On Wednesday, Microsoft revealed in a Securities and Trade Fee submitting and weblog put up that the Inner Income Service says the corporate owes the US Treasury $28.9 billion in again taxes, plus penalties and curiosity, studies the Related Press. The declare comes because of a prolonged IRS audit that examined how Microsoft distributed its income throughout completely different international locations from 2004 to 2013. Microsoft disagrees with the IRS’s declare and intends to enchantment the choice.
In accordance with the AP, the continued IRS probe started in 2007 and is described as “one of many largest within the Service’s historical past” in courtroom paperwork launched final yr. Lately, Microsoft acquired notification that the audit section has concluded, triggering the following steps for settling the dispute. On the core of the IRS investigation is the observe generally known as “switch pricing,” which some critics argue permits corporations to report decrease income in international locations with greater taxes and vice versa, minimizing their general tax obligations.
Microsoft maintains that it has complied with IRS guidelines all alongside and can proceed to enchantment the company’s determination—a course of anticipated to final for years. This is how the corporate described the episode in Part 8.01 of its SEC submitting:
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