IRS Extends to June 10 the Deadline for Submitting Error Reports on Branded Prescription Drug Sales

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On Friday, May 27, 2011, the Internal Revenue Service ("IRS") issued Notice 2011-46 (the "New Notice"), which extended to June 10, 2011 the deadline to submit error reports in accordance with the dispute resolution process established with respect to the preliminary fee calculation of the 2011 fee imposed on certain manufacturers and importers of branded prescription drugs.

Background

Section 9008 of the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the "ACA"), imposes an annual fee (the "Fee") on each "covered entity" (i.e., any manufacturer or importer with gross receipts from sales of branded prescription drugs) with gross receipts of more than $5 million from certain sales of branded prescription drugs. In Notice 2010-71 (the "Initial Notice"), the IRS provided guidance on the calculation of the Fee. For 2011, the aggregate Fee to be paid by all covered entities is $2.5 billion. The IRS will apportion this Fee among the covered entities based on each covered entity's proportionate share of branded prescription drug sales that are taken into account during the applicable Sales Year. For a detailed description of the Initial Notice, including definitions of these terms and the methodology for calculating the Fee, see Reed Smith's Tax Alert 10-278.

Please see full alert below for more information.

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