Senate Finance Committee Chairman Ron Wyden, D-Oregon, is once again targeting Amgen on its tax practices. This time, he's making a “final request” of the California biotech to provide information on how it shifts revenue to offshore subsidiaries.
In a letter to Amgen CEO Robert Bradway, Wyden said he seeks “voluntary compliance” and answers to a prepared list of questions by Dec. 21.
While Amgen generated 70% of its sales in the U.S. in 2021, it reported only 28% of its pretax income there, Wyden said.
By funneling profits to subsidiaries—primarily in Puerto Rico—Amgen paid an effective tax rate of 12.1% last year, Wyden said, which was “substantially lower” than the U.S. corporate rate of 21%. The previous year, the company’s effective tax rate was 10.7%.
Responding to a request for comment, Amgen said it has "cooperated voluntarily" with the committee's requests and remains committed to continuing to do so.
"Because Amgen is currently in litigation with the Internal Revenue Service (“IRS”), there are limitations on the information the company can provide," a copany spokesperson said in an email. "Moreover, much—if not all—of the information requested is available to the Committee through appropriate process, as enacted by Congress."
The new request comes four months after Wyden struck up his probe of Amgen. The committee wants to find out “country-specific information” on Amgen’s pretax earnings, profit margins, employee head count and taxes paid from 2018 to 2021.
“Unfortunately, Amgen declined to provide the committee this information, choosing to keep secret how much of its profits are reported by offshore subsidiaries that are treated as foreign for tax purposes,” Wyden wrote this week.
As for the IRS's investigation, the agency alleges that the company shifted $24 billion in income to subsidiaries in Puerto Rico.
Government scrutiny of Amgen has been ongoing for more than a decade. In April of this year, the company said it had received a notice of deficiency from the IRS, which proposed an increase to Amgen’s taxable income from 2013 to 2015. The move would leave Amgen with a $5.1 billion bill, plus interest, along with penalties of approximately $2 billion.
Before that, the IRS demanded $3.6 billion in back taxes for Amgen's operations from 2010 to 2012.
Amgen isn’t the only company in Wyden’s crosshairs. In July, Wyden accused Merck of avoiding billions in U.S. taxes by offshoring profits from mega blockbuster Keytruda. Also in July, Wyden zeroed in on AbbVie’s finances.