MusclePharm Closes Potential $7.3 Million Liability with IRS

Rhea-AI Summary

MusclePharm Corporation (OTCMKTS: MSLP) has successfully resolved a significant tax matter with the IRS regarding adjustments to its 2014 Federal Income Tax Return. An audit initiated by the IRS in 2016 proposed approximately $7.3 million in back taxes and penalties linked to former executives' restricted stock grants. Following a formal protest from MusclePharm, an IRS Appeals Officer confirmed on June 29, 2021, that the tax matter exceeded the statute of limitations and is now closed, eliminating potential financial liabilities.

Positive

• Tax matter with the IRS resolved, averting $7.3 million in potential back taxes and penalties.
• Closure of the IRS audit allows MusclePharm to focus on business operations without tax liabilities.

Negative

• None.

CALABASAS, Calif., July 26, 2021 (GLOBE NEWSWIRE) -- On April 6, 2016, the Internal Revenue Service (“IRS”) selected MusclePharm Corporation’s (OTCMKTS: MSLP) 2014 Federal Income Tax Return for audit and, as a result, proposed certain adjustments with respect to the tax reporting of certain of the Company’s former executives’ 2014 restricted stock grants. On April 4, 2017, MusclePharm received a letter from the IRS asserting back taxes and penalties of approximately $7.3 million dollars owed for the 2014 restricted stock grants. MusclePharm submitted a formal protest disputing the matter on several grounds and has been pursuing this matter vigorously through the IRS appeals process. On June 29, 2021, an IRS Appeals Officer confirmed that the tax matter had exceeded the applicable statute of limitations and was deemed closed from any further assessment by the IRS.

About MusclePharm Corporation

MusclePharm^® is an award-winning, worldwide leading sports nutrition & lifestyle company offering branded nutritional supplements. Its portfolio of recognized properties include the MusclePharm^® Sport Series, Essentials Series, and recently-launched Natural Series, as well as FitMiss™ – a product line designed specifically for female athletes. MusclePharm^® products are available in more than 100 countries globally, with its Combat Protein product lineup being the company’s most popular.

Contact:

John Mills, Managing Partner
ICR, Inc.
646-277-1254
John.Mills@Icrinc.com

FAQ

What was the IRS audit about for MusclePharm Corporation?

The IRS audit involved MusclePharm's 2014 Federal Income Tax Return, specifically adjustments related to former executives' restricted stock grants.

How much were the proposed back taxes and penalties from the IRS for MusclePharm?

The IRS proposed approximately $7.3 million in back taxes and penalties.

When was the IRS audit for MusclePharm Corporation officially closed?

The IRS audit was officially closed on June 29, 2021, after the Appeals Officer confirmed that the tax matter exceeded the statute of limitations.

What is the stock ticker for MusclePharm Corporation?

MusclePharm Corporation trades under the stock ticker MSLP.