Microsoft says IRS seeking for $28.9 billion in ongoing audit dispute


By MYBRANDBOOK


Microsoft says IRS seeking for $28.9 billion in ongoing audit dispute

Microsoft said that the U.S. Internal Revenue Service (IRS) in September has notified the company that it is seeking an additional tax payment of $28.9 billion, plus penalties and interest for tax years from 2004 to 2013. According to Microsoft, the IRS notices relate to an ongoing dispute between the company and the U.S. tax authority, which is auditing how Microsoft allocated its profit among different countries and jurisdictions. 

 

According to a Microsoft blog, the Redmond, Washington-based company has since changed its practices so that "issues raised by the IRS are relevant to the past but not to our current practices". 

 

Microsoft said it believes that any taxes owed after the audit would be reduced by up to $10 billion based on tax laws passed by former President Donald Trump. 

 

The company said it disagrees with the IRS's findings and plans to dispute them, first in an internal IRS proceeding and then later, if necessary, in courts. 

 

The IRS case dates back about a decade, when the tax body started getting aggressive with large corporations stashing profits in overseas tax havens. Microsoft had apparently moved “at least” $39 billion in profits to Puerto Rico, under a scheme that saw its intellectual property (IP) transferred to a small factory it owned on the Caribbean island. 

 

In January, Microsoft lost a lawsuit where it had attempted to force the IRS to release thousands of records related to its audit. 

 

The IRS, however said that it is prevented by U.S. law from confirming or denying whether it is auditing any taxpayer. 

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