$550-Million Chevron Tax Accord Reached

Chevron Corp. all but cleared its books of nine years of tax disputes by reaching a $550-million settlement with the Internal Revenue Service on Wednesday.

The agreement adds roughly 10% to the company’s federal tax payments between 1979 and 1987, with the bulk of the $550 million representing net interest on the tax adjustments.

Chevron, which had set aside reserves exceeding the settlement total, expects a “fairly significant benefit” to third-quarter earnings, said Laurie Sachtleben, a company spokeswoman.

“We’re very pleased with this outcome,” said Ken Derr, Chevron’s chairman and chief executive. “The settlement moves us strongly toward our goal of becoming current in our tax audit and resolving all tax issues in a timely manner.”