Officials at Pall Corp. said the company is investigating the possibility it materially understated U.S. income tax payments, as well as its provision for income taxes in certain prior periods going back to the fiscal year ended July 31, 1999. The maker of filtration systems for industrial applications elaborated that the matter relates to debt regarding one of its foreign subsidiaries.

The company added that it has notified the Internal Revenue Service and the Securities and Exchange Commission of the tax matter and of the audit committee’s pending inquiry. Pall also conceded that the issue may have resulted in the company’s failure to comply with certain terms of its debt or other agreements. As a result, it may need to seek waivers from creditors under those agreements, which could affect its “intention ” to declare a quarterly dividend for the quarter ending July 31, 2007.

Pall, which has a $6 billion market capitalization and generates $2.2 billion in annual revenues, said it intends to report on the audit committee’s inquiry as soon as it is practicable.