It found Peabody did not pay enough tax on unspecified transactions, the Australian Financial Review reports.

The US coal mining giant – which bought the MacArthur Coal for $5 billion in 2011 ¬– has been asked by the ATO to pay $50 million and a $22 million fine.

Peabody’s senior vice-president of investor relations and corporate communications, Vic Svec, told the Australian Financial Review that the ATO had challenged the way inter-company loans were priced.

“We believe the methodology was proper and intend to appeal the revised assessments,” he reportedly said.

In Peabody’s 2012 financial statements, lodged with the Australian Securities and Investment Commission, the company said it “plans to proceed with litigation” over the ruling.

“In April, the ATO issued a final assessment challenging certain financing transactions with a total assessment of $71.9m, comprised of additional taxes of $50m, plus interest and penalties of $21.9m,” the company said.

In its statements, Peabody said the company might be required to pay half the outstanding assessment amount in the second quarter of 2013.

In December, two Australians pleaded guilty to insider trading regarding Peabody’s takeover of MacArthur Coal.

A Sydney court was told that then-Royal Bank of Canada associate John Kay Jin Khoo communicated inside information on the Peabody-MacArthur deal to Active Capital Management director Jia Yao Mathew Tan before an announcement to the market was made.

The Australian Securities and Investment Commission said Tan made about $A40,000 off that information.

Tan also gained information from Khoo on the 2010 takeover of coke company Caledon Resources by China’s Guangdong Rising Assets Management.

While in possession of inside information from Khoo, Tan acquired 10,000 contracts for difference in Macarthur on July 8, 2011, three days before the announcement of the deal on the Australian Securities Exchange.