8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) September 12, 2005.

USG Corporation

(Exact name of registrant as specified in its charter)

Commission File Number: 1-8864

Delaware	36-3329400
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
125 South Franklin Street, Chicago, Illinois	60606-4678
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (312) 606-4000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01 Other Events

     On September 12, 2005, USG Corporation issued a press release announcing that the Internal Revenue Service has finalized its regular audit of the Corporation’s federal income tax returns for the years 2000 through 2002. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference into this Item 8.01 report on Form 8-K as if fully set forth herein.

SIGNATURE

     Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	USG CORPORATION Registrant
Date: September 12, 2005	By:	/s/ Richard H. Fleming
		Richard H. Fleming,
		Executive Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Exhibit
99.1	USG Corporation press release dated September 12, 2005.

EX-99.1

Exhibit 99.1

Investor Relations: (312) 606-4125
Media Inquiries:     (312) 606-4356

USG CORPORATION ANNOUNCES COMPLETION OF IRS AUDIT

     CHICAGO, IL., September 12, 2005 – USG Corporation (NYSE:USG) today announced that the Internal Revenue Service (“IRS”) has finalized its regular audit of the Corporation’s federal income tax returns for the years 2000 through 2002. The audit will result in an increase in the Corporation’s reported earnings for 2005 of $25 million and net cash outflows by the end of 2005 of $105 million.

     Substantially all of the additional tax liabilities resulting from the audit will be covered by liabilities currently recorded on USG’s financial statements. In addition, a portion of the Corporation’s recorded income tax contingency reserves are no longer necessary. This will result in a reduction in the Corporation’s income tax provision and a corresponding increase in consolidated net income in the third quarter of 2005 of $25 million.

     In the aggregate, the audit is expected to result in net cash outflows by the end of 2005 of $105 million ($53 million of which has already been paid), including $47 million directly related to the 2000 through 2002 audit and an additional $58 million relating to the Corporation’s 2003 and 2004 years. A substantial portion of the outflows relating to the audited years and all of the outflows relating to the 2003 and 2004 years are the result of the disallowance by the IRS of the Corporation’s current deduction of contractual interest on debt incurred prior to its bankruptcy filing in 2001. In addition, the audit is expected to result in net cash outflows of $12 million related to the 2000 year. Because this amount is considered

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USG CORPORATION ANNOUNCES COMPLETION OF IRS AUDIT/2

a prepetition liability under the Bankruptcy Code, the timing of payment is subject to Bankruptcy Court approval and has not yet been determined. Assuming that the contractual interest is ultimately paid, a substantial portion of these outflows will be recovered by the Corporation on its tax returns in future years following its emergence from bankruptcy.

     Payment of these amounts will be made from current cash balances. The Corporation had $1.2 billion of cash, cash equivalents and marketable securities as of June 30, 2005.

     USG Corporation is a Fortune 500 company with subsidiaries that are market leaders in their key product groups: gypsum wallboard, joint compound and related gypsum products; cement board; gypsum fiber panels; ceiling panels and grid; and building products distribution.

     USG Corporation and its principal domestic subsidiaries (collectively “USG”) filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code on June 25, 2001. This action was taken to resolve asbestos claims in a fair and equitable manner, protect the long-term value of the businesses and maintain their market leadership positions.

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