Motorola Faces Possible Tax Bill

The company says it will contest the IRS findings.
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Motorola

(MOT)

sagged 5% Wednesday on a tough day for tech stocks as the big wireless company warned of a possible tax bill.

The Schaumburg, Ill., tech giant said in a

Securities and Exchange Commission

filing that it may owe as much as $500 million in taxes on profits earned in the years 1996-2000. The company said it is vigorously contesting the potential tax bill.

Motorola says the IRS claims are based on how intercompany sales are calculated.

On Wednesday, Motorola fell 82 cents to $14.32.