IBM is looking repatriate $8 billion of undistributed profits earned outside the United States as part of a one-time US tax holiday policy.
In a regulatory filing, the world's largest computer company said recognising the $8 billion in profits would result in an income tax expense of up to $550 million, which it would take as a charge against quarterly earnings once the company's management and its board of directors approve the plan.
IBM said it is evaluating the possible effect on its financial results of recognising $8 billion in profits from some of its more than 80 non-US subsidiaries as part of a program under the American Jobs Creation Act of 2004.
The company also said it had discovered in the past month that certain employees of its global services business in Japan improperly resold equipment from another company, cutting its 2004 sales and costs by $260 million.
Of the total reduction, IBM's fourth-quarter earnings reported in January had already factored in a $50 million cut.
In a news conference in Tokyo today, IBM Japan said some of its employees had improperly recorded business transactions but that there was nothing criminal and no damage was done to its clients.