Microsoft Azure: IRS, Microsoft disagree over alleged tax debt

Oct 19, 2023 | Posted by Abdul-Rahman Oladimeji

The Internal Revenue Service (IRS) alleges that tech giant Microsoft owes the US government about $28.9 billion in taxes, penalties, and interest. However, Microsoft has denied these charges and intents to "vigorously contest" them. 

Microsoft revealed in an SEC filing that it received a Notice of Proposed Adjustment for the tax years 2004 through 2013 based on how it allocated its profits among different countries and jurisdictions. However, Microsoft has changed its corporate structure since then, excluding later years from the dispute. 

In a blog post, Daniel Goff, Microsoft's CVP of worldwide tax and customs, said, "Microsoft disagrees with these proposed adjustments and will pursue an appeal within the IRS, a process expected to take several years. We strongly believe we have acted in accordance with IRS rules and regulations and that our position is supported by case law."

Goff also notes that the $28.9 billion charge fails to account for taxes paid by the company under the Trump-era Tax Cuts and Jobs Act (TCJA), as it could reduce the tax debt under the audit by up to $10 billion. 

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