UnitedHealth faces IRS probe over potential tax avoidance through foreign subsidiary

Aug 17, 2026

UnitedHealth Group faces an IRS probe over potential tax avoidance from 2017 to 2020 via a foreign subsidiary, threatening to raise its taxable income. Meanwhile, an amended shareholder lawsuit filed on August 7, 2026, by Rhode Island's pension fund and Länsförsäkringar Fondförvaltning AB alleges historic governance failures. The suit claims UnitedHealth rushed its Change Healthcare acquisition to evade antitrust blocks, causing a $2 billion cyberattack, and hid $200 million in Medicare billing fraud.

IRS tax avoidance investigation

▪The Internal Revenue Service is investigating UnitedHealth Group over allegations of underpaying taxes from 2017 through 2020 by funneling money through a foreign subsidiary.
▪The Internal Revenue Service is seeking to significantly increase UnitedHealth Group's taxable income for 2017 through 2020 and may require additional payments for subsequent years.
▪UnitedHealth Group received notices regarding the Internal Revenue Service tax audit in March 2026, which the company disclosed in a regulatory filing.

Change Healthcare cybersecurity breach

▪The 2024 cybersecurity breach of Change Healthcare cost UnitedHealth Group over $2 billion and led to a decline in the company's net income and stock price.
▪According to a former Change Healthcare director of risk management, the Change Healthcare systems were compromised because UnitedHealth Group failed to implement multifactor authentication.
▪A 2024 ransomware attack on UnitedHealth Group's subsidiary, Change Healthcare, exposed the personal data of 190 million people and compromised claims processing nationwide.

Medicare billing fraud allegations

▪A shareholder lawsuit filed against UnitedHealth Group alleges that the company defrauded the federal Medicare program and submitted at least $200 million in unsupportable diagnosis codes.
▪The shareholder lawsuit claims UnitedHealth Group's chief executive and board chairman, Stephen Hemsley, supported eliminating an internal audit program that identified Medicare billing issues.

Shareholder lawsuit claims

▪Two institutional investors, the Rhode Island state employees public pension fund and Swedish asset manager Länsförsäkringar Fondförvaltning AB, filed an amended lawsuit against UnitedHealth Group on August 7, 2026.
▪The shareholder lawsuit alleges that UnitedHealth Group board members deceived investors, repurchased approximately $29 billion of their own shares, and concealed corporate misconduct.

Corporate governance failures

▪UnitedHealth Group declined to answer questions regarding the ongoing shareholder litigation in August 2026.
▪The shareholder lawsuit accuses UnitedHealth Group executives and board members of corporate governance failures, including violating patient privacy laws and unlawfully suppressing competition.

Rushed acquisition integration

▪Shareholders allege UnitedHealth Group deliberately rushed the post-acquisition transition of Change Healthcare to make the integration nearly impossible to reverse if the Department of Justice blocked the deal.
▪The Department of Justice filed an appeal in 2022 to block UnitedHealth Group's acquisition of Change Healthcare, arguing it would reduce competition and raise insurance costs.