Monday, October 29, 2007

Packeteer Resolves IRS Tax Dispute, Not Subject to $122 million

Packeteer resolved its previously reported dispute with the Internal Revenue Service (IRS). Under the deal, the company's pre-existing federal net operating loss carryforwards ("NOLs") will offset essentially all increases in income with the following net impact: the company will not be subject to the $122 million and $49 million of regular tax liabilities and penalties, or related interest, previously asserted by the IRS with respect to 2003 and 2004; and the company expects that the total federal and state regular and alternative minimum income tax and interest payments required to be made by the company as a consequence of the agreement (including adjustments impacting 2005, which were not included in the original assessment), to be less than $500,000.

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