securities and Exchange Commission, Interpublic revealed that the Internal Revenue Service is auditing its federal returns for the years 1994 to 1996. IPG also disclosed that the IRS plans to challenge some aspects of its returns.
The company has told the SEC it believes its returns are in compliance with tax law and that adequate provisions have been made for any foreseeable additional tax payments. IPG “does not anticipate any material earnings impact from the ultimate resolution of these matters,” it declared.
Furthermore, the filing continued, earnings will be restated downward by an extra $47 million (€44.22m; £29.95m) for periods backdated to 1997 – a situation of which IPG gave advance warning on March 6.
Of this $47 million, $17.1 million is attributable to the group’s Octagon Motor Sports division – now up for sale [WAMN: 18-Mar-03] – while a further $29.9 million relates to other activities.
Data sourced from: New York Times; additional content by WARC staff