July 2 Security services provider ADT Corp said it may have to contribute to a tax bill faced by former parent Tyco International Ltd if the total amount assessed by the IRS exceeds $1.85 billion.
Tyco said on Monday it received a notice from the U.S. Internal Revenue Service stating that several of the company's former units, including ADT, owed taxes of $883.3 million and penalties of $154.0 million for tax years from 1997 to 2000. ()
Tyco also said the IRS had disallowed interest and related deductions recognized on the U.S. income tax returns totaling about $2.86 billion related to intercompany debt transactions.
The company said four former subsidiaries would share the liabilities under tax-sharing agreements. The companies are Covidien Plc, TE Connectivity Ltd, ADT and Pentair Ltd. ()
Shares of ADT, which was spun off from Tyco in September, were little changed at $40.46 in morning trading on the New York Stock Exchange.