Intel Corp (INTC)

[Windsock]

For a company the size of Intel, The IRS always conducts an audit of their returns. In fact, they usually have a full-time, onsite audit team at the major companies.

The IRS challenge simply means that Intel is agressive in their tax poliecies. The IRS disagreede with an Intel interprettion in the early '90s on an export pricing issue. Intel challenged the IRS ruling in litigattion. Many companies in Silicon Valley joined a defense fund to assist Intel with legal fees because they had the same issues. The result of the challenge was that Intel prevailed and everybody -- except the IRS was happy.

By the way, AMD contributed to the defense fund and benefited from the court decision. The tax departments of Intel and AMD are quite friendly and cooperate a lot together because they have common interests on tax issues -- minimize the tax bill.