Columbia/HCA Settles Tax Case With IRS

Columbia/HCA Healthcare Corp. has agreed to pay $71 million to settle a dispute with the Internal Revenue Service over stock options for executives, the company said. The amount is about a quarter of the $276 million in taxes and interest sought by the IRS. In return for the payment, the IRS dropped its claim that the $525 million in corporate deductions claimed in 1992 was excessive and that the payments to executives were “golden parachutes.” Nashville-based Columbia, the target of a sweeping federal investigation looking into whether the company overcharged government health programs, said the settlement should not have any negative effect on its earnings. The IRS case had been watched closely by tax lawyers and publicly held corporations because of its potential impact on the use of stock options in executive pay. Columbia shares fell 50 cents to close at $30.50 on the NYSE.