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The Associated Press December 15, 2011, 9:22PM ET

Western Union to pay $220M more in IRS settlement

The Western Union Co. said Thursday that it will pay another $220 million to settle a tax dispute with the Internal Revenue Service and various state tax authorities.

The cash payment will come on top of a $250 million deposit that the payment-transfer company paid last year.

The agreement settles all remaining issues related to Western Union's restructuring of international operations in 2003, including the way it accounted for intangible income, royalties and other items.

In a filing with the U.S. Securities and Exchange Commission, the company said it agreed that the fair value of intangible property transferred to Western Union in the 2003 restructuring was $885 million higher than shown in tax returns.

The dispute goes back to a time when Western Union was owned by First Data Corp. It was spun off in 2006.

Western Union said it also would eliminate a related tax-contingency reserve and expects to record a one-time tax benefit of about $200 million for 2011.

The company said it expects it tax rates for 2012 and beyond to be reduced by about 7 percentage points compared to its previous forecast for 2011, which anticipated a rate of 23 to 24 percent.

Shares of the money order company rose 6 cents to close at $17.35. In extended trading, they were up 15 cents to $17.50.

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