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Sherwin-Williams settles tax dispute with IRS

October 24, 2011

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CLEVELAND—The Sherwin-Williams Co. said Monday that it will book a $75 million charge in the fourth quarter related to a settlement it has reached with the IRS over federal tax deduction claims related to the company's employee stock ownership plan.

The charge amounts to 72 cents a share and will reduce shareholders' equity by about $51.2 million in the fourth quarter, the company said.

The Internal Revenue Service challenged the tax deductions claimed by Sherwin-Williams and sought for the company to pay "substantial" excise taxes and penalties, Sherwin-William said.

The settlement resolves all the tax issues related to the company's employee stock ownership plan for the 2003-2009 tax years, Sherwin-Williams said.

Shares of Sherwin-Williams slipped 19 cents to $81.39 in aftermarket trading. The stock fell 41 cents to $81.58 during the regular trading session.