UnitedHealth Group is disputing an Internal Revenue Service proposal to raise its taxable income over the way it priced transactions with one of its foreign subsidiaries, according to quarterly filings the company disclosed in May and repeated in August.

The notices cover transactions between UnitedHealth and a foreign subsidiary for the 2017 through 2020 tax years, according to the May filing. The IRS is seeking to “significantly increase taxable income” for each of those years and could pursue similar adjustments for later years.

UnitedHealth said it does not agree with the IRS’s position. In its August filing, the company said it believes its tax positions are properly supported and intends to “vigorously contest” the proposed adjustments.

The case comes amid a broader IRS campaign that began more than a decade ago to examine how U.S. multinationals allocate profits between domestic operations and foreign subsidiaries, a process that can affect how much tax is paid in each country and often turns on complex factual comparisons rather than a single bright-line rule.

“This is quite common because the IRS has, since the Obama administration, increased its scrutiny of transfer pricing by U.S. based multinationals who are trying to shift profits out of the U.S. to their foreign subsidiaries,” Reuven S. Avi-Yonah, the Irwin I. Cohn Professor of Law at the University of Michigan Law School, told Fortune.

The IRS has pursued similar disputes with major companies including Coca-Cola, Meta and Medtronic, though those cases have had very different outcomes.

“The IRS has won some of these cases and lost others and the sums involved are usually in the billions,” Avi-Yonah said.

UnitedHealth said the matter remains unresolved.

“The company has previously disclosed the IRS examination and related tax matters in its public filings and believes its tax positions are properly supported,” a UnitedHealth Group spokesperson told Fortune. The spokesperson said the matters “remain subject to further review and discussions.”

Neither filing identifies the subsidiary, says where it is located, describes the transactions involved, or discloses a dollar figure for what the IRS is seeking.

That makes it difficult to assess the potential size of the dispute. Other transfer-pricing fights have involved billions of dollars, but UnitedHealth and the IRS have not provided enough detail to show what transactions are being challenged or how much money may be at stake.

A Notice of Proposed Adjustment is issued during an examination. It is a proposal, not a final determination, assessment or penalty. A company that disagrees can challenge it through the IRS administrative process, and unresolved disputes can proceed to court.

What is transfer pricing?

Transfer pricing refers to the price a company assigns to transactions between its own units in different countries. Because those prices can affect how much profit is attributed to each country, they can also determine where taxes are paid.

Section 482 of the tax code allows the IRS to adjust a company’s taxable income if it believes transactions between related businesses were not fairly priced.

The concept is straightforward, but applying it is often difficult because there is usually no unrelated third party making the same transaction for comparison. As a result, two sides can review the same intercompany dealings and reach different conclusions, leading to disputes that can take years to resolve.

UnitedHealth’s disclosure does not say what type of transaction triggered the proposed adjustment, which limits how much can be said about the specific tax issue at stake.

Avi-Yonah said many major transfer-pricing disputes have involved intellectual property moved to foreign subsidiaries, but he cautioned that he does not know enough about UnitedHealth’s case to say what the IRS is examining.

How large can transfer-pricing disputes become?

Coca-Cola’s case shows how large a transfer-pricing dispute can grow.

The beverage company’s dispute could ultimately involve about $20 billion in tax and interest. Coca-Cola has already paid the IRS $6 billion for tax years 2007 through 2009 while it appeals, and it estimates it could owe about $14 billion more in tax and interest for 2010 through 2025 if the Tax Court ultimately upholds the IRS adjustments. Its reserve was $529 million as of July 3, 2026.

Meta is also fighting an IRS notice that asserts $15.89 billion in additional tax, plus interest and penalties, for tax years 2017 through 2019, largely tied to transfer pricing with foreign subsidiaries and other international tax adjustments. The company petitioned the Tax Court in December 2025.

These disputes can last through multiple corporate and presidential administrations. Coca-Cola’s case concerns tax years 2007 through 2009, while Medtronic’s dispute began with its 2005 and 2006 tax years and only entered settlement talks this March after two trips to a federal appeals court. Avi-Yonah has written that the Medtronic case will likely take more than 20 years to resolve.

Those examples do not indicate where UnitedHealth’s case will end. They do show, however, how large and prolonged transfer-pricing disputes can become once they escalate.

What happens next?

If the matter is not resolved during the examination stage, UnitedHealth can continue through the IRS administrative appeals process and potentially litigate.

One figure in UnitedHealth’s filings does not clarify the company’s exposure. Its gross unrecognized tax benefits rose to $5.6 billion at the end of 2025 from $4.1 billion a year earlier, but the company said that should not be linked to this dispute.

A UnitedHealth spokesperson said the $5.6 billion reflects reserves across all of the company’s uncertain tax positions and “should not be interpreted as the amount associated with the NOPAs.” The company declined to say how much, if any, of that total relates to this matter or to identify the foreign subsidiary involved.

The IRS did not respond to Fortune’s request for comment. Federal law generally bars the agency from discussing individual taxpayers.

In its August filing, UnitedHealth said it believes its reserves for uncertain tax positions are adequate “based on current available information,” and that it intends to contest the proposed adjustments.

This story was originally featured on Fortune.com