EW · 10-Q · 2026Q3 · Full report

Tax Litigation and Exposure

Edwards Lifesciences Corp · 2026-11-04 · Importance 64 · Surprise 42 · Contradicted

The IRS is pursuing material transfer-pricing adjustments concerning Surgical/TAVR intercompany transactions between Edwards’ United States and Switzerland subsidiaries. For tax years 2015–2017, the IRS sought $269.3 million in additional federal tax before interest and a repatriation tax offset; Edwards is contesting the claim in court and says resolution is unlikely within 12 months. For 2018–2020, IRS notices proposed substantial taxable-income increases and 40% transfer-pricing penalties; an October 2026 Revenue Agent Report proposed tax increases of $167.0 million, $112.5 million, and $144.5 million for 2018, 2019, and 2020, respectively, and Edwards had until November 20, 2026, to submit its protest. Edwards intends to pursue administrative appeals and, if necessary, litigation; it says adverse outcomes could materially affect its financial statements.

Key facts

• In early October 2026, the IRS RAR proposed tax increases of $167.0 million for 2018, $112.5 million for 2019, and $144.5 million for 2020; Edwards Lifesciences received an extension through November 20, 2026, to submit its protest. source
• In the second quarter of 2026, Edwards Lifesciences received an IRS NOPA proposing a $233.5 million increase to U.S. taxable income for 2018 related to tax elections made in 2018. source
• An IRS 2026 NOPA proposed U.S. taxable-income increases of $625.3 million for 2018, $530.7 million for 2019, and $683.6 million for 2020 relating to transfer pricing of Surgical and TAVR intercompany licenses. source
• The IRS’s 2021 NOPA concerning 2015–2017 Surgical/TAVR intercompany royalties proposed approximately $265.0 million of additional tax expense and departed from a transfer-pricing method previously agreed with the IRS. source
• The IRS issued a notice of deficiency in the fourth quarter of 2023 seeking $269.3 million in additional tax for 2015–2017, before interest and a repatriation tax offset. source
• The Israel Tax Authority withdrew its approximately $110.0 million assessment, excluding interest and penalties, concerning an alleged 2017 intellectual-property transfer, but reserved the right to evaluate whether a transfer occurred in later years. source
• The IRS proposed 40% transfer-pricing penalties of $52.5 million for 2018, $44.6 million for 2019, and $55.9 million for 2020. source
• Edwards Lifesciences plans to contest the IRS’s 2015–2017 deficiency judicially; final resolution is not likely within the next 12 months, and an adverse outcome could materially affect its financial statements. source

Impact estimates